>>> What to look at today - 14th of May 2019

The global stock slide continued in Asia Tuesday, though with signs of some moderation as investors retained bets that the U.S. and China will ultimately reach a trade deal. The yen dropped and the yuan rose.
While the S&P 500 Index slumped 2.4% Monday in the wake of China’s retaliation on American goods, Japan’s Topix index trimmed a slide of much as 2.1% Tuesday, and South Korea’s Kospi reversed declines. Chinese shares had modest losses. Hong Kong equities fell more than 1% as the market re-opened after a holiday. The offshore yuan clawed back some of Monday’s slump, as did S&P 500 futures, after President Donald Trump said he has a feeling that talks with China will be “very successful.” Ten-year Treasury yields hovered near the lowest level since late March.
US After Hours IMMR +14%, LMNR -7%, TME -6% among earnings/guidance movers

Nikkei -0.70% Hang Seng -1.52% CSI -0.05% Shanghai -0.23% Shenzen -0.20%

Eur$ 1.1238 CNH 6.8995 CNY 6,8754 JPY 109.63 GBP 1.2961 CHF 1.0066 RUB 65.3550 TRY 6.1012 WTI $ 61.10

S&P +0.53% EuroStoxx +0.55% FTSE +0.16% Dax +0.39% SMI +0.56%

Macro :
- Trump Warns China Against ‘Substantial’ Retaliation in Trade War
- Japan's Abe Says North Korea Missile Tests Broke UN Resolutions
- China May Release More Retaliatory Trade Measures: Global Times

Keep an eye on :
- ADEB NO : Adevinta First Quarter Net Income EU22.5 Mln
- ALV GY : Allianz 1Q Op Profit Beats Highest Est.; Maintains Views
- AUSS NO : Austevoll Seafood First Quarter Ebit Misses Estimates
- BAYN GY : Bayer Jury Awards $2 Billion Damages in Third Roundup Trial
- BAYN GY : *BAYER WILL APPEAL $2 BILLION ROUNDUP VERDICT IN CALIFORNIA
- B5A GY : Bauer 1Q Ebit Falls 5% as Revenues Rise; Forecast Confirmed
- BG AV : Bawag 1Q Profit Rises More Than Expected on Lower Risk Costs
- BEI GY : Beiersdorf Buys Coppertone From Bayer for $550m
- BMW GY : Maserati to Use BMW Self-Driving Technology, Fiat Chairman Says
- CPR IM : Campari Says 6.9m Employees’ Shares to Be Sold in Block Trade
- CUR GY : Medical Supplier Curasan Plans Restructuring
- DBV FP : DBV Says Deputy CEO Schilansky to Leave in August
- DUFN SW : Dufry 1Q Revenue Beats Highest Estimate; Loss CHF109.5 Million
- DWNI GY : Deutsche Wohnen First Quarter FFO I EU144.2 Mln
- EDF FP : EDF First Quarter Revenue EU20.97 Bln
- EDP PL : EDP Sells Portuguese 2019 Tariff Deficit for EU609m
- EPICME NO : Epic Gas Offering Prices 36.1m Shares at $1.66/Share
- EVT GY : Evotec 1Q Adj. Ebitda Beats Highest Estimate; Confirms Views
- FB US : Joe Biden Says He Would Be Open to Facebook Breakup: AP
- FB US : WhatsApp Voice Calls Used to Inject Israeli Spyware: FT
- FRA GY : Fraport April Frankfurt Airport Passengers +5.1%
- GETIB SS : Getinge CEO Sees Underlying Market Growth Staying Healthy: DI
- GMM GY : Grammer Maintains Full Year Rev. Forecast; ’19 EBIT to rise
- HFG GY : Rocket Internet to Place Complete Hellofresh Stake
- HOFI SS : Hoist Finance First Quarter Pretax Profit SEK226 Mln
- INH GY : Indus Holding First Quarter Revenue EU437.6 Mln
- IGY GY : Innogy 1Q Adj. Ebit Falls 22%, Confirms Outlook, Innogy Confirms 2019 Outlook of Adj. EBIT of EU2.3 Billion
- I US : Intelsat Rallies as Senators Urge Fast Action on 5G Spectrum (1)
- IPN FP : Ipsen Targets 2022 Group Net Sales of Around EU3.2b
- SDF GY : K+S Earnings Beat Estimates as CEO Hails ‘Great Momentum’
- LXS GY : Lanxess FY Adjusted Ebitda View Midpoint Meets Est.
- LSG NO : Leroy First Quarter Adjusted Ebit Misses Estimates
- M5Z GY : Manz Maintains Full Year Revenue +10% To +14%
- MAS SM : Masmovil Mulls Entering Portuguese Market, EL Economista Says
- MDG1 GY : Medigene Boosts Full Year Revenue Forecast
- MRK GY : Merck KGaA 1Q Adj. Ebitda Misses; 2019 Guidance Above Estimates
- MRL SM : Merlin First Quarter Adjusted Ebitda Beats Highest Estimate
- MER LN : PrimeStone Urges Board Changes at Mears, Has 2 Candidates
- NHH SM : NH Hotel First Quarter Loss EU17.3 Mln
- NDX1 GY : Nordex 1Q Sales EU398.9M, Est. EU431.3M; Confirms 2019 Guidance
- NDX1 GY : Nordex Wins Order for 74 Wind Turbines in U.S.
- OHL SM : OHL First Quarter Loss EU7.7 Mln
- PIRC IM : Pirelli to Reorganize Brazil, Invest EU120m Through 2021
- PRY IM : Prysmian Confirms 2019 Adj. Ebitda Guidance as Rev. Beats Est.
- PRY IM : Prysmian CEO Confirms Western Link Repair Works by End of May
- RNO FP : Nissan Is Said to Mull Buying Stake in Chinese Electric Carmaker
- RUI FP : Rubis First Quarter Revenue EU1.16 Bln
- SESG FP :U.S. senators urged regulators to “act quickly” to make airwaves used by the firm and rival Intelsat available for 5G communication.
- G24 GY : Scout24 First Quarter Revenue Beats Highest Estimate
- SIE GY : Siemens Portfolio Changes May Become Valuation Catalysts: Citi
- SON PL : Sonae Chairman Paulo Azevedo Says Business Is ’Going Well’
- SAX GY : Stroeer 1Q Sales Rise 14%, Adj. Ebitda Up 9%
- TKA GY : Thyssenkrupp 2Q Adj. Ebitda Falls 29%
- TTI GY : Tom Tailor Says Syndicate Banks and Fosun Continue Negotiations
- VIV FP : Macron Creates EU225M Fund to Support French Cultural Companies
- VON GY : Vonovia Offering Expected to Price at EU45.10 Per Share: Terms
- VOW3 GY : Volkswagen Revives Traton Truck Unit IPO Plan
- VOW3 GY : *VW SUPERVISORY BOARD APPROVES PLAN TO PRODUCE BATTERY CELLS
- WPP LN : Roland Rudd Approached WPP About Finsbury Buyout, FT Reports

>>> US After Hours Summary: IMMR +14%, LMNR -7%, TME -6% among ear

After Hours Summary: IMMR +14%, LMNR -7%, TME -6% among earnings/guidance movers

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: IMMR +14.4% (also entered into settlement and license agreement with Samsung), STNE +5.1%

Companies trading higher in after hours in reaction to news: WETF +2% (light volume; CEO bought 75K shares), AES +1.7% (10% owner ValueAct bought ~2.5 mln shares), PAGS +1.4% (STNE sympathy), CTL +1% (Director Steven Clontz bought 37K shares worth ~$400K)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SLDB -9%, LMNR -7%, TME -5.8%, TTWO -2%

Companies trading lower in after hours in reaction to news: SRNE -0.8% (subsidiary Scilex reported net sales of ZTlido for the quarter ended March 31, 2019 were ~$2.8 mln), MMLP -0.8% (ticking lower; reports service disruption and structure damage at Neches Terminal in Texas)

>>> Europe : Brokers Upgrades & Downgrades - 14t of May 2019

>>> Up
* Acerinox Upgraded to Neutral at JPMorgan; PT 9.30 Euros
* AMS Upgraded to Add at AlphaValue
* Elia Upgraded to Buy at Citi; PT Set to 70 Euros
* FirstGroup Upgraded to Outperform at RBC; PT 1.60 Pounds
* Marimekko Upgraded to Reduce at Inderes; Price Target 22 Euros
* Mobilezone Upgraded to Outperform at MainFirst; PT 12 Francs
* Telefonica Upgraded to Buy at DZ Bank; PT 8.30 Euros
* Terna Upgraded to Neutral at Citi; PT Set to 5.30 Euros
* Vestas Upgraded to Buy at NYKREDIT; PT 630 Kroner
* Vifor Pharma Upgraded to Hold at Kepler Cheuvreux; PT 133 Francs
* Zurich Airport Upgraded to Buy at Goldman; PT 194 Francs

>>> Down
* Enagas Downgraded to Sell at Citi; PT Set to 21.60 Euros
* Hypoport Downgraded to Hold at Commerzbank
* SpareBank 1 SMN Downgraded to Hold at ABG; PT 97 Kroner

>>> Initiation
* Fresnillo Rated New Hold at Panmure Gordon; PT 8.11 Pounds
* G4S Reinstated at Morgan Stanley With Equal-weight; PT 2 Pounds
* Nova Re SIIQ Rated New Buy at Integrae SIM; PT 6.61 Euros
* Poxel Rated New Buy at Bank Degroof Petercam; PT 20 Euros
* Scapa Group Rated New Buy at Jefferies; PT 4.50 Pounds

>>> Call
* Scapa Track Record, Positioning Justify Buy Rating: Jefferies

FT : Iran’s metals trade funds weapons development Without new US sanctions, the

Iran’s metals trade funds weapons development
Without new US sanctions, the country’s steel export revenues will increase significantly

The US is determined to choke off external funding to Iran because we want to prevent it from financing missile development, fomenting regional conflicts and funding terrorist networks.

Much of Iran’s money comes from metal exports, including $4.2bn from the sale of steel — a 53 per cent increase from 2017 — and a further $917m from copper and its downstream products. The country is on schedule to become a net exporter of aluminium by the end of the year.

That is why US President Donald Trump signed a tough new executive order last week, extending existing sanctions to include Iranian aluminium, copper, iron and steel. Without such sanctions, Iran’s steel export revenues will increase significantly.

As part of its ambitious 2025 Vision Plan, Iran seeks to become the world’s sixth-largest steelmaker as capacity is projected to almost double, from 31m metric tonnes in 2017 to 55m by 2025.

Iran also has three greenfield primary aluminium smelters either under construction or recently completed. The Salco smelter in Asaluyeh is the largest. It is due to come online this year and will add nearly 300,000 tonnes of production. The project includes a deepwater port located near the facility in southern Iran — an indication that the smelter will export the majority of the aluminium it produces.

Most, if not all, of Iran’s export revenues from the metals trade flow right into government coffers. The country’s top three steel producers are all state-owned and account for more than 50 per cent of production. An emerging aluminium industry is entirely state-owned, growing rapidly and was projected to be a net exporter this year.

Iran’s top steel export markets currently include Indonesia, Thailand, Iraq, Turkey, Oman, the United Arab Emirates, Taiwan and Egypt. The new sanctions should turn the flow of Iranian metals to these markets into a trickle as America’s partners and allies respond to the higher risks of sourcing materials from Iran and seek out more reliable, alternative sources of supply that do not fund terror with the proceeds.

The proposed sanctions should curtail any attempts by Iran to “trans-ship” steel and other metals into the US through third-party countries — a scheme that undermines the pre-existing steel and aluminium tariffs the president has imposed for national security reasons.

These new sanctions will also send a clear signal that China may pay a heavy price if it continues to support rogue regimes, including Iran. Historically, China has provided Iranian steel producers with much of the investment, equipment and strategic advice necessary to expand its industry.

To take just one recent example, the state-owned Chinese Metallurgical Group Corporation intends to finance a significant share of Iran’s steel capacity expansion.

A similar situation exists with aluminium. The aforementioned $1.2bn Salco-Asalouyeh smelting facility was funded by the state-managed Chinese Nonferrous Metal Industry’s Foreign Engineering and Construction Company. The country is also in talks to build a 2m-tonne alumina refinery to support the sector’s expansion.

Here’s the bottom line: the Trump administration’s latest sanctions on Iran’s metals exports will help to further constrict the ability of Iran to develop missiles, spread radical Islam and mayhem in the region and support terrorist networks.

The countries and companies that are currently helping to finance Iran’s rogue behaviour through the metals trade have been put on notice that the price of such trade has just become a lot steeper. As buyers, they should beware that there will be zero tolerance for violations of Iranian sanctions in future.

FT : Poland cancels Israeli visit over property restitution

Poland cancels Israeli visit over property restitution
Dispute centres around Jewish buildings seized in Holocaust

Poland has cancelled a visit from an Israeli delegation amid a smouldering dispute over the restitution of Jewish property seized during and after the Holocaust.

Avi Cohen-Scali, from Israel’s social equality ministry, had been due to hold meetings in Poland on Monday. However, Poland’s foreign ministry said the visit had been cancelled after Israel changed the composition of its delegation at the last moment, “which could suggest that the talks were meant to focus on property restitution”.

Restitution is a highly emotive theme in Poland, which was home to Europe’s biggest Jewish population until it was all but obliterated by Nazi Germany during the second world war. Redress has emerged as a prominent issue in the final stretch of campaigning in Poland for this month’s European parliamentary elections.

At the heart of the fight is a US law passed last year, known as the “Just Act”, which requires the State Department to report on what various countries have done to return or provide compensation for “wrongfully seized or transferred Holocaust era assets”.

Polish nationalists have attacked the law, which they fear is aimed at pressuring Warsaw into paying compensation. Poland suffered huge losses after it was invaded by Germany and the government is vehemently opposed to paying out any money. On Saturday, thousands of nationalists marched through central Warsaw in protest against the US law.

The stand-off over restitution is the latest in a series of disputes between Poland and Israel over history. In February, Mateusz Morawiecki, Poland’s prime minister, cancelled a trip to Israel following spat about the Holocaust. And last year, the two countries were embroiled in a bitter fight over a Polish law that — until it was amended — introduced jail sentences for people found guilty of accusing the Polish nation or state of complicity in crimes committed by Nazi Germany.

Georgette Mosbacher, the US ambassador to Poland, on Monday sought to defuse the latest row, saying the Just Act does “not impose any financial or legal burdens. It’s just a one-off report for the US Congress, which is intended to analyse the progress of countries within the field of restitution,” she wrote on Twitter.

However, Poland’s decision to cancel the visit drew a sharp response from Israeli politicians. “After the Holocaust law, now the rightful return of property to the families of murdered Jews is off the table,” Yair Lapid, from the centrist Yesh Atid party, wrote on Twitter.

“The Polish government is using and abusing the memory of the Holocaust. It is Israel’s moral obligation to make its voice heard. The government has to take a stand and say enough.”

Wary of being outflanked from the right, Poland’s ruling Law and Justice party has stepped up its rhetoric against the US law in recent weeks. Both the party’s founder, Jaroslaw Kaczynski, and Mr Morawiecki, have ruled out Poland paying compensation.

One of Mr Morawiecki’s top aides said on Monday that Warsaw would unveil proposals this week that would protect Poland from paying war compensation.

FT : SEC gives green light to first ‘negative fee’ fund Latest stage in a feroci

SEC gives green light to first ‘negative fee’ fund
Latest stage in a ferocious fee war waging among asset managers

The first investment fund that pays customers who commit their money has been given the green light by the Securities and Exchange Commission, the US markets regulator.

The arrival of so-called ‘negative fees’ is the latest stage in the ferocious fee war waging among asset managers. It is a sign of the difficulties for new players trying to break into a market that is dominated by a handful of large index fund managers that have the economies of scale to offer ever-cheaper funds.

Salt Financial, a New York boutique manager, has introduced a new charging structure for its recently launched Salt Low truBeta US Market ETF after receiving regulatory approval late last week. The structure applies a 34 basis-point fee waiver to the fund’s 29bp management charge.

The result is that the fund will have a negative fee of 5bp, meaning customers will receive $5 for every $10,000 they invest.

The structure will be in place until the fund reaches $100m of assets — seen as a crucial size for a new ETF to reach.

Last week, before the company had received regulatory approval, Salt’s president and chief operating officer Alfred Eskandar told FTfm the company had devised the fee structure after struggling to attract assets to its first ETF, which it launched last year.

“David needed a slingshot to take down Goliath — we need a negative fee model to force our way into this anti-competitive market,” he said.

Asset managers gave up more than $3.5bn in income through fee cuts last year — and nearly $16bn since 2014 — according to Flowspring, a fund management research company. It found that products with expense ratios below 5bp grew 20 times faster than those above 20bp over the past five years.

Fund giants including BlackRock, Vanguard, JPMorgan Asset Management, Fidelity Investments and Charles Schwab have been especially aggressive fee-slashers.