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Research Market strategy
by Swissquote Analysts
Morning News

Allianz 4Q Net Profit Rose, Raises Dividend

Topic of the day

Allianz SE said Friday that fourth-quarter net profit rose, and increased its dividend for 2019. The German insurer said net profit was 1.86 billion euros ($2.01 billion), up from EUR1.7 billion a year earlier and beating analysts' forecasts of EUR1.68 billion, according to a consensus estimate provided by FactSet. Revenue for the quarter rose to EUR35.5 billion from EUR33.2 billion the year prior, the company said. Operating profit for the quarter fell to EUR2.75 billion from EUR2.77 billion, while for the full year it rose to EUR11.86 billion, in line with Allianz's view that it would hit the upper half of the company's EUR11 billion-EUR12 billion targeted range. Allianz's Solvency II ratio, a key measure of balance-sheet strength, stood at 212% at the end of 2019. The company proposed a dividend of EUR9.60 a share, up from EUR9 a share the year prior. In the asset-management division, which includes U.S. fund manager Pacific Investment Management Company, operating profit for the year rose 9.7%. Allianz guided for 2020 operating profit of about EUR12 billion, plus or minus EUR500 million. Late on Thursday, the company said it will launch a EUR1.5 billion buyback program.

Swiss stocks

Profit-taking dominated trading on the SMI Thursday. After having risen to a new all-time high Wednesday, the index fell 1 percent to 11,155 points. The heaviest loser on the SMI was Swiss Re, which slumped 8.1 percent after reporting very high claims when presenting 2019 financials. UBS surged 0.9 percent on the news that CEO Sergio Ermotti is resigning and will be replaced in the autumn by Ralph Hamers, currently CEO of the Dutch ING Groep. Pharmaceutical stocks Roche slid 1.6 percent and Novartis 1.3 percent. Index heavyweight Nestle closed almost at the previous day’s level. Strong Swiss watch export data for January had little effect on the SMI’s luxury goods stocks. Richemont slid 1 percent and Swatch 0.3 percent. Traders said investors were already bracing for disappointing data for February, as the coronavirus is likely to have caused severe shrinkage in watch sales on the Chinese market, which is a particularly important market for Richemont and Swatch.

International markets

Europe

The Stoxx Europe 600 traded 0.9% lower, while the FTSE 100 lost 0.3%. European stocks droppe as traders sat on the sidelines ahead of economic data due out Friday. Aeroports de Paris has reached an agreement to buy a stake of up to 49% in Indian airport group GMR Airports for 1.36 billion euros ($1.47 billion). The agreement foresees a two-leg deal, the first stage of which will see the French airport operator buy a 24.99% stake in GMR Airports over the coming days. Shareholders representing about 18% of Unione di Banche Italiane's capital said that Intesa Sanpaolo SpA's offer for the bank is "unacceptable." The offer "appears hostile, not agreed upon, inconsistent with the implicit values of UBI Banca and therefore unacceptable," the members of UBI's shareholders' pact said Thursday in a statement. The statement comes after Italian bank Intesa Sanpaolo launched a 4.9 billion euros ($5.3 billion) takeover bid for its smaller rival, offering UBI shareholders 17 newly issued shares of Intesa for every 10 UBI shares held. The CAC-40 retreated 0.8% and the DAX backtracked 0.9%

United States

U.S. stocks slid intraday as concerns mounted that the coronavirus outbreak could have more of an impact on corporate earnings and global growth than investors initially believed. The Dow Jones Industrial Average fell 159 points, or 0.5%, in afternoon trading, paring declines of more than 300 points earlier in the session. The S&P 500 dropped 0.5%, while the Nasdaq Composite declined 0.8%. All three indexes have posted double-digit gains over the past year and set repeated highs in recent sessions. For the most part, investors have shrugged off the outbreak that has killed more than 2,100 people and infected more than 74,000, mostly in mainland China. When the outbreak erupted into the headlines last month, many analysts expected markets to follow the pattern of past pandemics, such as severe acute respiratory syndrome, in which stocks sold off sharply at the outset, only to rebound once the rate of infections slowed. Sprint and T-Mobile US have agreed on new terms for their merger, as the wireless carriers race to close the deal after overcoming a federal court challenge. The parties will improve the exchange ratio in the all-stock deal for T-Mobile's parent, Deutsche Telekom, the companies said in a written statement confirming an earlier Wall Street Journal report. U.S. District Judge Victor Marrero last week allowed the deal to proceed by rejecting arguments from a group of state attorneys general seeking to block the merger as anticompetitive.

Asia

In Asia, stocks in Tokyo were flat, while Hong Kong and Sydney retreated. Traders shifted money into bonds and gold, a traditional safe haven.

Bonds

Prices for U.S. government bonds rose as investors bought assets seen as havens. The yield on the 10-year U.S. Treasury note fell to 1.530%, from 1.569% on Wednesday. Bond yields fall as prices rise.

Analysis

CS lowers the Eni target to 16 (16,75) EUR – Neutral
CS rises the Dt. Telekom target to 17 (16) EUR – Neutral
CS lowers the Covestro target to 44 (45) EUR – Outperform


Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.

 
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