The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0750 GMT - Li Ning's 2023 net profit margin is likely to remain under pressure, as the company steps up efforts to promote sales and invest in brand image, Citi analysts say in a note. They cut the stock's target price to HK$72.40 from HK$90.60 with an unchanged buy call. In a call with Citi, Li Ning's management has indicated a 2023 net profit margin target of mid-teen percentage, citing its planned investment to clear inventories and further elevate products and branding, the analysts say. While this may weigh on profitability in the near term, Citi reckons the strategy is "pragmatic and proactive" and could "solidify its foundation for 2H growth." Shares are up 5.9% at HK$58.90. (email@example.com)
0746 GMT - Nordic markets are expected to open higher, with IG calling the OMXS30 up 0.8% at around 2136. Financial turbulence continues and markets are waiting for the Fed interest-rate decision Wednesday, SEB analysts say in a note. The UBS takeover of Credit Suisse pleased stock markets and bank stocks, but confidence was shaken in parts of fixed-income trading, SEB says. The U.S. focus is on First Republic after its share price nearly halved and the banks that previously supported deposits are now working on a new plan, SEB adds. U.S. stock markets rose Monday and Asian indexes have mostly followed higher while futures indicate rising stock prices in Europe. OMXS30 closed at 2118.71, OMXN40 at 2218.51 and OBX at 1060.76. (firstname.lastname@example.org)
0744 GMT - RWE's earnings guidance and dividend for the current year came in ahead of expectations, analysts at Bernstein say in a research note. The German energy company's adjusted net income outlook of EUR2.1 billion-EUR2.7 billion is around 6% above consensus of EUR2.3 billion, according to the firm. Adjusted Ebitda, seen at between EUR5.8 billion and EUR6.4 billion, is 3% ahead of consensus of EUR5.9 billion, while adjusted EBIT of EUR3.6 billion-EUR4.2 billion is 4% ahead, the analysts say. RWE guides for an increased dividend of EUR1 a share for 2023, 11% above expectations. (email@example.com)
0743 GMT - The FTSE 100 Index looks set to open 45 points higher at 7448, according to IG futures data, after upbeat trading in Asia and on Wall Street. Markets in Australia, mainland China, Hong Kong and South Korea all make gains and the Dow closed 1.2% higher. Brent crude drops 1.1% to $72.98 a barrel. "Today's key data release will be the ZEW index from Germany," Danske Bank analysts say in a note, adding, however, that the confidence indicator is unlikely yet to fully reflect recent market turbulence. "From the U.S., we get existing home-sales data." (firstname.lastname@example.org)
0738 GMT - Techtronic Industries' sales outlook is likely to be brightened by the latest Feb U.S. housing starts data, which strongly beat market expectations, Citi analysts say in a note. New-home building in the U.S. rose 10% sequentially in February to its highest level since September 2022, Citi notes. Housing completions also reached a multi-year high, the bank adds. Earnings of Techtronic, which makes home-improvement tools and counts the U.S. as a major export market, are closely related to U.S. home-construction, Citi notes, adding that the stock's price is also highly correlated with U.S. housing start and competition data. (email@example.com)
0736 GMT - Fresenius has so far been given little credit for its steps toward simplifying its corporate structure and for its plans to turn around organic earnings growth and returns through non-core business disposals, Berenberg analysts say in a note. The company is also targeting mid-single-digit organic growth and annual cost savings of EUR350 million by 2025. Those targets look achievable, the analysts say. "Equally, returning to a return on invested capital range of 6% to 8% in the near term does not look like a stretch if Fresenius can divest some of its non-core business lines and geographies," Berenberg says. (firstname.lastname@example.org)
0720 GMT - China stocks end higher, extending their morning gains in a sign of recovery after the market's recent muted trading pattern. The benchmark Shanghai Composite Index ended up 0.6% at 3255.65, while the Shenzhen Composite Index jumped 1.6% to settle at 2085.98. The tech-heavy ChiNext Price Index was the best performer, rising 2.0% to 2337.26. Consumer goods and services sectors including healthcare providers, e-commerce companies and education firms led gains. Many analysts are expecting an imminent rebound in A-shares, which have suffered a broad downturn since late January as enthusiasm about China's reopening cooled. But analysts reckon the recent selloff has likely priced in most risk factors and earnings recovery momentum should help stocks re-rate. (email@example.com)
0714 GMT - The destocking trend, which affected the larger chemical sector in 2022, will likely spill over in 1Q, Citi analysts say in a research note. China's recovery hasn't fully materialized as a lack of orders from the region made itself felt, and though oil prices have declined, naphtha prices remain high, the analysts say. "The summer season will be the potential easing point for margins as energy costs go down further along with other raw materials," Citi says. "Overall, buyers are incrementally cautious as they are in the wait-and-see mode in anticipation of lower prices." (firstname.lastname@example.org)
0659 GMT - Malaysian banks are well positioned to face potential asset quality deterioration arising from inflationary pressures, higher interest rates and danger of weaker global growth, says RAM Ratings co-head of financial institution ratings Wong Yin Ching in a statement. She says the local banking system is protected by robust capital buffers against loss, diversified sources for funding and well-controlled asset quality risks. Wong believes the recent banking crisis in the U.S. won't have a ratings impact on domestic banks. She expects loan growth to be driven by Islamic banking sector and given China's substantial contribution to Malaysia's trade and tourism, Wong reckons China's reopening should encourage Malaysia's business loan growth. (email@example.com)
0655 GMT - South Korea's benchmark Kospi rose 0.4% to close at 2388.35. Institutional investors remained net buyers as fears over banking-sector turmoil eased on regulators' measures to calm jitters. Shipbuilding and gaming stocks led the Kospi's advance. Wall Street's gains overnight supported investor sentiment, though caution ahead of the Fed's rate decision capped the upbeat mood. USD/KRW settled 0.1% higher at 1,311.20. Shipbuilders Hyundai Mipo Dockyard and Daewoo Shipbuilding & Marine Engineering rose 4.7% and 5.6%, respectively. Videogame developer Netmarble climbed 6.3% after it received a new publishing license in China. Index heavyweight Samsung Electronics closed 0.2% higher. (firstname.lastname@example.org)
0552 GMT - PTT Global Chemical's 2023 earnings growth could remain muted in 2023, due to the economic slowdown and inflation concerns in Europe, say Nomura analysts Ahmad Maghfur Usman and Bineet Banka in a note. They reckon that the Thai petrochemical company's strong ethane intake could cushion the impact of a weaker performance chemicals segment. On the bright side, PTT Global's new projects appear to be on track, they add. Nomura lowers the stock's target price to THB55.00 from THB63.00 and maintains a buy rating. Shares are unchanged at THB44.00. (email@example.com)
0533 GMT - Traders might have begun to unwind HKD carry trades against the USD ahead of this week's FOMC meeting, Ken Cheung, chief Asian FX strategist at Mizuho Bank, says in an email. With the Fed likely to alter its rate trajectory to balance the risks of inflation and financial instability, unwinding of long USD/short HKD carry trades are probably underway, Cheung says. A carry-trade strategy typically involves borrowing in a low-interest-rate currency and investing in a high-interest-rate currency to take advantage of differences in interest rates. USD/HKD is little changed at 7.8402 after earlier touching 7.8355, its lowest intraday level since Feb. 21, according to FactSet. (firstname.lastname@example.org)
(END) Dow Jones Newswires
March 21, 2023 03:50 ET (07:50 GMT)
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