profit taking after double-digit rebound

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THE TREND

The CAC40 fell 1.7% this afternoon to 4.355 points, yielding rather calmly to taking fairly logical profits after 13% rebound in the previous two sessions. The Parisian index had even picked up yesterday, 22.5% from its low point of 10 days ago, or 800 points!

Volatility could therefore return, with, in the firing line, weekly jobless claims in the United States this afternoon. The statistic is particularly awaited. Economists polled by Bloomberg said enrollments are expected to hit a record high of 1.64 million for the week ended March 21, up from 281,000 the week before. The current record dates from 1982 with 695,000 registrations. These estimates, however, appear very disparate since some economists are betting on more than 4 million new jobless claims!

For France, the business climate is deteriorating very sharply in services (-14 points) and retail trade (-13 points). INSEE currently estimates that activity is running at around 65% of normal with, in particular, household consumption which should fall very sharply, in the region of -35%.

In the United States, the Senate adopted on Wednesday evening the plan to support the economy of 2,000 billion dollars to face the coronavirus. The text must now be approved by the House of Representatives, controlled by the Democratic opposition, before being sent if necessary to Donald Trump for promulgation. The House vote is expected to take place on Friday. In an interview with the American channel ‘Fox News’, Donald Trump said that too prolonged confinement could “destroy” the economy of the world’s leading power. “You can destroy a country by closing it this way,” he said, saying that a “severe recession” could kill more people than the new coronavirus.

On the business side, the abandonment of financial forecasts for 2020 is increasing in Paris. All managements now sail by sight! Since yesterday’s close, Legrand, Casino, Rexel and even Suez Environnement have been among the groups that have warned.

RISING VALUES

* Pernod Ricard (+ 2.7%) finalized the acquisition of the entire capital of Monkey 47 which produces ultra-premium gin. Its founder, Alexander Stein, will remain involved in the development of the brand.

* At the head of the CAC40 Airbus wins 5% to 63 euros but the title had benefited from the rebound of the last two days.

* Aubay (+ 10%) published solid 20198 results and decided to leave its dividend unchanged at 0.60 euros per share. The 2020 forecasts are however suspended and the group notes a daily turnover 10% lower than the budgeted level since mid-March. The impact is, however, different depending on the country, with a drop of around 15% in Spain and France, 10% in Belux, 5% in Italy. Portugal has not been impacted to date.

* Eurobio Scientific (+ 25% to 8.8 euros) has received CE marking for its proprietary test EBX 041 SARS CoV2, developed specifically for the clinical diagnosis of COVID-19. The test is produced in-house by Eurobio, at its recently renovated Ulis premises and follows the ISO 13481 regulatory normative process. The production capacity is more than 200 kits of 96 tests, or nearly 20,000 tests per day, with a capacity to triple this volume according to demand. This is a multiplexed real-time PCR test (based on the detection of DNA sequences) directly usable on a large number of open thermal cycler instruments, present in diagnostic laboratories. It allows rapid detection (1h15) after extraction, of the genes identifying the SARS COv2 virus as recommended by the World Health Organization (WHO). At the same time, Eurobio Scientific is continuing to distribute the test for its South Korean partner SEEGENE, of which it is the exclusive distributor in France. With nearly 60 laboratories and technical platforms installed in France (public and private), Eurobio specifies that the order book (sales + orders) for these tests and related instruments currently stands at around 5 million euros.

FALLING VALUES

* Casino (-5% to 32.6 euros) has released its 2019 results and is suspending its initial financial forecasts for 2020 and beyond due to the uncertainties linked to the coronavirus. Over the past financial year, the Stephane group recorded current operating income of 1.292 billion euros, up 5.5% at constant exchange rates (excluding tax credits). EBITDA increased by 0.6% (at constant exchange rates) to 2.64 billion euros for a turnover up by 0.9% (+ 4.2% at constant exchange rates) to 34.645 billion euros.

* Suez Environment (-1.8% to 9.53 euros): the 2020 targets are suspended. “It is clear to us that, like all industries, we are likely to be significantly impacted in 2020 by the consequences of population containment. We are monitoring the situation very closely and will inform the market in due course as the trends will become clear, “said the Board of Directors.

* Engie (-4% to 10.17 euros): the financial rating agency Standard & Poor’s placed Wednesday under surveillance with negative implication the credit rating “A- / A-1” long and short term of the group in the context of the coronavirus epidemic, the reduction of financial leeway, and against the background of a change in group governance.

* Total lost 4% to 31.5 euros while the barrel of Brent yields about 2% around 26.8 dollars.

* Impacted in these trades, whether in concessions or construction, Vinci lost 4% to 71.4 euros.

* Ipsen (-1%) today announced the upcoming resumption of palovarotene by patients aged 14 years and over currently participating in the clinical program of progressive ossifying fibrodysplasia (FOP). In the United States, the Food and Drug Administration (FDA) has confirmed that resumption of treatment by patients aged 14 years and older poses no safety concerns.

* Bastide (stable) generated in the first half of its financial year 2019-2020 a current operating income up + 10.1%, to 15.7 ME (including + 0.3 ME linked to the impact of application of IFRS 16). The current operating margin was 8.9% (8.6% excluding the impact of accounting standards).



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