>>> German govt Fall economic outlook expected in 15mnts

German govt Fall economic outlook expected

>>> Prior Spring Outlook
- Maintained 2014 GDP growth at 1.8%; exports seen at +4.7% vs. 4.1% prior view; Imports seen at +4.7% vs. +5.0% prior) 
- Set 2015 GDP growth at 2.0%

>>> Spring comments:
- Econ Min Gabriel: Ukraine situation is a concern both politically and economically; Germany is not afraid of tougher sanctions on Russia

>>> Recent comments on German growth
- On Oct 10th Fresh speculation circulated that Germany could cut its GDP growth forecasts for both 2014 and 2015
- On Oct 10th Germany Economy Ministry: Outlook for exports remained 'very restrained' in coming months
- On Oct 8th Germany Aug Exports registered that largest decline since Jan 2009 (MoM: -5.8% v -4.0%e)
- On Oct 8th German Leading Economic Institutes (Advisors) cut GDP forecasts for 2014 and 2015
- On Oct 5th IMF cut German 2014 and 2015 GDP growth forecasts citing effects from Ukraine and Middle East crisis 
- On Sept 28th Econ Min Gabriel: German 2014 GDP could be below 1.8% official forecast

>>> Sapin Says Royal’s Highway Proposal Came as â€連 Surprise窶�

everybody will be surprised in a free country to see a minister ssked to a private company to to give free access to hihways during the week end and pick time...when they are supposed to make the more moeny...that kind of news will be very reassuring for all foreign investors thinking about investing in France...
BN 10/14 11:04 *SAPIN WAS SPEAKING TO REPORTERS IN LUXEMBOURG
BN 10/14 11:04 *SAPIN SAYS R0YAL'S HIGHWAY PROPOSAL CAME AS `A SURPRISE'
Sapin Says Royal’s Highway Proposal Came as ‘A Surprise’
2014-10-14 11:09:46.67 GMT


By Mark Deen
Oct. 14 (Bloomberg) -- French Finance Minister Michel Sapin
said he wasn’t informed of Energy Minister Segolene Royal’s
suggestion that highway tolls be lifted during weekends.
* “Every day brings its surprises,” Sapin says.
* Sapin speaks to journalists in Luxembourg.


Link to Company News:{DG FP <Equity> CN <GO>}
Link to Company News:{FGR FP <Equity> CN <GO>}

For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}

To contact the reporter on this story:
Mark Deen in Luxembourg at +33-1-5365-5066 or
markdeen@bloomberg.net

To contact the editor responsible for this story:
Mark Deen at +33-1-5365-5066 or
markdeen@bloomberg.net

(Jefferies) Telecom Services - 3Q14 Previews

Key Takeaway

This note outlines our first batch of expectations for 3Q14 reporting season. We
expect results to provide a positive catalyst in particular to Orange and KPN.
We also mention tailwinds for BT and Telenor and headwinds at TalkTalk, SES
and Telekom Austria.

* Positive trading calls. Orange should benefit from renewed hope of French
consolidation now that ILD has terminated its attempts to acquire TMUS. We expect
increasing optimism of market repair in Spain to be another supportive theme as Orange
promotes a positive outlook for its Spanish operation to justify part-funding the JAZ
acquisition with equity. And rising awareness that Orange's five-year plan, due to be
announced in February, should contain a cost-reduction target may instil confidence that
strong recent cost-cutting momentum will not prove short-lived. We believe KPN will
be able to show ever more tangible signs of progress towards the guided stabilisation
of financial trends by year-end, which is not fully appreciated by consensus, in our view.
Key areas to watch in this regard include postpaid momentum in consumer mobile, the
progression of broadband share, and efficiency measures mitigating top-line pressures in
the business segment. The outlook for relative stability is not discounted in the current
valuation (5.4x 2014e EV/EBITDA, vs 5.9x for the sector), in our view. BT should draw
attention to a strong 2H outlook as several headwinds subside. Management can calm
fears on EPL/mobile by reassuring that ambitions here remain tied to enhancing loyalty/
profitability of its retail BB base. Following the guidance upgrade in 2Q, Telenor should
report a solid 3Q – supported in particular by the domestic operations, and notwithstanding
continued competitive pressures in Thailand and also some regulatory headwinds in
Pakistan. Valuation presents an opportunity, in our view: On a mark-to-market basis, the
core EV (excluding VIP, and start-up operations in India and Myanmar) now trades on 6.7x
2014e EV/EBITDA, a modest premium to the sector on 5.9x for Telenor’s growth profile.

* Negative trading calls. We expect TalkTalk to report 1H marketing costs still at the
elevated levels of 1H last year despite slower TV adds. This may cast doubt on exactly how
bullish margin expansion targets might be achieved. Telekom Austria will no longer have
the technical support of the America Movil offer, so any deviation from inflated expectations
leaves the equity exposed to the downside (and the increased speculation of new Austrian
MVNOs is a growing overhang). While our base is that SES will reiterate FY14 guidance
(albeit with expectations now thoroughly anchored at the bottom of the 6%-7% range),
we worry that management will be unable to convince on the 4Q14 trading momentum
needed to bridge the gap to revenue guidance.

(BofA-ML) Global & European Fund Manager

Retreat but no Capitulation - see attached
>>> GLOBAL FUND MANAGER SURVEY: October FMS sentiment most bearish in 2 years but no panic and US growth/EPS recession not priced-in. Autumn pain trade would be US dollar/tech/banks/EZ peripheral bonds down, EM/resources/commodities up. FMS cash level at 4.9% says risk assets oversold & bounce likely in coming weeks.

European Longs closed - see attached
>>> EUROPEAN FUND MANAGER SURVEY: Longs on European stocks closed but Shorts not opened yet. Growth, profits & policy expectations falling but no capitulation. 7/10 expect ECB QE but investors losing faith in whether QE can generate
growth. Positioning is still pro-cyclical except for commodity sectors. Contrarians would go long Basics and short Insurance.

(GS) ILIAD - Terminates plan to buy TMUS - Positive for French consolidation

* News
Iliad announced that it terminated plans to buy T-Mobile US (TMUS) because TMUS’ majority shareholder Deutsche Telekom and other selected board members refused to entertain its new offer. Iliad had offered €33/share for 56.6% of the company, but stated that it had raised the equity proportion of its offer to c.67% (supported by two leading PE funds according to the company), with no material change to the price per share. Iliad said that it will "continue (its) profitable growth policy" going forward.

* Analysis
Overall, we view the announcement as positive as it raises the possibility of French consolidation in the near-term. We expect the share price reaction to be tempered by Iliad's recent statements that it would look at other similar deals in the future. Two key points: 1) French consolidation potential rises - we see 60% likelihood of French consolidation given the
attractiveness of consolidation for all French operators and the authorities. We argue Iliad walking away from TMUS increases the routes to consolidation as: a) Iliad can be a necessary participant in consolidation as the acquirer of Bouygues' network. This would be as part of regulatory concessions should another, larger French operator acquire Bouygues Telecom (a scenario possible even if Iliad had acquired TMUS in our view); and b) Iliad now has the financial flexibility to lead consolidation alone (which would not have been possible). 2) Future acquisitions cannot be ruled out - Iliad has stated that there is "no Plan B" target in the near- to medium-term if its TMUS offer were not accepted, but it would not rule out a similar move in the longer-term. We believe that while the acquisition of TMUS materially raised the risk profile of Iliad, it could be materially value accretive even without Iliad's planned cost efficiencies (on which there was
significant investor scepticism). For more details please see our note, NT uncertainty clouds LT value creation: Off CL, retain Buy, August 8, 2014.

* Implications
We remain Buy-rated, but put our price target under review.

>>> FMR doubles World Duty Free stake to 10% - report (translated)

FMR doubles World Duty Free stake to 10% 

FMR, the investment fund, has boosted its stake in listed Italian airport retailer World Duty Free from 5.18% to 10%, Italian language daily Milano Finanza reported. The unsourced item said that FMR had taken advantage of WDF's falling stock price to build up its stake.

The report said that FMR is now the second largest shareholder in WDF. The item added that WDF is controlled by the Benetton family, which holds a 50.1% stake in WDF.

WDF has a market cap of EUR 1.73bn.

 


Source Milano Finanza daily edition