The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0800 GMT - Baidu's generative artificial intelligence revenue could rise gradually and mitigate the impact of subdued ads revenue, CCB International analyst Cathy Chan says in a research note. GenAI and foundation models accounted for 6.9% of AI cloud revenue and have been a key revenue driver for Baidu in 1Q, the analyst says. Once Baidu finishes integrating its Ernie GenAI model in its search engine, that could also boost the muted ads revenue, she adds. CCB maintains a outperform call on Baidu while raising its H-share target to HK$139.85 from HK$138.10 in view of the long-term potential of the AI-driven business. Shares are last at HK$107.30. (sherry.qin@wsj.com)
0801 GMT - Ryanair's higher earnings and its decision to bring back buybacks should drive upgrades to consensus estimates, Bernstein analysts Alex Irving and Tobias Fromme say in a research note. The Irish low-cost carrier had suspended the buybacks since the Covid-19 pandemic."[Ryanair] is making good on its promise to return excess liquidity to shareholders, and to favor buybacks where the shares look undervalued," they say. Ryanair's net profit in the fourth quarter beat expectations by 4.2%, while passenger numbers rose 4.5%. However, the quarterly rise in passengers was below the 7% on-year growth recorded in 3Q, the analysts say. Shares are down 1% at EUR18.15. (pierre.bertrand@wsj.com)
0743 GMT - Frencken Group's semiconductor segment is likely to recover in FY 2024, Maybank Research analyst Jarick Seet says in a note. In 1Q, the Singapore-listed technology solutions provider's semiconductor segment did well, thanks to higher sales from its key customer in Europe and improving sales in Asia, Seet notes. Management expects a gradual recovery in FY 2024 for the segment from various new production introductions in Asia and Europe, he adds. The company has also relocated their U.S. operators to a larger facility and expanded their motor business which supports semiconductor equipment customers, he adds. Maybank maintains a buy rating on the stock with a target price of S$1.77. Shares are at S$1.38.(amanda.lee@wsj.com)
0731 GMT - The timing of British Land's disposal of its 50% stake in the Meadowhall shopping center is clearly significant and reflects growing investor optimism in the retail sector, Shore Capital says. "The ability for British Land to realize an exit from Meadowhall is a further enhancement to the positive investment case in our view, with a helpful reduction in debt and loan-to-value," analyst Andrew Saunders writes in a research note. That the sale also helps facilitate the retail company's focus on its target growth markets also adds to its investment case, Saunders says. Shares are down 0.6% at 400.80 pence. (christian.moess@wsj.com)
0729 GMT - Keywords Studios has struggled to regain investor confidence and shares have remained weak, Shore Capital analyst Katie Cousins writes in a research note. The London-listed videogame services company confirmed this morning that it was in talks with European private equity company EQT over a potential cash offer for 2,550 pence a share, which is 73% above Friday's closing price, Cousins says. However, while the group is still growing, its organic growth has slowed over the past few years and profit margins appear fairly fixed over the medium term, she adds. Shares are up 62.7% at 2,392 pence. (najat.kantouar@wsj.com)
0711 GMT - Chinese shares closed higher as sentiment remained positive after Beijing's stimulus measures targeting the property sector. Investors are also digesting China's unchanged benchmark lending rates, data showed earlier Monday. The benchmark Shanghai Composite Index ended 0.5% higher at 3171.15, the Shenzhen Composite Index was up 0.5% and the ChiNext Price Index rose 0.6%. Commodity stocks led gains. Jiangxi Copper advanced 5.9%, while Zhongjin Gold and China Coal Energy each rose 5.6%. Among decliners, Seazen Holdings and Haier Smart Home dropped 4.3% and 3.6%, respectively. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0710 GMT - South Korea's benchmark Kospi closed 0.6% higher at 2742.14, in line with most Asian peers. The gains were supported by institutional buying that saw financial and technology stocks close higher. Index heavyweight Samsung Electronics gained 1.9% and SK Hynix added 0.1%. Auto stocks also rose, with Kia and Hyundai Motor gaining 2.0% and 2.7%, respectively. Shinhan Financial Group rose 2.7%, and Woori Financial Group closed 1.1% higher among the financial stocks. USD/KRW was nearly flat at 1,355.90 in Seoul onshore trading. (venkat.pr@wsj.com)
0706 GMT - JD Logistics is likely to see profitability continue to improve throughout the remainder of 2024, Daiwa analysts Frank Yip and Kelvin Lau say in a research note. They point out that the logistics arm of Chinese e-commerce giant JD.com reported better-than-expected 1Q earnings, thanks to improved cost control and the company's advantageous scale. Management is likely to raise FY guidance on revenue and profitability while reporting 2Q results, the analysts say. Daiwa raises its target price to HK$12.00 from HK$9.50 and keeps a buy rating on the stock. Shares are 2.8% lower at HK$9.93. (tracy.qu@wsj.com)
0649 GMT - The FTSE 100 is expected to open 9.2 points higher, according to IG, having closed on Friday at 8420.26 as investor sentiment remains positive due to increased expectations of interest-rate cuts in the coming months. "The start of the week has seen further gains in global share prices, Asian equities are higher, and U.K. and U.S. stock index futures are also pointing to positive opens," XTB research director Kathleen Brooks says in a note. Investor focus is on U.K. inflation data and the U.S. Federal Open Market Committee minutes due this week. "[The data] may determine the timing of shifts in major central banks' policy stances, which could have a big impact on financial markets," XTB says. (miriam.mukuru@wsj.com)
0638 GMT - NetLink NBN Trust remains a high-yielding and safe-haven stock, thanks to its stable revenue streams and operating cash flows, UOB Kay Hian analysts say in a research note. Given management is aware of this profile, key criteria of any potential new investments by the company in the near term would probably have to include the country risk premium, the analysts say. Also, the Singapore operator of a nationwide fibre network has sufficient debt scope to drive its acquisition ambitions without compromising cash flow and dividends, the analysts add. The brokerage maintains the stock's buy rating but trims the target price to S$0.98 from S$1.01 to reflect a valuation rollover. Shares are 0.6% lower at S$0.86. (ronnie.harui@wsj.com)
0629 GMT - Nordic markets are seen opening slightly higher with IG calling the OMXS30 up 0.1% at around 2605. Geopolitics continues to dominate the news with continued pressure on Israel's Netanyahu to find solutions to the Gaza conflict and the Iranian president being killed in a helicopter crash, SEB analysts say in a note. In Taiwan, the new president, Lai Ching-te, took office this morning. China describes Lai Ching-te as a dangerous separatist, but stock markets in Asia are rising almost across the board, SEB adds. Futures in the U.S. and Europe are pointing up a few tenths after U.S. stock markets on Friday closed slightly higher after trading around zero throughout the day. OMXS30 closed at 2602.20, OMXN40 at 2825.94 and OBX at 1327.03. (dominic.chopping@wsj.com)
0629 GMT - Japanese stocks end higher, led by gains in bank and energy stocks, as the 10-year Japanese government bond yield hits an 11-year high. Mizuho Financial Group gains 3.1% and Sumitomo Mitsui Trust Holdings climbs 2.4% as the 10-year JGB yield rises 3 basis points to 0.975%, the highest level since May 2013. Meanwhile, Eneos Holdings gains 6.2% and Inpex adds 4.2%. The Nikkei Stock Average rises 0.7% to 39069.68. Investors are focusing on developments in the Middle East and crude oil prices after Iranian President Ebrahim Raisi was killed in a helicopter crash on Sunday. USD/JPY is at 155.74, compared with 155.67 late Friday in New York. (kosaku.narioka@wsj.com; @kosakunarioka)
(END) Dow Jones Newswires
May 20, 2024 04:01 ET (08:01 GMT)
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