-
Deutsche Wohnen (DWNI TH) +6.8%
- Lufthansa Replaced by Deutsche Wohnen in DAX: Deutsche Boerse
- AstraZeneca (ZEG TH) +4.6%
- AstraZeneca Widens Covid Vaccine Access in $750 Million Deal (1)
- Rolls-Royce (RRU TH) +4.5%
-
EasyJet (EJT1 TH) +3.8%
- Airlines Are Flying Blind Into Europe’s Sunny Summer Skies
- Carnival Plc (POH1 TH) +3.1%
- Banco Santander (BSD2 TH) +2.1%
- Airbus (AIR TH) +2.1%
- BBVA (BOY TH) +2.1%
- Scor (SDRC TH) +2%
- Legrand (LRC TH) +1.6%
- CaixaBank (48CA TH) -1.4%
- Fortum Oyj (FOT TH) -1.9%
-
Lufthansa (LHA TH) -3.8%
- Airlines Are Flying Blind Into Europe’s Sunny Summer Skies
- Lufthansa to Depart Germany’s DAX Benchmark After 32-Year Stay
DAX:
- MTU Aero (MTX TH) +2.3%
- Continental AG (CON TH) +2%
- Linde (LIN TH) +1.8%
- Bayer (BAYN TH) +1.6%
- Biggest Beneficiary of U.K. Virus Aid Plan Is German Chemicals
- Infineon (IFX TH) +1.5%
- Lufthansa (LHA TH) -3.9%
- Lufthansa to Depart Germany’s DAX Benchmark After 32-Year Stay
MDAX:
- Deutsche Wohnen (DWNI TH) +6.7%
- Lufthansa Replaced by Deutsche Wohnen in DAX: Deutsche Boerse
- Hugo Boss (BOSS TH) +2.2%
- Hugo Boss Is in Ongoing Talks With Daniel Grieder for CEO Role
- Metro AG (B4B TH) +2%
- Airbus (AIR TH) +1.9%
- Commerzbank (CBK TH) +1.5%
- Top German Bank Regulator Warns on Second Wave of Defaults
- Telefonica Deutschland (O2D TH) -0.7%
- Telefonica Said to Near German Tower Sale to KKR-Backed Venture
- Deutsche PBB (PBB TH) -0.9%
- Lender will be removed from MDAX Index
SDAX:
- Steinhoff (SNH TH) +7.1%
- Ceconomy (MEO TH) +4.7%
- Ceconomy Raised to Buy at Baader Helvea; PT 4 euros
- Encavis (CAP TH) +3%
- Corestate (CCAP TH) +2.8%
- Kloeckner (KCO TH) +2.4%
- Dermapharm (DMP TH) -1%
- Dermapharm Cut to Hold at Commerzbank; PT 48 euros
TCI pushes Safran to keep outgoing chief in place
Activist hedge fund wants Philippe Petitcolin to steer the aerospace group through the industry’s crisis
TCI, the UK hedge fund run by Chris Hohn, is pushing French aerospace group Safran to keep its outgoing chief executive in place while it navigates the upheaval caused by the pandemic.
Philippe Petitcolin, who has led the €39bn group since 2015, is due to be succeeded by Olivier Andriès following a transition period that runs until the end of the year.
TCI, a $20bn fund that has agitated for boardroom change at companies from the London Stock Exchange to Wirecard, sent a letter to Safran’s board on Wednesday, according to multiple people familiar with the matter. The fund wants Mr Petitcolin to stay on as CEO, or at the very least, an adviser, the people said.
Safran is planning a board meeting on Thursday evening where the letter will be discussed, the people said.
“It just doesn’t make sense to change pilot during this kind of crisis,” said one person familiar with the matter.
Mr Petitcolin has warned that the aerospace sector faces a “new normal” of structurally lower demand, potentially 30 per cent below levels enjoyed before the pandemic, which has devastated the airline industry.
With job losses in the aerospace industry looming, the French government is planning to unveil a support package this month. Safran’s share price has tumbled by close to 28 per cent this year.
TCI and Safran declined to comment.
For the 67-year-old Mr Petitcolin to remain as chief executive, Safran would need to change its statutes which currently only allow for CEOs to stay in their position until the age of 68. The aerospace group has already amended its statutes once to allow Mr Petitcolin to stay beyond on the original limit of 65.
As it stands, Safran could extend Mr Petitcolin’s mandate until the group’s next annual general meeting, which is scheduled to take place in either May or June next year.
TCI owns 5.7 per cent of Safran, according to Reuters data. Its push to keep Mr Petitcolin as CEO is not its first intervention at Safran.
In 2017, the fund successfully forced Safran to revise a takeover for aircraft interiors maker Zodiac. TCI had waged a campaign to force Safran to drop the deal completely, saying that Safran is “massively overpaying” for the troubled Zodiac in return for “questionable synergies”.
As well Safran, TCI holds large stakes in Alphabet, Charter Communications and Microsoft.
Hedge funds: bear with us
The pessimistic view that hefty new debts will slow recovery is being outweighed for now by animal spirits and cheap money
Investors pay up to find the “smart money”. That is the justification for the steep charges of hedge funds. The crash and rally in equities this year has given them the chance to prove their worth. Pessimists among them, including Elliott Management and Fasanara Capital, expect to do so by doubting recent price rises. Their scepticism is well founded.
US stock markets, which set the tone for the world’s bourses, have detached from economic realities. The S&P 500 index is less than a tenth from its all-time peak. Yet the consensus forecast is for GDP to drop by more than half year on year in the second quarter. The economy cannot rebound quickly after that, thinks Elliott’s Paul Singer.
The veteran investor expects a depression that exceeds the last global financial crisis. His fund has performed well enough in the first quarter this year — up 2 per cent versus an average drop of over 9 per cent — for his words to carry weight.
What will happen when government stimulus stops? Fearing this reality shock, funds such as Fasanara Capital hold 70 per cent of their assets in cash. Other hedgies, such as Crispin Odey, worry that high inflation will follow the stimulus.
Earnings-based valuations are already pricing in a full recovery. Germany’s Dax index trades at a forward price to earnings multiple of about 18 times — 40 per cent more than the average this millennium.
Every week of rising prices brings humiliation for pessimists — including Lex. We think the hefty new debts of governments and corporations will slow down recovery. Animal spirits and cheap money are outweighing that view for the moment.
That helps a majority of hedge funds, who, despite their name are positively correlated to markets. Meanwhile, Sandbar’s Global Equity Market Neutral fund has delivered positive — and uncorrelated — returns throughout this year. As of this week, it has risen 11 per cent. These are the sort of smarts investors long to own — rather than the chance to lose money for logical reasons.
Cannes Film Festival announces the line-up for its cancelled event
Fifty-six films get the Cannes seal of approval but there will be no prizes and no red carpet
So this is what it came down to. The Cannes Film Festival, a name associated with glitz, glam and dazzling star wattage, reduced to three men sitting in a cinema as empty as your local multiplex on a summer school-day. No fanfares, no film clips, no PowerPoint presentation even, just artistic director Thierry Frémaux clutching a sheaf of papers and reeling off a list of the 56 films that comprise the line-up for an event that will now never happen. (He was flanked by president Pierre Lescure and a soft-pedalling interviewer.)
Some titles gave a teasing glimpse of what might have been: Wes Anderson’s The French Dispatch, whose ridiculously starry cast may well have overcrowded the red carpet on opening night; Steve McQueen, bringing not one but two features; a directorial debut from actor Viggo Mortensen; new works by Cannes regulars such as François Ozon, Naomi Kawase, Thomas Vinterberg and others, whom Frémaux dubbed “The Faithful”. In lieu of a glittering berth on the Côte d’Azur, these films will now go on general release (many online only) or show at other festivals when restrictions ease, wearing the official Cannes seal of approval like a rosette on a prize pony.
“What’s the point?” you may well wonder. For the festival itself, the message was vehemently clear: “We’re still here and we still matter.” The timing of the pandemic has been cruel to Cannes. After several years of being outdone by its main rival, Venice, and hampered by a battle with Netflix (whose straight-to-streaming films it refuses to play in competition), last year was seen as a triumphant comeback. An edition featuring starry hits such as Quentin Tarantino’s Once Upon a Time . . . in Hollywood was topped off with a Palme d’Or for Parasite, which repaid the festival by going on to become this year’s surprise Best Picture Oscar winner. Cannes’s reputation as a key influencer was restored.
Lescure played down how big a blow this year’s no-show was, referring to the festival’s “year-round” influence and spinning harder than one of the carousels that line the Croisette. “Cinema is not dead, it’s not even sick,” insisted Frémaux, bringing to mind Monty Python’s dead parrot. “It’s just resting,” he might have added — but not resting on its laurels. While sifting through the record 2,067 features submitted this year, Cannes has also been looking inward. After facing repeated criticism for the paucity of film directed by women it programmes, the three men were at pains to tell us that Cannes is inching towards parity: 16 female directors made the cut this year, up from 14 in 2019.
But for all its failings and occasional pomposity, the truth is that Cannes still matters enormously to many film-makers. Not so much the Tarantinos and Andersons who hardly need the publicity, but to the smaller independents and bit-part players in the world cinema scene who benefit from the glare of publicity it provides. These films excite not on paper but on screen and will now find it harder to stand out, but they can at least flaunt the famous Cannes frond.
Could the festival not also have streamed the competition films for the jury (due to be chaired by Spike Lee), thereby enabling the awarding of prizes? But that would have compromised its anti-streaming stance (even if Frémaux has admitted that Lee’s Netflix-backed Da 5 Bloods had been due to show out of competition). “We want to preserve the mythology of cinema,” was how Frémaux put it in a speech released prior to the official launch. Cannes, as ever, was not willing to compromise.
Pointedly, he ended that speech with a quote from Federico Fellini, who would have been 100 this year: “Viva il cinema!” It’s a sentiment all of us film lovers can get behind as we look forward to Cannes 2021, but he could also have invoked another centenary, that of The Cabinet of Dr Caligari. At the end of Robert Wiene’s Weimar Expressionist masterpiece, it is revealed that the protagonists have been sleepwalking through a nightmare and the titular doctor announces he now has a cure for what ails them. Here’s hoping.
Gapping down
In reaction to disappointing earnings/guidance:
- SMAR -19.1%, MIK -12.7%, CLDR -11.9%, CHNG -10.2%, CMTL -8.7%, ESTC -5.8%, SJM -4%, CIEN -0.7%
Other news:
- NMIH -9.4% (prices offering of 13,800,000 shares of Class A common stock at a $14.50 per share)
- VREX -7.7% (to offer $150 million of its Convertible Senior Notes)
- TWST -4.5% (prices offering of 3,030,303 shares of common stock at $33.00 per share)
- GLOB -3.6% (announces 2 mln share offering)
- RCL -2.7% (proposed offerings of senior guaranteed notes and senior convertible notes)
- WERN -2.6% (prices offering of 12,845,930 shares of its common stock by co's founder at $41.00 per shar)
- AMC -1.7% (announces reopening of Odeon Cinemas in Norway, marking first reopening for AMC's cinema properties worldwide)
- GPS -1.4% (sued by Simon Property (SPG) over unpaid rent - CNBC)
Analyst comments:
- PLNT -3.7% (downgraded to Mkt Perform from Outperform at Raymond James)
- FRO -1.9% (downgraded to Hold from Buy at Pareto)
Gapping up
In reaction to strong earnings/guidance:
- ZUO +20.5%, LX +11.2%, SCWX +7%, GWRE +6.1%, GEF +3.1%, TLYS +3%, NAV +2.5%, GIII +0.5%
Other news:
- KZR +44.3% (announces updated results from Phase 1b portion of MISSION study)
- IBIO +21.2% (initiated preclinical immunization studies for its second COVID-19 vaccine platform)
- ATSG +13.4% (AMZN expands aircraft fleet with the leasing of 12 Boeing 767-300 aircraft from ATSG)
- RM +6.3% (provides business update)
- WWW +6.3% (provides update on Q2 trends)
- NIO +6.1% (reports May deliveries of 3,436 vehicles, representing a strong 215.5% growth year over year)
- AVXL +6% (received a No Objection Letter from Health Canada as well as Clinical Trial Authorization from the Medicines and Healthcare products Regulatory Agency in the United Kingdom to expand the Phase 2b/3 safety and efficacy trial of ANAVEX)
- FNKO +4.9% (expects to reduce its global workforce by approximately 25%)
- AAL +4.4% (increases domestic flying for summer travel season)
- INO +3.8% (files complaint seeking to compel VGXI)
- BA +3.4% (AMZN expands aircraft fleet with the leasing of 12 Boeing 767-300 aircraft from ATSG)
- FIT +3% (introduces low-cost emergency ventilator offering Fitbit Flow)
- GLUU +2% (prices offering of 15,000,000 shares of common stock at $9.25 per share)
- ESPR +1.9% (announces NEXLIZET is now available in U.S. pharmacies)
- COST +1.1% (reports May comps)
- SABR +1% (takes steps for strategic realignment of its airline and agency-focused businesses, as well as other measures to support the new organizational structure)
Analyst comments:
- SEAS +3.3% (upgraded to Buy from Neutral at Citigroup)
- TSN +2.3% (upgraded to Outperform from Mkt Perform at Bernstein)
- SYKE +1.5% (upgraded to Outperform from Neutral at Robert W. Baird)
- VVV +1% (upgraded to Buy from Hold at SunTrust)
- CMA +0.9% ( upgraded to Buy from Neutral at B. Riley FBR)
- MEOH +0.8% (upgraded to Sector Outperform from Sector Perform at Scotiabank)