TheChek News Flow

Norway’s $1.1tn oil fund recorded the third best quarter in its 23-year history as the world’s largest sovereign wealth investor rebounded from a difficult end to last year.

The oil fund returned 9.1 per cent in the first quarter — behind the second and third quarters of 2009 — while in krone terms it was the investor’s largest ever increase with NKr738bn ($84bn).

Apple, Microsoft and Amazon made the biggest positive contributions to the fund’s equity performance with technology companies the best performing sector. Equities, which the fund is boosting to 70 per cent of its portfolio, returned 12.2 per cent.

The strong return in the quarter made up for the final three months of 2018 when the fund posted its largest ever drop in krone terms, leading Norwegian officials to warn of the possibilities of big swings in the fund’s value, which is used to finance large parts of the country’s annual budget.

“This is the fund’s best quarterly return measured in kroner ever,” said Yngve Slyngstad, the fund’s chief executive. “As a major equity investor, we must be prepared for large fluctuations in the fund’s market value in line with developments in global stock markets.”

Holiday Inn owner nonetheless adds 12,000 rooms in first quarter in expansion drive

InterContinetal Hotel Group the owner of Holiday Inn and Kimpton hotels, reported a first-quarter slowdown in hotel occupancy rates, especially in the US, but has stayed on track with its aggressive expansion drive.

The FTSE 100 company said in an update on Friday that it had added 12,000 rooms to its portfolio in the three months to March and had another 24,000 in the pipeline.

Like-for-like group revenue per available room, or revpar — the industry’s favoured performance measure — meanwhile was up 0.3 per cent, compared with an increase of 3.5 per cent for the same three months last year. Occupancy rates were down 0.2 per cent.

Industry analysts have been warning of a slowdown in IHG’s core US market for some time. Analysts at Morgan Stanley said in February that they expected overall US revpar to slow from an annual 3 per cent growth rate between 2016 and 2018 to 1.4 per cent this year “driven by a more challenging corporate demand environment”.

Nearly two-thirds of IHG’s rooms are in the Americas with about a quarter in Europe, the Middle East and Africa and the rest in China.

To counter slowing growth in the US, IHG hopes to expand its reach in Asia and target “highest opportunity segments”. It said that it had opened 18 hotels and signed another 52 in Greater China this quarter, its highest number yet.

IHG has been investing heavily in the luxury sector. In February it bought Six Senses, a group of resorts, in a $300m cash deal, which it hopes to expand with another 60 sites over the next decade.

The investment is funded by a programme to achieve $125m of annual savings by 2020, which chief executive Keith Barr said was “going well”.

“While macroeconomic and geopolitical uncertainties remain in some markets, the strong fundamentals of our business give us confidence for the balance of the year,” Mr Barr said.

Revpar declined most in Europe, Africa and the Middle East, which the company attributed to the unrest during gilets jaunes protests in France and “tough trading conditions” in the Middle East.

Like Whitbread, which reported its full-year results on Tuesday, IHG said that revpar in London was up but that the UK regions remained flat.

From Burberry Bespoke to Gucci DIY, brands are offering customers more ways to stand out from the crowd

Tucked away off a quaint courtyard near the Louvre in Paris, designer Christian Louboutin and his team work in a secret atelier on their most special made-to-measure requests. This might be a collection of shoes for burlesque dancer Dita Von Teese’s latest revue, bridal pumps to match the fabric of the wedding dress, or even like one recent commission, a 100 per cent vegan shoe.

“Bespoke styles have always been something important to me,” Mr Louboutin told the Financial Times. “It’s a way for me to keep an intimate connection with my clients and to have direct feedback on how they perceive my work.” Last year, the designer said, bespoke requests rose by a fifth.

From Gucci’s “DIY” service, through which customers can personalise knitwear, tote bags and its Ace sneakers with letters in different colours and materials, to Burberry Bespoke which allows customers to choose the style, fabric, colour and hardware of their trenchcoat, brands are increasingly offering personalisation and customisation.

Consumers are demanding it as they seek ways to stand out from the crowd in a world where brands are in danger of becoming overexposed through social media and the mass consumption of luxury.

“The return to some degree of product personalisation in luxury is an astute way for brands to offer additional customisation services to a more discerning clientele while continuing to grow overall volumes, particularly in entry-level categories,” said Thomas Chauvet, an analyst at Citi.

Almost one in five luxury buyers said that customisation, notably made-to-measure, is relevant to them when they buy luxury products, according to a report last month by the Boston Consulting Group and Altagamma, Italy’s luxury association.

According to the report, the €330bn personal luxury market grew 5 per cent last year and is expected to reach €405bn by 2025. It said that younger generations are more willing to wait or pay extra for personalised products.

Mr Chauvet said that personalised products typically have a higher margin, “and we expect this segment to grow faster than the overall luxury market, albeit on a relatively limited sales base”.

Le Bon Marché, the LVMH-owned department store in Paris, is devoting more and more space to personalisation, “a crucial and growing area for us,” according to Patrice Wagner, its chairman and chief executive.

Customers can personalise products from more than 80 international brands, buying or bringing in clothes or shoes to be jazzed up with stones, studs and sequins, or designing a T-shirt on screen. “Customers want something original and different,” said Mr Wagner. “I don’t think it’s a passing phenomenon, it’s a trend that has substance. The consumer is becoming the designer.”

Managing the personalisation process can be a challenge, however. Olivier Salomon, a managing director at consulting firm AlixPartners said brands “need to understand this in the overall context of making and delivering the products, while making sure that it doesn’t cannibalise their existing business”.

Product personalisation is going hand in hand with personalisation of both a customer’s individual experience and their relationship with the brand. “Today with digital and data analytics, brands have the opportunity to have a personalised relationship with everyone, not just their VIP clients and biggest buyers,” said Olivier Abtan, a partner at BCG.

François-Henri Pinault, chairman and chief executive officer of Kering, said at the group’s annual meeting last month, that “we must customise the dialogue with our clients” and said that the group is expanding its use of artificial intelligence. Like other brands, Kering is increasingly using AI to personalise the customer experience and optimise targeted marketing.

Luxury e-commerce platforms like Yoox Net-a-Porter, Moda Operandi and Matchesfashion.com use tools including data analytics and AI-enabled personal stylists to make recommendations for customers based on their stated preferences, browsing and buying history, as well as based on what other people with a similar profile bought.

“Personalisation is extremely important in this business, just like with Netflix or Spotify,” said Ganesh Srivats, chief executive officer of Moda Operandi. “There are only so many people with whom an individual stylist can interact. The bridge between what humans can offer and clients are demanding is data.”

Mr Srivats added, however, that technology-driven recommendations can be “a double-edged sword” because “taken to its logical conclusion consumers would only see replicas of everything they had already liked or bought. The question is how do you add to the sense of the familiar while continually challenging the consumer.”

As so-called experiential luxury drives a new era for the industry, the boundaries of bespoke are expanding.

“Personalisation should be about a lifestyle, understanding that it’s not just about fashion but anything that has a value to your life: art, cinema, food, literature,” said Ulric Jerome, chief executive of Matchesfashion. Last year the group opened a Mayfair townhouse at 5 Carlos Place, an experiential retail and event concept that intends to connect online shopping, social media, and old-fashioned bricks and mortar.

This month Matchesfashion is launching a collaboration with Pellicano Hotels in Italy, in which a 1930s yacht will tour the Mediterranean featuring a 5 Carlos Place pop-up. The cruise will be projected across all the group’s platforms via live streams, podcasts and social channels.

“People want to travel with us and be inspired by us,” said Mr Jerome. “They want to be part of the adventure. That’s what we consider to be full personalisation.”

DAX:

MDAX:

SDAX:

 Stocks were mixed across Asia as investors turned their focus to earnings reports and the upcoming U.S. jobs data, while continuing to monitor developments in trade talks. Treasury futures steadied after yields climbed overnight and the dollar edged higher.

Shares in Hong Kong edged up after profit at HSBC Holdings Plc topped estimates. Weakness at Macquarie Group Ltd. weighed on Australia’s stock index after the bank said profit will drop slightly this year. Equities in Seoul retreated, though volumes were light across the region with markets in China and Japan still closed. Futures on the S&P 500 Index edged up after U.S. shares fell Thursday amid concern a U.S.-China trade deal remains elusive.

US After Hours WW +16%, OLED +14%, MELI +11%, MNST +8%, X +5% are higher, while SRCL -17%, ANET -15%, TDC -8.5%, FSLR / EXPE -3% are lower following earnings/guidance

Nikkei Closed Hang Seng +0.28% CSI +0.33% Shanghai +0.52% Shenzen +0.68%

Eur$ 1.1170 CNH 6.7423 CNY 6.7347 JPY 111.49 GBP 1.3036 CHF 1.0202 RUB 65.4360 TRY 5.9740 WTI$61.74 -0.11%

S&P +0.17% EuroSToxx +0.09% FTSE +0.14% CAC +0.05% Dax +0.05% SMI +0.11%

Macro :

- CFTC Chief Urges Fed to Cut Burden in Swaps Margin Requirements

- Weidmann Gets Juncker Support in Race to Head ECB: Macro Squawk

- Merkel Weighs Carbon Tax for Germany to Speed Pollution Cuts

Keep an eye on :

- ADS GY : Adidas 1Q Operating Profit Rises 17%, Beating Highest Estimate

- ADYEN NA : Adyen Holders General Atlantic, Pentavest to Offer EU750m Shrs --> offered @ 680

- AF FP : Air France-KLM 1Q Op. Loss At EU303M V. EU118M Loss Last Year

- AF FP : Air France To Launch Voluntary Staff Departure Plan: La Tribune

- AZA IM : Atlantia CEO Repeats Not Planning Alitalia Investment: Ansa

- ATC NA : Altice USA 1Q Adj. Ebitda Tops Est.; Posts Unexpected Loss

- CS FP : Axa 1Q Revenue Climbs 2.7% as Solvency Ratio Dips to 190%

- CS FP : Axa’s CFO Says Notre Dame Fire to Cost ‘Several Million Euros’

- BALTA BB : Balta Group First Quarter Organic Revenue +11.5% Vs. +1.70% Q/Q

- BAS GY : *BASF 1Q ADJ. EBIT EU1.73B, EST. EU1.67B

- BAS GY : BASF Had Weakening Demand from Key Industries; 1Q Adj Ebit Beats

- BOL SS : Boliden First Quarter Operating Profit 3.0% Above Estimates

- BRG NO : Borregaard First Quarter Net Income Beats Highest Estimate

- BPOST BB : Bpost First Quarter Adjusted Ebit Beats Estimates

- BRNL NA : Brunel First Quarter Ebit EU12.1M; Says Outlook Remains Positive

- DIE BB : Belgian April Car Registrations Drop 2%; D’Ieteren Has 22.6%

- DIC GY : DIC Asset First Quarter FFO EU17 Mln

- DNB NO : DNB First Quarter Net Interest Income Misses Lowest Estimate

- ELIS FP : Elis 1Q Rev. EU777M; Confirms FY Outlook

- EBS AV : Erste First Quarter Net Income Beats Estimates

- EQNR NO : Equinor CEO Says Dividend, Stronger Balance Sheet Are Priority

- ERICB SS : Watch Ericsson, Nokia After Arista Networks Shares Plunged

- FARN LN : Faron Pharma Says No Reason for Share Price Move

- FNTN GY : Freenet Upside Now Price In, Still Cautious on Fundamentals: UBS

- FPE GY : Fuchs 1Q Revenue Meets Estimates; Outlook Confirmed (1)

- GSK LN : Glaxo,Innoviva Trelegy Ellipta Asthma Study Met Primary Endpoint

- G24 GY : Blackstone, H&F Said to Mull Extending Scout24 Bid Amid Pushback

- GLJ GY : Grenke First Quarter Net Income EU33.6 Mln

- HEIA NA : Heineken Buys Majority Stake in Biela Ecuador; No Terms

- HSBA LN : *HSBC 1Q ADJ PRETAX $6.35B, EST. $5.69B

- ICA SS : ICA Gruppen 1Q Adjusted Operating Profit Beats Highest Est.

- IHG LN : InterContinental Hotels 1Q Comparable Hotel RevPAR +0.3%

- INTU LN : *INTU CUTS LIKE FOR LIKE NET RENTAL INCOME FORECAST TO -4 TO -6%

- LGEN LN : Blackstone Seeks up to $600M in Damages From RCS Chair: Reuters

- SIFG NA : SIF First Quarter Net Debt EU8.4 Mln

- SKB GY : Koenig & Bauer Maintains Full Year Ebit Margin About 6%

- NENTA SS : Nent Group Has Acquired Minority Stake in Picturestart in U.S.

- NXU GY : Nexus First Quarter Ebit EU3.88 Mln

- NOKIA FH : Watch Ericsson, Nokia After Arista Networks Shares Plunged

- NOFI NO : Norwegian Finans Holding 1Q Net Income 1.9% Above Est.

- NPRO NO : Norwegian Property First Quarter Pretax Profit NOK220.3 Mln

- NOVOB DC : Novo Nordisk 1Q Ebit Beats Highest Estimate; Outlook Maintained

- OMV AV : OMV Says 2019 Production Target Depends on Libya Security

- RHK GY : Rhoen Klinikum Maintains FY Ebitda EU117.5 Mln To EU127.5 Mln

- SAN FP : Alnylam Holder Sanofi Is Said to Offer Shares, Exit Position

- WAF GY : Siltronic 1Q Ebitda EU127.2m; Maintains Lower 2019 Forecasts

- GLE FP : SocGen 1Q Net Income Falls 26%; Trading Revenue Declines

- GLE FP : SocGen CEO Oudea Says ‘Clearly No’ Plans for A Rights Issue, SocGen Deputy CEO: ‘Too Early’ to Predict 2019 Trading Outlook

- SREN SW : Swiss Re 1Q ROE +5.9%; P&C Combined Ratio 110.3%

- STAN LN : StanChart Buys Back 1.34M London-Listed Shares May 2

- TATE LN : said to have attracted takeover interest from Roquette Freres; speculation downplayed - reported rumour

- TEN IM : Tenaris First Quarter Net Sales Miss Lowest Estimate

- TCG LN : Thomas Cook Bonds Plunge as Lenders Are Said to Exit at Loss (2)

- TGS NO : TGS to Buy Spectrum in All Share Transaction

- UBSG SW : UBS Doesn’t Expect Wave of Lawsuits, Chairman Weber Tells NZZ

- UPONOR FH : Uponor 1Q Net Sales, EPS Miss Lowest Estimate; Guidance Is Kept

* Catena Upgraded to Buy at Kempen & Co; PT 270 Kronor

* Duerr Upgraded to Buy at Commerzbank; PT 49 Euros

* Hugo Boss Upgraded to Neutral at Goldman; PT 64 Euros

* Indivior Upgraded to Hold at Stifel; PT 44 Pence

* Kesko Upgraded to Hold at Handelsbanken; PT 48 Euros

* Logitech Upgraded to Buy at Kepler Cheuvreux; PT 45.50 Francs

* Wacker Chemie Upgraded to Neutral at JPMorgan; PT 78 Euros

* Zalando Upgraded to Hold at SocGen; PT 43 Euros

>>> Down

* Big Yellow Group Cut to Sell at Kempen & Co; PT 9.60 Pounds

* Cramo Downgraded to Reduce at Inderes; PT 19 Euros

* Freenet Downgraded to Sell at UBS; PT 16 Euros

* Geberit Downgraded to Neutral at MainFirst; PT 470 Francs

* Kion Downgraded to Hold at Jefferies; PT 63 Euros

* Lancashire Downgraded to Hold at HSBC; PT 6.96 Pounds

* Outokumpu Downgraded to Hold at SEB Equities; PT 3.10 Euros

* Siemens Healthineers Downgraded to Neutral at Citi

* VIB Vermoegen Cut to Hold at SRC Research; Price Target 26 Euros

* Workspace Cut to Neutral at Kempen & Co; Price Target 10 Pounds

>>> Initiation

* Cyan Rated New Buy at Berenberg; PT 41 Euros

* GB Group Rated New Hold at Panmure Gordon; PT 5.74 Pounds

* Ideagen Rated New Buy at Panmure Gordon; PT 1.65 Pounds

* IQE Rated New Buy at Panmure Gordon; PT 1.20 Pounds

* John Laing Group Rated New Outperform at Macquarie

* Kainos Rated New Hold at Panmure Gordon; PT 5.30 Pounds

* Learning Tech Rated New Buy at Panmure Gordon; PT 1.10 Pounds

* Network International Holdings Rated New Buy at Berenberg

* Nordic Entertainment Group New Equal-weight at Morgan Stanley

* SIG Combibloc Group Rated New Hold at Bank Vontobel

>>> Call

* Freenet Upside Now Price In, Still Cautious on Fundamentals: UBS