By Swissquote Analysts
Sika Results Rise, Lifts Dividend
Topic of the day
Swiss specialty chemical firm Sika AG reported that its fiscal 2022 net profit grew 11 percent to 1.16 billion Swiss francs from last year's 1.05 billion francs. Earnings per share were 7.57 francs, 9.6 percent higher than 6.91 francs last year. Operating profit or EBIT increased 13.5 percent to 1.58 billion francs from last year's 1.39 billion francs. The EBIT margin was 15.1 percent, up from 15 percent last year. The company exceeded the 10 billion francs sales mark for the first time with sales of 10.49 billion francs, up 13.4 percent from last year's 9.25 billion francs. Sales increased 15.8 percent in local currencies. Further, at the Annual General Meeting on March 28, the Board of Directors will propose to increase the gross dividend by 10.3 percent to 3.20 francs. Looking ahead for fiscal 2023, Sika expects sales to rise by 6 percent to 8 percent in local currencies and anticipates an over-proportional increase in EBIT, excluding the impact of the MBCC acquisition. The shares rewarded this perspective with a 4.9 percent increase in price to 276.90 francs and were thus at the top of the SMI on Friday.
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Friday, the Swiss stock market recovered particularly strongly from the day's lows, due to the convincing business performance of Sika and the strength of the three heavyweights Roche (+1.4%), Novartis (+1.2%) and Nestle (+1.3%). The SMI gained 0.5 per cent to 11,256 points. Among the 20 SMI stocks, there were ten price losers and ten price gainers. 45.9 (previously: 49.37) million shares were traded. The shares of reinsurer Swiss Re closed little changed. In the wake of good results, the outlook looks very cautious, analysts pointed out. RBC Capital Markets noted, the profit forecast for this year of 3 billion is below the consensus of 3.2 billion dollars. Kühne+Nagel rose 0.9 per cent after a JP Morgan upgrade. Newron (+19.4 per cent) continued the previous day's surge unabated after the company recently published positive study data. Swiss Steel announced the sale of several non-core distribution companies, the share price added 1.2 per cent.
European stocks traded lower on Friday, as strong U.S. macro and inflation data have undercut the idea that the Federal Reserve is nearly done raising rates. The Stoxx Europe 600 index fell 0.2% to 464.3 points. In Paris, the CAC 40 and SBF 120 were down 0.3% each. The DAX 40 in Frankfurt lost 0.3% and the FTSE 100 in London slipped 0.1%. For the week as a whole, the Stoxx Europe 600 index rose by 1.4%. The CAC 40 gained 3.1% thus displaying all-time highs. The biotech company Valneva (-9.1%) announced that its US partner Pfizer had decided to exclude a significant percentage of participants who had been recruited in the US for the phase 3 clinical study of its candidate vaccine (VLA15) against Lyme disease. Eutelsat fell by 9%. The satellite operator's decline in profitability during the first half of the year to the end of December was deemed "surprising" by Bryan Garnier. GTT (-6.2%) reported slightly better-than-expected results for 2022, but its consolidated EBITDA forecast for 2023 was below analyst expectations. Air France-KLM (+5.3%) returned to profit and posted record fourth-quarter revenue, while its closely watched operating profit beat consensus thanks to strong pricing on long-haul routes, Citi analysts commented. Video game publisher Ubisoft (+3.8%) confirmed its financial targets for the year to the end of March, after seeing its net bookings, the equivalent of turnover, fall in the third quarter. Mercedes-Benz Group (+2.8% in Frankfurt) will pay 5.6 billion euros in dividends to its shareholders and will launch a share buyback programme worth up to 4 billion euros in 2023. The German carmaker saw results jump in the fourth quarter and for the full year 2022 yet warned that sales are likely to stagnate this year due to ongoing supply problems.
The S&P 500 fell Friday as investors amped up bets on how far the Federal Reserve will raise interest rates in the coming months. The broad-based U.S. stock index lost 11.32 points, or 0.3%, to 4079.09, its second down day in a row. The tech-heavy Nasdaq Composite declined 68.56 points, or 0.6%, to 11787.27. Led by Merck (+2.8%), Amgen (+2.7%) and J&J (+2.1%), the Dow Jones Industrial Average (DJIA) finally managed to gain 0.3% to 33,826.69 points. Inflation data and commentary from Fed officials this week have stymied the big rally that started the year. The Fed has set a 4.5% to 4.75% target range for its short-term rate and is next due to reassess in late March. Still, some corners of the stock market continued their winning streak. Tesla notched a sixth consecutive week of wins, the longest such stretch since November 2021. Shares of Cisco Systems finished their best week since February 2021. In corporate news, Moderna shares fell $5.71, or 3.3%, to $166.60, after the drugmaker said an experimental flu vaccine had mixed results in a large clinical trial. DraftKings shares jumped $2.73, or 15%, to $20.54, after the company reported quarterly results. Shares of farm equipment maker Deere were up $30.35, or 7.5%, to $433.31 on strong earnings. Wrestling promoter Vince McMahon is seeking $9 billion for World Wrestling Entertainment (WWE), the broadcasting company he ran for decades, Bloomberg reported, citing sources close to the matter. Endeavor Group Holdings, which owns the Ultimate Fighting Championship league, is said to be among the candidates for the buyout. WWE gained 0.9 percent on Friday. Applied Materials (+0.04%) presented solid business figures, yet the 2023 financial year that has just started was described as "challenging". Doordash earned more than expected on an adjusted basis and reported the best quarter in the company's history. Nevertheless, the food delivery service's fourth-period loss was higher than expected. The share price turned 7.6 per cent negative.
Asian stocks traded mixed on Monday. China's Shanghai Composite index rises 1.5 per cent while Hong Kong's Hang Seng index adds 0.8 per cent. Japan's Nikkei index was virtually unchanged as hawkish comments from Fed and ECB officials offset investor optimism over a weakening yen. Meanwhile Seoul stocks were seeing very modest gains despite North Korea firing a pair of ballistic missiles off its east coast. STX Heavy Industries' shipyard shares are down 6.6 per cent. According to reports, Hanwha Group has dropped its bid. Instead, the group is now said to be preparing a majority stake in ship engine builder HSD Engine (unchanged). Korea Shipbuilding & Offshore Engineering fall 2.9 per cent. SCK jumps 8.8 per cent after the company closed a copper foil deal.
Most U.S. Treasury yields, except for short-term T-bill rates, held steady on Friday as traders weighed the possibility that the Federal Reserve might need to boost the size of its March interest rate hike. The 10-year Treasury note fell 4 basis points to 3.822%. The 2-year Treasury note declined by 4 basis points to 4.630%. 12 Swiss Confederation bonds are reported at lower prices. The yield on two-year Confederation bonds was last quoted at 1.109% and on ten-year bonds at 1.364%.
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