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CHR - Chr Hansen Holding A/S News Story

DKK546.2 4.4  0.8%

Last Trade - 12/05/21

Consumer Defensives
Large Cap
Market Cap £8.32bn
Enterprise Value £9.75bn
Revenue £791.0m
Position in Universe 90th / 1832

LIVE MARKETS-Closing snapshot: Choppy markets

Thu 27th June, 2019 5:03pm
* STOXX 600 flat, Germany's DAX rose 0.2% driven by Bayer * Bayer +9%, Elliott welcomes steps to address litigation * Earnings in focus: H&M, Chr Hansen * US, China agree tentative trade truce before G20 - SCMP Welcome to the home for real-time coverage of European equity markets brought to you by Reuters stocks reporters and anchored today by Danilo Masoni. Reach him on Messenger to share your thoughts on market moves: rm:// CLOSING SNAPSHOT: CHOPPY MARKETS (1602 GMT) European stocks see-sawed throughout the day as headlines on U.S.-China trade kept investors guessing on the outcome of the Trump-Xi meeting over the weekend. STOXX 600 .STOXX ended the day nearly flat after a solid start in the morning as markets gave up some gains on a report that there were preconditions on trade talk from Beijing, including a removal of the ban on the sale of U.S. tech to Huawei. Later in the day, White House economic adviser Larry Kudlow said there are no preconditions set ahead of talks with China. Among single stocks, Bayer BAYGn.DE soared 9% after the German blue chip company revealed plans aimed at resolving multi-billion dollar lawsuits linked to glyphosate, a move welcomed by activist shareholder Elliott. H&M HMb.ST shares had their best day in 9 months, rising 14% after the Swedish fashion retailer said sales of its summer collections had started well. Peer Inditex ITX.MC rose 3.2% and online fashion retailer Zalando ZALG.DE rose 3.5%, boosting the STOXX retail index (+2.2%), which had its best day in 3 months. AMS AMS.VI jumped 10% after it agreed with Chinese AI provider Megvii to jointly develop plug-and-play solutions that enable 3D face recognition in any smart device. Among fallers, Glencore GLEN.L shares declined 5% after 36 artisanal miners were killed when part of a mine owned by the company collapsed in southeast Congo. Shares in Denmark's Chr Hansen CHRH.CO tumbled 14% after a sales warning. (Thyagaraju Adinarayan) ***** NEGLECTED TELCOS: TIME FOR A RETHINK? (1354 GMT) Morgan Stanley thinks so so and a successful bond sale by Cellnex CLNX.MC yesterday is a reminder of how investors see pockets of value in an industry otherwise plagued by harsh competition, unfavourable regulation and slowing growth. Telecoms have been serial underperformers for good reasons, but maybe they've been penalised too much and their defensive qualities may play in their favour this time. Analysts at the U.S. investment house say it's time for investors to revisit the global telco space: "Fundamentals are improving after years of decline, but stocks look underowned and undervalued (13% discount vs. MSCI ACWI, a 10-year low)". "We expect global telco revenue CAGR in USD to more than double from +1.6% 2017-19 to +3.9% 2019-21 and drive stock returns. An uncertain global backdrop is supportive of defensive positioning, and telcos remain an attractive bond proxy with a resilient 4.4% dividend yield," they add in a note today. To the question of what to own, Morgan Stanley singles out six names: AT&T T.N (US), Telus T.TO (Canada), Telefonica Brasil VIVT4.SA (Brazil), Cellnex CLNX.MC (Spain), HKT (Hong Kong) and Tele2 TEL2b.ST (Sweden). In this chart, you can see how poorly European telcos have performed over the past two years compared to the STOXX but also how Cellnex and Tele2 have done pretty well. (Danilo Masoni) ***** THE WARM GLOW OF AN ACTIVIST SHAREHOLDER (1142 GMT) Aaaaah the warm glow from news that U.S. hedge fund Elliott Management has taken a stake in a company! Bayer shares have rallied more than 7% this morning, increasing its market cap by a whopping 4 billion euro ($4.6 billion) in just two hours of trading and volumes are nearly double long-term daily averages after the activist shareholder revealed it's built up a stake in the German chemicals group and said it considers the stock undervalued. The disclosure came as the company outlined plans to tackle its multi-billion dollar lawsuits linked to glyphosate. Shareholders have broadly welcomed the news because it will help boost sentiment in the stock, but continue to note the long-term struggle to deal with the legal headache. "We view last night's events as a positive for sentiment (in Bayer in general) as well as potentially signalling an earlier-than-expected settlement," says Dean Cheeseman, portfolio manager at the UK-based Multi-Asset team at Janus Henderson, one of the company's top shareholders. "That said, in essence nothing as yet has fundamentally changed and the share price reaction this morning is mainly a reflection of the extreme levels of negative sentiment and over-stretched valuation discount." The shares have been under severe pressure following its $63 billion acquisition of Monsanto, which brought with it massive legal issues after more than 13,400 plaintiffs alleged the company's glyphosate weedkiller caused cancer - a claim Bayer contests. Alistair Campbell, equity analyst at Liberum agrees that the creation of a committee to resolve the litigation issue "points in the right direction" and news of Elliott's purchase has stirred hopes that it will shake things up at the company aiming to boost the stock's valuation. "It's a ridiculously undervalued stock and the market is overestimating what they will ultimately pay" to settlement the litigation, he said. The chart below shows just how poorly the company is valued compared with the European chemicals sector. Today's share reaction and the Elliott disclosure were very similar to the way Elliott disclosed just two months ago it had built up a stake in another German heavyweight - SAP - in its first large tech investment. SAP shares hit all-time highs the day on the news, which came as the German software company announced quarterly results.*:nL5N2260MG (Josephine Mason) ***** TRADE HEADLINES KEEP MARKETS BUSY (1110 GMT) European stocks seem to be very sensitive to headlines on U.S.-China trade ahead of the G20 meeting. No surprise there. The pan-European STOXX 600 dipped as much as 0.4% after a steady open as a report by the Wall Street Journal shed some light on preconditions from Beijing ahead of the Trump-Xi meeting. "Beijing is insisting that the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies Co. Beijing also wants the U.S. to lift all punitive tariffs and drop efforts to get China to buy even more U.S. exports," the report said citing Chinese officials with knowledge of the plan. Traders say adding to worries was a tweet by the editor in chief of China's Global Times: "Two days before meeting President Xi, @realDonaldTrump claimed to have Plan B and threatened new tariffs. This is a very unfriendly move and will have a negative impact for sure." Trump said his "plan B" was to reduce business with China. Sharp spike in volumes (see below): About 40% of daily average volumes have gone through on the trade-sensitive DAX index in under three hours of trading. Markets typically see a fifth of the trades go through at closing. (Thyagaraju Adinarayan) ***** TRUCE BUT NO DEAL? (1001 GMT) The G20 summit between Trump and Xi is squarely in focus and hours before the event markets are positioning for a truce rather than an outright deal. "I continue to think that the maximum we can expect is an formal resumption of talks, with new tariffs suspended (eventually with a specific time frame)," says Giuseppe Sersale, strategist and portfolio manager at Anthilia Capital in Milan. "This is broadly what the market is expecting for and should this be the outcome, there shouldn't be any big impact, beyond a bit of volatility," he adds. Mark Haefele, Chief Investment Officer, UBS Global Wealth Management, seems to agree. Here's UBS' baseline scenario, to which they attribute a 50% probability: "Xi and Trump agree to a ceasefire and ongoing negotiations... Trump temporarily drops the threat of tariffs on the remaining USD 300bn of Chinese imports, conscious of their negative impact on US growth. To bring China back to the negotiating table, some US concessions on Huawei may be needed". If that's the case, UBS sees U.S. stocks rising as much as 5% over a six-month horizon and Chinese stocks to range between a 5% decline to a 10% rise. Bolstering expectations of a possible truce is a report in the South China Morning Post which said Washington and Beijing were laying out an agreement that would help avert the next round of US tariffs on Chinese imports. (Danilo Masoni) ***** OPENING SNAPSHOT: STOXX EDGES UP, BAYER RALLIES, EARNINGS DRIVE TOP MOVERS (0732 GMT) European shares are off to a positive start with the STOXX 600 .STOXX snapping a four-day losing streak following gains in Asia on the back of a report in the South China Morning Post which bolstered hopes of a trade truce between China and the U.S. just before their leaders meet at this weekend's G20. The pan-European benchmark is up 0.2%. In corporate news Bayer BAYGn.DE is a big focus after the group hired a lawyer and formed a committee to address glyphosate litigation. Activist shareholder Elliott welcomed its steps to improve supervision of litigation issues and revealed for the first time its holding, saying the company is undervalued. Bayer shares are up more than 6%. "The... actions of the supervisory board might be an indication for a quicker than expected solution in the glyphosate litigation cases," says Baader Helvea, affirming its bullish view on the stock. Elsewhere earnings news is driving the biggest movers. Swedish fashion retailer H&M HMb.ST led the gainers in Europe, up 9.5% after it reported a slight drop in fiscal second-quarter pretax profit but said sales of its summer collections had gotten off to a good start and that it was selling more clothes at full price. Top faller is Chr Hansen CHRH.CO , down 13% after the Danish food ingredients maker reported quarterly profit that fell short of forecasts and cut its revenue outlook for the year, hurt by a disappointing performance at its food colouring and animal health businesses. In sectors, financials are providing the biggest uplift, helped by a rebound in government bond yields after comments from Federal Reserve officials cooled expectations over aggressive rate cuts in the U.S. (Danilo Masoni) ***** WHAT WE'RE WATCHING AT THE OPEN (0700 GMT) European shares are set to open higher following gains in Asia on a report in the South China Morning Post that the US and China have tentatively agreed to a truce in their trade war before their leaders meet tomorrow at the G20. Futures on main country benchmarks are up 0.2-0.5% following four straight sessions of losses on cooling expectations of aggressive rate cuts by the Federal Reserve and caution before the G20. The STOXX 600 however has recovered from the May sell-off and is set to close June up more than 3 percent and not much far away from the nine-month high hit in April. On the corporate front, it seems dealmaking, stakebuilding and IPOs are dominating headlines, while earnings also start to trickle in. Elliot has revealed for the first time it has taken a 1.1 billion euros ($1.25 billion) stake in Bayer, saying the company is undervalued and shares are up as much as 4.5% in early Frankfurt trading. Bayer has also hired an external lawyer to advise its supervisory board and has set up a committee to help resolve a multi-billion dollar glyphosate litigation issue. Meanwhile, sources from Brussels told Reuters that Vodafone is set to secure EU approval for its $22 billion bid for Liberty Global's cable networks in Europe. Its shares are indicated up 1%. Still in M&A, Reuters said Generali and rival Grupo Catalana Occidente are vying to take control of Portuguese insurance firm Tranquilidade in a deal worth up to $682 million. French retailer Casino said it plans to restructure its Latin America business, while Italian brake maker Brembo is eyeing an acquisition target of "significant size". In IPO news, VW unit Traton lowered its price range, Thyssenkrupp stuck to its elevator listing plans, while Swiss Re set the IPO price range for its UK life assurance business. Among top movers, traders flag Premier Oil, seen up 4-10%, after a big upgrade to production estimates for its Xama field, while a revenue warning Chr Hansen is set to send shares in the Danish bioscience company down 5-8%. Serco is seen rising 3-5% after nudging its full-year revenue target higher. Elsewhere, the U.S. Federal Aviation Administration has identified a new risk that Boeing must address on its 737 MAX before the grounded jet can return to service. The news is seen lifting shares in European rival Airbus by 1%. Other stock movers: France's Macron says no need to lower govt's stake in Renault; H&M Q2 profit just lags forecast, summer collections off to strong start; Britain's Kingfisher names Carrefour's Garnier as new CEO; Wet summer hurts Greene King's sales in new financial year (Danilo Masoni) ***** HEADLINES ROUNDUP: DEALMAKING AND IPOS (0554 GMT) Turning to the corporate front it looks that dealmaking and IPOs are dominating headlines so far this morning, even though there is nothing earth-shattering. Sources from Brussels said Vodafone VOD.L is set to secure EU approval for its $22 billion bid for Liberty Global's cable networks in Germany and central Europe, while in IPO news, Traton 8TRA.BE lowered its price range, Thyssenkrupp TKAG.DE stuck to its elevator listing plans, while Swiss Re SRENH.S set the range for the flotation of its UK life assurance business. Still in M&A, it also seems that a race to take control of Portuguese insurance firm Tranquilidade has reached a crucial point.*:nL8N23X2UI Meanwhile in France, President Macron said there's no need to lower the government's stake in Renault RENA.PA and that he wants the Nissan alliance to strengthening its synergies. Anyhow, here's your full early morning headlines roundup: Vodafone set for EU go-ahead on Liberty Global deal - sources*:nL8N23X5C4 VW's Traton sets price range for IPO at 27-28 euros a share*:nL8N23X56Y Thyssenkrupp sticks to elevator listing plan amid bid talk*:nL8N23X4ZA Global Fashion Group lowers IPO offer price to 4.50 euros a share*:nFWN23X0VA Generali, Catalana in final race for $682 mln Portuguese deal - sources*:nL8N23X2UI Bayer seeks glyphosate litigation advice as Elliott reveals stake*:nL8N23X5IO France's Macron says no need to lower govt's stake in Renault*:nL4N23Y11K Hexagon CEO Rollen found not guilty of insider trading in appeals case*:nL8N23X5Q0 No breakthrough in Swiss-EU battle of the bourses*:nL8N23X2VR (Danilo Masoni) ***** EUROPE SET TO BOUNCE BACK (0532 GMT) The positive mood seen in Asia overnight following a report in the South China Morning Post (SCMP) that the United States and China have tentatively agreed to a truce in their trade war*:nL4N23Y10R is set to spread to Europe this morning. Spreadbetters at IG expect London's FTSE to open 6 points higher at 7,423, Frankfurt's DAX to open 42 points higher at 12,287, and Paris' CAC to open 12 points higher at 5,512. On Wednesday the STOXX 600 .STOXX fell 0.3%, suffering its fourth straight session of losses, on cooling expectations over aggressive rate cuts by the Fed and as caution over Sino-U.S. trade relations prevailed before this weekend's G20 summit, where Trump and Xi will meet. Turning to the day ahead, Rabobank highlights that's going to be another session of session of second-tied data: "We only have Eurozone confidence surveys to look to, expected broadly unchanged and hence sending no new signals, and German CPI, seen 0.1% m/m, 1.3% y/y" and "There is another look at US Q1 GDP, but that’s very much yesterday’s story (and expected 3.2%)." (Danilo Masoni) ***** ($1 = 0.8807 euros) <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ European-markets Bayer telcos ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> ((; +39-02-66129734; Reuters Messaging:; On Twitter
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