Gapping up
In reaction to strong earnings/guidance:
- PRGS +24.2%, SAIC +11.6%, BB +6.5%, KMX +4.3%, BGCP +2.1%, HYRE +0.8%
Other news:
- GLPG +14.4% (Galapagos NV and Gilead announce that filgotinib met primary and key secondary endpoints in the Phase 3 FINCH 1 study)
- EXP +7.7% (Sachem affirms 8.9% active stake; intends to engage in discussions with management, board, and other stockholders )
- SGMO +4.9% (presents new preclinical data demonstrating significant (>80%) reduction of tau expression in the nonhuman primate brain following administration of zinc finger protein transcription factors)
- AXGT +3.6% (provides updates and plans regarding AXO-AAV-GM2 and AXO-Lenti-PD programs)
- GILD +2.8% (Galapagos NV and Gilead announce that filgotinib met primary and key secondary endpoints in the Phase 3 FINCH 1 study)
- REV +2.4% (files previously delayed 10-K and discloses material weakness in the internal control over financial reporting)
- WFC +2.1% (announces retirement of CEO Timothy J. Sloan, effective June 30; appoints C. Allen Parker as Interim CEO, effective immediately)
- ALGN +1.7% (Align Tech to receive $35 mln from Straumann to settle ClearCorrect patent disputes and signs letter of intent for Straumann to distribute iTero scanners), AMRN +1.7% (submits sNDA to FDA seeking new indication for Vascepa to reduce the risk of major adverse cardiovascular events)
- MS +0.9% (confirms President Colm Kelleher plans to retire effective June 30, 2019)
Analyst comments:
- TGTX +6% (initiated with an Overweight at Cantor Fitzgerald)
- VKTX +4.2% (upgraded to Outperform from Mkt Perform at SVB Leerink)
- APLS +1.9% (initiated with Outperform at Robert W. Baird)
Early premarket gappersGapping up:
- PRGS +25.3%, GLPG +13.7%, SAIC +10.1%, EXP +7.7%, GILD +2.6%, REV +2.4%, BGCP +2.1%, APLS +1.9%, WFC +1.8%, ALGN +1.7%, MS +1.3%
Gapping down:
- SGH -16.3%, RH -16%, CHMA -13.4%, OXM -10.6%, AZN -5%, SBS -4%, DWDP -2.2%, HYRE -1.8%, DVAX -1.3%, LULU -0.9%
French business schools seek out new investors
As public sector funding is cut, the country’s schools are turning entrepreneurial
Some of France’s most prestigious business schools are in need of new money.
Those institutions funded by the state, including many of the country’s prestigious grandes écoles, have been doubly hit by successive cuts in funding from the French Chambers of Commerce and Industry (CCI) and the local taxe d’apprentissage, or apprenticeship tax.
The CCI Paris Ile-de-France, which provides ESCP Europe, Essec Business School and HEC with €10m each a year, last year revealed plans that could see the total elimination of this financial support over the next three years.
This represents a net loss of about 10 per cent of these schools’ total funding pot, according to Hamid Bouchikhi, professor of management and entrepreneurship and co-chair of the management department at Essec.
But what particularly concerns Mr Bouchikhi, other faculty and some of their students, is a plan by the Paris CCI to open a new avenue for funding from private investors by creating a holding company to manage its shareholdings in these institutions.
There are plenty of highly ranked, privately owned business schools in France, most notably the country’s top institution Insead.
The Paris CCI’s plan would create an entity valued at €2bn. More significantly, it would open the capital fund for schools to private investors, which Mr Bouchikhi claims will have interests in conflict with those of academia.
“The business model of the top management schools is not compatible with the standards of profitability of private investors,” he says. “Private investors will be tempted to sacrifice academic research and some lessons for budgetary reasons.”
Students are concerned too, mainly about the damage that could be done to the reputation of their alma maters.
“I don’t want to study at the Coca-Cola Business School,” Benoit de Angelis, a fourth year masters in management degree student at Essec, says.
The Paris CCI’s proposals would mean that these institutions would become private sector companies but with one shareholder, the CCI itself. However, it would be an unusual kind of privatisation: unlike in other countries, the chambers of commerce are not an association of local businesses but a public sector body.
“The funding of management schools is not only the problem of chambers of commerce and other stakeholders in these schools, it is a matter of national interest,” Mr Bouchikhi says.
“Instead of transforming our management schools into companies, we need to consider them as academic institutions that combine professionalisation and intellectual training and make France shine.”
Vincenzo Vinzi, dean and president of Essec, defends the changes, noting that as a non-profit organisation his school will be reinvesting any surplus made from commercial activities to improve teaching.
“Deans and presidents of business schools in France now have a dual role,” he says. “As presidents, they need to be business leaders. They also need to be entrepreneurs and build new profit centres.”
Essec now has a business unit offering custom programmes developed in partnership with companies to meet their training needs. This unit “is a token of our will to go after new revenue streams,” Mr Vinzi says.
Investors offer a good opportunity for French business schools to start “practising what they preach” to students, Mr Vinzi adds. But Frédéric Fréry, management professor at ESCP Europe, is concerned that the involvement of investors could have negative effects on core business school activities.
By definition, these investors are looking for profitability, he says, which could mean scrapping “costly activities”, such as research, in favour of profitable ones, such as corporate training.
He describes the involvement of private investors as “dangerous” to the proper functioning of French business schools, which risks undermining their global standing.
Funding is a challenge for business schools worldwide, says Vincent Mangematin, dean and chief academic officer at Kedge Business School. This Grande École, founded in Bordeaux in 1874, is managed and financed by the Bordeaux Chamber of Commerce.
“Privately held business schools worldwide have been developing high quality standards [and] it could be the same in France.”
The challenge is not a question of investors, but a question of governance, according to Mr Mangematin. “To successfully evolve, the French business schools need the academic body as engaged as possible,” he says. “They are the actors of the transformation and of the differentiation.”
Back at Essec, Mr de Angelis admits that something needs to be done to put leading French institutions on a firm financial footing. “Don’t get me wrong, I enjoy the co-operation between firms and business schools,” he says.
“But I don’t want this co-operation to become a hierarchical relationship. I don’t think PE actors, or firms for that matter, can ensure the independence of the teaching, let it be for financial or ideological or practical reasons.”
The best way for a business school to find funds is through a foundation, according to Mr de Angelis, funded by alumni like himself. But he admits that this will take time — and French business schools are not yet prepared.
Huawei’s profit soars despite battle with US
Chinese telecom group weathers criticism from Washington with strong overseas growth
Huawei Technologies on Friday reported record profits and strong overseas growth for 2018 despite mounting pressure from the US for countries to ditch the Chinese telecoms company from their 5G networks.
The Shenzhen-based group said its calendar-year net profit rose 25 per cent last year compared with 2017 to Rmb59.3bn ($8.8bn). Revenues rose 19.5 per cent to a record Rmb721.2bn, buoyed by a 45 per cent jump in sales for its smartphone unit.
The company said while 52 per cent of its sales are still in China, revenue grew more than 20 per cent in the Americas as well as in Europe, the Middle East and Africa. Asia-Pacific growth was 15 per cent.
Huawei, which is privately owned, is under rising international pressure from the US and other countries concerned that its equipment could be used for spying by the Chinese government.
Meng Wanzhou, Huawei’s chief financial officer and the daughter of the company’s founder, was arrested in Canada on a US extradition request that she face charges related to breaching Iran sanctions.
“The US government has a loser’s attitude,” said rotating chairman Guo Ping. “They want to smear Huawei because they can’t compete with us.” He added that “the US has abandoned all table manners”.
Responding to the mounting international criticism of the company, Mr Guo said that external pressure had helped Huawei improve.
“[The US’s] actions have troubled us to some extent,” said Mr Guo. “We have more communication work to be done. You can see some of the results of this. Countries have made their own decisions based on their own interests, not the interests of the US.”
The company forecasts double-digit growth in revenues this year.
Huawei is the world’s biggest telecoms equipment manufacturer, with 28 per cent of the market, according to research company Dell’Oro, far ahead of its European competitors Ericsson and Nokia.
But despite scoring the most 5G contracts in the world, with more than 30, sales for the carrier division in 2018 were slightly down 1.3 per cent at Rmb294bn. Mr Guo ascribed the decrease to operators’ investment cycles, and said it was within the company’s expectations.
“The carrier business has been slowing, but as the roll-out of 5G begins in earnest this year, growth should accelerate,” said Dan Wang, a technology analyst at Gavekal Dragonomics, a consultancy.
“There’s a risk that pressure from the US can hurt Huawei’s business,” Mr Wang added. “Huawei will have a hard time if the US decides to limit the export of US technologies to the company.”
Last year, Huawei overtook Apple for the first time to become the world’s second-biggest smartphone vendor. The company was one of the first to launch a foldable smartphone this year.
While its handsets sell for 30-50 per cent of Apple’s prices, analysts say it has been quick to innovate. “Huawei smartphones are differentiated from other Chinese phones, they have their own chips after all, and stronger design,” said Fei Mu, analyst at market research company Forrester. “They also found a good niche targeting business people who can pay higher prices.”
On Thursday, a British watchdog harshly criticised Huawei for failing to improve on cyber security, saying that it could only give “limited assurance” that risks to the UK’s national security could be sufficiently mitigated.
Mr Guo responded: “The report has shown we have no backdoors. In fact we have opened the front door and provided our source code for testing.”
He was referring to allegations Huawei’s technology could contain hidden access points that would allow the Chinese government to view and control data.
DAX:
- Covestro (1COV TH) +0.8%
- Daimler (DAI TH) +0.8%
- Deutsche Post (DPW TH) +0.8%
- EON (EOAN TH) +0.7%
- Deutsche Bank (DBK TH) +0.7%
- Deutsche Bank Merger Seen Threatened by Mounting Opposition (1)
- Bayer (BAYN TH) +0.4%
- Roundup Is Losing in Court But Farms Aren’t About to Give It Up
- Allianz (ALV TH) +0.3%
- Pimco, Other PG&E Creditors Said to Pitch $35 Billion Plan (2)
- Siemens (SIE TH) +0.2%
- Wirecard (WDI TH) -1.4%
- Deutsche Telekom (DTE TH) -4.5%
- UBS Banker Spied on Eurostar Neighbor to Crack $15 Billion Deal
MDAX:
- K+S (SDF TH) +2.1%
- Nemetschek (NEM TH) +1.1%
- Nemetschek 2019 Revenue Forecast 1.0% Above Estimates
- Commerzbank (CBK TH) +1.1%
- Deutsche Bank Merger Seen Threatened by Mounting Opposition (1)
- ProSieben (PSM TH) +0.9%
- Telefonica Deutschland (O2D TH) +0.7%
- Evotec (EVT TH) +0.7%
- Hochtief (HOT TH) +0.5%
- Deutsche PBB (PBB TH) +0.4%
- 1&1 Drillisch (DRI TH) -0.3%
- Carl Zeiss Meditec (AFX TH) -3.7%
SDAX:
- RIB Software (RIB TH) +4.8%
- RIB Software 2019 Revenue Forecast Beats Highest Estimate
- Steinhoff (SNH TH) +1.6%
- Steinhoff’s Unitrans Is Said to Be Worth Up to $280 Million (1)
- SMA Solar (S92 TH) +1.5%
- Aixtron (AIXA TH) +1.2%
- Rhoen Klinikum (RHK TH) +0.9%
- Rhoen-Klinikum Still Sees 2019 Ebitda of EU117.5m to EU127.5m
- Schaeffler (SHA TH) +0.3%
- DWS (DWS TH) +0.2%
- Deutz (DEZ TH) +0.1%
- Wacker Neuson (WAC TH) +0.1%
- Nordex (NDX1 TH) -0.9%