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Nissan Shares fall along with Chairman - EMEA Brief 20 Nov

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  • Nissan shares fell more than 5% following Chairman Carlos Ghosn being placed under arrest for allegedly violating Japanese financial law
  • Societe Generale SA settles sanctions violation case with US authorities agreeing to pay $1.34 billion 
  • Talk talk hackers who caused massive data breach affecting 1.6 million customer accounts in 2015 have been jailed for cyber crimes 
  • Oil prices ended on a high yesterday, as EU reported to back French sanctions on Iran 
  • Dow Jones tumbled around 400 points yesterday as technology stocks including Facebook, Amazon, Apple, Netflix and Alphabet declined 
  • Bitcoin fell a further 12% to sit below $5,000, its lowest level in over a year
  • GBP rallied to $1.30 following Prime Minister's announcement of cabinet backing for Brexit withdrawal plan 

Asian overnight: Asian markets followed their US counterparts lower overnight, with Chinese and Hong Kong markets suffering the heaviest losses, losing 2% over the course of the session. The tech sector has been a particular focus for selling pressure, with recent signs over a potential peak in iPhone sales coupled with ongoing tension between the US and China. Bitcoin has continued its decline following the recent drop below a technically important zone of support around $6000.

Nissan stocks took a hit after Chairman Carlos Ghosn was arrested for violating Japanese financial law. The misconduct was reported in a whistleblower report which sited that an investigation showed that Ghosh (and Representative Director Greg Kelly) had been reporting compensation amounts in the Tokyo Stock Exchange securities report that were lower than the actual amount, in order to reduce the disclosed amount of Carlos Ghosn's compensation. The report also suggested this was not Ghosn's only transgression but outlined numerous other significant acts of misconduct such as personal use of company assets. Following these findings it is suggested that Nissan's CEO Hiroto Saikawa, will propose to the Board of director that both Ghosn and Kelly are removed from their positions. 

UK, US and Europe: Looking ahead, the main event of note comes from the UK, where the BoE inflation report hearing sees the likes of Mark Carney take the stand for a bout of questioning. Also keep an eye out for the latest US building permits, and housing starts in the afternoon. Earnings-wise, we see a host of US retail names report their latest earnings, with Gap, Target, Footlocker, Best Buy, Lowe's, and Barnes & Noble all in the spotlight. Theresa May continues to argue in defense of her draft withdrawal agreement, stating at the annual Confederation of British Industry yesterday that the deal puts the UK's economic success above all else. However Spain has argued that a consensus must be met in regard to Gibraltar before they will accept the proposed Brexit deal. 

Economic calendar - key events and forecast (times in GMT)


1.30pm – US housing starts & building permits (October): permits to rise to 1.27 million and starts to rise to 1.23 million. Markets to watch: US indices, USD crosses

Source: Daily FX Economic Calendar

Corporate News, Upgrades and Downgrades

  •  Compass said that revenue rose 5.5% to £23.24 billion, while operating profit was up 7.1% to £1.74 billion, for the full year. 
  • Spectris said that sales rose 9% in the four months to October, while the full-year performance is expected to be in line with forecasts. 
  • Polypipe reported a 10.2% rise in revenue for the four months to October, while the full-year is forecast to be in line with expectations. 
  • AO World said that full-year results would be weighted towards the second half of the year, due to more challenging UK trading conditions. Total sales for the half year rose 10% to £404 million, but the overall loss was £11.7 million, although this was fractionally less than last year’s £12 million. 
  • EasyJet reported a 41.4% rise in pre-tax profit to £578 million, while revenue rose 16.8% to £5.9 billion. 
  • Nvidia fell a further 11% yesterday after 3rd quarter earnings report 
  •  TSB appoints Debbie Crosbie as new chief executive after IT scandal 
  • Urban Outfitters shares increased by over 6% during after-hours trading following company earning reports of 70 cents per share vs estimated 62 cents a share
  • L Brands shares declined by more than 5% after cutting annual dividends in half to $1.20

Melrose Industries Upgraded to Top Pick at RBC
Rotork Raised to Outperform by RBC
Dermapharm Upgraded to Buy at Oddo BHF

Tryg Downgraded to Sell at Goldman
Gjensidige Downgraded to Neutral at Goldman
Aker BP Downgraded to Neutral at JPMorgan
Spirax Downgraded to Underperform at RBC

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Information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary

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