- China Stocks to Play Catchup as Asia Opens Higher: Markets Wrap
(Bloomberg) — Asian equity benchmarks inched up in early trade as traders await the reopening of China from a long holiday break. Mainland markets look poised to gain as Beijing’s supportive policy stance adds impetus to a budding bullish momentum. Australia’s share index edged higher after the S&P 500 gained 1.3% Friday when softer-than-expected US payroll data. - Truce Talks Shift to Qatar as Hamas Hits Israel Border Crossing
(Bloomberg) — Israel closed the Kerem Shalom humanitarian crossing into Gaza on Sunday after a rocket barrage was fired by Hamas, as weekend talks on a potential truce broke up inconclusively. The status of the talks was unclear after the latest round in Cairo: Hamas officials said their negotiators had returned to Qatar to consult with the group’s political leadership. - RBA Likely to Keep Key Rate at 12-Year High as Inflation Stirs
(Bloomberg) — Australia’s central bank will likely keep its key interest rate at a 12-year high and stick with it for much of the year to restrain inflationary pressures underpinned by a surprisingly tight job market. All but one of the economists surveyed by Bloomberg expect the Reserve Bank will hold the cash rate at 4.35% for a fourth straight meeting on Tuesday. - What Fed in Flux Means for World Central Bank Outlook: Economics
(Bloomberg Intelligence) — The outlook for the Fed is in flux, with Chair Powell making a hawkish shift in mid-April, but failing to double down on it at the May FOMC. Still, relative to a few months ago, Bloomberg Economics’ view – and the consensus in the market – is that Fed cuts will start later and proceed at a slower pace. With the Fed the anchor for global monetary policy, that shift has implications for central banks. - Westpac Unveils Buyback, Special Dividend as Profit Declines
(Bloomberg) — Westpac Banking Corp. increased its buyback program and handed investors a special dividend, helping to offset weaker first-half profit as competition in mortgages weighed on the Australian lender’s key consumer business. The shares rose 2%. Net income fell 16% to A$3.3 billion ($2.2 billion) from the previous year in the six months ending March 31. - Buffett Praises Apple After Trimming It, Drops Paramount Stake
(Bloomberg) — At Berkshire Hathaway Inc.’s annual meeting in Omaha on Saturday, Warren Buffett heaped praise on Apple Inc. — after revealing he’d cut his stake in it. Berkshire reported a $135.4 billion holding in the iPhone maker at the end of the first quarter, down from $174.3 billion at the year end. - Hedge Funds’ Options Bets Trigger Green Stock Alert, Study Says
(Bloomberg) — If you want to know how your green stock portfolio is likely to perform next quarter, you should take a look at hedge funds’ options bets. That’s according to a newly published academic paper which looks at a decade’s worth of data from more than 1,900 hedge fund firms through 2022. - EQT to Buy Tech Consultant Perficient in $3 Billion Deal
(Bloomberg) — EQT AB agreed to buy technology consultant Perficient Inc. in a deal valued at about $3 billion including debt. Shareholders will receive $76 per share in the sale to BPEA Private Equity Fund VIII, part of EQT, according to a statement Sunday. That’s a 58% premium to the stock’s closing price of $48.11 on Friday. - Sony and Apollo in Talks to Acquire Paramount
After letting exclusive talks with the movie studio Sky dance lapse, Paramount’s directors met over the weekend and decided to negotiate with all the suitors. Paramount has decided to formally open negotiations with a bidding group led by Sony Pictures Entertainment and the private equity giant Apollo, according to three people familiar with the matter. - Credit Agricole shares rose 1.1% after the French bank delivered a big net income beat in the first quarter, mainly thanks to a strong performance from its Corporate & Investment Banking arm.
The lender pulled forward a target to reach annual adjusted profit of €6 billion in 2024, a year ahead of schedule. FIRST QUARTER RESULTS: Net income EU1.90 billion, +55% y/y, estimate EU1.5 billion. Operating expenses EU3.67 billion, -4.5% y/y, estimate EU3.73 billion. Provision for loan losses EU400 million, +7% y/y, estimate EU509.4 million. CET1 ratio fully-loaded 11.8%, estimate 11.6%. Cost/income ratio excluding SRF 53.9% vs. 54.4% y/y. - Novonesis shares rose 5.9% after the Danish company reaffirmed its organic revenue forecast for the full year. The stock had fallen recently after Novonesis provided disappointing guidance for 2024.
FIRST QUARTER RESULTS: Organic revenue +4%. YEAR FORECAST: Still sees organic revenue +5% to +7%. Still sees adjusted Ebitda margin about 35%. COMMENTARY: Against a strong comparable Novonesis realized 4% pro forma organic sales growth in 1Q 2024. Volumes increased by around 2% and pricing also contributed around 2%, co. says. Citi (neutral): Household care was the “star performer” in 1Q, helping organic sales growth to meet expectations, analyst Ranulf Orr wrote. Still, customer order phasing along with 1Q restock suggests that it probably won’t persist into 2Q, “similar to peers”. - Coinbase shares fell 2.4%, shrugging off a first-quarter results beat, as Mizuho noted the crypto trading platform’s strong year-to-date rally, signs of a transaction revenue drop in the coming months and potential regulatory risks.
FIRST QUARTER RESULTS: Revenue $1.64 billion vs. $772.5 million y/y, estimate $1.32 billion. Transaction revenue $1.08 billion vs. $374.7 million y/y, estimate $775 million. Subscription & services revenue $510.9 million, +41% y/y, estimate $458.1 million. EPS $4.40 vs. loss/shr 34c y/y, estimate $1.07. Trading volume $312 billion vs. $145 billion y/y, estimate $285.51 billion. SECOND QUARTER FORECAST: Sees subscription & services revenue $525 million to $600 million, estimate $489.1 million. Mizuho (Dan Dolev, underperform, PT $145): 1Q was strong overall, but this was widely expected, given the rise in Bitcoin and crypto volatility since the start of the year. Sees resilient take rates as a positive, but expects the stock to lose ground today for multiple reasons: April’s transaction revenue implies a 2Q run-rate around 16% below 1Q. The large proportion of revenue coming from altcoins and staking, which are subject to potential regulatory scrutiny. Other metrics like S&S revenue was ahead of guidance, but not enough to justify the 30%-plus rally in the share price YTD. - Fortinet shares fell 9.7%, as the cybersecurity company reported a miss in first-quarter billings due to weakness in Europe. The reiteration of guidance implies the need for a steep billing ramp-up from here, analysts warn.
FIRST QUARTER RESULTS: Billings $1.41 billion, -6.4% y/y, estimate $1.43 billion. Adjusted EPS 43c, estimate 39c. Revenue $1.35 billion, +7.2% y/y, estimate $1.34 billion. Adjusted operating margin 28.5% vs. 26.5% y/y, estimate 26%. SECOND QUARTER FORECAST: Sees adjusted EPS 39c to 41c, estimate 40c. Sees revenue $1.38 billion to $1.44 billion, estimate $1.39 billion. Sees billings $1.49 billion to $1.55 billion, estimate $1.54 billion. Sees adjusted operating margin 25.8% to 26.8%, estimate 26%. YEAR FORECAST: Sees adjusted EPS $1.73 to $1.79, estimate $1.70. Sees revenue $5.75 billion to $5.85 billion, saw $5.72 billion to $5.82 billion, estimate $5.79 billion. Still sees billings $6.40 billion to $6.60 billion, estimate $6.54 billion. Sees adjusted operating margin 26.5% to 28%, saw 25.5% to 27.5%, estimate 26.9%. - Motorola Solutions shares rose by 5.19%, following its upbeat first-quarter earnings report.
Motorola reported an adjusted earnings per share of $2.81 vs $2.22 YoY, beating estimates of $2.53. It also reported net sales of $2.39 billion, +10% YoY, beating estimates of $2.35 billion. In light of its first-quarter results, the company raised its revenue and profit forecast for the year and expects its revenue to grow above 7%, from 6% previously. - Buffett says Berkshire sold its entire Paramount stake: ‘We lost quite a bit of money’
Warren Buffett revealed that he dumped Berkshire Hathaway’s entire Paramount stake at a loss.
“I was 100% responsible for the Paramount decision,” Buffett said at Berkshire’s annual shareholder meeting. “It was 100% my decision, and we’ve sold it all and we lost quite a bit of money.” Berkshire owned 63.3 million shares of Paramount as of the end of 2023, after cutting the position by about a third in the fourth quarter of last year, according to latest filings. The Omaha-based conglomerate first bought a nonvoting stake in Paramount’s class B shares in the first quarter of 2022. - China’s Ant Group doubles down on global expansion with cross-border payments offering Alipay+
Ant Group is looking to expand into the payments markets of Europe, Middle East and Latin America with its Alipay+ offering. “What we found is that people want to use their home e-wallets when they travel abroad. So, they don’t want to have to load their card into another app that they don’t know as well,” Douglas Feagin, senior vice president of Ant Group, told CNBC. Ant introduced Alipay+ in 2020, allowing foreigners to use apps from their home countries to make payments in China and other nations by scanning QR codes of Ant Group’s domestically-focused platform Alipay. - Asia stocks track Wall Street gains as softer-than-expected U.S. jobs data fuels rate cut hopes
Asia-Pacific markets tracked Wall Street gains on Monday as a softer-than-expected U.S. jobs report fueled hopes that the Federal Reserve could start cutting rates soon. Investors, meanwhile, awaited the Reserve Bank of Australia’s rate decision on Tuesday and China’s April trade data on Thursday. ING said in a note last week that the RBA meeting was “worth watching closely,” adding that recent inflation data from Australia showed growth in prices was starting to accelerate. - Booking shares rose 3% after the online travel agency reported first-quarter results that beat expectations.
FIRST QUARTER RESULTS: Revenue $4.42 billion, +17% y/y, estimate $4.25 billion. Adjusted Ebitda $898 million, +53% y/y, estimate $718.6 million. Adjusted Ebitda margin 20.3% vs. 15.5% y/y, estimate 16.8%. Adjusted EPS $20.39 vs. $11.60 y/y, estimate $13.94. Gross bookings $43.5 billion, +10% y/y, estimate $42.2 billion. Room nights sold 297 million, estimate 290.93 million. Room nights sold +8.5%. COMMENTARY: Says More Travelers Moving into Upper Loyalty Tiers. Says Results Show Increasing Direct Mix, Frequency. Citi (buy, PT $4,100): The report “highlights significant progress across Booking’s strategic imperatives to gain a greater share of travel budgets”.
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