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China is ready to have discussions with the United States and work to resolve trade issues because the world’s two largest economies stand to lose from confrontation, Vice President Wang Qishan said on Tuesday.

“The Chinese side is ready to have discussions with the U.S. on issues of mutual concern and work for a solution on trade acceptable to both sides,” Wang told the Bloomberg New Economy Forum held in Singapore.

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Novartis raises 2019 guidance, helped by Sandoz generics unit



Novartis lifted full-year sales and profit targets on Thursday, helped by innovative medicine sales and as the Swiss drugmaker’s Sandoz generics unit saw rising international demand for its biosimilar copies of blockbuster drugs made by rivals.

Second-quarter core operating income rose 20% in constant currencies to $3.6 billion, while sales were up 8% to $11.8 billion, compared to the $11.54 billion forecast by 10 analysts in a Refinitiv poll.

“We are really excited about the results we’re seeing in (the second quarter). We’ve seen strong sales momentum across all our growth-drivers,” Vasant Narasimhan, CEO of Novartis told CNBC.

The Basel-based company now expects 2019 core operating income to grow at low-double-digit to mid-teens percentages, faster than the previous high-single-digit percentage rate target. Sales expectations were also raised, with growth now seen in the mid to high-single digit range.

Novartis highlighted performance at Sandoz, where it said international business offset price declines in the United States.

It revised Sandoz 2019 sales forecasts upwards — to broadly in line with last year or possible low-single-digit growth — as the company’s copies of Roche’s Mabthera, AbbVie’s Humira and Amgen’s and Pfizer’s Enbrel captured business from the namebrand drugs in Europe.

“We increased our full year guidance for both sales and core operating income in light of our strong momentum,” Narasimhan said in a statement.

Signage is displayed on the exterior of the Novartis AG Institutes for BioMedical Research building in Cambridge, Massachusetts, U.S., on Friday, Aug. 5, 2016.

Scott Eisen | Bloomberg | Getty Images

U.S. Health Reform

Amid the ongoing discussions in the United States over changes to the health system, Narasimhan told CNBC there is still a lot of uncertainty as to what might happen to the sector.

“It is a very fluid environment right now – both in terms of the executive branch and potential actions from the executive branch could take and the legislative branch,” he said.

“We believe, it is important first and foremost, (that) we need to tackle patients out of pocket costs at the pharmacy counter,” Narasimhan also told CNBC.

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Danske Bank profits hit by higher costs as it sets aside cash for a potential money laundering fine



Danske Bank‘s second-quarter pre-tax profit came in below expectations on Thursday, with the Danish lender citing low interest rates and higher regulatory costs following a money-laundering scandal at its Estonian branch.

Pre-tax profits for the second-quarter fell to 4.76 billion Danish crowns ($717.47 million) from 5.49 billion crowns the previous year, missing a forecast of 5.06 billion by analysts, according to Refinitiv data.

A reported net profit of 4.0 billion crowns was in line with Danske’s preliminary second-quarter estimates from early July.

Dankse Bank CFO Christian Baltzer told CNBC’s “Squawk Box Europe” on Thursday that significant investment was being made in compliance and regulatory functions, driving costs.

“We have not set aside a provision, per se, but we have put aside capital of 10 billion (Danish crowns) in our capital reservation for a potential fine and the ramification of the AML (anti-money laundering) issue,” he said, adding that the bank was in “ongoing dialogue with the FSA (Financial Supervisory Authority)” around its capital requirements.

Danske Bank shares have fallen more than 40% over the past year, after it revealed in 2018 that it had channeled 200 billion euros of suspicious payments through its Estonian branch between 2007 and 2015.

In June, the bank said it would compensate around 87,000 clients who had been overcharged for an investment products, costing around 400 million crowns.

Baltzer said running a bank in the modern era is a much more costly exercise due to regulatory expenditure, both in terms of capital requirements and new compliance directives.

“Finding the right balance in a low margin environment to actually be able to run a bank efficiently, but also to make a profit and have competitive products, is a balance that the winners of the banks tomorrow will need to strike,” he added.

“We need to find the right ways of not just pushing the cost over to the customers, but actually being more efficient in the way that we implement our compliance and our regulatory environment.”

European banks have suffered a sharp sell-off in the second quarter of 2019, shedding more than 13% over the past three months, and are down 18.64% over the past year.

However, they have begun to rebound slightly in recent weeks, gaining 5% over the past 30 days.

– Reuters contributed to this report.

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European banking stocks are ready for a rebound, Barclays strategists says



European banks are finally showing signs of recovery and investors should be looking to reduce their bearish positioning in the beleaguered sector, according to Barclays strategists.

In a note published Wednesday, Barclays’ European banking and European equity teams projected that the stabilization of euro zone economic data and bond yields may bolster the banks, which have the most positive correlation to these two metrics of all European sectors.

“Euro zone composite PMI (purchasing managers’ index) is stabilizing and the key domestic drivers of activity are well oriented,” the note stated.

It added that in the meantime, bond yields and inflation expectations are “trying to find a floor,” which gives a breather to value stocks, those which trade at a lower price relative to their fundamentals.

On top of this, the Italian government is “showing some fiscal discipline” and the European Central Bank (ECB) has opened the door to new quantitative easing while “seeking to mitigate the drag from negative rates on banks.”

European banks suffered a sharp sell-off in the second quarter of 2019, shedding more than 13% over the past three months, and are down 18.64% over the past year.

However, they have begun to rebound slightly in recent weeks, gaining 5% over the past 30 days, and though consensus has the European banking sector at an underweight position, Barclays is maintaining an equal weight.

Short-covering expectations

The Barclays strategists, led by head of European equity strategy Emmanuel Cau, also highlighted that bank stocks at present are cheap and under-owned. As the third-worst performing sector year-to-date, many banks are trading at a “near-extreme valuation discount and offer and attractive dividend yield of 6%,” the note said.

Combined with depressed valuations and current bearish positioning from investors, this environment could lead to further “short-covering,” the buying in of securities that have been sold short (when traders bet they will lose value) in the hope of minimizing losses if the share price increases.

The note highlighted, however, that “structural headwinds are not going away,” with earnings remaining constrained by negative interest rate policy, and trade tensions, Brexit and anti-money laundering issues continuing to cloud the outlook.

But the analysts identified several banks which offer “quality at a reasonable price,” and have established overweight positions in Lloyds, Caixabank and ABN while remaining “skeptical of certain restructuring stories” involving Deutsche Bank, Standard Chartered, UBS and BNP Paribas.

The note suggested Deutsche would struggle to achieve the revenue it sought from a recent mass strategic overhaul, and questioned whether the German lender might need to raise equity within the next 12-24 months.

“In our view, many investors simply believe the sector is not investible anymore and see it as a value trap,” the note stated.

“While we agree that its medium-term profitability backdrop remains challenging, we think the some of the macro headwinds that exacerbated its recent underperformance are easing.”

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