(Bloomberg) — China’s yuan strengthened and stocks rose on mainland exchanges in a positive start to the month for traders returning to work after an eight-day holiday.

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The currency advanced 1.1% as of 9:53 a.m. in Shanghai, tracking recent moves in the offshore rate. The People’s Bank of China set its yuan fixing at 6.7796 per dollar on Friday — or slightly stronger than expected — suggesting it will continue to allow for currency gains after the yuan had its best quarter since 2008 versus the greenback.

“Markets will take any indication that the authorities are not too concerned about the level of the yuan as a positive sign,” said Khoon Goh, head of research at Australia & New Zealand Banking Group Ltd. “In effect, not sending a signal is in itself a signal.”

The Shanghai Composite Index of stocks rose 1.4% and the CSI 300 Index climbed 1.7%. China’s $9.4 trillion onshore equity market last traded on Sept. 30.



chart: China's yuan strengthens toward 6.7 per dollar


© Bloomberg
China’s yuan strengthens toward 6.7 per dollar

Solar and technology stocks were among the biggest gainers in early trade. Longi Green Technology Co. surged 9.3% to hit a record high. Lens Technology Co. rose 7.4% and GoerTek Inc. added 6.3%.

“Stocks are getting a boost from the better-than-expected consumption data during the Golden Week holidays and a strong yuan,” said Daniel So, strategist at CMB International Securities Ltd. “Investors are looking forward to the Communist Party meeting toward month-end, before which market sentiment has usually been positive, as more stimulus policies are expected.”

China is unique among major economies to close its financial markets for long periods several times a year. In February, stocks were hit by a ferocious wave of selling and the yuan weakened past a key level against the dollar, as a rapidly

Investment Thesis

Fueled by chronic undervaluation despite the solid financials and a rich pipeline, Alexion Pharmaceuticals, Inc. (ALXN) has frequently been the subject of acquisition rumors as investors demand a sale of the company. Management has revised up the 2020 revenue guidance twice over the past three months, but the shares have underperformed the broader market in the year so far. The top line growth continued unabated even through a raging pandemic, and margins have also held up. The rivals are challenging the prospects, but proactive measures are in place to neutralize the threat.

The current NTM EV/EBITDA multiple stands at a sharp discount to the historical average, which, along with our conservative EBITDA forecast, based on revenue assumptions in line with the past, indicates an undervalued stock. Meanwhile, the strong cash flows and net cash position have attracted acquirers looking for growth at a cheap valuation. Amid acquisition rumors, we therefore turn “Bullish” on the stock as management’s renewed commitment to buybacks supports the shares.

Alexion_Drug Portfolio

Source: Company website

Long-term Undervaluation

Persistent undervaluation and investor demands for a sale have once again seen Alexion becoming the subject of a possible acquisition. A potential target of Amgen (AMGN) in 2019, the company has triggered interest from Biogen (BIIB) last month as the activist investor, Elliott Management, calls for a sale of the company questioning its strategic direction. Their logic is not without merit. Targeting ten product launches by 2023, the company is currently advancing twenty development programs, up from only four at the end of 2017. Since 2017, the top line has jumped ~55.9% through the LTM (last twelve-month) period, while the net income nearly doubled. Yet, the stock has dropped ~6.0% over the period, underperforming the 58.2% gain in the NBI (NASDAQ Biotechnology Index).

Alexion_Share Performance since 2017

Source: Koyfin

Underwhelming Revenue Guidance

Over

By Florence Tan

SINGAPORE, Oct 5 (Reuters)Oil prices rose about 2% on Monday, lifted by comments from doctors for U.S. President Donald Trump suggesting he could be discharged from hospital as soon as Monday, just a few days after his positive test for COVID-19 sparked widespread alarm.

Trump’s health update eased political uncertainty in global markets, pushing Brent LCOc1 up to $39.96 a barrel by 0232 GMT, gaining 69 cents or 1.8%. U.S. West Texas Intermediate (WTI) crude CLc1 was at $37.81 a barrel, up 76 cents, or 2.1%.

Prices had slumped more than 4% on Friday amid uncertainty surrounding Trump’s health, adding to concern that rising coronavirus case numbers that could dampen global economic recovery.

But analysts said Monday’s rebound was driven by an easing of the worst fears about Trump’s health condition, albeit clouded by some mixed signals.

“I think it’s the improving health of the U.S. President … over the weekend there were a lot of conflicting reports on his health, but generally he’s improving,” said Avtar Sandu, senior commodities manager at Phillip Futures.

“He could be back to work soon,” Sandu said, adding that investors were worried about the stalled U.S. fiscal stimulus plan which could aid oil demand recovery.

Prices were also supported by an expanding workers’ strike in Norway on Monday that could reduce the country’s production capacity by as much as 330,000 barrels of oil equivalent per day (boepd) or 8% of its total output, according to the Norwegian Oil and Gas Association.

These offset indications of rising oil supply in the market.

Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), has seen a near three-fold rise in its output which hit 270,000 barrels per day last week after eastern forces eased a blockade on the

By Florence Tan

SINGAPORE, Oct 5 (Reuters)Oil prices rose more than 1% on Monday, lifted by comments from doctors for U.S. President Donald Trump suggesting he could be discharged from hospital as soon as Monday, just a few days after his positive test for COVID-19 sparked widespread alarm.

Trump’s health update eased political uncertainty in global markets, pushing Brent LCOc1 up to $39.79 a barrel by 0140 GMT, gaining 52 cents or 1.3%. U.S. West Texas Intermediate (WTI) crude CLc1 was at $37.64 a barrel, up 59 cents, or 1.6%.

Prices had slumped more than 4% on Friday amid uncertainty surrounding Trump’s health, adding to concern that rising coronavirus case numbers that could dampen global economic recovery.

But analysts said Monday’s rebound was driven by an easing of the worst fears about Trump’s health condition, albeit clouded by some mixed signals.

“I think it’s the improving health of the U.S. President … over the weekend there were a lot of conflicting reports on his health, but generally he’s improving,” said Avtar Sandu, senior commodities manager at Phillip Futures.

“He could be back to work soon,” Sandu said, adding that investors were worried about the stalled U.S. fiscal stimulus plan which could aid oil demand recovery.

Oil cold yet receive a jolt from an expanding strike by Norwegian workers on Monday that could reduce the country’s production capacity by as much as 330,000 barrels of oil equivalent per day (boepd) or 8% of the country’s total output, according to the Norwegian Oil and Gas Association.

Signs of Trump’s health improving offset indications of rising oil supply in the market.

Libya, a member of the Organization of the Petroleum Exporting Countries (OPEC), has seen a near three-fold rise in its output which hit 270,000 barrels per day last week

British Prime Minister Boris Johnson says “there’s a good deal to be done” with the European Union on post-Brexit trade as he prepares for crunch talks with the head of the bloc’s executive arm

LONDON — British Prime Minister Boris Johnson said Saturday that “there’s a good deal to be done” with the European Union on post-Brexit trade, as he prepared for crunch talks with the head of the bloc’s executive arm.

Johnson told reporters that the U.K. wants a free trade deal along the lines of the one the EU has with Canada, but is also prepared for negotiations to fail.

“We’re resolved on either course, we’re prepared for either course and we’ll make it work, but it’s very much up to our friends and partners,” Johnson said.

He and European Commission President Ursula von der Leyen will try to break an impasse in negotiations during a videoconference later Saturday.

The two parties are trying to strike a rudimentary trade deal before then, to avoid a barrage of uncertainty, tariffs and red tape that would hurt economies on both sides.

But while negotiators have inched close to agreement in many areas during six months of talks, they remain deadlocked over European fishing boats’ access to U.K. waters, and over the level of support governments can give to industry. The EU is concerned that British plans to subsidize sectors such as technology will amount to unfair competition.

“We should not forget that we have made progress on many, many different fields. But, of course, the most