Tag Archives: Forecast / Warning Results

Morgan Stanley disclosed Archegos’ loss of $ 911 million as profits soared | Instant News


(Reuters) -Morgan Stanley lost nearly $ 1 billion from the collapse of the family offices of Archegos Capital Management, the bank said on Friday, clouding a 150% jump in first-quarter profit supported by a boom in trade and deal-making.

Morgan Stanley is one of several banks with exposure to Archegos, which failed to pay a margin call late last month and sparked a stock sale fire across Wall Street.

Morgan Stanley lost $ 644 million selling shares held in relation to the Archegos position, and another $ 267 million trying to “demean” them, Morgan Stanley Chief Executive James Gorman said by phone with analysts.

“I consider the decision necessary and money well spent,” he said.

The bank did not immediately disclose the loss because it was deemed immaterial in the context of the overall results, he added.

Morgan Stanley is not alone in dealing with losses as the main broker for Archegos. Switzerland’s Credit Suisse Group AG and Japan’s Nomura Holdings Inc. bore the brunt, having lost $ 4.7 billion and $ 2 billion, respectively.

Goldman Sachs Group Inc, Deutsche Bank and Wells Fargo & Co also handled the Archegos position but left without a loss, Reuters and other media outlets have reported.

Morgan Stanley was unaware that Archegos had similar positions and was concentrated in several banks on Wall Street, Chief Financial Officer Jonathan Pruzan told Reuters. As such, the collateral requirements imposed reflect only Archegos’ specific Morgan Stanley risks, not risks across a broader portfolio of mutual funds.

Morgan Stanley has reviewed its main brokerage business for similar issues but found none, Pruzan said. The bank is looking more broadly at its methods for stress testing, and will recalibrate positions with clients if needed.

“We are never happy when we have a loss,” he said. “But the show is over … and we will learn from that experience.”

Archegos’ story likely had regulatory implications, however, with multiple US watchdogs as well as the Senate Banking Committee all investigating the incident to better understand why multiple banks were so exposed to one client.

FILE PHOTOS: View of Morgan Stanley London headquarters at Canary Wharf in London, England 24 June 2016. REUTERS / Russell Boyce / File Photo

Gorman occasionally seems exasperated during phone calls when he faces repeated questions from analysts about Archegos, distracting from the bank’s otherwise reversed performance.

Morgan Stanley shares fell 1%.

“This is not a financial event in the grand scheme of things, but is likely to raise concerns,” Oppenheimer analyst Chris Kotowski wrote in a note to clients.

Although Archegos Morgan Stanley’s losses dominated discussions on Friday, first-quarter earnings beat expectations. The report closed a strong quarter for the biggest US banks, which benefited from the release of reserves and record capital market activity.

The surge in trading, driven in part by the trading frenzy sparked by Reddit in “meme” stocks such as GameStop Corp., boosted a 66% jump in revenue in Morgan Stanley’s institutional securities business.

Unlike rivals JPMorgan Chase & Co and Bank of America, Morgan Stanley and Goldman Sachs lacked large consumer lending units, which limited their exposure to lending problems during the pandemic and allowed them to focus on investment banking and trade.

Morgan Stanley earnings rose to $ 3.98 billion, or $ 2.19 per share, in the quarter ended March 31, from $ 1.59 billion, or $ 1.01 per share, a year ago.

Analysts are looking for a gain of $ 1.70 per share, according to IBES data from Refinitiv.

Net income jumped 61% to $ 15.72 billion.

Like its larger rival, Goldman Sachs, Morgan Stanley is benefiting from an unprecedented boom in deal-making through special-purpose acquisitions (SPAC) companies.

Global investment banking costs hit an all-time record of $ 39.4 billion during the March quarter, according to data from Refinitiv.

Morgan Stanley has also made good payouts from a series of mergers and by pledging many IPOs for well-known companies including Affirm Holdings and AppLovin Corp.

Its investment bank revenue more than doubled to $ 2.6 billion.

Reporting by Elizabeth Dilts in New York, Additional reporting by Ambar Warrick in Bengaluru and Matt Scuffham in New York Writing by Anirban Sen and Michelle PriceEditing by Saumyadeb Chakrabarty and Lauren Tara LaCapra

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The German fashion e-tailer About You grossed 1 billion euros in revenue | Instant News


BERLIN (Reuters) – German fashion e-tailer About You, which is widely reported to be preparing for listing in Frankfurt, said on Wednesday it had revenue of 1 billion euros ($ 1.2 billion) last year after launching in more than a dozen European markets. .

Revenues grew 57% to 1.17 billion euros this year through February, while the last quarter the company made its first profit before interest, taxes, depreciation and amortization since launching in 2014.

Although the COVID-19 pandemic is driving more shoppers online, About You co-founder Tarek Mueller said the decline in socializing has led consumers, especially among the younger generation, to spend less on clothes.

Even so, “we managed to grow massively,” he said. “We are taking our chances in a crisis.”

The Hamburg-based group more than doubled revenue in Europe outside of Germany, Austria and Switzerland to 464 million euros after launching in 13 countries from Estonia to Ireland.

It also develops enterprise products that allow retailers and brands to set up and run their own online stores, competing with e-commerce solutions from established players SAP and Salesforce.

Sales in the business-to-business segment grew 61 percent last year.

Mueller declined to comment on reports that the company plans to float on the Frankfurt stock exchange, which has a busy spring featuring debuts by telecom company Vantage Towers and used car sales platform AUTO1.

About You The main owners are mail order group Otto and Danish investment conglomerate Anders Holch Povlsen, Heartland, which previously supported consumer games including Zalando, Asos and Klarna.

Written by Douglas Busvine; Edited by Jan Harvey

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UPDATE 1-German investor morale fell in April on lockdown fears, said ZEW | Instant News


(Adding analyst, context)

BERLIN, April 13 (Reuters) – Investor sentiment in Germany fell unexpectedly in April, the ZEW economic research institute said on Tuesday, citing growing concerns that private consumption could be depressed as Europe’s biggest economy got closer to extending lockdown measures.

ZEW said the investor’s economic sentiment survey fell to 70.7 points, the first drop since November 2020, from 76.6 the previous month. A Reuters poll forecasted the increase to be 79.0.

“Financial market experts are somewhat less euphoric than the previous month,” said ZEW President Achim Wambach in a statement. “The ZEW economic sentiment indicator, however, is still at a very high level and the current situation is considered much more positive than in March.”

Germany tightened lockdown measures in December to fight a third wave of coronavirus infections and the economy is expected to shrink in the first three months of this year.

Hopes for a return to growth in the second quarter have been tempered by expectations that restrictive measures will be extended beyond mid-April to stop an exponential rise in infections.

“The ZEW indicator is preparing us for another delay of the anticipated economic recovery,” said Thomas Gitzel, chief economist at VP Bank Group. “The limitation on gross domestic product growth in the second quarter is too high. The ZEW headline tells us that the bar must be lowered. “

Economists earlier this year predicted German growth of 3% based on expectations of a slow return to normal economic activity.

The ZEW gauge for current conditions rose to -48.8 points from -61.0 the previous month, confirming an assessment that the German economy remains in relatively good shape as increasing demand for goods from China and the United States keeps factories humming.

“Concerns about a tighter lockdown have led to lower expectations for private consumption,” said Wambach. However, the export prospects are better than the previous month. (Written by Joseph Nasr; editing by Maria Sheahan, Larry King)

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US laboratory product provider Avantor bought Germany’s Ritter for $ 1.1 billion | Instant News


FRANKFURT (Reuters) – US laboratory products supplier Avantor has agreed to buy German counterpart Ritter for 890 million euros ($ 1.1 billion) in cash, adding to a wave of deal-making in the sector.

Ritter, which makes robotic handling consumables and fluids for laboratories such as shelves, dispensers and cartridges, saw demand for its products – including those used for COVID-19 PCR testing – increase sharply in the pandemic.

In the same sector, Italy’s DiaSorin has announced plans to buy US rival Luminex, while Roche acquires US-based GenMark Diagnostics, and German laboratory group Synlab has said it will list on the stock exchange.

The pandemic has sparked rapid growth in some laboratory suppliers, but as the COVID-19 vaccine rollout continues, some analysts have voiced concerns about a possible drop in demand for COVID-19 molecular tests once the emergency is over.

The Ritter family owner months ago began looking for potential partners to finance its global expansion, said people with knowledge of the matter in February.

Avantor said the transaction came after 40 completed M&A deals, in which it raised more than $ 8 billion in capital and generated more than $ 350 million in synergy benefits measured by core revenue or EBITDA.

The transaction, in which Avantor funds available cash and uses additional term loans, is expected to add up to adjusted earnings per share (EPS) soon after closing, which is expected in the third quarter, the company said.

Jefferies and Centerview, as well as Schilling, Zutt & Anschütz, advised Avantor, while Goldman Sachs, Carlsquare and Gleiss Lutz advised Ritter, with Citi financing the transaction.

($ 1 = 0.8394 euros)

Reporting by Arno Schuetze; Edited by David Holmes

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The prospect of Brazil’s 2021 interest rate rising to 5.25%, the survey showed | Instant News


BRASILIA, April 12 (Reuters) – The prospect of Brazil’s 2021 interest rate rising to 5.25%, the central bank’s survey of economists published on Monday showed, after repeated comments by policymakers that aggressive tightening now means borrowing costs won’t rise as much as in the end. .

The median estimate for Selic’s benchmark interest rate of more than 100 economists in the central bank’s weekly ‘FOCUS’ survey increased from 5.00% the previous week, and 4.50% four weeks ago.

Central bank chief Roberto Campos Neto said more than once last week that an advance rate hike meant there was no need to raise that much, and that the bank’s ‘partial normalization’ policy meant Selic would not move up to his neutral level until next year.

Figures showing inflation rose above 6% in March “solidified” another 75 basis point rate hike to 3.50% in May, a repeat of the first rate hike in last month’s tightening cycle, he said.

The ‘FOCUS’ survey on Monday also showed economists’ average year-end inflation forecast edged up to 4.9% from 4.8%, even further above the central bank’s goal of 3.75%.

Economists’ Selic 2022 forecast was unchanged at 6.00%, and their 2023 outlook was unchanged at 6.50%, the survey showed.

With the second wave of the deadly COVID-19 pandemic hitting the country, the outlook for Brazil’s economic growth in 2021 has dimmed slightly for the sixth week in a row to 3.1% from 3.2%. The year-end forecast for the exchange rate also slipped for a third week to 5.37 reais per dollar from 5.35, the survey showed.

$ 1 = 5.68 reais Reported by Jamie McGeever; Edited by Paul Simao

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