(BFW) EON Says Free Cash Flow Possible in 2014; Targeted for 2015

BN 08/13 08:07 *EON CFO KLAUS SCHAEFER COMMENTS ON CALL WITH REPORTERS
BN 08/13 08:07 *EON: FREE CASH FLOW MAY BE POSSIBLE IN 2014; TARGETED FOR 2015
EON Says Free Cash Flow Possible in 2014; Targeted for 2015
2014-08-13 08:30:28.160 GMT


By Tino Andresen and Nadine Skoczylas
Aug. 13 (Bloomberg) -- EON CFO Schaefer makes free cash
flow comments on call with reporters.
* CEO Teyssen sees stabilization in wholesale power prices
* Preparing arbitration court claim vs Gazprom on gas price
* Says vol. of Gazprom dispute much smaller than last time
* Shares up 4.7% after earlier rising as much as 5.6%
* See earlier earnings stories here and here


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To contact the reporters on this story:
Nadine Skoczylas in Jerusalem at +972-2-640-1103 or
nelsibai@bloomberg.net;
Tino Andresen in Dusseldorf at +49-69-92041-395 or
tandresen1@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
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Nadine Skoczylas

(MS) July ’14 Hedge Fund Recap

July ’14 Hedge Fund Recap - PDF ATTACHED

SPECIAL SECTION: 
There have been a number of questions around the Event Driven space given last week’s activity. Event Driven gross was at multi-year highs as of early August; despite last week’s news, gross and net leverage saw relatively small declines. Among Multi-Strat / Macro funds, we have recently seen net leverage fall across this sample (though these figures are generally more volatile).

PERFORMANCE: 
Most hedge funds gave back some ground in July as over 60% of funds had negative returns and the median fund fell 58bps. This leaves overall YTD returns slightly above +1%, which puts it in line with July YTD returns in ’10 and ’11
Stock picking appeared to be challenging again last month: global equity long positions fell nearly 3%, which was almost 2% more than the MSCI AC World and 1% more than shorts

LEVERAGE: 
In July, Asia saw increases in gross and net leverage, while Europe saw decreases in both. In the early part of August, Europe gross and net have continued to fall, whereas in Asia, the increases seen in July have reversed some. US Equity L/S leverage figures were relatively non-volatile MoM.

EQUITY TRADING ACTIVITY: 
Despite US and European equity markets pulling back in July, hedge funds remained modest buyers of DM equities during the month.
Despite the deal-related news in early Aug, Event Driven funds only exhibited one large day of net selling (Aug 6) and this only served to offset a small fraction of the net buying in Jul.

US SECTOR ACTIVITY: 
7 of 10 sectors were net bought in July.
Health Care was the most net bought sector in July (4th consecutive month where it has been one of the most net bought sectors); in contrast, Discretionary was the most net sold sector – this sector has been net sold in 11 of the last 14 months

CAP INTRO UPDATE: 
Investors seem somewhat disappointed by muted Equity L/S performance YTD. In the UK, Event Driven strategies remain popular and UCITS allocators continue their Macro search. In Asia, a number of notable new funds recently launched or will over the next several months.

(MS) July ’14 European Market Colour

July ’14 European Market Colour - PDF ATTACHED

1/ In Europe, average gross exposure (for European focused Equity L/S Funds) dropped -1.06% in July via a greater MoM fall in long exposure than the rise in short exposure (-2.61% and +1.36% respectively). This combined decrease in long exposure and increase in short exposure led to the continued MoM reduction in net leverage (-11.35%), ending July at a 20 month low of 39%. Gross leverage levels ended the month at 173% after decreasing -0.53% MoM.

2/ Globally, exposure to Europe decreased on both the long and short side (-4.30% and -2.57% respectively), causing the European L/S ratio to fall -1.8%. Global gross exposure to Europe dropped -3.68% in July as a result. The larger MoM fall in long exposure versus short exposure led to the decrease in net exposure (-6.45%). In July the MSCI Europe fell -1.6%.

3/ Average equity trading volumes were subdued in July, increasing by 1.0% MoM. Similarly, the 20-day average increased +0.7% MoM. However, average trading levels still remain at 51% above the entire period average since Jan 2011. The standard deviation of these daily volumes increased +9.2% versus the previous month.

(BFW) Russian Natgas Flows to EU From Ukraine Are Normal: Slovak Grid

Russian Natgas Flows to EU From Ukraine Are Normal: Slovak Grid
2014-08-13 07:43:18.554 GMT


By Elena Mazneva
Aug. 13 (Bloomberg) -- No reductions in pressure or volumes
of gas flows from east, Slovakian pipeline operator Eustream
says on website.
* Ukraine transported 153.7mcm of Russian gas to Europe on
Aug. 11 vs 152.1mcm day earlier, data from website of natl
pipeline operator UkrTransGas show
* Shipments to Slovakia’s border were 81.1mcm vs 84.8mcm
* Ukraine has 15.2bcm of natgas in underground storage as of
Aug. 11: UkrTransGas
* NOTE: June 16, Gazprom cut off deliveries to Ukraine citing
debt; transit to EU uninterrupted so far
* NOTE: Yday: Russia May Disrupt European Gas in Repeat of
2009, Naftogaz Says NSN NA71D06JIJV2<GO>


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emazneva@bloomberg.net
To contact the editors responsible for this story:
Will Kennedy at +44-20-7073-3603 or
wkennedy3@bloomberg.net

(BFW) Bank of Portugal Confirms Novo Banco Has Access to ECB Financing

Bank of Portugal Confirms Novo Banco Has Access to ECB Financing
2014-08-13 07:44:58.52 GMT


By Anabela Reis
Aug. 13 (Bloomberg) -- Novo Banco is “adequately
capitalized, having counterparty status for monetary policy
operations and, therefore, access to Eurosystem liquidity in
normal conditions like other national banks,” central bank
says.
* ECB credit to Banco Espirito Santo was transferred to Novo
Banco, Bank of Portugal says
* Bank of Portugal comments in e-mailed response to questions
* NOTE: ECB’s Governing Council on Aug. 1 decided to suspend
Banco Espirito Santo SA’s status as counterparty from Aug.
4, according to documents posted on Bank of Portugal’s
website
* NOTE: Aug. 4, Portugal Announces $6.6 Billion Banco Espirito
Santo Rescue NSN N9RYRJ6S972R <GO>


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(GS) Tax inversion reform could cause a splash, but unlikely to sink M&A recover

Tax inversion reform could cause a splash, but unlikely to sink M&A recovery

Inversions – unlikely to derail M&A
Tax inversion deals continue to gather a lot of press, with investors now questioning the
implications of potential reform on global M&A volumes and fees. While inversions accounted for 9% of announced M&A value in 2014, excluding inversion activity announced M&A value is still up 31% yoy. With fundamentals for a robust M&A cycle still firmly in place, we believe potential reform is unlikely to alter our positive outlook on the space. LAZ (CL-Buy) seems most insulated in case of a slowdown in inversion activity.

How big of a deal are inversion deals?
Inversion M&A volume has accelerated ($207bn announced ytd), accounting for 9% of total ytd announced volume and 10% of industry fee backlog amid widening global corp. tax spreads and growing overseas cash balances. While the headline figures look large, the deal flow has been very concentrated, with just 14 deals announced in ytd, almost entirely in Healthcare (3 deals account for 76% of all inversion deal value ytd). Given this concentration, the number of advisors impacted is limited.

Who is impacted?
Within our coverage, exposure to pending inversion deals has been limited. EVR (Neutral) seems to be the only one with meaningful exposure (14% of its total fee backlog per Dealogic) or roughly 5% of 2014 EPS. Overall, independent advisory firms have not had much exposure to recent inversion deals, as larger banks tend to dominate with a 76% market share of announced inversion deal fees in 2014. While there are lots of uncertainties with respect to reform outcome, given amount of cash outside the US, Healthcare and TMT could be the sectors most impacted if rules around inversions are changed. LAZ historically had lower exposure to both of these sectors, given the firm’s diversified Advisory base.

Still lots of runway for M&A
Despite a solid start to the year (up 36% yoy), M&A volumes are still 20% below prior peak and below historical average both as a percentage of market cap and GDP. As deal completions accelerate (days to close are down 9% in 2014 vs. 2013), we expect velocity to pick up further. Financial Sponsors and EU are still the biggest areas for further upside.

(BFW) Berkshire Hathaway Hires Two Senior Executives From AIG: WSJ

Berkshire Hathaway Hires Two Senior Executives From AIG: WSJ
2014-08-13 06:42:31.909 GMT


By Christopher Kingdon
Aug. 13 (Bloomberg) -- Berkshire hires Marc Breuil,
previously head of AIG’s country operations in Hong Kong,
Taiwan, and Marcus Portbury, who was regional head of casualty
for Asia Pacific at AIG, WSJ reports, citing unidentified people
familiar.
* Berkshire Hathaway Specialty Insurance is applying for
licenses to regulators in Sydney, Hong Kong, Singapore,
Europe: WSJ cites one unidentified person familiar
* Hires are part of strategy to move beyond core reinsurance
operations to writing commercial insurance in Asia: WSJ
cites one unidentified person familiar

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