WEBVTT - BNP Jumps, Rheinmetall Drops, Maersk Down

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

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<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

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<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

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<v Speaker 3>Now, let's take a look at some of the stocks

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<v Speaker 3>on the move today in Europe.

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<v Speaker 1>I'm Caroline Hepgam. I'm joined by.

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<v Speaker 3>Bloomberg reportacloone Malay. Lots of earnings to think about today.

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<v Speaker 3>Let's start with BNP Pariba. We heard from the CFO

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<v Speaker 3>we saw a jump in profits and then also raising

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<v Speaker 3>some midterm targets for them.

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<v Speaker 4>Yeah. Absolutely quite positive results across the board for BNP

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<v Speaker 4>Barrier bu so as you said, they be expectations and

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<v Speaker 4>then they also raised some targets for profitability. This is

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<v Speaker 4>actually the second time in just a few months in

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<v Speaker 4>the CEO has set more ambitious targets and part of

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<v Speaker 4>why he did it last time and why he's done

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<v Speaker 4>it again today was to reassure investors that all would

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<v Speaker 4>be well despite some litigation risks that are facing the bank.

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<v Speaker 4>So in October, US court rule that BNP would need

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<v Speaker 4>to compensate to three foremost student civilians who accused the

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<v Speaker 4>bank of helping to finance students dictatorship which had committed

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<v Speaker 4>human rights abuses, and so that meant that BNP could

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<v Speaker 4>face some quite high settlements.

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<v Speaker 1>But right now this is still a big unknown.

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<v Speaker 4>BNP is appealing the ruling in the coming days, it said,

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<v Speaker 4>and we'll have to see what kind of comes out

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<v Speaker 4>of that.

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<v Speaker 1>But in the meantime, the really.

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<v Speaker 4>Good results, those raised targets, the fact that the bank

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<v Speaker 4>is also revamping its French business to match that profitability

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<v Speaker 4>for the rest of the business. That's what investors decided

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<v Speaker 4>to focus on today and so we have seen the

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<v Speaker 4>shares jump quite quite strongly this morning. Yeah.

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<v Speaker 3>Absolutely, I mean the concern is that that litigation could

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<v Speaker 3>be in the billions because of the settlement with those

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<v Speaker 3>three plaintiffs, and that might apply to many thousands of

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<v Speaker 3>other people. So yes, they are also appealing, as you say,

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<v Speaker 3>in the process of that, right. So that's BNP pariber

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<v Speaker 3>on their results and litigation risks too. What about Ryan

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<v Speaker 3>mettal We focused the great deal on defense names, haven't we.

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<v Speaker 4>Yeah, we have, we have and today it is down

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<v Speaker 4>this morning, Ryandmatti is down because of a pre closed

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<v Speaker 4>call with analysts which implied that guidance for twenty twenty

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<v Speaker 4>six was maybe a little bit below expectation. So there

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<v Speaker 4>should still be growth, but it looks like it might

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<v Speaker 4>be a little more muted than investors at a hope.

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<v Speaker 4>So JP Morgan Analysts, for example, said that the ramp

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<v Speaker 4>up in earnings and sales growth appears to be a

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<v Speaker 4>little more challenging than they had previously thought, and so

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<v Speaker 4>the messaging from Ryan Mettal on things like orders and

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<v Speaker 4>cash flow was actually seen as reassuring, but maybe a

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<v Speaker 4>little bit less so when it comes to the earnings growth.

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<v Speaker 4>So definitely, Ryemettel is in good shape. But when we

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<v Speaker 4>have such lofty expectations for a company, you know, the

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<v Speaker 4>company moderating some of those expectations always creates a bit

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<v Speaker 4>of a negative reaction for investors, and we have seen

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<v Speaker 4>that happening today.

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<v Speaker 1>We have got four year results actually in March for

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<v Speaker 1>Ryan Mitzal's.

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<v Speaker 4>We have to wear a little bit longer until we

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<v Speaker 4>get more detail on their outlook.

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<v Speaker 3>Okay, shipping in musk it's cutting jobs.

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<v Speaker 1>Why yeah, it's cutting jobs.

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<v Speaker 4>It's also trying to kind of get costs way down

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<v Speaker 4>this year because the outlook is not looking great. So

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<v Speaker 4>the reason for that is because the shipping companies as

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<v Speaker 4>overall are set for quite difficult twenty twenty six because

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<v Speaker 4>freight rates are coming down, and that is because there's

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<v Speaker 4>an existing kind of mismatch between supply and demand. There's

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<v Speaker 4>too many ships, too little need for them, because partly

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<v Speaker 4>of trade tensions, and that situation will get even worse

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<v Speaker 4>because the Red Sea shipping route is set to be reopening,

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<v Speaker 4>and so the container liner industry had really benefited from

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<v Speaker 4>the extra time that it took for ships to sell

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<v Speaker 4>around the tip of Africa rather than through the Red Sea,

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<v Speaker 4>and that had lowered the capacity the vessel capacity worldwide

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<v Speaker 4>by as much as eight percent. But now Musk has

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<v Speaker 4>made a couple of successful passages through the Red Sea,

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<v Speaker 4>it looks like that route is set for reopening this year,

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<v Speaker 4>and so that means that ships were have to go

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<v Speaker 4>the long way around, and so there will be more

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<v Speaker 4>vessel capacity, means that they'll be able to command less

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<v Speaker 4>high prices and rates will be coming down, and rates

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<v Speaker 4>will already on a downward trajectory, they'll be coming down

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<v Speaker 4>even further, and so that means quite a lot of

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<v Speaker 4>pressure on earnings for those shipping companies, and so Musk

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<v Speaker 4>is trying to tell investors now to moderate their expectations

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<v Speaker 4>a little bit for this year.

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<v Speaker 2>The Stock Movers Report from Bloomberg Radio. Check back with

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