RBC PRE-MKT INDICATIONS
ADP +1% Rtrs reports that CAISSE DES DEPOTS may consider take in company
ADP +1% Rtrs reports that CAISSE DES DEPOTS may consider take in company
AIR FRANCE +2% Strong June traffic, Load factor +2.2%, Consensus still too low.
ALMIRALL -10% Profit warning, reducing FY sales forecast -10% due to US biz
AVEVA +2% S.Times speculating that SCHNEIDER close to new bid for AVEVA
BT +1% Telegraph reports BT plotting major corporate shake-up
CARILLION -25% Awful trading statement, suspends div, CEO steps down
CENTAMIN -2% Q2 Production a tad light, Gold a touch weaker overnight as well
EASYJET +1% Reports DIXONS CEO to ITV - and not EASYJET. Small positive.
ITV 0% Press reports DIXONS CEO could be candidate for ITV
MAERSK -1% COSTCO SHIPPING to acquire ORIENT OVERSEAS (+19.5%) for $6.3bln.
NORSKE H. 0% Agrees to acquire ORKLA Sapa interest for NK 27bln ($3.2bln)
TEL. ITALIA 0% CEO to consider exit, unhappy about VIV influence
UNILEVER +1% Susquehanna suggest KRAFT 75% likely to make hostile bid for UNA
WPP/PUB -1% DENTSU (-1.72%) announced June net ad sales -13% YoY
Investec UK & Euro Pre Mkt Indications
UK
* AVEVA: Schneider Electric said to be interested in Aveva again - ST.......+3%
* CARILLION: Messy warning, cashflow issues, FY to be below guidance........-20%
* CENTRICA: Bid spec in press (market reports story for the move really)....+1%
* CENTAMIN: bounces back after weak Q1. maintains '17 production guidance...+2%
* OPHIR: COO to step down, announces further cost reductions...............-0.5%
* SAINSBURY: Nisa shopkeepers pooling shares to oust Nick Read - ST.........unch
* TALK TALK: Group CFO Iain Torrens to step down, Kate Ferry to suceed......unch
* UNILEVER: broker spec of 75% chance Kraft come back with hostile bid......+1%
* UNITE: +ve 1/4ly USAF & LSAV valuation update............................+0.5%
* WOOD GROUP: Contract win from Maersk, 3 years, no numbers.................unch
EUROPE
* ADP-Caisse des Depots may consider buying stake if Govt sells(Rtrs).......+1%
* AIR FRANCE-June passengers +8.2%..........................................+2%
* ALMIRALL-cuts FY estimates, conf call at 10am.............................-10%
* CREDIT AG-Cariparma may buy 3 Italian banks for €1(Messagero).Was rmrd b4..U/C
* EDF-may not be part of French Govt asset sales (Rtrs).....................+2%
* EUROFINS-buys Amastigroup for €130m + debt................................+1%
* EURONEXT-can spend up to $2.3bn on acquisitions says CEO..................U/C
* ICA-June sales due pre mkt
* KONE-gets order for 196 elevators, escalators in China...................+1.5%
* MAERSK-‘welcomes consolidation’ as Cosco offers $6.3bn for Orient O/seas...+1%
* NORSK HYDRO-buys out ORKLA(+2%) stake in Sapa JV, EV $3.2bn...............U/C
* REFRESCO-may merge with COT US to fend off PAI offer......................-1%
* SCHNEIDER-said to mull new bid for Aveva (S Times)........................U/C
* TIT-CEO said to discuss exit w/Vivendi, concerned can't run as he wants...-1%
Other
* ROCHE-Analyst briefing after close
* UNILEVER-broker note says K
Shore
AVEVA - Schneider Eletric to plan new bid for AVV (S.Times)..................+2%
CARILLION - revs & op.profit below mgmt expectations,suspends 2017 divi's...-15%
CENTAMIN - Q2 gold production +14% on Q1,maintains FY g'dance................+1%
MARKET TECH - Fire at Camden Lock Market was under control by early Monday..UNCH
FLOWTECH - H1 revs +24.7%,acquisitions have strengthened position,FY in line.+1%
MICHELMERSH - chosen to supply 440k bricks to Battersea Power Station........+1%
UNITE GROUP - portfolio +0.9% on LfL basis,reservations perform strongly....UNCH
BT - calls in McKinsey to conduct review with aim of saving money (T'graph).UNCH
* European small cap returns during H1 were strong at 10.3% (480bps better than Europe-large and 350bps better than Global Small), however, returns weakened in June. Our top down view suggests that this pullback provides a buying opportunity.
* Positive view on Eurozone small caps as a range of macro indicators continue to strengthen and political risk appears to be rapidly falling. Current PMIs typically coincide with c20% annualised returns and strong outperformance relative to global small and European large caps (this is in-line with the view of our Global Equity Strategy team, see A view on Style).
* We remain negative on UK small owing to the recent, sharp, weakening in macro conditions, growing political uncertainty and falling corporate spending intentions (see our recent corporate spending survey). Current macro readings tended to coincide with UK underperformance in the past.
* Earnings sentiment improving rapidly: with 12mF EPS now up 12% during past 3months driven by France (+26%), Italy (+20%) and Swiss small caps (+13%). Energy and Semiconductor earnings have moved up most but other cyclical sectors including financials are still lagging. We expect earnings momentum to further improve which supports our bullish Eurozone call.
* Valuation: European small is not cheap at c19x 12mF, however, the premium of c8% to Europe large is well below the historical c15% average whereas it also remains c20% below US small cap valuation levels. Swiss and semiconductor small caps appear cheapest whereas expectations and valuation levels for French small caps already reflect a “Macron effect”.
ASIAN MARKETS – MOSTLY HIGHER on Monday. Signs of risk-on sentiment with regional gains tracking another upward move in yields and the dollar-yen. The Nikkei is rebounding with yen weakness contributing to gains. Japan data came in mixed with bank lending growth improving but machinery orders contracting at a faster pace. There was little new from BoJ Governor Kuroda, who reiterated that easing will remain in place until the inflation target reached. Chinese markets are mixed with mainland indices weaker. The PBoC skipped open market operations for a 12th day, draining another CNY30bn in liquidity. This as mainland press continue to highlight a need for monetary policy to promote financial stability. There were few surprises from the latest China inflation data, which showed CPI and PPI unchanged from May. Elsewhere ASX banks are outperforming amid the latest Aussie yield backup.
Nikkei +0.82% Hang Seng +0.97% CSI +0.14% Shanghai +0.04%
Eur$ 1.1404 CNH 6.8017 CNY 6.8019 JPY 114.23 GBP 1.2903 CHF 0.9642 RUB 60.2698 WTI $ 44.39 +0.38%
S&P +0.19% EuroStoxx +0.49% FTSE +0.48% DAX +0.64% SMI +0.58%
Macro :
- ECB’s Coeure Says Euro Zone Needs to Be Ready for Next Crisis
- France Ready to Fend Off Hostile Predators of Big Cos.: Le Maire
- Google, Amazon, Facebook Must Pay EU taxes, French Minister Says
- Cariparma in Talks to Buy 3 Italian Banks for EU1: Messaggero
- Buffett Plans Further Investments in Germany, Advisor Tells BAMS
- Large Banks Need to Raise Much More Equity, Kashkari Says in WSJ
Keep an eye on :
- A2A iM : A2A Gets Non-Binding Offers for Montenegro EPCG Stake: Radiocor
- ADP FP : Caisse Des Depots May Consider Aeroports de Paris Stake: Reuters
- AF FP : Air France-KLM June Passengers Increased 8.2% to 9M
- AMZN VX : Amazon Prime On Pace to Have More Subscribers Than Cable: Recode
- AAPL US : ITunes Store’s Share of Movies Market Falls to 25%-30%: WSJ
- AV/ LN : Schneider Electric Is Said to Mull New Bid for Aveva: S. Times
- GBF GY : Bilfinger CFO Patzak Says Restructuring Still at Early Stage: BZ
- BT/ LN : BT Group to Conduct a Review of Its Businesses: Telegraph
- DC/ LN : Dixons Carphone CEO Is Said to Have Been Approached for ITV: Sky
- EDF FP : EDF May Not Be Part of France State-Asset Sale: Reuters
- HEN3 GY : Henkel Plans Additional Acquisitions, Mega Deals Unlikely: RP
- LIN GY : Linde Already Approached on Potential U.S. Divestments: Baader
- MAERSKB DC : Maersk Says It Welcomes Consolidation in Shipping Industry
- NETS DC : Nets shareholders could unlock value via sale after disappointing post-IPO run - MergerMarket
- NOVOB DC : Novo Sues Glenmark Over Vagifem Patent Violation: Berlingske
- NHY NO : Orkla Sells 50% Interest in Sapa to Norsk Hydro
- OCLR US : Oclaro PT Raised at Stifel; Seen as Logical M&A Target
- ROG VX : Shire Gets Injunction Against Roche on Emicizumab
- SU FP : Schneider Electric Is Said to Mull New Bid for Aveva: S. Times
- SHP VX : Shire Gets Injunction Against Roche on Emicizumab
- FP FP : Total-Led Group Saw Return of Iran Sanctions as Unlikely: Shana
- UNA NA : Kraft 75% Likely to Make Hostile Bid for Unilever: Susquehanna
- VIV FP : Vivendi asks Telecom Italia boss to cool broadband row with Rome - http://reut.rs/2u75fFx
- VOW3 GY : VW Official Said to Have Estimated ~$19b Fines in Aug. ’15: BamS
- VOW3 GY : Arrested ex-Audi Manager to Cooperate With Prosecutors: SZ
>>> Up
*Aena Raised to Neutral at Goldman, PT EU179
*Brenntag Raised to Buy at HSBC, PT EU58.50
*Chr. Hansen Raised to Buy at Goldman
*Diageo Raised to Neutral at Goldman
*EON Raised to Buy at HSBC, PT EU9.60
*EON Raised to Buy at UBS, PT EU10
*Essity Raised to Buy at Goldman
*RWE Raised to Neutral at UBS, PT EU17.50
*SAS Raised to Buy at Sydbank
*Uniper Raised to Buy at UBS, PT EU18.50
>>> Down
*Coca-Cola HBC Cut to Neutral at Goldman
*DKSH Cut to Reduce at HSBC, PT CHF70
*Henkel New Equal-weight at Morgan Stanley, PT EU135
*Kuehne + Nagel Cut to Sell at Goldman
*Lagardere Cut to Neutral at Goldman, PT EU31
*RELX Cut to Neutral at Goldman, PT EU19.36
*Remy Cointreau Cut to Neutral at Goldman
>>> Initiation
*Danone Reinstated Sell at Goldman
*Idorsia New Sell at Berenberg
*Lundin Petroleum New Buy at ABN Amro Bank, PT SEK210
*Reckitt Benckiser Reinstated Neutral at Goldman
Asia Mid-Session Market Update: G20 fails to impress the markets, China CPI/PPI in line and BOJ affirms policy stance
***Asia Summary***
- Markets take a risk on sentiment at the start of the week, seemingly unconcerned about the G20 who met over the weekendin Hamburg, Germany among heavy protesting. The Communique was fairly standard, reiterating to fight protectionism and secure free trade. New elements include to agree by November steps to reduce global overcapacity of steel and in afirst ever dissent: 19 members affirmed the Paris accord with the US (dissenter) saying it will help other countries "access and use fossil fuels more cleanly and efficiently."
- Japan govt cut its assessment of machinery orders for the first time since September 2016 after May orders fell 3.6% m/m and only rose 0.6% y/y v the expected 7.6%. USD/JPY rose 0.1% to 113.99 after the data and later tested 114.20. The PBOC again skipped open market operations for the 12th consecutive day, while local press highlighted financial stability as a major topic for the National Financial Work Conference, which will start in mid-July. CPI and PPI were a non-event in the session.
- Global shipping names rallied after Cosco Shipping (1919.HK) confirmed it will acquire Orient Overseas for HK$78.67/shr in a HK$49.2B deal. Maersk gave their support of the deal, saying consolidation would be good for the industry.
***Key economic data***
- (CN) CHINA JUN CPI M/M: -0.2% V -0.1% PRIOR; Y/Y: 1.5% V 1.6%E
- (CN) CHINA JUN PPI Y/Y: 5.5% V 5.5%E
- (JP) JAPAN JUN BANK LENDING (INC TRUSTS) Y/Y: 3.3% V 3.2%E; BANK LENDING (EX-TRUSTS) Y/Y: 3.3% V 3.3%E
- (JP) JAPAN MAY TOTAL CURRENT ACCOUNT: ¥1.65T V ¥1.79TE; ADJ TOTALCURRENT ACCOUNT: ¥1.40T V ¥1.63TE; TRADE BALANCE BOP BASIS: -¥115.1B V -¥45.0BE
- (JP) JAPAN MAY MACHINE ORDERS M/M: -3.6% V 1.7%E; Y/Y: 0.6% V 7.6%E
- (JP) Japan Jun Bankruptcies Y/Y: -7.5% v 19.5% prior
***Speakers and Press***
China
- (CN) China Head of State Administration of Foreign Exchange (SAFE) Pan Gongsheng said no intention of devaluing yuan currency to boost its competitiveness – financial press
- (CN) Overseas M&A expected to be major talking point at National Financial Work Conference in mid-July - SCMP
Japan
- (JP) Bank of Japan (BOJ) Gov Kuroda: Economy is turning towards moderate expansion; BOJ will continue to adjust policy as needed
- (JP) According to Yomiuri poll Japan PM Abe approval rating fell to 36% from 49% in June (lowest reading since being in office)
Australia/New Zealand
- (AU) Australia Department of Industry, Science and Innovation: Iron ore will sink back below $50/ metric ton next year as global supply expands and demand moderates in China
- (NZ) New Zealand Ministry of Business, Innovation and Employment: Find no evidence of China steel coil dumping
US
- (US) Fed's Kashkari says large banks need to raise 'much more' equity - US financial press
***Asian Equity Indices/Futures (00:30ET)***
- Nikkei +0.8%, Hang Seng 1.0%, Shanghai Composite -0.2%, ASX200 +0.5%, Kospi +0.3%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.4%, Dax +0.2%, FTSE100 +0.3%
***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.1409-1.1390; JPY 114.20-113.89; AUD 0.7615-0.7596; NZD 0.7281-0.7265
- Aug Gold +0.1% at 1,210/oz; Aug Crude Oil +-0.8% at $44.58/brl; Sept Copper +0.2% at $2.66/lb
- (AU) Australia repurchases A$500M in Oct 2018 and March 2019 bonds
- (CN) PBoC skips open market operations (12th straight session)
- (CN) PBOC SETS YUAN REFERENCE RATE AT 6.7964 V 6.7914 PRIOR
- (KR) Bank of Korea (BOK) sells KRW1.20T v KRW1.2T offered in 1-yr monetary stabilization bonds; avg yield 1.46% v 1.47% prior
- (KR) South Korea sells 5-year bonds at 1.985%
- (JP) Japan 5-year JGB yield hits highest level since Jan 2016, near -0.03%
***Asia equities notable movers***
Australia
- Bellamy's Australia, BAL.AU China suspends export licence of newly acquired canning facility
- Ardent Leisure Group,AAD.AU Reports June theme park unit visitation -30.5% y/y, Rev A$4.4M, -35.3% y/y; +2.5%
- 88 Energy,88E.AU Gives update on Project Icewine, located onshore North Slope of Alaska; -25.5%
Japan
- KDDI Corp, 9433.JP President comments on mobile price cuts: Says price cuts needed to compete with Mvnos; -3.1%
Hong Kong/China
-316.HK China COSCO Shipping Holdings confirms to bid HK$49.2B ($6.3B) or HK$78.67/share in cash for Orient Overseas International (~31% premium); +24.2%
-China Life, 2628.HK China Development said to seek to buy up to 25.3% of China Life - US financial press; +0.4%
US
- MYCC To be acquired by Apollo Global Management for $17.12/shr cash (~31% premium); declares one time dividend of $0.13
- PBR Federal Court of Appeals in New York partially grants appeal related to class action
- WFC Court Grants Preliminary Approval of $142M Settlement in Wells Fargo Unauthorized Accounts Class Action
***US market Friday Summary***
US stock markets moved up after the June jobs report offered more of the same for investors and the Fed to ponder. Fears that the Fed might have made (or is about to make) a policy mistake should ease, but the data are likely to suggest to the Fed that there is no urgency about raising rates again soon. Job growth accelerated ahead of forecasts, but wage growth came up short of expectations once again. The unemployment rate ticked up along with the participation rate, indicating some slack likely still exists for the US labor market. The NASDAQ reversed course once again, adhering to the fickle nature of trade that has engulfed technology stocks in recent weeks. Along with the strength in technology, homebuilding stocks move higher along with healthcare and deep cyclical sectors. The energy complex moved lower along with crude oil prices.
US rates drifted higher, while the Treasury curve continued to steepen, and TIPS breakeven spreads came off, helped by the decline in oil prices. The US Dollar firmed almost across the board, with the exception being the Loonie. The Canadian Dollar surged after a Canada jobs report crushed expectations. The Yen remained under pressure after the BOJ offered to buy unlimited amount in fixed-rate bonds as part of their yield control operations. Gold prices dropped back towards the 1200 mark, hitting that level for the first time since March.
Being an American or Chinese company helps, so does developing or embracing artificial intelligence. But perhaps the most striking thing that many on the list of the 50 Smartest Companies have in common is the fact that most of us have never heard of them.
The list is put together by the MIT Technology Review and is dominated by firms based in the US or China.
Three Chinese companies - voice recognition company iFlytek, developers of the WeChat instant messaging service Tencent and facial recognition company Face++ - feature in a top 11 otherwise filled with American companies.
Image: MIT Technology Review
Three of the top five are developing AI technologies as part of their business offering.
While big names such as Amazon, Google, Apple and Facebook all feature, the list is far from just a compilation of the largest and most powerful tech companies on the planet. There are smaller firms on the list too.
MIT Technology Review says the list represents its editors’ “best guess as to which firms will be the dominant companies of the future”, based on their current development of technology.
Here’s the top 11:
1. Nvidia
Headquarters: Santa Clara, California
Valuation: $90.9 billion
MIT Technology Review places Nvidia at the top of its list not for its main business of selling graphics chips for video games, but for quickly establishing itself as the leading provider of processing power for AI software. The company says all the major Internet and cloud-service providers use its chips to accelerate their processes, and a number of large carmakers, including Toyota, are using its autonomous-driving technology.
Image: MIT Technology Review
2. SpaceX
Headquarters: Hawthorne, California
Valuation: $12 billion
Tesla CEO Elon Musk’s space travel venture SpaceX takes the second spot for its development of reusable rockets. These make space travel far cheaper and faster, and are critical to SpaceX’s long-term goal of establishing an interplanetary transport system. The start-up has also begun preliminary tests of its Falcon Heavy booster, which is expected to be the world’s most powerful rocket when it is completed later this year.
3. Amazon
Headquarters: Seattle, Washington
Valuation: $479.3 billion
Amazon makes the list for its use of a range of AI technologies, including computer vision, machine learning, and natural-language processing, to reinvent mobile computing and shopping. Amazon is moving its technology from online to real world shopping through its Seattle-based Amazon Go convenience store. Customers simply enter the store, scan an app on their smartphones, and walk out with their purchases. Amazon uses AI, cameras, and sensors to identify the products they have selected and bills them automatically — no lines or checkouts necessary.
4 23andMe
Headquarters: Mountain View, California
Valuation: $1.1 billion
Genetic testing company 23andMe sells reports on risks for late-onset Alzheimer’s disease, Parkinson’s disease, and eight other conditions. The company has more than 2 million customers worldwide, and its DNA-related products have been used in a number of research projects, including studies of female fertility, depression, Parkinson’s disease and even nail biting.
Image: MIT Technology Review
5. Alphabet
Headquarters: Mountain View, California
Valuation: $673.9 billion
Google parent company Alphabet is responsible for subsidiaries that are technology leaders in AI, autonomous vehicles, augmented reality (AR) and virtual reality (VR). Its DeepMind division keeps devising new ways for AI systems to mimic human intelligence, while its self-driving-car project, Waymo, continues to improve performance.
6. iFlytek
Headquarters: Hefei, China
Valuation: $6.8 billion
iFlytek already dominates China’s voice-recognition market and is now expanding into voice-activated command systems for cars, homes, robots and schools. It has also established a multimillion-dollar fund to invest in AI-related start-ups around the world. It says that more than 160,000 developers use its software and more than 400 million people use its products.
7. Kite Pharma
Headquarters: Santa Monica, California
Valuation: $5.7 billion
This immunotherapy company is taking the body’s T cells, which naturally fight infections, and engineering them to fight cancer. It is furthest along with its therapy for aggressive non-Hodgkin’s lymphoma, with more than a third of one study’s participants showing no sign of disease six months after treatment.
8. Tencent
Headquarters: Shenzhen, China
Valuation: $350 billion
Owners of China’s biggest social network, WeChat, TenCent are credited by some as revealing the future of social media. Though WeChat already boasts more than 900 million monthly active users, Tencent keeps expanding the mobile app so that it now offers messaging, online gaming, shopping, music, videos and peer-to-peer payments.
9. Regeneron
Headquarters: Tarrytown, New York
Valuation: $55.5 billion
Biotech company Regeneron uses genetic information to focus its drug development efforts. In March it announced that, along with the UK biobank and pharmaceutical giant GlaxoSmithKline, it would be sequencing genetic data from 500,000 volunteers to help support research into drug development and the connections between DNA and disease. It is also creating “off-the-shelf” engineered T cells to target tumors without requiring a patient’s own immune cells to be used - an approach that could make this field of treatment much easier to scale.
10. Spark Therapeutics
Headquarters: Philadelphia, Pennsylvania
Valuation: $1.9 billion
In addition to its treatment for a progressive form of blindness, the company has also been testing a way to combat hemophilia B, a blood clotting disorder. This involves intravenous treatment with viruses carrying a corrected version of the gene that codes for a blood-clotting protein called factor IX. MIT Technology Review says this is one to watch because the disease, which affects one in 5,000 men, is expensive to treat conventionally.
11. Face ++
Headquarters: Beijing, China
Valuation: $1 billion
Facial recognition company Face++’s software powers many of China’s most popular applications. Alipay, the popular online payment platform, uses the technology to let users log in and make payments using their face as ID; ride-sharing provider Didi Chuxing uses it to verify the identity of its freelance drivers; and smartphone app maker Meitu uses it to offer highly detailed photo-retouching features. The five-year-old start-up is believed to be the first facial recognition unicorn, having raised at least $145 million in recent years, including at least $100 million in December 2016.