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Mid-session Paris: the CAC40 still sees red, the recession worries


THE TREND

(Boursier.com) — Volatile morning for the CAC40. Once again in the red at the opening, the Parisian index went up the slope before finally relapsing as midday approached. It appears down 0.71%, to 5,742 points at noon, and accentuates its losses after dropping close to 5% last week, returning to levels of mid-July.

It must be said that the news remains gloomy. The OECD has lowered its global growth forecast for next year due to the consequences of Russia’s war in Ukraine and the combination of inflation and the energy crisis in Europe. While the Paris-based organization still expects global growth to reach 3% this year, it only sees it at 2.2% in 2023, down from 2.8% in its previous forecast in June. . The OECD estimates that economic growth in the euro zone will decline from 3.1% this year to 0.3% in 2023, suggesting that the group of 19 countries sharing the single currency should spend at least part of the l next year in recession…

In Germany, the business climate in Germany deteriorated even more than expected in September and the risk of recession is increasingly clear. The confidence index compiled by the Ifo Institute thus reached 84.3 over the current month against 88.6 the previous month. At its lowest for more than 2 years, it also comes out below the expectations of economists who were counting on 87. The current assessment component lost three points to 94.5 points (96 consensus) and the expectations component stood at 75, 2 points against 80.5 a month before (79 consensus).

In the United Kingdom, the pound sterling hit a historic low against the dollar after the announcement by the Liz Truss government of massive tax cuts, in which many investors see above all a danger for British public finances. Bond rates soared, with 2-year bonds still gaining nearly 50 basis points around noon.

In Italy, the victory of the bloc of rights in Italy, in which Fratelli d’Italia achieves the highest score, is not reassuring. It could bring fears of a breakup in the euro zone to the fore. The single currency also pays the price, down 0.33% to $0.966 between banks.

On the commodity markets, the ounce of gold is stable, around $1,643. The prices of black gold are still falling a little after falling sharply last week due to fears weighing on demand. The barrel of Brent from the North Sea is currently yielding 0.7% to $85.5.

Finally, on the value side, Theradiag flames after the takeover bid of Biosynex, M6 jumped with the continuation of speculation around Bertelsmann’s participation and Elior fell in an unfavorable economic environment.

RISING VALUES

* Theradiag soared 58.6% to 2.3 euros and adjusted without delay to the offer of Biosynex. Already the first shareholder of Theradiag holding 25.07% of the capital and 25.16% of the voting rights, Biosynex announced at the end of last week that it had filed with the Autorité des Marchés Financiers a draft voluntary cash tender offer aimed at Theradiag shares that it does not hold. This merger of two French players in the in vitro diagnostics industry present in France with private and hospital laboratories as well as internationally, “will allow the two companies to create value by pooling their know-how. complement each other in R&D and production and unify the strategy and the sales teams”.

* Novacyt jumped 28% to 1.09 euros in a copious volume. In the absence of any tangible element explaining this rally, one can imagine that certain audacious investors draw a parallel with the file Theradiag (+58.6%), which will be the subject of a takeover bid by its shareholder at 25.07% Biosynex. Biosynex is also a shareholder of Novacyt since February. The group had notified in July a stake of 4.49%. Biosynex, whose results had soared during the pandemic, took various stakes. Last week, the group also announced the acquisition of the company Bigix Pharma in Italy, which distributes various product lines in the medical equipment segment and had achieved in 2021 a turnover of around 2.9 ME.

* M6 climbed 5.3% to 15.2 euros. The commotion remains strong around the ‘six’ after the failure of the merger with TF1. RTL Group (Bertelsmann) wishes to sell its stake as quickly as possible, wishing to refocus on the countries where it is the leader. A procedure accelerated by the fact that the renewal of the frequency of the M6 ​​channel is scheduled for next May. However, French law prohibits the owner of the channel concerned from selling it within 5 years of this renewal…

According to the latest information obtained by ‘Bloomberg’, the French businessman Stéphane Courbit and his financial partners have offered a price of 20 euros per share to take over Bertelsmann’s stake. The offer would thus represent a premium of 39% compared to the closing price of the M6 ​​share on Friday, at 14.43 euros, and values ​​the 48% stake in M6 at around €1.22 billion. Rodolphe Saadé, CEO of CMA CGM, and businessman Marc Ladreit de Lacharrière would be present in this consortium. The Czech businessman, Daniel Kretinsky, and the Italian television group MediaForEurope, associated with Xavier Niel, the founder of Iliad, are also in the race.

* Valneva (+2.2% to 5.8 euros) had previously indicated that it would invest in the development of a second generation vaccine against Covid-19 only if it received the necessary funding or a funding commitment during the third quarter of 2022. The Company is in discussions with a potential partner to obtain such financing. These discussions could continue for several months and may not lead to an agreement. In addition, Valneva is continuing discussions with various governments and regulatory authorities around the world, with the aim of deploying the remaining stocks in international markets within the next twelve months. The Company also plans to report additional clinical data by the end of the year, including heterologous recall data, which could potentially support the disposal of these stocks.

* TotalEnergies (+0.1% to 46.6 euros) was once again selected as the first international partner for the North Field South (NFS) LNG project, with a capacity of 16 Mt/year. According to the agreement, TotalEnergies will obtain a 9.375% stake in the NFS project – out of a total of 25% available to international partners – while the national company QatarEnergy will hold the remaining 75%. Thanks to the combination of its interests in NFE (6.25%) and NFS, TotalEnergies will add, by 2028, 3.5 Mt/y of production to its growing global LNG portfolio, in line with the objective Company to increase the share of natural gas in its sales mix to 50% by 2030.

FALLING VALUES

* Elior fall of 19% to 2.18 euros. Elior plunged nearly 14% to 2.27 euros at the start of the session in Paris, its biggest drop in more than 15 weeks. The news around the collective catering group under contract is marked by several notes from analysts. Stifel first reiterated its ‘sell’ advice while lowering its target from 2.8 to 2.2 euros. JP Morgan reduced its target from 2.5 to 2 euros with a recommendation maintained at ‘underweight’. Oddo BHF confirms its ‘underperform’ opinion and reduces its target from 3 to 2.6 euros.

Following a contact with the company, the analyst notes a cautious message linked to certain macroeconomic elements which could weigh on Elior’s activity in the short term. Thus, the group is currently experiencing supply difficulties and very high inflation on certain raw materials linked to the summer drought, in particular butter and milk, products that are difficult to substitute. At the same time, Elior is facing recruitment difficulties on the return of summer, with fewer available workers, which leads to additional wage inflation…

* Veolia loses 3.2% to 20 euros with Engie (-2.6% to 12.2 euros). Utilities are suffering on Monday.

* BNP Paribas yields 2.1% to 45.9 euros with Societe Generale (-2.5% to 22 euros). Fears of recession outweighed the rise in bond rates, which was nevertheless favorable to the banking sector.

* Airbus point down slightly by 0.2% while many analysts adjust to the file after the investor day organized on Friday by the Toulouse group. For Oddo BHF, the tone of the management during this CMD was ultimately not as cautious as expected by some investors, which suggests the end of the downward revisions of the consensus. Deutsche Bank for its part lowers its target from 141 to 133 euros but remains on the ‘purchase’. Airbus has helped ease concerns about delivery execution and capital allocation, according to the broker. Stifel for its part adjusts the slider from 155 to 150 euros and also remains in the ‘purchase’.

* Eurofins Scientific (-0.1% to 60.6 euros) has reached an agreement to sell its Digital Testing business to Stirling Square Capital Partners (“Stirling Square”) for 220 million euros, without cash or debt. This company contributes approximately 1% of the Group’s sales and employs more than 600 people.



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