Welcome Snackers, today’s snack will cover the market developments of Asetek and DanCann Pharma A/S.
Today’s Market Movements
Denmark:
OMX:C25 (0.23%)
Sweden:
OMX:S30 (1.07%)
Norway:
OBX:OSL (2.04%)
S&P 500 (1.18%)
Nasdaq (1.08%)
European markets rose today following an announcement from Evergrande declaring the Chinese property developer has struck a deal on its domestic debt payment. The news eases fears of a financial crisis spillover from a credit crisis in China. In Europe consumer confidence rose, from -5.3 in August to -4.0 in September; confidence developed better than expected with markets anticipating a figure of -5.3. The markets have reacted positively to the day’s news thus far but the FOMC meeting this evening has the potential to change the course. FED Chairman Jerome Powell is expected to signal a reduction to the current US stimulus via its bond purchasing programme; European markets tomorrow will react to interpretations of the speech.
Today’s snacks
Asetek today announced its withdrawal from the High-Performance Computing (HPC) sector. Closure of the HPC business activity will correspond to a one-off cost of USD 2.5m. Problems in standardising compatibility meant the sector has been loss-making and ASETEK state it is closing its activity to increase profitability. This announcement followed a downwards guidance revision following supply chain issues in China. ASETEK now expects revenue growth in 2021 of 10-20% (from earlier 20-30%), EBIT expectations for 2021 are now USD 0-2m, down from USD 8-12m. Covid-19 related lockdowns in China have further disrupted supply on what was already a difficult scenario with the company stating shipping cost increases of over 300%. ASETEK’s supply chain issues could become a recurring theme for companies manufacturing in China this autumn as bottlenecks are a global problem. The stock ends the day -45.5%.
DanCann Pharma A/S is up 4.7% as markets close following an announcement that although no one exercised their right to buy during their warrant programme; which was expected given the market price is below the warrant price, the company expects to have sufficient capital to finance its investment plans. This announcement eased market concerns the company was in need of capital.
Disclaimer: HC Andersen Capital receives payment from the companies for a #DigitalIR agreement.
Author: Philip Coombes
