TheChek News Flow

>>> What to look at today - 7th of April 2020

Asian stocks headed for their first back-to-back gain in two weeks on continuing optimism that the deadly coronavirus outbreak may be waning in some key epicenters.

The MSCI Asia Pacific Index climbed about 1% after advancing almost 3% Monday. Futures on the U.S. S&P 500 fluctuated between gains and losses after the index closed up 7%, at its highest since March 13. The dollar, a key barometer of funding strains during the crisis, retreated against major peers. Indonesia mounted its biggest-ever dollar bond sale, in another sign of easing stress. Treasuries dipped.

US After Hours VRNS -6.1% falls on downside guidance but KHC +2.3% sees Q1 revs well above consensus

Nikkei +1.09% Hang Seng +0.54% CSI +2.05% Shanghai +1.74% Shenzen +2.75%

Eur$ 1.0840 CNH 7.0850 CNY 7.0725 JPY 108.76 GBP 1.2287 CHF 0.9752 RUB 75.4169 TRY 6.7648 WTI$ 27.03 +3.60%

S&P +0.48% Nasdaq +0.27% EuroStoxx +1.26% FTSE +0.85% Dax +1.82% SMI +0.76%

Macro :

- World’s Biggest Wealth Fund Forced to Adjust Holdings After Routcix

- ‘Real Capitulation’ Stock Selling May Be Yet to Come: Pictet

- Japan Readies Extra $154 Billion to Fund Record Stimulus

- Trump Eases Covid-19 Export Ban Amid Backlash Around World

Keep an eye on :

- ABI BB : SAB Offers Up to 10.2m AB InBev Shares in Placement, Terms Show, Priced at EU39.50 in Offer, Raising EU375 Mln

- AIRBNB IPO : Airbnb Says Silver Lake, Sixth Street Partners Invest $1B

- AIR FP : Airbus Pauses Production in Germany and Alabama on Coronavirus

- AIR FP : Airbus Struggles to Gauge How Much Scaling Back Is Too Much

- AF FP : Air France Needs Further Govt Support Soon, Rigail Tells Figaro

- ALC SW : Alcon Pulls 2020 Guidance, FY Dividend due to Coronavirus

- AMBUB DC : Ambu Raises Revenue Guidance as Covid-19 Outbreak Boosts Demand

- APAM FP : Aperam Names Sudhakar Sivaji CFO Effective May 6

- AGR LN : Assura to Offer Up to 240.2m Shrs

- CLNX SM : *CELLNEX MAY DOUBLE THE TOWERS IT MANAGES IN 3 YEARS: CEO

- CSGN SW : Credit Suisse-Backed Fund Sees Powerful Rebound for U.S. Stocks

- DIA IM : DiaSorin to Launch Test to Detect Immune Response to Covid-19

- DIE BB : D’Ieteren Suspends Buyback, Withdraws 2020 Forecasts

- EDEN FP : Edenred Proposes 20% Cut in Dividend for ‘19 to EU0.70/Share

- EDF FP : EDF Rivals Sue Regulator’s Rejection of Force Majeure: Les Echos

- FCA IM : Fiat Chrysler Aims to Restart Plants in U.S., Canada on May 4

- HLNG NO : Hoegh LNG Suspends Div, Implements Cost Cuts of $9-11m for 2020

- BOSS GY : Hugo Boss Suspends Dividends, Waives Board Remuneration

- IMCD NA : IMCD Says No Material Impact on 1Q Results Due to Covid-19

- LHA GY : Lufthansa Mulls Germanwings Future; Plans Capital Raise: Rtrs

- B4B GY : Metro Wholesale Turns Retail as Stores Allowed to Remain Open

- NEX FP : Nexans: Board of Directors, and Mgmt to Take Voluntary Paycut

- PSH NA : Pershing Square Approves New $100m Share Buyback Program

- RR/ LN : Rolls-Royce Says Maverick Capital Takes 3.20% Voting Rights

- SFL IM : Safilo Withdraws 2020 Outlook, Sees 1Q Rev Down 11%-13% Const Fx

- HO FP : Thales Withdraws 2020 Outlook, Cancels Final Dividend Payment

- TKO FP : Tikehau Capital, City Developments Rise Stake in Ireit Global

- SFER IM : Ferragamo Withdraws Dividend Proposal; 1Q Revenue -31% Y/y

- SMWH LN : WH Smith Starts Equity Raise, Signs New Financing Arrangement

- VOW3 GY : Volkswagen SEAT Starts Production of Ventilators in Spain

>>> Europe : Brokers Upgrades & Downgrades - 7th of April 2020 V2(+)

>>> Up

* AB Dynamics Raised to Buy at Stifel; PT 1,331 pence (+)

* Akzo Nobel Raised to Buy at Baader Helvea; PT 75 euros

* Amadeus Raised to Buy at HSBC; PT 55 euros

* BNP Paribas Raised to Hold at SocGen; PT 30 euros

* Brenntag Raised to Buy at Baader Helvea; PT 45 euros

* Covestro Raised to Buy at Baader Helvea; PT 33 euros

* Diageo Raised to Buy at Liberum; PT 3,100 pence

* Elementis Raised to Buy at Stifel; PT 65 pence (+)

* Enagas Raised to Sector Perform at RBC; PT 19.70 euros

* Eni Raised to Outperform at Bernstein; PT 13 euros

* Eni ADRs Raised to Outperform at Bernstein; PT $29

* Equinor Raised to Outperform at Bernstein; PT 170 kroner

* Equinor ADRs Raised to Outperform at Bernstein; PT $19

* FinecoBank Raised to Accumulate at Banca Akros (ESN) (+)

* Go-Ahead Raised to Buy at Liberum; PT 1,500 pence

* Gurit Raised to Buy at Baader Helvea; PT 1,450 Swiss francs

* Lanxess Raised to Buy at Baader Helvea; PT 46 euros

* Nabaltec Raised to Buy at Baader Helvea; PT 28 euros

* National Grid Raised to Buy at UBS

* Repsol Raised to Outperform at Bernstein; PT 13 euros

* Restaurant Group Raised to Buy at HSBC; PT 80 pence

* Severn Trent Raised to Outperform at RBC; PT 2,500 pence

* Stagecoach Raised to Buy at Liberum; PT 125 pence

* Travis Perkins Raised to Outperform at Exane; PT 1,010 pence

* Tryg Raised to Buy at Handelsbanken; PT 195 kroner

* United Utilities Raised to Outperform at RBC; PT 975 pence

>>> Down

* Banco BPM Cut to Neutral at Citi, Cut to EUR1.50 From EUR1.75

* Centrica Cut to Underperform at RBC; PT 33 pence

* DP Aircraft I Cut to Hold at Jefferies

* Electrocomponents Cut to Hold at HSBC; PT 480 pence

* Emmi Cut to Hold at MainFirst; PT 900 Swiss francs

* Engie Cut to Hold at HSBC; PT 10.20 euros

* E.On Cut to Sector Perform at RBC; PT 9.50 euros

* Ferguson Cut to Hold at HSBC; PT 5,000 pence

* Grifols Cut to Neutral at Citi; PT 19.72 euros

* Grifols ADRs Cut to Neutral at Citi

* H&M Cut to Add at AlphaValue

* Iberdrola Cut to Sector Perform at RBC; PT 10 euros

* Impax Asset Raised to Buy at Peel Hunt; PT 350 pence (+)

* Lufthansa Cut to Sell at DZ Bank; PT 6.50 euros (+)

* Metro AG Cut to Reduce at Oddo BHF (+)

* Michelin Cut to Add at AlphaValue

* Micro Focus Cut to Sell at Investec; PT 325 pence (+)

* Mol Cut to Hold at Renaissance Capital; PT 2,600 forint (+)

* Pirelli Cut to Add at AlphaValue

* Salvatore Ferragamo Cut to Reduce at Equita (+)

* SSE Cut to Underperform at RBC; PT 1,150 pence

* Stockmann Cut to Sell at Handelsbanken; PT 90 euro cents

* Voestalpine Cut to Underperform at Credit Suisse; PT 22 euros (+)

>>> Initiation

* SEIT LN Rated New Positive at Stifel

* Ubisoft Rated New Equal-Weight at Wells Fargo; PT 80 euros

>>> Call

* Codemasters Update Has ‘Much to Like,’ Sales Strong: Jefferies (+)

* Emmi Shares Fully Valued Given Headwinds; Mainfirst Downgrades (+)

* EU Utilities Insulated From Virus Impacts, But Not Immune: RBC (+)

* Hugo Boss Scrapping Dividend Is a Short-Term Negative, Citi Says

* Nordic Insurers Now at Bargain Prices, Tryg Raised to Buy at SHB (+)

* U.K. Bank PTs Slashed at Morgan Stanley; Lloyds Preferred (+)

FT : LVMH and Kering backtrack on state support for jobs

LVMH and Kering backtrack on state support for jobs

Owners of Louis Vuitton and Gucci had told employees it would rely on government scheme

LVMH and Kering, the world’s biggest luxury goods groups, told employees they would be a placed on an emergency government assistance scheme but later backtracked after smaller rivals Hermes and Chanel pledged to cope without state support in a spirit of “national solidarity”.

Internal emails and documents reviewed by the Financial Times show that soon after France entered lockdown on March 15, LVMH had started to put some workers on the government’s so-called “partial activity” scheme across its various businesses.

The scheme, the centrepiece of France’s emergency efforts to prop up its economy during coronavirus, allows companies to put workers on reduced hours or furlough them while the state finances most of their salaries in an attempt to avoid mass lay-offs.

Workers at Louis Vuitton, LVMH’s biggest brand accounting for almost half of group operating profit, and beauty retailer Sephora were among those told in March they would be put on the government programme — only to have the decision reversed last week.

Similar events took place at Gucci-owner Kering. A union representative at Boucheron, a watch and jewellery brand, said in an interview that three meetings had been held in recent weeks about putting staff on the “partial activity” scheme. But on Monday, the union was informed that the plan would not go ahead, said Yannick Blaise, a CFDT representative at Boucheron.

Whether to tap state aid has turned into a fraught question for some of France’s biggest companies because asking for help risks turning once internal matters such as executive pay or dividends into matters of public debate.

Some such as Total and Société Générale have promised not to use the partial activity scheme so as not to weigh on public accounts. To date, some 473,000 companies have applied for help to cover the costs of some 5m workers, including at Airbus, Renault, and Air France-KLM, at a cost of more than €11bn for the state.

In luxury, the equation is complicated by the fact that LVMH and Kering are controlled by the richest and third-richest men in the country respectively, according to Forbes magazine’s rankings.

The two billionaires, LVMH’s Bernard Arnault and Kering’s François-Henri Pinault, are fierce competitors and high-profile figures in France whose moves are scrutinised closely. Both have donated money and resources to the fight against Covid-19 in recent weeks, with LVMH being lauded for converting perfume factories over to making hand sanitiser for health workers.

Jenny Urbina, a CGT labour representative at Sephora, said the company had told employees that its reversed decision not to rely on the scheme would apply across LVMH, except for at its newspapers Les Echos and Le Parisien.

“I think they moved ahead too quickly and didn’t think about how it would look, and were caught out when competitors made their announcements,” she told the FT.

“While we are happy that the company did this, we at the CGT thought that it was scandalous that LVMH wanted to seek help from the state. Those programmes are supposed to help fragile companies and workers who really need it, not the big profitable ones.”

Chanel, which is privately owned and family controlled, on March 28 said it did not intend to use the “partial activity” aid programme at this stage of the crisis. “Our aim is not to weigh on the public accounts so the French state can prioritise help to the most vulnerable companies, and focus its resources on the health system and its doctors and nurses,” it said in a statement.

Hermes, which is also family backed, went further on April 1 by promising to maintain the salaries of its 15,500 employees worldwide, and not to fall back any “partial activity” for the length of the crisis.

An LVMH spokesman said the company was not in the habit of making decisions based on its competitors’ actions. Kering declined to comment.

>>> TradeGate Pre-Market Indications

DAX:

MTU Aero (MTX TH) +6.2%
Lufthansa (LHA TH) +4.5%
- Lufthansa Cut to Sell at DZ Bank; PT 6.50 euros
- Air France Needs Further Govt Support Soon, Rigail Tells Figaro
HeidelbergCement (HEI TH) +3.5%
Infineon (IFX TH) +3.4%
- Samsung’s Profit Beat Showcases a Rare Bright Spot in a Pandemic
Daimler (DAI TH) +3.3%

MDAX:

Fraport (FRA TH) +5.8%
Cancom (COK TH) +5.7%
Airbus (AIR TH) +4.6%
Siltronic (WAF TH) +4.6%
Rheinmetall (RHM TH) +4.5%
HelloFresh (HFG TH) -3%

SDAX:

Borussia Dortmund (BVB TH) +6.2%
Corestate (CCAP TH) +5%
Leoni (LEO TH) +4.8%
LPKF (LPK TH) +4.6%
DIC Asset (DIC TH) +4.5%

>>> Stoxx 600 Pre-Market Indications

Carnival Plc (POH1 TH) +13%

Shares gained 25% yesterday on Saudi Arabia stake

Rolls-Royce (RRU TH) +11%

Rolls-Royce Says Maverick Capital Takes 3.20% Voting Rights

TUI (TUI1 TH) +9.9%

Ambu (547A TH) +7.8%

Banco Santander (BSD2 TH) +6.4%

OMV (OMV TH) +5.9%

Global Oil Powers Stumble Their Way Toward Historic Deal (2)

MTU Aero (MTX TH) +5.7%

BBVA (BOY TH) +4.9%

Airbus (AIR TH) +4.5%

Airbus Struggles to Gauge How Much Scaling Back Is Too Much

TOMRA Systems ASA (TMR TH) -1%

HelloFresh (HFG TH) -1.3%

>>> Europe : Brokers Upgrades & Downgrades - 7th of April 2020