THE TREND
The CAC40 fell 1.3% again to 6,560 points on Wednesday afternoon after dropping yesterday (-1.28%) in the wake of long-term yield tensions being confirmed after comments from future Fed Chair Lael Brainard , which calls for a rapid reduction in the US Federal Reserve’s balance sheet from its May meeting, in order to fight inflation. His statements bolstered the scenario of several Federal Funds rate hikes by half a point during upcoming Fed meetings to curb inflation. At the highest point since the beginning of 2019 for the two-year at 2.5918%, since December 2018 for the five-year 2.784% and since March 2019 for the ten-year 2.6256% (+7.2 points).
ECO AND CURRENCY
French 10-year government bond yields crossed 1.20% for the first time since July 2015, as the approach of the presidential election in France contributes to a context of a general recovery in bond yields. The yield on the German Bund of the same maturity rose by 5 points to 0.664%.
The yield differential, or “spread”, between German and French securities was approximately 53.5 basis points. At its highest point since March 2020, it remains below the level at which it evolved before the first round of the 2017 presidential elections, as it then exceeded 70 points… The hypothesis of a victory for Marine Le Pen in the presidential elections is also strengthening in the commercial spaces, enough to explain the adjustments to French values observed since yesterday, particularly unfavorable for highway or bank concessionaires…
In the United States, the FOMC (Fed) minutes will follow at 8 p.m.
The euro/dollar parity fell to $1.09 this afternoon. A barrel of Brent trades at $108.
INCREASING VALUES
2CRSI (+9%) announced the winning of a major new order to supply several thousand OCP (Open Compute Project) servers “for one of the leaders in Cloud Computing”. Monthly timed deliveries are scheduled after the first two deliveries of 1500 servers each. This customer should represent approximately 18 ME of turnover for the current fiscal year, compared to 3.5 ME for the previous fiscal year.
Groupe Gorgé: +5% followed by LFE (+4%) and M&P (+3%)
Carrefour: +2% with Eurofins, Thales, Adocia, Waga
Wavestone: +1% with Publicis, OVH
Axis system: +0.5% with Ipsen, Orange, Genfit, Sanofi, Séché, Eutelsat
DECREASING VALUES
Showroom private: -7% with McPhy (-5%), Atari, Aramis, Akwel
Ubisoft: -4% followed by Innate, Stellantis, S30, Maisons du Monde
Atos: -3.5% with Faurecia, Saint-Gobain, Nexans
Eramet: -3% at CGG, Sodexo, Valeo, Casino, Worldline
Barrier: -2.5% with SG, Veolia, STM, Plastic Omnium
EDF (-2%) announced the success of its capital increase in cash while retaining shareholders’ preferential subscription rights. The gross amount of the capital increase (including issuance premium) amounts to 3.16 billion euros. At the end of the subscription period, which ended on April 1, 2022, total demand was approximately €4.1 billion, corresponding to a subscription rate of 129.01%. In accordance with its commitment, the French State has subscribed to the Capital Increase for approximately EUR 2.7 billion, ie approximately 83.88% of the Capital Increase, and will own approximately 83.88% of the share capital of the company upon completion of the Capital Increase. Total market demand (excluding the French State) was approximately 1.4 MdE, or 280% of the amount not subscribed by the French State (510 ME).
Alstom (-2%) has signed a historic agreement with Swedish railway company SJ for the delivery of 25 high-speed electric trains Zefiro Express, with an option for 15 additional trains. The contract for the first firm order is close to 650 million euros. The new trains will be the fastest in Sweden, with a top speed of 250 km/h. The first train is to be delivered in 2026.
Latécoère (-1%) said it is making ongoing efforts to strengthen its business through acquisitions, in order to create long-term shareholder value. The French group therefore confirms that it will continue discussions with several potential targets, which, if successful, would have “a significant impact on the combined group”. In particular, upon completion of its technical due diligence, Latécoère has submitted two legally non-binding offer letters to acquire 100% of two separate companies, both based in North America, active in Aerostructures solutions. In total, they generated a turnover of approximately €90 million in 2021. One of these offers, relating to the larger of the two target companies, was approved by each of the boards of directors of Latécoère and the target with a view to the proposed merger . On April 5, the parties entered into exclusive negotiations until April 29, 2022 to finalize the final legal documentation. The second offer is currently under examination by the Board of Directors of the lesser of the two targets, and in particular remains subject to the approval of the Board of Directors of Latécoère, as well as the completion of final documentation related to the transaction. Should these transactions materialize, they would require a maximum total cash investment of approximately €95 million (split on a basis of approximately 70/30 if the two transactions were executed), which would be financed entirely by the proceeds of the capital increase of August 2021. Completion of these operations in this case should occur within the next 12 months. However, there is no assurance that these acquisition projects will succeed at this stage.
