Asian stocks tumbled Friday on worries the U.S. and China won’t reach a trade deal before another round of tariff hikes are set to kick in. Bonds climbed across the region and Treasuries ticked higher.
Japanese shares led declines in Asia, and Hong Kong stocks slumped as trading resumed after a three-day holiday. U.S. futures dropped after the S&P 500 sank following news that President Donald Trump is unlikely to meet Chinese President Xi Jinping before the March 1 deadline for more tariffs. The Australian dollar sank after the central bank slashed its economic outlook and New Zealand’s benchmark yield dropped to a record low. China’s markets remain shut for Lunar New Year.
US After Hours MAT +18%, SKX +17%, EXPE +7%, MHK +6% are higher, while VCRA -21%, QNST -14%, TDC -4%, QRVO -3% are lower following earnings/guidance
Nikkei -2.01% Hang Seng -0.09% CSI Closed Shanghai Closed Shenzen Closed
Eur$ 1.1339 CNH 6.7847 CNY 6.7457 JPY 109.78 GBP 1.2950 CHF 1.0017 RUB 66.0767 TRY 5.2679 WTI$ 52.29 -0.66%
S&P -0.34% EuroStoxx -0.13% FTSE -0.03% CaC +0.31% Dax -0.24% SMI -0.16%
Macro :
- Brexit Deadlock Continues as EU Rebuffs May’s Demands
- Hedge Funds Post Gain in January as Stock Rally Rewards Managers
Keep an eye on :
- AF FP : Air France-KLM Group January Passenger Traffic Rises 2.3%
- AV/ LN : Aviva May Miss Its Own Deadline For New CEO: Sky
- AST IM : Japan’s IHI May Have Withdrawn Interest in Italy’s Astaldi: Sole
- BPE IM : BPER Buys Unipol Banca for $250 Million to Grow in Central Italy
- BSLN SW : Basilea Gets $5m Milestone Payment From Pfizer for Cresemba
- CGCBV FH : Cargotec Full Year Dividend Per Share Beats Estimates
- CEC GY : Ceconomy 1Q Profit Falls on Costs to Replace Managers
- COFB BB : Cofinimmo Full Year Adjusted EPS Forecast Misses Estimates
- CBK GY : Germany Seeks Decision on Deutsche, Commerzbank By End-May: WiWo
- DBK GY : Germany Seeks Decision on Deutsche, Commerzbank By End-May: WiWo
- DB1 GY : Deutsche Boerse Had ‘Really Good Year’ in 2018, CEO Weimer Says
- DIA SM : Lack of Information on DIA’s Offer is Credit Negative: Moody’s
- DIC GY : DIC Asset Full Year Dividend Per Share Matches Estimates
- EDF FP : Macron Says France to Decide on EPR Reactors Around 2022: Rtrs
- FLOW NA : Flow Traders 4Q Net Trading Income 2.8% Above Est.
- GRF SM : Grifols Gets FDA Approval for Procleix Babesia Assay
- RMS FP : Hermes 4Q Rev. Rises 9.6% at Constant Exchange Rates
- KEMIRA FH : Kemira Full Year Dividend Per Share Misses Estimates
- LEO GY : Leoni Sees Full Year Revenue EU5.2 Bln, Leoni Suspends Dividend as Earnings Decline More Than Thought
- MOBN SW : Mobimo Full Year Dividend Per Share Matches Estimates
- OR FP : L’Oreal 4Q Like-For-Like Sales Beats Estimates on China Demand
- OTE1V FH : Outotec Makes EU110 Mln Provision on Ilmenite Smelter Project
- RNO FP : Renault Executive Urges Korea Unit Union to Stop Strikes: Daily
- RUI FP : Rubis Full Year Revenue Meets Estimates
- SKAB SS : Skanska Cuts Outlook for Swedish Residential Development Market
- GLE FP : Gundlach Says SocGen’s Oudea Has ‘No Idea What He Is Doing’
- SRCG SW : Swiss Government Awards Mobile Radio Frequencies for 5G
- TKTT FP : Tarkett FY Adj. Ebitda Slumps 21% on Raw Materials, Misses Est.
- UMI BB : Umicore Full Year Capital Expenditure Misses Lowest Estimate
- UNI IM : Unipol to Sell Unipol Banca to BPER for EU220m; Buy NPLs
- US IM : UnipolSai Full Year Net Income 1.3% Below Estimates
- VIV FP : Vivendi Wrote to Telecom Italia Board on Rothschild: Telegraph
- VOLVB SS : Volvo Cars in Talks With Investors to Finance Polestar: Rtrs
- WHA NA : Wereldhave Full Year EPS Forecast Misses Estimates
>>> Up
* Bankia Upgraded to Neutral at Credit Suisse; PT 2.90 Euros
* Enel Upgraded to Hold at HSBC; PT 5.10 Euros
* Kesko Upgraded to Reduce at Inderes; PT 48 Euros
* Neurones Raised to Buy at Midcap Partners; Price Target 28 Euros
* Orange Belgium Upgraded to Buy at ING; Price Target 21 Euros
* Thales Upgraded to Buy at Citi
* Travis Perkins Upgraded to Outperform at RBC; PT 15.50 Pounds
* UniCredit Upgraded to Buy at Citi
>>> Down
* Alstom Cut to Hold at Kepler Cheuvreux; Price Target 38.50 Euros
* Assura Downgraded to Hold at Liberum
* Cellavision Cut to Sell at Pareto Securities; PT 245 Kronor
* Centrica Downgraded to Neutral at Citi
* DKSH Downgraded to Underperform at MainFirst; PT 62 Francs
* DWS Downgraded to Hold at Pareto Securities; PT 26 Euros
* Fiat Chrysler Downgraded to Equal-weight at Barclays
* Fiskars Downgraded to Reduce at Inderes; PT 18.60 Euros
* GEA Group Downgraded to Neutral at Credit Suisse; PT 21 Euros
* *GRIFOLS A SHARES CUT TO HOLD AT BERENBERG; B SHARES REMAIN BUY
* HolidayCheck Downgraded to Reduce at HSBC; PT 2.80 Euros
* Infineon Downgraded to Hold at Nord/LB; PT 21 Euros
* Norsk Hydro Cut to Hold at Pareto Securities; PT 40 Kroner
* Outokumpu Downgraded to Reduce at AlphaValue
* Proximus Downgraded to Sell at ING; PT 18 Euros
* Rio Tinto ADRs Downgraded to Underperform at CLSA
* Telenet Downgraded to Hold at ING; PT 42 Euros
* Unite Group Downgraded to Hold at Liberum
* Zurich Ins. Cut to Neutral at Mediobanca SpA; PT 351 Francs
>>> Initiation
* DS Smith Resumed at Citi With Buy
* Engie Reinstated at Barclays With Overweight; PT 16.50 Euros
>>> Call
After Hours Summary: MAT +18%, SKX +17%, EXPE +7%, MHK +6% are higher, while VCRA -21%, QNST -14%, TDC -4%, QRVO -3% are lower following earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: EGAN +27%, MAT +17.7%, SKX +17.1%, FLDM +13.9%, VSAT +13.1%, BECN +12% (light volume), COLM +12%, FSCT +10%, RPD +9.6%, EXPE +7%, KN +6.5%, MHK +6%, BHE +4.1%, PMT +3.9% (light volume), MTW +3.1% (light volume), ARWR +1.4%, LGND +1%
Companies trading higher in after hours in reaction to news: IMGN +5.3% (ahead of earnings tomorrow before the open), SNE +4.5% (lifting on reports of JPY100 bln share buyback disclosure in Tokyo Stock Exchange filing), HAS +3.3% (following MAT earnings and ahead of its own earnings release tomorrow before the open), PSX +3% / CLF +1.8% (ahead of earnings tomorrow before the open), ADM +1.4% (Director Felsinger bought 60K shares worth ~$2.5 mln), TRIP +1.2% / BKNG +1% (following EXPE results), CRSP +1.1% (rebounding from today's 9% move lower - with boost from BTIG initiation with a Buy rating after the close), APA +0.7% (indicated higher after releasing its 2019 capital budget and production outlook)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: VCRA -21.4%, QNST -13.7%, SGEN -8.1%, CARB -6.8% (also will acquire Webroot), ANGI -6%, MCFT -3.9% (light volume), TDC -3.9%, QRVO -3.1%, URBN -0.8%
Companies trading lower in after hours in reaction to news: OCX -4.9% (announces proposed public offering of common stock), IMMU -4.5% (notified that the FDA will be conducting a re-inspection of the Company's Morris Plains, New Jersey manufacturing facility as part of the BLA resubmission), PSDO -2.5% (announces secondary offering of 4.0 mln shares of common stock by selling shareholders), SLDB -1.9% (downgraded to Mkt Perform from Outperform at SVB Leerink), SWKS -1.9% (continued weakness and QRVO sympathy)
Orange mulls acquisitions opportunities in Spain; open to Euskaltel tie-up
Orange [EPA:ORA], the French telecoms company, could still consider acquisition opportunities in Spain including a tie-up with Euskaltel[BME:EKT] if it comes up for sale, said four sources familiar with the situation.
On 21 January, in a statement published on the Spanish stock-market regulator CNMV's website, Orange said that “it was not analysing a 100% acquisition of Spanish telecommunications operator Euskaltel but that it was always analysing options for growth in Spain.”
Orange was ready to consider a tie-up combination with Euskaltel, including a minority stake acquisition, but the shareholders of the Spanish group were opposed to a sale, a first source familiar explained.
However, should Euskaltel shareholders come up with a tie-up proposal, it is clear Orange will consider it, this source added. Euskaltel is not a target for Orange at the moment, this source stressed.
Euskaltel shareholders seem reluctant to a 100% acquisition by Orange but they might not necessarily turn down a minority stake sale, a second source familiar suggested.
The cable company is based in Spain's Basque Country. Management, 21.3% shareholder Kutxabank and the regional establishment are more keeping the group’s Basque identity rather than realizing all its value through an aggressive but dilutive strategy, this news service wrote last October.
Euskaltel is capitalized at EUR 1.42bn. At the end of last year, its 15% shareholder Zegona Communications [LON:ZEG] said that its board decided to call off an offer for a further 14.9% of the cable company due to difficulties financing a partial bid. It also allied with Talomon Capital, which currently owns 1.3%. Although both parties want to buy shares in the market, they said that they had yet to do so on 28 January.
Kutxabank could not be reached for comment. Zegona declined to comment.
Orange has repeatedly denied being interested in Euskaltel since the takeover rumours emerged last month, a third source familiar with the situation said. The rumours surrounding Orange’s interest pushed Euskaltel’s share price-up, and as a result worked against Zegona’s plan to buy more shares, this source added.
Spain is one of the largest markets in Europe and Orange is well positioned there. It would then make sense to look for growth opportunities as there are no substantial growth opportunities in France, two of the sources agreed.
In Spain Orange bought Jazztel in 2014 and sat out the next round of consolidation as it focused on integration issues, as reported.
Although Orange’s statement left the door open to some kind of deal with Euskaltel that falls short of a takeover, many in the market remain unconvinced. The two companies are unlikely to find any common ground, said a second sector banker, two sector lawyers and a fourth source familiar with the situation.
Any deal with Orange could lead to some negative synergies in areas such as television rights, added the third source.
According to a Santander analyst report, negative synergies could arise from football rights and remedies that would fully offset any potential synergies.
Orange generated a EUR 41.09bn in 2017 with an adjusted EBITDA of EUR 12.8bn and an operating cash flow of EUR 5.6bn according to a company statement.
Orange had a EUR 7.2bn available in CAPEX to invest network quality and customer experience. In Spain where the group generates 12.9% of its overall revenues (vs. 42% in France), it achieved "record” revenue growth in 2017, up 7.1% and adjusted EBITDA up 17.0%, the company statement read.
A spokesperson for Orange declined to comment. Euskaltel declined to comment.