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LIVE MARKETS-On the radar: Iberdrola unit merger, Akzo Nobel, Ericsson

Wed, 21st Oct 2020 07:49

* European stock futures up 0.2%

*
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ON THE RADAR: IBERDROLA UNIT MERGER, AKZO NOBEL, ERICSSON (0639 GMT)

European stocks are poised to open higher, with sentiment boosted by hopes for a U.S. rescue
package and better-than-feared earnings results.

While concerns about the pandemic in Europe continue to weigh, we have a decent batch of
corporate news to cheer up investors, starting with a multi-billion cross border merger in the
renewable energy sector. Avangrid, the U.S. unit of Iberdrola, has agreed to
buy U.S. utility PNM Resources for around $4.3 billion. The merged company would have
assets worth $40 billion and generate core earnings of around $2.5 billion and net profit of
$850 million.

Akzo Nobel reports a better-than-expected 18% increase in third-quarter core
profit to 353 million euros.

Nestle stocks are up 2.7% in premarket trade after the company beats Q3 sales
expectations and raises its guidance for 2020.

Ericsson quarterly core earnings beat market estimates, helped by higher margins
and China's 5G rollout, and is "more confident" in meeting its 2020 targets.

Good news also on the vaccine front as AstraZeneca Plc's trial in the United States
is expected to resume as early as this week after the U.S. Food and Drug Administration
completed its review of a serious illness in a study participant.

But we still see pressure on the financial sector. Shares in GAM Holding are down
2.2% in premarket trade after results., while Handelsbanken reports
lower-than-expected quarterly net earnings due to restructuring costs.

Vinci expects earnings to continue falling in the second half of the year, as
weakness at its pandemic-ravaged airports business outweighs signs of a recovery in construction
and motorway traffic.

GlaxoSmithKline would move its experimental vaccine against the respiratory
syncytial virus (RSV), a cause of pneumonia in toddlers and the elderly, into the final stage of
testing, encouraged by mid-stage trial results.

Shares in Bilfinger are up 7.2% after press reports on possible takeover of the
company.

(Stefano Rebaudo)

*****

EUROPE CAUTIOUSLY IN THE BLACK (0528 GMT)

European stock futures are in the black along with their U.S. peers as hopes of a quick
approval of a U.S. stimulus package are propping up risk sentiment.

But investors continue to be cautious as coronavirus trajectories as well as possible new
restrictive measures are now seen as the single biggest near-term risk to the economic recovery.

Italy, Spain and Britain are considering new restrictions, including curfew in hard-hit
regions, to limit the spread of the pandemic. The latest curbs in Ireland will see GDP fall by
3.5% this year, Finance Minister Paschal Donohoe said.

(Stefano Rebaudo)

*****

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