Dr. Reddy’s Laboratories reported a strong Q2FY25 performance, with US sales growing 15.6% YoY to USD 445 million, driven by gRevlimid and a robust vaccine portfolio in India. The company’s outlook remains positive, supported by recent acquisitions and new product launches, prompting a HOLD rating with a target price of INR 1,270.
The SMI closed lower, with Novartis, Roche, and Nestlé experiencing losses, while Wall Street showed positive momentum and cryptocurrencies gained. In individual stocks, TDK surged 7% after raising its profit forecast, Nomura Holdings climbed 8% following a significant quarterly profit increase, and Sanrio's shares rose 14% after boosting its net profit outlook. Despite these gains, caution prevails among investors ahead of the US presidential election, contributing to high volatility in the Nikkei.
Wall Street showed positive momentum, while the Swiss stock market faced losses, with major companies like Novartis, Roche, and Nestlé declining. In Japan, TDK surged 7% after raising its profit forecast, and Nomura Holdings climbed 8% following a significant quarterly profit increase. Despite these gains, investor caution prevails ahead of the US presidential election, contributing to high volatility in the Nikkei.
The downfall of Credit Suisse has raised serious concerns about auditor independence, particularly regarding PricewaterhouseCoopers (PWC), which saw a significant increase in audit fees despite the bank's financial turmoil. The Financial Market Authority (FINMA) is now advocating for a system change to enhance auditor independence, as current practices create dependencies that may compromise critical oversight. This situation echoes past criticisms of auditing firms, notably following the Swissair bankruptcy, where PWC was also involved.
The downfall of Credit Suisse has raised serious concerns about auditor independence, particularly regarding PricewaterhouseCoopers (PWC), which saw a significant increase in audit fees despite the bank's financial turmoil. The Financial Market Authority (FINMA) is advocating for a system change to ensure auditors are less dependent on their clients, as evidenced by PWC's failure to adequately address critical accounting issues leading to substantial losses for CS. This situation echoes past criticisms of auditing practices, highlighting a persistent need for reform in the industry.
Activist investor Jana Partners, alongside Continental Grain, is engaging with Lamb Weston to address financial performance, capital spending, and corporate governance, aiming to place five nominees on the board. The firm plans to enhance operational efficiency and align management incentives with shareholder value, potentially leading to a new CEO. A strategic review may also consider a sale, with Post Holdings as a possible acquirer, given its strong market performance since Lamb Weston’s spin-off.
UBS has emerged as the largest Swiss donor in the US election campaign, contributing $1.5 million to the Republican Party and Donald Trump, while also donating $1.45 million to the Democrats, including Kamala Harris. This strategic funding approach positions UBS favorably for various election outcomes, reflecting its significant involvement alongside other Swiss companies like Roche and Novartis. Overall, UBS is spending around $3 million on the election, aiming to gain access to future decision-makers.
Ghana's Cocoa Management System (CMS) aims to enhance cocoa traceability and comply with EU deforestation regulations, having already registered 793,000 farmers and mapped 1.2 million hectares. A proposed one-year delay in the EU's deforestation regulation implementation could provide Ghana additional time to finalize the CMS and improve logistics. This extension is also crucial for Tanzania, where coffee farmer registration is just beginning.
Swiss equities declined mid-week, with the SMI dropping 1.1% to 11,968 points as profit-taking weighed on major stocks like UBS, which fell 4.5% despite strong quarterly results. Concerns over US labor market strength and upcoming elections contributed to investor caution, while Sandoz shares rose 3.7% following positive earnings. Weak demand from China impacted luxury goods stocks, with Richemont and Swatch down 1.4% and 3.4%, respectively.
The Swiss stock market remains in the red, with the SMI index dropping further below 12,100 points despite UBS's strong quarterly performance. A weaker-than-expected US JOLTS report raises concerns about the labor market and the Federal Reserve's next moves, while European GDP figures show modest growth in France and Germany. Among Swiss stocks, Sandoz leads gains, while Swatch Group and Straumann face significant losses amid negative analyst coverage.
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