FT : Coronavirus and the $2bn race to find a vaccine

Coronavirus and the $2bn race to find a vaccine
The start-up leading the US fight to develop a treatment will need state backing and up to 18 months to make it work

Juan Andres woke up three times during the night after putting his precious vials of vaccine on the back of a delivery lorry. In late February, Moderna, a biotech group based outside Boston, smashed the record for the fastest time between identifying a virus — in this case Covid-19 coronavirus — and creating a vaccine ready to test in humans: just 42 days.

In the lab, the team had been excited but in the early hours Mr Andres, a 30-year pharma veteran in charge of manufacturing, was nervously checking his phone to track the lorry carrying the potential vaccine to a discreet location where the US National Institutes of Health would start the trial to test whether it works.

“The pride comes from this [being] a race,” he says. “Doing this as fast as possible is something that is a duty.” Once they were sure the vaccine had arrived safely, the team celebrated with ice cream. At least 100 Moderna staff worked on the project but Mr Andres says everyone is excited to be involved, even people’s families. “I can’t remember the last time my 15-year-old thought I did something cool,” he laughs.

Moderna is one of more than 20 companies and public sector organisations worldwide racing to develop a vaccine against Covid-19, which in little more than two months has exploded from a few people suffering from respiratory disease in the Chinese city of Wuhan to a near-pandemic with 95,000 cases and 3,300 deaths worldwide so far.

The Coalition for Epidemic Preparedness Innovations — a partnership of governments, industry and charities, created three years ago to fight emerging diseases that threaten global health — is already sponsoring four Covid-19 vaccine projects, including Moderna’s. It is also on the point of signing contracts for four more, says Richard Hatchett, CEPI chief executive. He estimates that developing Covid-19 vaccines at the speed required will cost about $2bn over the next 12-18 months.

Moderna is off to the fastest start, Dr Hatchett believes, but several others are close behind. “We received 48 applications from all over the world following our call for proposals in February,” he adds. “There is a real sense of urgency . . . because the threat we are facing is unprecedented in the last 100 years in terms of its speed and potential severity,” he says, referring to the 1918 Spanish flu pandemic.

The trigger for Moderna came when Stéphane Bancel, its chief executive — who had worked on the 2009 H1N1 swine flu pandemic which came from Mexico — called a contact at the National Institutes of Health. In the autumn, the two organisations had agreed to run a test at the company’s manufacturing plant to see how quickly they could respond to a pandemic. But before any dry run was possible, coronavirus — part of a family of viruses that cause respiratory diseases ranging from mild colds to fatal pneumonia — provided a real test.

Nestled on a hill outside Boston, Moderna’s Norwood factory is smaller than a standard pharmaceutical plant. It was built to be quickly adaptable, as some of its potential products are personalised for each patient. Work at the Massachusetts facility and at other early entrants in the Covid-19 vaccine race began in earnest as soon as Chinese scientists published online the genome of coronavirus — all 30,000 biochemical “letters” of its genetic code — on January 10.

“With the genomic sequence, we were off to the races,” says Anthony Fauci, head of the US National Institute of Allergy and Infectious Diseases.

Ahead of an outbreak, it is impossible to predict what virus is coming next. “Instead of trying to develop a vaccine for a pathogen [virus], which is kind of tough . . . you have to try to develop platform technology to facilitate rapid development of vaccines,” Dr Fauci says.

One such platform is Moderna’s production of vaccines based on viral genetics. By February 7, the company’s scientists had manufactured dozens of doses of clinical grade vaccine, enough for the NIH’s early trial in healthy volunteers, scheduled for April. Researchers then had to wait to see if the batch was sterile, giving any bacteria two weeks to grow. Staff quickly completed other necessary tests in case they needed to start again. Fortunately everything went right, every step of the way.

Despite the rush, vaccine experts say that it will be at least a year to 18 months before one is available for widespread use. After an initial safety trial, there must now be larger clinical studies to test efficacy. Meanwhile, the epidemic is likely to spread across the world, killing many more thousands or even millions of people.

The work of Moderna and its competitors may only be useful if coronavirus comes back again in another outbreak next year or becomes an endemic infection like seasonal flu. With commercial returns uncertain, industry’s response to epidemics carries elements of corporate social responsibility and excitement in meeting a scientific challenge — though sometimes there is a big pay-off, as Wellcome, later part of GlaxoSmithKline, found with its pioneering zidovudine Aids drugs in the 1980s.

Moderna may be the first to test in humans but many more are trying to create a vaccine, from big pharma companies such as Johnson & Johnson and Sanofi to academics including those at the University of Queensland. Genetic sequencing and new structural biology tools are transforming vaccine development, allowing scientists to create their own synthetic versions of viruses — rather than waiting for someone to FedEx a specimen.

This is opening the field to new players, says Paul Duprex, director of the Center for Vaccine Research at the University of Pittsburgh. “You have more people thinking about the problems in different ways, not limited by having to grow the virus in a particular lab,” he adds.

Shane Crotty, a professor at La Jolla Institute for Immunology in California, says one approach being pursued is to search for the best immune response in a patient with the disease — and try to copy it so the vaccine can elicit a more robust defence. “That’s been the biggest, most exciting advance in the past five years. Several of those have gone into human trials looking good. It’s a much more sophisticated way to make a vaccine,” he adds.

Mr Bancel signed the Cepi contract that helped fund Moderna’s vaccine in January on an iPhone at the World Economic Forum in Davos, where the coalition had been founded in 2017to help quash epidemics quickly. He told Dr Hatchett that in this case “quickly” meant now — and the agreement was signed two days after their first conversation about the outbreak.

As a nine-year-old lossmaking company with several candidate vaccines and treatments in trials but none on sale, Moderna could not shoulder the costs of creating a new Covid-19 vaccine on its own. Even profitable big pharma groups have shied away from investing in vaccines for outbreaks without public funding, because the chances of cashing in are small. Several companies have lost money over vaccines developed for past outbreaks, such as Ebola and Sars, which were almost over before any products were ready.

Now Moderna is over the first hurdle, it must start preparing to scale up. The Norwood facility could produce a larger batch for the next trial but not create a vaccine for all those who might need it. Mr Bancel is in talks with governments about how they would manufacture millions or even billions of doses. Inevitably Moderna will have little option but to strike a deal with a larger manufacturer.

Production capacity will be key if and when licensed products emerge successfully from clinical trials, says Roger Connor, president of global vaccines at GSK. “Everybody will want it immediately. It may then take a period of time to create the supply organisation after that,” he warns.

GSK, the world’s largest vaccine maker, has announced a partnership with Clover Biopharmaceuticals of China, which runs one of the country’s largest in-house biopharmaceutical manufacturing operations. GSK has also made its “adjuvant” technology, which proved effective in the H1N1 flu pandemic, available free to any company that it judges can make use of it.

When added to a vaccine an adjuvant agent can trigger a stronger immune response. “The dose that you have to give of the vaccine can be smaller, which means you can get it to more people faster,” he says. GSK has had “lots” of approaches since announcing it would make the technology available, and is running a “structured assessment” process to determine who receives it.

Not all vaccines “will technically benefit from an adjuvant, so we do a technical scan, first of all, that their candidate vaccine will actually benefit, and our experts can tell. Then we want to understand how capable they are and what’s their probability of success to bring it through,” he adds.

For now any commercial gain from involvement in creating a successful vaccine is a secondary concern to the drive to find a treatment, Mr Connor says. “At the minute we’re completely focused on the science and focused on who to partner with . . . to bring together a vaccine fast.”

Negotiations over commercial terms can wait, he says: “We think the priority is to get the scientific collaboration together, get the product to them free, get it tested pre-clinically and let’s see if this thing can work.”

In the US, where politicians and patients are railing against high drug prices, more than 40 members of Congress wrote to Donald Trump in February to demand that the president ensure that any government funding of a vaccine or treatment came with an important string attached: everyone will be able to access it.

“If we manage to find, at taxpayer expense, some treatment or cure through a vaccine, we need to be able to afford it everywhere,” says Jan Schakowsky, a Democratic congresswoman from Illinois, who led the initiative. “It should not be turned over to private pharma companies.”

“We are very concerned about access,” says Cepi’s Dr Hatchett. “With H1N1 flu in 2009, the wealthiest countries put contracts in place and monopolised vaccine supplies.”

Cepi has done a lot of scenario planning, including asking whether a Covid-19 vaccine will be needed when it is ready next year. “I don’t think it is plausible any longer that containment will be a success and the disease knocked out,” he says. “There is a business case that there will be a long-term commercial niche for these vaccines.”

Back at the Moderna headquarters, Mr Bancel says Covid-19 proved the company’s technology was faster than anyone imagined. And next time he thinks it could be even faster still.

Yet as the death toll rises, his colleague Stephen Hage, the company’s president, worries that even quicker is not quick enough. Just when he thought Moderna would have time to breathe after the first batch of its potential vaccine was out the door, he watched the outbreak spreading to South Korea, Europe and beyond.

Like Mr Andres, he has had his own sleepless nights. “I’m going to bed thinking we made some progress”, he says, “and waking up every morning feeling further and further behind.”

FT : Activist demands halt to Colony Capital’s related-party deals

Activist demands halt to Colony Capital’s related-party deals
Blackwells Capital queries CEO Tom Barrack’s transaction with polo club acquaintance

An activist investor is urging Colony Capital to halt any related-party deals that could benefit its chief executive Tom Barrack, and is calling for an independent investigation into management decisions that seen the company’s shares fall nearly 70 per cent in three years.

The demand marks an escalation in Mr Barrack’s battle with activist boutique Blackwells Capital. It comes after Colony invested $185m in a data centre business associated with Marc Ganzi, a veteran investor, whom Mr Barrack last year designated as his successor.

Blackwells owns about 2 per cent of Colony, and has waged a year-long campaign against the company’s management team, winning the appointment of three new directors and a strategic review process that has led to major asset disposals.

Mr Barrack has resisted calls to step down, despite his company’s sliding share price. He has also brushed off long-running investigations into his role as chairman of President Donald Trump’s inauguration committee, and his alleged efforts to influence US foreign policy — neither of which have resulted in any accusation of wrongdoing.

Blackwells’ latest salvo focuses on the role of Mr Ganzi, the proprietor of a polo club that Mr Barrack sometimes frequents, about a 40-minute drive from his Colorado home. He joined Colony as managing director last year, after selling Digital Bridge, an investment management company he co-founded, to Mr Barrack’s company for $325m.

Mr Ganzi has a long record of investing in mobile phone masts and other digital infrastructure assets. In one of his first significant deals at the firm, he announced Colony would pay $185m for a 20 per cent stake in Databank, a data centre operator in which the Digital Bridge founders had previously invested.

Now Jason Aintabi, founder of Blackwells, is urging Colony to “impose a moratorium” on related-party deals, and demanding “a comprehensive and independent investigation into [Colony’s] inexplicable loss of value”. He wants the probe overseen by a new board, untainted by economic interests that he views as being potentially in conflict with those of shareholders, which he said “may be partly to blame for [Colony’s] miserable performance”.

Colony defended the Databank transaction, saying it would create value by “pivoting to become the leading global player in the digital real estate industry”. It said it had acquired its stake in an arms-length deal with two institutional shareholders, without Mr Ganzi selling any shares. 

To mitigate any potential conflicts of interest, it added, Mr Ganzi exchanged “incentive units” he received in the deal for financial interests in Colony that are subject to a lock-up. The deal was “unanimously approved” by Colony’s board, including the three directors nominated by Blackwells.

Mr Barrack forged his reputation as a real estate investor in the 1990s, when he placed contrarian bets amid the wreckage of the savings and loans crisis.

A Financial Times investigation last year uncovered data suggesting that investors lost about 3.7 cents of every dollar they invested in 18 funds that Colony raised between 1991 and 2015. Colony disputed the data and the methodology. Some who suffered heavy losses had paid large fees to Mr Barrack’s company.

FT : Lacoste clothing brand owner hunts for acquisitions

Lacoste clothing brand owner hunts for acquisitions
Family-owned Swiss group earns more from international brands than retail

The Swiss family behind apparel company Lacoste is scouting for acquisitions to add to its portfolio of sportswear and “affordable luxury” brands after enjoying a period of strong growth.

Thierry Guibert, head of the international business of Maus Frères SA and chief executive of its biggest brand Lacoste, said in an interview that the Maus family had charged him with growing the apparel business. 

“Our brands have a lot of potential and the group wants to go on the offensive again,” he said, adding that it had considerable firepower since was it debt-free. “There is a desire to reinforce our portfolio of brands.” 

The subsidiary that Mr Guibert leads — recognisable by its green crocodile logo — now accounts for about 60 per cent of the roughly €5bn in revenue earned annually by Maus Frères SA. This makes it bigger than the retail outlets in Switzerland, including Manor department stores and DIY chain Jumbo, which are the historical roots of the group.

Unlike the department store business, where revenue is under pressure as more people shop online, the apparel business has been growing steadily, bucking the wider malaise in middle-market fashion. As well as Lacoste, the Maus family group also owns clothing brands Gant and Aigle, which it bought in 2008 and 2003, respectively, and the Kooples — bought last year.

Lacoste has emerged as the group’s main growth driver over the past few years. By taking many licensing deals in-house and attempting to revitalise the brand after Mr Guibert took over in 2015, Lacoste has grown 42 per cent since 2016 to reach €2bn in sales. 

Founded in 1933 by two tennis players, Lacoste sells clothing, shoes, and accessories for use both on and off the court, and has a partnership to sell apparel at the Olympic Games. 

“Lacoste has won back a younger clientele after falling off their radar for awhile,” said Mr Guibert. Partnerships with American skateboarding brand Supreme and rapper Tyler the Creator have helped boost visibility outside the tennis-playing set, he added. Shoe sales have also grown considerably since Lacoste stopped licensing out the activity.

As it hunts for expansion opportunities, the business led by Mr Guibert is changing its name from Maus Frères International to MF Brands Group. He is looking to acquire brands that are already positioned in the premium segment, with around €200m to €300m in sales.

“We are looking for brands that have a capacity to transcend borders and be desirable anywhere, and that can be in clothing or even in objects for the home,” said Mr Guibert. “Kooples is the perfect example: we think we can double sales to €400m or so in the coming years by expanding in Asia and elsewhere.”

FT : One of the most-feared activist investors has locked horns with Twitter’s C

One of the most-feared activist investors has locked horns with Twitter’s CEO
Welcome to Due Diligence, the FT’s daily deals briefing

The strain of holding two jobs is normally associated with low and middle-income earners who are struggling to make ends meet. Rarely does it have to do with a chief executive running two multibillion-dollar businesses.

Jack Dorsey (pictured above, right) has been CEO of two companies for the past five years —— he runs Twitter and Square, companies that he co-founded. While some investors have warned it could be an issue, it hadn’t caused much of a fuss until now. Enter Elliott Management, the most feared activist on Wall Street.

The $38bn hedge fund run by Paul Singer (above, left) has built a stake in Twitter worth more than $1bn, which amounts to about 4 per cent of the social media company. And Elliott wants Dorsey out.

The activist investor has also put forward four board nominees who will stand for election at the company’s annual shareholder meeting in May, even though only three seats are up for grabs.

It’s clear how Elliott feels about Dorsey, which is why the FT’s Hannah Murphy and Tim Bradshaw spent time with other investors and Twitter employees to get their views. Even with #WeBackJack trending on Twitter, it isn’t clear Elliott is on its own.

Employees have described the company as disorganised and paralysed by indecision and Dorsey’s plan to spend up to six months in Africa this year has left some investors wondering how he’ll run two companies from a perch a continent away.

As one shareholder told the FT, Dorsey may have been able to “keep the wolves at bay” if Twitter was outperforming its competitors, but it’s not. Compared to Facebook, one of its biggest rivals, the company has fallen behind.


Facebook’s valuation has doubled in the past four and half years whereas Twitter’s share price has increased by about 10 per cent over the same period. The gains are down to Facebook’s far better success with advertisers; Facebook has increased the revenue it generates from each of its daily active users by 72 per cent since the first quarter of 2017. That’s three times more than Twitter. And Facebook’s operating margin, at 34 per cent, dwarfs the 11 per cent margin at Twitter.

With the US presidential election and the Tokyo Olympics on the horizon, 2020 is bound to be a big year for Twitter. Whether Dorsey, who has worked to cement his legacy as quietly thoughtful and eccentric, will be able to enjoy the boost Twitter is expected to get from those events is an open question.

Tom Barrack and his polo club acquaintance
When an activist investment group turned its fire on Tom Barrack (illustrated below) last year, the real estate investor and ally of Donald Trump was quick to strike a compromise.

He quickly acceded to a demand that he appoint three new directors to his listed investment group Colony Capital, and started down the path of major asset disposals. Then, in July, he said he would quit as Colony’s chief executive in 2021, stepping down from a role he had assumed only a few months earlier.

Barrack even had a successor in mind: Marc Ganzi, who has a long record as an investor in mobile phone towers, and is also the proprietor of a polo club that Barrack sometimes frequents, about a 40-minute drive from his Colorado home.

But that choice seems to have inflamed Barrack’s row with activist investor Blackwells Capital and its managing director Jason Aintabi, as DD’s Mark Vandevelde reports.

Ganzi joined Colony as managing director last year, after selling Digital Bridge, an investment management company he co-founded, to Barrack’s firm for $325m.

In December, Ganzi announced that Colony would pay $185m for a 20 per cent stake in DataBank, a data centre operator in which he had previously made a personal investment. It was one of his first significant deals at the firm.

Ganzi exchanged DataBank “incentive units” for financial interests in Colony, which are subject to a lock-up. Colony’s board —— including three directors nominated by Blackwells —— gave their unanimous sign-off to the deal.

The acquisition of a leading data centre operator is actually one of the more prosaic investments of Barrack’s career, which has seen him buy everything from Michael Jackson’s Neverland mansion to Harvey Weinstein’s Miramax movie studio.

But an FT investigation last year uncovered data suggesting that investors lost about 3.7 cents of every dollar they invested in 18 funds that Colony raised between 1991 and 2015. (Colony disputed the data and the methodology.)

Now, despite an extensive process to mitigate any potential conflicts of interest in the DataBank deal, Aintabi is calling for “a moratorium” on related-party deals at Colony.

And, with the shares down about 70 per cent in three years, he wants “a comprehensive and independent investigation” into what he calls Colony’s “inexplicable loss of value”.

Elliott and Bank of East Asia call for a truce
Anyone following the fierce control battle between Elliott Management and Bank of East Asia must have been surprised to see a joint statement from the two parties this week announcing a cease fire.

Elliott has been trying for six years to wrangle control of BEA from the Li family that founded the bank in Hong Kong in 1918 (David Li is pictured below on the right). But time and again the US activist hedge fund has been thwarted by complex holding structures and friendly investment deals that have protected the family’s grasp on the company.


With a Hong Kong trial in early May set to decide if BEA secured strategic investments only to protect the Li family against the Elliott attack, many observers expected the situation to remain tense for months.

The joint announcement said that Elliott had applied to put the legal proceedings on hold and that the bank had hired Goldman Sachs to conduct a full strategic review of the bank’s assets.

The Li family can claim an early victory. Elliott has at least for the moment given up on its push for a sale of BEA.

The Goldman-run review has not started and it is unclear what conclusions it will draw. A person involved in the matter said that “everything is on the table”. Large parts of the business, such as the bank’s China business, could be put on the auction block, the person said. It could still leave Elliott with a win.

>>> Stoxx 600Pre-Market Indications

  • MorphoSys (MOR TH) +4.6%
    • MorphoSys Approves Issuance of 907k New Ordinary Shares
  • HelloFresh (HFG TH) +3.2%
    • HelloFresh to Replace Dialog Semiconductor in MDAX Index (1)
  • Kion (KGX TH) +2.7%
    • Kion Weakness is Chance to Buy, SKF Demand Bounce Unlikely: Citi
  • Hugo Boss (BOSS TH) +2.7%
    • Hugo Boss 2020 Ebit Forecast Midpoint 3.7% Below Estimates
  • Lanxess (LXS TH) +2.5%
    • Lanxess Raised to Buy at Bankhaus Metzler; PT 57 euros
  • AB InBev (1NBA TH) +2.3%
  • Vodafone (VODI TH) +2.2%
    • TPG, Vodafone sprint toward July merger
  • Hochtief (HOT TH) +2.2%
  • Bechtle (BC8 TH) +2.2%

>>> TradeGate Pre-Market Indications

DAX:
  • Lufthansa (LHA TH) +1.8%
    • Lufthansa’s Swiss Further Cuts Capacity in Zurich, Geneva
  • Vonovia (VNA TH) +1.7%
    • Vonovia Maintains 2020 Adj Ebitda EU1.88 Bln To EU1.93 Bln
  • Merck KGaA (MRK TH) +1.7%
    • Germany’s Merck Sees Coronavirus Subsiding in Second Quarter
  • Wirecard (WDI TH) +1.6%
  • Continental AG (CON TH) +1.6%
MDAX:
  • MorphoSys (MOR TH) +5.1%
    • MorphoSys Approves Issuance of 907k New Ordinary Shares
  • Kion (KGX TH) +3.7%
    • Kion Weakness is Chance to Buy, SKF Demand Bounce Unlikely: Citi
  • Siltronic (WAF TH) +3%
  • K+S (SDF TH) +2.9%
  • Rheinmetall (RHM TH) +2.9%
  • Puma (PUM TH) +1.3%
    • Adidas and Puma Estimates Cut on China Virus Pressure, RBC Says
  • TeamViewer (1UD TH) +1.3%
  • ThyssenKrupp (TKA TH) +1.1%
    • ThyssenKrupp Downgraded to BB- by Fitch, Outlook Stable (1)
  • Evotec SE (EVT TH) +1%
SDAX:
  • SGL (SGL TH) +4.4%
  • HelloFresh (HFG TH) +3.8%
    • HelloFresh to Replace Dialog Semiconductor in MDAX Index (1)
  • Leoni (LEO TH) +3.8%
  • Wacker Neuson (WAC TH) +3.5%
    • Stock fell 6.1% yesterday
  • LPKF (LPK TH) +3%

>>> Europe : Brokers Upgrades & Downgrades - 5th of March 2020

>>> Up
* Arkema Raised to Buy at Goldman; PT 101 euros
* Atlantia Raised to Outperform at Exane; PT 23.10 euros
* BAT Raised to Outperform at Bernstein; PT 3,900 pence
* BAT ADRs Raised to Outperform at Bernstein; PT $50.83
* BHP Group PLC Raised to Neutral at JPMorgan; PT 1,900 pence
* Ceres Power PT Raised to 540 pence from 300 pence at Liberum
* Dialog Semi Raised to Buy at Deutsche Bank; PT 42 euros
* DSV Panalpina Raised to Outperform at Exane; PT 815 kroner
* Eurocash Raised to Neutral at JPMorgan; PT 19.70 zloty
* Freenet Raised to Buy at HSBC; PT 21 euros
* HelloFresh Raised to Overweight at JPMorgan; PT 28 euros
* Humana Raised to Buy at ABG; PT 62 kronor
* KBC Group Raised to Equal-Weight at Barclays; PT 59 euros
* Kion Raised to Buy at Citi
* Korian Raised to Buy at HSBC; PT 50 euros
* Maersk Raised to Outperform at Exane; PT 9,250 kroner
* PZU Raised to Overweight at JPMorgan; PT 44 zloty
* Santander Brasil ADRs Raised to Buy at HSBC; PT $10.70
* SEB Raised to Buy at SocGen; PT 136 euros
* Sodexo Raised to Market Perform at Bernstein; PT 89 euros
* Vinci Raised to Neutral at Exane; PT 97 euros

>>> Down
* Adecco Cut to Neutral at JPMorgan; PT 57 Swiss francs
* Barclays Cut to Add at AlphaValue
* Meggitt Cut to Neutral at Goldman; PT 654 pence
* Richter Cut to Neutral at JPMorgan; PT 7,900 forint
* Saga Cut to Hold at Peel Hunt
* SES GDRs PT Cut to 8.60 euros from 14 euros at Morgan Stanley
* SKF Cut to Sell at Citi

>>> Initiation
* Alcon Rated New Neutral at Citi
* Allianz Rated New Buy at Berenberg; PT 282 euros
* Axa Rated New Hold at Berenberg; PT 29.70 euros
* Generali Rated New Hold at Berenberg; PT 20.90 euros
* Kruk Rated New Buy at Citi
* Mountain Alliance Rated New Buy at Montega; PT 6.70 euros
* Sampo Rated New Buy at Berenberg; PT 49.40 euros
* Zurich Ins. Rated New Buy at Berenberg; PT 477.90 Swiss francs

>>> Call
* Adidas and Puma Estimates Cut on China Virus Pressure, RBC Says
* BAT ‘Future-Proofing’ Its Business, Bernstein Ups to Outperform
* European Large-Cap Insurers Remain Undervalued: Berenberg
* Saga Risks Running Out of Options as Virus Hits Cruise Ops: Peel
* Swedbank Faces Potential Positive AML Catalyst: Morgan Stanley

>>> What to look at today - 5th of March 2020

Asian stocks extended a global equity rally after an emergency U.S. spending bill to combat the impact of the coronavirus added to signs of support from policy makers around the world. Treasuries edged higher and U.S. stock futures gave back some of Wednesday’s gains.
Equities gained across the region with the Asian benchmark set to advance for a fourth day. S&P 500 futures slid as California called a state of emergency due to the virus. The underlying gauge Wednesday surged more than 4% in the wake of Congress authorizing nearly $8 billion for virus prevention. The Bank of Canada joined this week’s wave of global central bank action and Australia’s finance minister on Thursday said stimulus will come very soon as speculation grew that governments will provide more help with the outbreak hitting economic growth prospects.
US After Hours MRVL +10.4%, AEO +5.4% up big on earnings while GWRE -12.4%, CMTL -4.9%, ZM -4.3% lead on the downside

Nikkei +1.09% Hang Seng +2.15% CSI +2.29% Shanghai +2% Shenzen +1.88%

Eur$ +1.1138 CNH 6.9350 CNY 6.9359 JPY 107.32 GBP 1.2875 CHF 0.9565 WTI 47.43 +1.45

S&P -0.76% Nasdaq -0.65% EuroStoxx +0.82% FTSE +0.7% Dax +0.92% SMI

Macro :
- BOE Will Cut Rate By 50Bps at March Meeting, Goldman Predicts
- Big Buyers at Bottom of Stock Rout Look to Have Been Hedge Funds
- World’s Biggest ETF Lured Most Cash in 2020 Before Stock Rally
- U.S. Investor Bull-Bear Spread -0.9: AAII

Keep an eye on :
- ADS GY : Adidas and Puma Estimates Cut on China Virus Pressure, RBC Says
- AEO LN : Aeorema Communications Sees Earnings Below Market Expectations
- AIR FP : Airbus Weighs A330 Output Cut After Largest Buyer Seeks Deferral
- BCART BB : Biocartis Full Year Revenue Misses Lowest Estimate
- BOKA NA : Boskalis Full Year Ebitda Beats Highest Estimate
- BRAME NO : BRAbank to Offer Up to 170m Shrs NOK0.50/Shr
- CCL LN : Carnival’s Princess Reroutes Ship Linked to Virus Death (1)
- CIBUS SS : Cibus Nordic Real Estate to Sell Up to 6.2m New Shares: Terms
- CSGN SW : Credit Suisse Chairman Rohner Has Sought to Extend Tenure: FT
- DBV FP : DBV To Use EU308M Cash Position to Prepare Viaskin Peanut Sales
- DLG GY : HelloFresh to Replace Dialog Semiconductor in MDAX Index
- DRW3 GY : Draegerwerk Full Year Ebit Misses Estimates
- ELAL IT : El Al: Israel’s New Travel Restrictions to Cut Revenue Further
- FCA IM : Fiat Sales Boss Leaves After Settling Dispute Over SEC Probe (1)
- FRES LN : Kingfisher, NMC Health and TUI AG to Exit FTSE 100 index
- BAER SW : Star Banker Collardi’s Past Causes Tension at Swiss Bank Pictet
- HFG GY : HelloFresh to Replace Dialog Semiconductor in MDAX Index
- BOSS GY : Hugo Boss 2020 Ebit Forecast Midpoint 3.7% Below Estimates
- HYQ GY : Hypoport Prelim Full Year Ebit Misses Lowest Estimate
- IFCN SW : Inficon Full Year Operating Income Misses Lowest Estimate
- ICP LN : Kingfisher, NMC Health and TUI AG to Exit FTSE 100 index
- IMPN SW : *NORBERT KETTERER VOTING RIGHTS IN IMPLENIA RISE TO 10% FROM 5%
- DEC FP : JCDecaux Sees First Quarter Organic Revenue About -10%
- KARN SW : Kardex Full Year Dividend Per Share CHF4.50 Vs. CHF4 Y/y
- KGF LN : Kingfisher, NMC Health and TUI AG to Exit FTSE 100 index
- KVW NA : Reggeborgh Buys ~15.66% VolkerWessels at EU22.2/Share Incl Div.
- MRK GY : Merck KGaA Assumes -1% Effect on 2020 Net Sales on Coronavirus
- MLP GY : MLP Full Year Revenue 1.8% Above Estimates
- EPIA SS : Mobilaris Plans Stockholm Listing Before End of Year, DI Reports
- MOR GY : MorphoSys Approves Issuance of 907k New Ordinary Shares
- NTGY SM : BlackRock to Buy 50% of Naturgy Stake in Medgaz: Economista
- NEL NO : NEL Fourth Quarter Revenue Beats Highest Estimate
- NMC LN : NMC Health to Be Removed From FTSE 100 When Trading Resumes
- RI FP : Pernod Ricard Invests in $75 Japanese Gin as CEO Moves Upmarket
- PNN LN : Kingfisher, NMC Health and TUI AG to Exit FTSE 100 index
- PHARM NA : Pharming Full Year Operating Profit Beats Highest Estimate
- PSM GY : ProSiebenSat.1 Struggles With Turnaround Amid Tough TV Ad Market
- PSM GY : NuCom Agrees to Buy Meet Group for $6.30 per Share in Cash
- RILBA DC : Ringkjobing Landbobank Reports DKK150m Buyback Program
- RIO LN : China Plans to Approve Developing Giant Simandou Iron Ore Mine
- SAN SM : Santander Bans Large Meetings Due to Coronavirus: Confidencial
- SAN FP : Sanofi Says Its Net Prices for Drugs Fell by 11.1% in 2019: DJ
- SAN FP : Sanofi Unit Sues CSL for Patent Royalties on Hemophilia Drug
- SIGN SW : SIG Combibloc Holder Onex to Offer 35m Shrs to Trade On March 5, Holder Prices 37.5m Shrs CHF14.20/Shr
- SIGN SW : SIG Combibloc Free Float to Rise to 79% After Onex Stake Sale
- SIOE BB : Sioen Full Year EPS Misses Estimates
- SO FP : Somfy Full Year Current Operating Income Beats Highest Estimate
- SRAIL SW : Stadler Rail Full Year Net Revenue 1.5% Below Estimates
_ TIT IM : Google, Telecom Italia Signs Cloud Services, Data Centers Deal
- TEF SM : Telefonica Says Employee in Madrid Confirmed With Covid-19
- TELIA SS : Sweden’s Armed Forces Rejects State Sale of Telia Shares: DI
- TUI LN : Kingfisher, NMC Health and TUI AG to Exit FTSE 100 index
- TWEKA NA : TKH Full Year Revenue Misses Lowest Estimate
- UBER US : Ex-Google Engineer Must Pay $179 Million Over Uber Defection
- VWS DC : Vestas Wants Former CEO Runevad to Join Board
- VNA GY : Vonovia Maintains 2020 Adj Ebitda EU1.88 Bln To EU1.93 Bln
- VOW3 GY : Volkswagen Chattanooga to Recruit 600 Production Employees
- ZOOM US : Zoom Video Has ‘Large Increase’ in Free Users Amid Outbreak

FED Watch : T.Duy : Bullard Tries To Pull Back Rate Cut Expectations

Bullard Tries To Pull Back Rate Cut Expectations

A couple of quick items tonight.
First, yesterday’s Bloomberg Opinion column:
Financial markets met Tuesday’s emergency interest-rate cut with a fresh wave of equity selling and bond buying. This probably wasn’t the reaction Federal Reserve Chair Jerome Powell was hoping for. Did the central bank just make things worse? This probably isn’t the right way to think about the current situation…
Second, St. Louis Federal Reserve President James Bullard tried to throw some cold water on rate cut expectations. Via Bloomberg:
“It’s unlikely we are going to have that much different of information when we get to the March meeting,” he said Wednesday. “I am not sure you should put a lot of weight on the March meeting right now.”
Bullard is saying that we got the March rate cut early and we should be happy about that and not expect something more. I wouldn’t take too much stock in Bullard. Clearly, it doesn’t take much imagination to see another wave of bad news coming down the pipeline in the next couple of weeks. The number of Covid-19 cases are certainly go to rise, there will be school and workplace closures, etc. Travel and tourism will certainly be impacted. That said, we should be on the watch for similar comments by other Fed speakers. I think such comments would be injudicious given the evolving situation.
Third, a refinancing boom is underway, also via Bloomberg:
A drop in interest rates in response to the coronavirus outbreak is adding urgency to a hiring spree across the mortgage industry.
Executives at four of the nation’s 15 biggest mortgage lenders, already gearing up for a busy 2020, anticipate hiring thousands of employees this year to keep up with what they expect to be a flood of demand for purchase loans and refinancings.
Refinancing will help support consumption and lower rates will support the housing market in general. A bit of economic good news amongst the gloom.