>>> US Gapping down

Gapping down
Select financial related names showing weakness: BBVA -3.1%, SAN -2.5%, LYG -2.4%, NBG -2.3%, ING -1.9%, ING -1.9%, BCS -1.6%, DB -1.4%.

Select metals/mining stocks trading lower: AG -3%, RIO -1.5%, ABX -1.4%, GOLD -1.1%, BHP -0.9%, GDX -0.7%, SLV -0.7%.

Other news: NQ -3.5% (mentioned cautiously in updated Muddy Waters report; thinks NQ set pretext to change auditors), PSTI -2.9% (still checking), MT -2.5% (announces the issuance of EUR600 mln Notes under its EUR3 bln EMTN Program), TSLA -1.1% (reports of stolen Model S crash/fire).

Analyst comments: GTAT -9.2% (downgraded to Neutral from Buy at UBS), JMI -2.5% (downgraded to Sell from Neutral at Citigroup), NSIT -2% (downgraded to Underperform from Mkt Perform at Raymond James), TDW -2% (downgraded to Underweight from Overweight at Morgan Stanley), ODFL -1.3% (downgraded to Hold from Buy at Deutsche Bank), BTU -1% (downgraded to Hold from Buy at Deutsche Bank), HOLX -0.8% (downgraded to Neutral from Buy at BTIG Research).

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SIMO +7.3%, .

Other news: CYTX +16% (receives notice of intent to exercise first contract option from BARDA), BDSI +15% (Co and ENDP announce positive top-line results from the Phase III clinical trial of BEMA buprenorphine in opioid-experienced patients with chronic pain), PAL +10% (announces reduction of senior secured term loan interest rate and extension of credit facility), MNGA +8.4% (announced that the results of the recent Swine Manure Sterilization trials meet Rule 503.32 requirements making swine manure suitable for Class A treatment.), PMFG +4.9% ( awarded new SCR system orders for Asia valued at more than $10 mln), SPPI +4.5% (FDA grants accelerated approval of Beleodaq (belinostat) for injection), RSH +4.2% (still checking), NGD +3.3% (announces 24% increase in new afton C-zone gold measured and indicated mineral resources), SNTA +2% (cont strength), GPRO +1.7% (Cont strength), RLGY +1.7% (positive Barron's mention), CGEN +1.6% (discloses achievement of milestone in cancer immunotherapy collaboration with Bayer (BAYRY)), WTW +1.6% (positive Barron's mention), CASI +1.5% (receives U.S. Orphan Drug Designation for the use Of ENMD-2076 to treat hepatocellular carcinoma), CBI +1.4% (Awarded $60 mln Sphere Storage Contract By Petrofac ).

Analyst comments: KING +4.4% (upgraded to Overweight from Neutral at Piper Jaffray), MOBL +3.9% (initiated with a Buy at Goldman among others), SONS +3.8% (initiated with an Outperform at Pacific Crest), UTEK +3.5% (upgraded to at ), BXE +2.8% (positive comments from Northland), AMAT +2.7% (upgraded to Overweight from Neutral at JP Morgan), SEAS +1.7% (upgraded to Outperform from Mkt Perform at BMO Capital Mkts), CENX +1.5% (upgraded to Neutral from Sell at Goldman), SCCO +1.3% (upgraded to Buy from Neutral at BofA/Merrill), NAO +1.1% (initiated with a Outperform at Credit Suisse), VC +1.1% (resumed with a Overweight at JP Morgan), WSM +1% (upgraded to Buy from Neutral at BofA/Merrill)

>>> Family Dollar: TAG discusses FDO ahead of earnings, still prefers DG and DLT

Family Dollar: TAG discusses FDO ahead of earnings, still prefers DG and DLTR

TAG sees in-line Q3 results; they note FDO has failed to take full advantage of the growth in the deep discount sector, by its own admission, due to poor execution—evidenced by its (3.8%) same-store sales result in 1QF14 and 2014 guidance of negative LSD. Going forward, they are encouraged by the co's return to an EDLP strategy, which we believe will drive traffic and allow Family Dollar to better compete. However, they would like to see proof of sustained improvement before becoming more constructive on the name, which could take several quarters, and they continue to prefer DG and DLTR given their consistent track records. Regardless of the fundamentals, the stock price still has support in the near-term on talk of a possible merger or LBO.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: LQDT +15.9%, LIVE +11.5%, CGEN +3.3%, KING +3.2%, SFUN +2.8%, GPRO +2.7%, RAD +1.1%

Gapping down: GTAT -6.5%, NQ -6.1%, BBVA -3.1%, AG -3%, MT -2.7%, PSTI -2.6%, SAN -2.4%, NBG -2.1%, LYG -1.9%, RIO -1.7%, ABX -1.7%, ING -1.7%, GOLD -1.3%, AUY -1.3%, GDX -1.1%, BCS -1.1%, DB -0.9%, SLV -0.8%

FT : SABMiller to sell out of African hotel and casino group Tsogo Sun

Tsogo Sun operates more than 90 luxury hotels in seven African countries including Nigeria and the Seychelles. Its interests include Montecasino, a hotel, theatre and casino complex in Johannesburg designed to resemble a weathered Tuscan village.
In April, the world’s second-largest brewer by sales announced it was reviewing its strategic options for its shareholding in the South African company, one of its few non-core assets. It had signalled its desire to exit the business as early as 2010.
Alan Clark, SABMiller chief executive, said on Monday that the proceeds from the sale would be reinvested in “core growth business, including our African operations”.
“Gaming and hotels are not core to our operations, and we have concluded that the time is right for us to exit our investment through a transaction which is beneficial to shareholders of both SABMiller and Tsogo Sun,” he said in statement.
The brewer announced in May that it would merge its South African business with its wider African operations in an effort to exert greater central control over a company that has more than 200 beer brands and 70,000 employees across more than 75 countries.
SABMiller shares slipped 0.4 per cent to £33.383, while Johannesburg-listed Tsogo Sun fell 7.1 per cent to R5,000.

Tsogo Sun operates more than 90 luxury hotels in seven African countries including Nigeria and the Seychelles. Its interests include Montecasino, a hotel, theatre and casino complex in Johannesburg designed to resemble a weathered Tuscan village.
In April, the world’s second-largest brewer by sales announced it was reviewing its strategic options for its shareholding in the South African company, one of its few non-core assets. It had signalled its desire to exit the business as early as 2010.
Alan Clark, SABMiller chief executive, said on Monday that the proceeds from the sale would be reinvested in “core growth business, including our African operations”.
“Gaming and hotels are not core to our operations, and we have concluded that the time is right for us to exit our investment through a transaction which is beneficial to shareholders of both SABMiller and Tsogo Sun,” he said in statement.
The brewer announced in May that it would merge its South African business with its wider African operations in an effort to exert greater central control over a company that has more than 200 beer brands and 70,000 employees across more than 75 countries.
SABMiller shares slipped 0.4 per cent to £33.383, while Johannesburg-listed Tsogo Sun fell 7.1 per cent to R5,000.

(VB) Why old-school tech giants need M&A to stay relevant

Why old-school tech giants need M&A to stay relevant

There’s no better time than the present for established enterprise players like IBM, Salesforce, and Oracle to swallow up bleeding-edge business intelligence companies.

From SAP to Microsoft, established players are fighting to be the all-encompassing solution for the enterprise. Yet, they’ve been stagnating. Hewlett-Packard is trying to architect a seemingly endless turnaround. IBM is culminating a 10-year campaign to focus on high-margin services and software, but at the expense of lost market share in its hardware business. Only now is Microsoft focusing on the cloud, a move that almost looks like too little, too late.

The only way anyone will emerge as a clear winner is through M&A (mergers and acquisitions). And executives have suggested as much — focusing on cloud and big data acquisitions in particular. For the remainder of 2014, I predict a strong increase in M&A activity, particularly in business intelligence.

Rumblings of this have already happened: TIBCO recently purchased analytics and reporting company Jaspersoft for $185 million, Dun & Bradstreet bought cloud-based BI company Indicee, and business planning- and analytics company Tidemark received $32 million in new funding. Tableau, the major public BI player (and a potential hot acquisition target, if it wants to be), announced Q1 2014 growth of 86 percent.

Business intelligence in particular is a crucial piece of the acquisitions pie, if only because current cloud-based BI systems make data more accessible and actionable than before. BI builds links between businesses’ massive coffers of big data and the everyday usage that is essential for running a data-driven business. It is just the kind of “new-world” technology that established players need in order to get back into the rink.

Now is the ideal time for these players to swallow up bleeding-edge cloud companies to build their competitive advantage and make up for market share lost during the recent cloud- and mobile disruptions. As always with M&A, the key is to fill the gaps in existing offerings. SAP, traditionally focused on ERP and data warehousing, did exactly that when it bought BI company Business Objects in 2007, a key acquisition that gave SAP the opportunity to integrate with Salesforce before the current “cloud wars” positioned the latter as more of a competitor.

Now that SAP has BI reporting in the bag, it stands to build its repertoire—and competitive advantage—by augmenting its offerings with human-resource and people management, perhaps acquiring something like Evolv. IBM could harness its existing focus on the healthcare sector with a clinician-focused product like the 3D mapping offered by Ayasdi. Salesforce could compete more directly with SAP — and solve users’ need to go between multiple screens all the time—by purchasing an integrated, visual dashboarding player with the ability to put everything on one pane (Qlikview and Tableau are examples).

As enterprise demands move away from large, licensed solutions and towards vendors that can pour data intelligence into every niche of the business, a rash of M&A will be inevitable. Global technology spend is slated to hit $2.22 trillion this year, more than the GDP of Italy. Large and small players alike want a piece of the pie.

Lesson learned? Large players that can make the best acquisitions, will win.

(BofA-ML) Vallourec - Time to move on, double upgrade to buy

* The end of an era, a turning point, double upgrade to Buy
We’ve been Underperform on Vallourec for three years, but we believe now is the
most attractive opportunity to be buying a depressed set of earnings combined with
a compelling share price entry point and we double upgrade Vallourec to Buy. We
think Vallourec has just one more cut to earnings, before profits bounce over the
next two years and we reflect this in EPS cuts we make, highlighted below. We
apply higher multiples to these depressed earnings and raise our PO to EUR40,
giving 20% upside potential, which we believe can be achieved in the near term.

* After seven warnings, we expect one more cut to earnings
Vallourec has been through a challenging period in the last three years, with seven
warnings, each time leading to double digit earnings downgrades. With the first five
relating to company specific issues, mainly centred around new mills, the recent two
downgrades related more to macro issues, with demand declining, particularly in
Brazil. Over the next one to two years, we hope for some of the recent negative
macro trends to improve, including the US gas rig count, and for demand in Brazil
and EAMEA to tick up. We see scope for one more cut to earnings, but we expect
this will end the downgrades and see a turning point in earnings.

* New EUR40 PO, on depressed earnings gives 20% upside pot’l, Buy
We revise our estimates on Vallourec, mainly on margin expectations. For 2014
there is no change to our earnings, however we cut 2015E by 19% and 2016E by
14%. For 2014-16E these changes leave our estimates 2%, 9% and 12% below
consensus. In terms of our price objective, we revise it up to EUR40 (from EUR35).
Our PO is constructed by blending a PE of 15x 15E, an EV/EBITDA multiple of 8x
15E and a DCF analysis. We increase the multiples towards the higher end of the
range we would use for an OCTG company, which we look to offset what we believe
to be depressed and bottoming earnings. Our new PO gives us 20% upside,
leading us to double upgrade Vallourec to a Buy rating.

>>> What to look at today - 7/7/2014

US Market was closed on friday after a strong close on thu., Trading on the Asian bourses was slower than usual following a US market holiday. Japan retailers were one of the more heavily traded sectors after the main retailers posted quarterly results last week. Aeon declined 4.5% by the mid-day break due to weak Q1 results. Familymart was the top performer rising 4% after it was announced Itochu increased its stake in the company, At the quarterly Branch Managers meeting BOJ Gov Kuroda reiterated the view that the domestic economy is recovering moderately as a trend and will maintain easing as long as necessary to achieve its 2 percent inflation target. He also added that the y/y rise in the core inflation is likely to be around 1.25% for some time., China property developers traded higher for the second consecutive days. China Vanke rallied over 7% over two trading days, after releasing Jun sales results last week.
Nikkei -0.24% Hang Seng -0.19% Shanghai -0.25%

Eur$ 1.3582 S&P -0.06% EuroStoxx Unch FTSE -0.01% Dax -0.02% SMI -0.11%

Macro :
- HSBC Upgrades Emerging Markets Stocks, Downgrades Developed Mkts
- Goldman Shifts Fed Rate Hike Forecast to Q3 2015 from Q1 2016
- Premier Li Says China 2Q Economic Performance Improved From 1Q
- Barclays Cuts Japan Q2 GDP Forecast to Annualized -7.3% Q/Q
- Lagarde Signals IMF to Cut Growth Forecast Even as U.S. Economy Rebounds
- China’s Central Bank Wades Into Fiscal Waters as Li Seeks to Spur Growth
- Alibaba-Backed Kuaidi Challenges Uber in China With Audi, BMW Luxury Cars

Keep an eye on :
- AF FP : Air France-KLM to put cargo division, including Martinair, up for sale
- AIR1 GY : Air Berlin, Etihad Deal to Get European Approval: Focus
- AIR FP : Airbus Said to Sell 100 Helicopters to Chinese Cos.: Reuters
- AIR FP : Airbus Sees ‘Good Commercial Dynamic’ at Farnborough: Lahoud
- AIR FP : Strategy chief: not decided yet if Airbus will formally launch A330neo at the Farnborough Air Show this month, but confident about the number of orders we will get at the show - press - The A330neo is an update version of the A330, which is now a 20 year old design - Farnborough to take place from 14th to 20th.
- BES PL : ESFG Proposes Vitor Bento to Be Banco Espirito Santo CEO
- BLNX LN : Blinkx the subject of bid speculation
- EN FP : Orange could study again Bouygues telco if invited - Le Figaro
- CU FP : Caisse des Depots Hasn’t Been Asked to Join Club Med Bid: CEO
- EDF FP : France, EDF Discuss Pace of Electricity-Price Increase: Parisien
- EDF FP : EDF in Talks With China Over U.K. Nuclear Site Sale: S. Times
- ENG SM : Enagas Estimates EU120M Annual Revenue Impact From Gas Reform
- ENL IM : Enel Hires BNP and Deutsche Bank for Slovakia Asset Sale: Sole
- Formula One : Ecclestone Preps Bid for Formula 1 as CVC Looks to Sell: Express
- GBL BB : Groupe Bruxelles Lambert Adj. NAV EU102.52/Shr on July 4
- GOW SM : Gowex to File for Insolvency as CEO Resigns on Fake Accounts
- HEN3 GY : Henkel would not rule out large buys, no share buyback on the agenda - Euro am Sonntag
- III LN : 3i Said to Plan $1.4 Billion Sale of Finnish Company Eltel
- MS IM : Telefonica to Buy 11.1% of Mediaset Italian Pay-TV Unit
- ORA FP : France’s Phone Company Orange to Test German Market Entry: WiWo, interested i n Spanish Acquisitions
- ORA FP : Richard Says Orange Ready to Participate in French Consolidation
- LG FP : Lafarge, Holcim Announce List of Proposed Asset Disposals
- LHA GY : Lufthansa Plans Venture With Air China to Expand in Asia: FAZ
- MC FP : Apple hires exec from luxury watch maker Tag Heuer ahead of expect launch of iWatch later this year - tech blogs - Has hired Patrick Pruniaux, VP for sales at Tag Heuer, a unit of LVMH. His exact role at Apple has not been announced.
- MS IM : Mediaset Espana Considers Share Buyback Alternatives: Filing
- MTC LN : Destination Maternity working on fresh bid for Mothercare; shareholders Allianz and Fidelity support board’s rejection of offer 
- NOVN VX :3,900 Novartis Staff in Switzerland Hit by Restructuring: SamS
- PTC PL : Portugal Telecom to Have 8 Percent Less Shares in Oi: Folha Link
- SAN FP : Sanofi Says Currency Hurt 2Q Business EPS by 8-10 Pct Points
- SGO FP : Saint-Gobain CEO Says French Housing Figures Are Worrying
- SHP LN : AbbVie May Still Raise Bid for Shire, Investor Tells Telegraph
- SHP LN : AbbVie head of research to visit UK next week to push case for Shire takeover bid
- SIE GY : Siemens interested in pursuing deals to take advantage of bullish prospects in naturall gas sector.
- TEF SM : Telefonica to pay EUR 295m for Mediaset's 22% stake in DTS
- TEL2B SS : Tele2 Doesn’t Plan on Entering New Countries, CEO Says
- TIT IM : Telecom Italia chairman dismisses claims that Italian govt plans to ban company from selling Tim Brasil, TIT Lost 4% on this news Friday - finish the day -1,47%
- UCG IM : Unicredit’s HVB Wants EU500m From DAB Bank Sale: Handelsblatt
- YAR NO : +ve article in the BArron's
- VIV FP : Spotify Is Preparing Share Sale for 2015, Valued at $10b: Focus
- VOW3 GY : Volkswagen Has Permit for 2 More China Production Sites: Reuters
- WIHL SS : Wihlborgs 2Q Net Income Falls to SEK39m From SEK352m Y/y

>>> Brokers Upgrades & Downgrades -7/7/2014

>>> Up
*CTT RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*ENAGAS RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*KBC RAISED TO BUY VS HOLD AT BERENBERG
*WEIR RAISED TO BUY VS NEUTRAL AT CITI

>>> Down
*BLINKX CUT TO NEUTRAL VS BUY AT GOLDMAN
*DEUTSCHE BOERSE CUT TO UNDERPERFORM AT CREDIT SUISSE
*ICAP CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*M6 CUT TO REDUCE VS NEUTRAL AT ODDO
*SKY DEUTSCHLAND CUT TO NEUTRAL VS BUY AT NOMURA
*SWEDBANK CUT TO HOLD VS BUY AT DEUTSCHE BANK

>>> PT Change

>>> Initiation
*BME RATED NEW NEUTRAL AT CREDIT SUISSE; PT EU35.5

>>> Call
>> Country
*HSBC CUTS DEVELOPED WORLD STOCKS TO UNDERWEIGHT FROM NEUTRAL
*HSBC RAISES EMERGING MARKETS STOCKS TO OVERWEIGHT FROM NEUTRAL