>>> European RPe-Mkt Indications - From the street

SOLVAY - EBITDA a 9% beat, 3% divisional beat is strong, guidance solid...+3%
POSTNL - Revs in line, op profit EUR 77m v 70m MLe, outlook at top end..+2-3%
ZODIAC - +ve read from BEAV strategic review, potential M&A in space......+2%
COUNTRYWIDE - Strong momentum continuing, cash generation positive........+2%
SYMRISE - 10% EPS beat on better margin, sales in line, solid.............+2%
SNAM - Look ahead of cons, net income EUR 292m vs cons 273m...............+2%
EUROFINS - Org growth > 8% in Q1, rev +13% YoY, optimistic for FY.......+1-2%
LAFARGE - Q1 EBITDA broadly in line, confirms FY, org growth strong.....+1-2%
HOCHTIEF - LEI AU +1.7% post figs, new orders +10%, capex -34%, reit FY...+1%
DUFRY - Q1 EBIT 35.1m v 35.6m est, sales slightly light, solid outlook....+1%
RENTOKIL - We UPGRADE to BUY, PO of 144p..................................+1%
LUFTHANSA - EBIT EUR -245m v -272m est, passenger yields worse, reit FY...+1%
JUST EAT - Trading slightly ahead of expectaions, on iPad app and weather.+1%
BMW - PBT ahead on China, auto EBIT margin slightly light.................+1%
AXEL SPRINGER - Q1 Sales, EBITDA small beat, buys Yad2 for EUR 165m.......+1%
SCHNEIDER - To announce vast restructuring of French ops, Force Ouvriere..+1%
UBS - 1% bea tv cons, 3% miss on rev offset by costs, IB revs lower.....+0.5%
STATOIL - Considering selling JV in Eagle Ford basin for > $4bn.........+0.5%
DSM - EBITDA ex-items a 3% miss BUT reits 2014 outlook, will see relief.+0.5%
REXAM - Completes sale of of pharmaceutical devices for $805m, expected...u/c
LINDE - EBITDA at EUR 927m bang in line with consensus....................u/c
SALAMANDER - Reits production guidance, nothing much in IMS...............u/c
TDC - Broadly in line, revs 1% light, EBITDA 2% ahead, guidance unch....-0.5%
EVONIK - Q1 EBITDA 463m v 475m cons but reiterate FY targets..............-1%
GLENCORE - Copper production and thermal coal in line, zinc small.light...-1%
ADIDAS - Net a 7% miss, maintains FY tgts, DJ say to sell Rockport........-1%
NEXANS - Sales 2% below cons due to higher FX, organic growth in line.....-1%
AIXTRON - -ve read from VECO US results, -7.7% after mkt..................-1%
ABERDEEN - Rev -2% YoY, margin slightly weak div in line, disappointing.-1-2%
PFEIFFER VAC - Q1 Result Broadly In Line With exp, op profit -8.2~% YoY.-1-2%
FRES MED - 6% EPS miss on poor margins, rev a small miss, maintains FY..-1-2%
GEA - Sales in line, adj EBIT 1-2% below on margin, reit guidance.........-2%
BARCLAYS - Costs better, IB revs v poor (FICC weakness), capital okay.....-2%
HISCOX - Q1 in line, gross premiums a little light, outlook okay........-1-2%
FRESENIUS - 2% top line but 4.5% beat at EPS, 5% miss at Kabi the -ve...-2-3%
ALSTOM - French gov asking for improvements to GE's $17bn bid.............-3%
BALFOUR BEATTY - 3rd WARNING. Fy guidance now implies 19% downgrades..-12-15%

FT : Reject a deal that’s based on financial manipulation

Reject a deal that’s based on financial manipulation

Sir, In 59 years of my letters being published by you, I have regularly and repeatedly railed against the loss of ownership of British industry and commerce through the shortsightedness and sharp practices in the business world. The risk today is posed by the Pfizer bid for one of Great Britain’s and Sweden’s iconic companies.
More
IN LETTERS
Bigotry curbed by a lack of language
Promises, promises – we’ve seen how they get broken
Tax breaks distract attention from the fundamentals
One more scare story for Yes camp
In the 1960s and 1970s, pharmaceuticals was a lossmaking department of ICI’s dyestuffs business. Its management favoured closure. Sir Michael Clapham, a visionary patriotic British business grandee, deputy chairman of ICI and subsequently president of the CBI, was adamant this should not happen. I was his clerk at the time and he graciously allowed me to speak on the topic. Our counsel to continue the pharmaceuticals activities prevailed. The closure of the pharmaceutical department would have deprived the world of statins and many other life-saving medicines. Short-term profits on this occasion, fortunately, did not outweigh long-term financial and enormous healthcare gains. Centralisation is not conducive to successful research and development.
Pfizer’s 2013 sales were $52bn, of which 39 per cent was in the US, generating huge gross margins there, but the upfront current federal tax charge was a paltry $142m, 5 per cent of the group upfront tax charge. Pfizer’s manipulation of its huge overseas capital resources to minimise its tax charge and the relocation of its tax base to the UK to encourage the naive UK authorities to support the bid, would appear to be extraordinarily cynical, and for the Treasury to rely on the promise of future tax take would appear to be whimsical. The US-dominated board seems to have lacked basic ethical standards, depriving the US economy of desperately needed tax revenue while, at the same time, being succoured by US public spending. It appears to be a highly centralised company, failing good corporate practice of dividing the two functions of chairman and chief executive.
It beggars belief to observe the apparent acquiescence of the UK towards this bid while being force-fed the harassment of BP by the US authorities. What is the good of a five-year employment guarantee when it takes 10 years to develop a new drug? A successful bid will uproot AstraZeneca’s purposeful goal of enhanced R&D capabilities.
Pfizer encompasses a corporate culture that is totally inimical to AstraZeneca. The deal is based on financial manipulation and should be rejected at any price.

FT : France to oppose GE’s $13.5bn Alstom deal

France to oppose GE’s $13.5bn Alstom deal

The French government said it would oppose General Electric’s $13.5bn offer for Alstom’s energy business, saying that it wanted the US conglomerate to suggest a different and more equitable deal.
In a letter sent to Jeffrey Immelt, GE chief executive, signed by the French industry minister Arnaud Montebourg, it said it wanted a “balanced partnership” rather than a takeover.

Last week the Alstom board of directors accepted a GE deal which valued its majority energy business, which makes up 70 per cent of revenues, at $13.5bn, despite the clear unease of the government.
“French companies are not prey,” said Mr Montebourg last week, suggesting that he preferred a rival offer from Siemens of Germany, which would involve assets swaps to create two “European champions” in trains and power.
On Monday, in a letter published by Les Echos, the government said it wanted GE to offer a deal more akin to the successful 50:50 joint venture between GE and Safran in aircraft engines, rather than a straight takeover.
“The government would like to examine with you the means of achieving a balanced partnership, rejecting a pure acquisition, which would lead to Alstom’s disappearing and being broken up,” said the letter.
It added that as part of a new deal GE could transfer its railway assets into Alstom Transport. It said that otherwise the division would be too small to compete when the company’s majority energy division was carved out.
‘‘As it stands, we unfortunately cannot support the proposals you have made . . . based solely on the acquisition of Alstom’s activities in the energy domain,” said the letter.
The French government has the power to block takeovers of French companies in “strategic sectors”, although in practice it uses a mixture of tacit warnings, public threats and financial power to try to influence deals.
In the letter Mr Montebourg stressed Alstom’s strategic importance to the country’s nuclear industry.
At a joint press conference in Paris last week Patrick Kron, chief executive of Alstom, and Mr Immelt said they were confident their deal would be completed. “This is not my first time at the Elysee,” said Mr Immelt.
On Monday GE said in a statement: “We appreciate the engagement of the French government. We believe our proposal is good for France, for Alstom and for GE. As our letter to President Hollande stressed, we are open to continuing dialogue.”

>>> Auchan likely buyer for half of Paris stores being sold by Casino

Auchan likely buyer for half of Paris stores being sold by Casino

The French, privately-owned, retail group Auchan is understood to have agreed to acquire about 25 stores currently owned by the listed competitor Casino Guichard Perrachon, French weekly LSA reported.

The French competition authority previously cleared the acquisition for the sole control of Monoprix SA by Casino Guichard Perrachon subject to conditions, including the divestment of 55 stores in Paris.

The unsourced report said the deal is currently closing and that French retailers Carrefour and Intermarche did not manage to acquire a single outlet, while Systeme U could acquire one store only.

The listed, UK retailer Marks & Spencer could acquire 6 stores, while independent retailer G20 could have agreed to buy 7 stores, the report added.


Source LSA

>>> What to look at today - 06/05/2014

US MArket closed slightly higher but in a quiet market, healthcare & TEch OP the mkt again, Financials were lagging, volume were below average @ 600mil shares, VIX @ 13,29 +2,94%, picking up from low levels...US after Hours PRTA +14.3%, PLOW +9.6%, DATA +8.6%, ININ -15.9%, AEIS -12.3%, ECOM -10.6% following earnings/guidance....Asian trading volumes were largely subdued by bank holidays in Japan, Korea, and Hong Kong as well as generally trendless sentiment overnight on WallStreet...Nikkei closed HS Closed Shanghai +0,06%...

Eur$ 1,3880 S&P Fut +0,21% European Fut : +0,32%

MAcro
- Buy European Large Caps, At Record Low Valuations: M. Stanley {NSN N5502T6JTSE8 <go>}

Keep an eye on :
- ABE SM : Abertis 1Q Net EU125 Mln; Analyst Est. EU116.6 Mln
- ADS GY : Adidas 1Q Sales, Net Miss, Keeps 2014 Forecast
- AMAG AV : Amag 1Q Net EU10.4 vs EU15m; Sees 2014 Ebitda of EU95m-EU110m
- ANDR AV : Andritz 1Q Sales Miss Ests.; Net Income EU20.7m vs EU4.1m
- AZN LN : AstraZeneca Chairman Has Got No Signals of New Pfizer Bid: DI
- AZN LN : Pfizer CEO Says Willing to Walk Away From AstraZeneca Offer: WSJ
- SPR GY : Axel Springer 1Q Sales, Ebitda Beat Ests.; Buys Yad2 for EU165m
- BMW GY : BMW 1Q Profit, Rev. In-Line; Full-Year Targets Reiterated, Auto Margin Light
- DSM NA : DSM 1Q Ebitda Ex-Items EU270m, Est. EU278m, Repeats 2014 Outlook
- DUE GY : Duerr 1Q Sales Miss Estimates, Ebit Beats; EPS Rise 26%
- DUFN VX : MORE: Dufry 1Q Sales Miss Ests., Ebit In Line
- EUZ GY : Eckert & Ziegler Bebig 1Q Net Loss EU705,000 vs EU632,000 Profit
- ERF FP : Eurofins 1Q Revenue EU304 Mln up 13%
- EVK GY : Evonik 1Q Adj. Ebitda, Sales Miss Ests., Repeats 2014 Forecasts
- F IM : Fiat Said to Start Alfa Romeo Model Expansion With Own Funding
- FIS1V FH : Fiskars 1Q Profit Declines on ‘Adverse’ Currency Development
- FRE GY : Fresenius SE 1Q Adj. Net, Ebit Miss Ests.; Keeps Forecast, Narrows 2014 Outlook for Kabi Unit
- FME GY : Fresenius Medical 1Q Net, Rev. Miss Ests.; Keeps Forecast
- FUR NA : Fugro Says 1Q Margin Decreased Significantly Y/y; 1Q Sales Up 6%
- GEA GY : GEA Group 1Q Sales Beat, Earnings Rise; Confirms 2014 Outlook
- GIL GY : DMG Mori Seiki 1Q Sales Beat Ests.; Profit After Tax Up 73%
- GLEN LN : Glencore 1Q Copper Output Rises, Zinc Falls; Marketing In Line
- KBC GR : Kontron 1Q Sales Fall 4%; Says Results in Line With 2014 Outlook
- LG FP : Lafarge 1Q Sales, Ebitda Below Estimates; Confirms FY Outlook
- LHA GY : Lufthansa 1Q Net Loss Beats; Confirms 2014 Profit Forecast
- LIN GY : Linde 1Q Operating Profit Misses, Sales Beat; Repeats Outlook
- NEX FP : Nexans 1Q Sales Fall 5.5% to EU1.6B
- PFV GY : Pfeiffer Vacuum Says 1Q Result Broadly In Line With Expectations
- PNL NA : PostNL 1Q Revenue EU1.03b vs EU1.04b y/y
- PMI IM : Pop. Milano CEO Rules Out Additional Capital Increase: Corriere
- REP SM : Repsol Studies Possible Purchase in Norway, Economista Says
- RIO LN : Rio Tinto’s Aluminum Business to Recover, Deutsche Bank Says
- SBX NO : SeaBird Exploration 1Q Sales Fall; Sees Stable Day Rates in 1H
- SOLB BB : Solvay 1Q Ebitda Ex-Items Beats Ests. on Volume Gains, Savings
- SRG IM : Snam 1Q Net EU292m vs Est. EU273m; Ebit EU542m Beats Est. EU533m
- SY1 GY : Symrise 1Q Profit Beats, Sales Miss; Sticks to 2020 Targets
- UBSN VX : UBS 1Q Net Income Beats Estimates; Sticks to 15% ROE Target, indicated 1,2% higher

>>> Brokers Upgrades & Downgrades

>>> Up
*AKER SOLUTIONS RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*ANTOFAGASTA RAISED TO OUTPERFORM VS SECTOR PERFORM AT RBC
*ATLAS COPCO RAISED TO BUY VS SELL AT CITI
*DANSKE BANK RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*GRUPA LOTOS RAISED TO HOLD VS SELL AT SOCGEN
*HOWDEN JOINERY RAISED TO BUY FROM HOLD AT PEEL HUNT
*INTERCONTINENTAL HOTELS CUT TO NEUTRAL VS BUY AT UBS
*MELROSE RAISED TO HOLD VS REDUCE AT NUMIS
*RENTOKIL RAISED TO BUY VS NEUTRAL AT BOFAML

>>> Down
*BRUNEL CUT TO HOLD VS BUY AT ING, PT CUT TO EU46 VS EU53
*H LUNDBECK CUT TO SELL VS HOLD AT NORDEA
*RUBIS CUT TO NEUTRAL VS BUY AT AT ODDO

>>> PT Change


>>> Initiation
*HANNOVER RUECK SE RATED NEW REDUCE AT KEPLER CHEUVREUX
*MUNICH RE RATED NEW HOLD AT KEPLER CHEUVREUX

>>> call
>> Country
*FRENCH STOCKS RAISED TO OVERWEIGHT VS UNDERWEIGHT:CREDIT SUISSE
*GERMAN STOCKS CUT TO BENCHMARK VS OVERWEIGHT AT CREDIT SUISSE

>>> Asian Update

Asian Market Update: Australia trade surplus slows despite strong iron ore shipments; Markets await RBA statement

***Economic Data*** - (AU) AUSTRALIA MAR TRADE BALANCE (A$): 0.7B (4th consecutive month of surplus; 3-month low) V 1.0BE - (TW) TAIWAN APR CPI Y/Y: 1.7% V 1.5%E; WPI Y/Y: 0.1% V 0.7%E - (PH) PHILIPPINES APR CPI M/M: 0.4% V 0.3%E; Y/Y: 4.1% V 4.1%E; CORE CPI Y/Y: 2.9% V 2.9%E

Market Snapshot (as of 03:30 GMT): - Nikkei225 closed, S&P/ASX +0.4%, Kospi closed, Shanghai Composite +0.2%, Hang Seng closed, Jun S&P500 +0.2% at 1,878, Jun gold flat at $1,309, Jun crude oil -0.1% at $99.43/brl

***Highlights/Observations/Insights*** - Asian trading volumes were largely subdued by bank holidays in Japan, Korea, and Hong Kong as well as generally trendless sentiment overnight on Wall Street. Australia is in the spotlight today, both in terms of economic data and earnings. March trade balance marked its 4th consecutive surplus, but at a 3-month low. Overall imports were flat and exports were down 2% on the month. Iron ore export components were most surprising, reaching A$7.38B v A$6.31B prior on value; On volume iron ore shipments rose 6% m/m, with 9% rise in exports to China and a 17% drop in shipments to Japan. Investors are also awaiting the latest RBA policy statement for any clues on whether the latest soft CPI data could tone down the recently more hawkish central bank rhetoric. - Australia's Leighton Holdings reported a 23.5% rise in net profit and a 5% increase in revenue. Leighton also affirmed FY14 net guidance, with CEO noting a good range of new project opportunities. David Jones posted a 4% rise in Q3 Revenue and a 2.4% increase in LFL sales.

- Among the notable developments in China, CSRC was reported to have received an additional 30 applicants for IPO filings, bringing the total to 241 since Apr 19th. China Electricity Council was said to have guided H1 power consumption +6% y/y and 2014 growth at 7.0%. In the property space, city of Ningbo was reportedly considering an easing of its home purchase curbs.

- Korean press cited BOK Gov Lee indicating the central bank will not adjust benchmark interest rates "unexpectedly", giving markets several months to prepare for higher rates through a series of statement signals. Separately, a survey of economists continues to project BOK maintaining rates unchanged in May for the 12th consecutive month. Korean Fin Min Hyun also expressed concern that consumption sentiment has deteriorated since the ferry disaster.

***Fixed Income/Commodities/Currencies*** - (CN) China to drain CNY60B in 28-day repos (22nd consecutive drain) - USD/CNY: (CN) China's State Administration of Foreign Exchange (SAFE) (fx regulator) official Guan: Yuan rise and depreciation are normal - Chinese press

- USD majors remain contained to narrow ranges - EUR/USD is up about 10pips from the lows around $1.3880, USD/JPY is down some 15pips supported by ¥102 handle, while AUD/USD has quickly recovered from a softer than expected trade balance figure to regain the $0.9280 level, up about 10pips from opening lows. NZD/USD was the most notable mover, rising about 25pips to briefly test above the $0.87 handle - a 3 week high.

***Equities*** US markets: - PSMI: Reports Q1 -$0.24 (adj) v -$0.22e, R$41.3M v $34.3Me; +10.4% afterhours - PLOW: Reports Q1 $0.07 v -$0.02e, R$36.4M v $24.4Me; +9.6% afterhours - DATA: Reports Q1 -$0.01 v -$0.11e, R$74.6M v $62.9Me; +8.8% afterhours - AVGO: To join S&P 500 after the close of trading on May 7, replacing LSI which it is acquiring; +2.4% afterhours - APC: Reports Q1 -$5.30 (incl items) v $1.19e, R$5.84B v $3.99Be; +1.5% afterhours - CFN: Reports Q3 $0.60 v $0.63e, R$968M v $979Me; -1.2% afterhours - SMG: Reports Q2 $2.17 v $1.94e, R$1.08B v $1.08Be; -2.5% afterhours - AIG: Reports Q1 $1.21 v $1.08e, net premiums earned $8.23B v $8.56B y/y; -3.0% afterhours - ATHN: Greenlight's Einhorn: Betting against ATHN; stock is overpriced, could fall over 80% - Ira Sohn conf comments; -12.2% afterhours - AEIS: Reports Q1 $0.43 v $0.40e, R$140.9M v $142Me; -12.3% afterhours

Notable movers by sector: - Materials: Lynas Corp Ltd LYC.AU -7.6% (plans A$10M in placement) - Industrials: Leighton Holdings LEI.AU +1.7% (Q1 results; Hochtief raises stake) - Technology: Beijing SuperMap Software 300036.CN +7.6%, Guangzhou Hi-Target Navigation Tech 300177.CN +2.4% (Tencent acquires stake in NavInfo); Zhejiang East Crystal Electronic 002199.CN +6.4%, Luxshare Precision Industry 002475.CN +5.2%, Suzhou Anjie Technology 002635.CN +6.0%, GoerTek Inc 002241.CN +5.4% (Apple closes above $600 for the first time since Nov 2012); HTC 2498.TW +2.7% (demand for HTC One M8 exceeds supply) - Telecom: China Unicom 600050.CN +1.9% (parent company to add stake)

(BFW) Buy European Large Caps, At Record Low Valuations: M. Stanley

Buy European Large Caps, At Record Low Valuations: M. Stanley
2014-05-06 05:18:29.154 GMT


By Roger Neill
     May 6 (Bloomberg) -- Now is the time to raise exposure to
large-cap stocks as they offer the best risk-reward across the
market, Morgan Stanley’s Graham Secker says.
  * Are trading at 30-year relative valuation lows to rest of
    the market on P/BV, close to 30-year highs on relative
    dividend yield: MS
  * Large-caps are a significant consensus underweight across
    both long-only investors and hedge funds: MS


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

To contact the reporter on this story:
Roger Neill in London at +44-20-7673-2867 or
rneill3@bloomberg.net

To contact the editor responsible for this story:
Gaurav Panchal at +44-20-7392-0511 or
gpanchal2@bloomberg.net

>>> US After Hours

After Hours Summary: PRTA +14.3%, PLOW +9.6%, DATA +8.6%, ININ -15.9%, AEIS -12.3%, ECOM -10.6% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: PRTA +14.3%, PLOW +9.6%, DATA +8.6%, TXMD +8.1%, NCMI +7.9%, NLS +5.5%, VVUS +5.2%, QLYS +4.9%, SALE +4.7%, ELNK +3.6%, CKP +3.3%, EOX +3.2%, RGR +2.8%, ALXA +2.7%, HL +2.6%, CRK +2.5%, FOLD +2.3%, EOG +2.1%, APC +1.6%, LDR +1.3%, ANV +0.9%, TRN +0.5%, RBC +0.5%, OAKS +0.4%, MR +0.2%

Companies trading higher in after hours in reaction to news: NCMI +7.9% (announced acquisition of Screenvision for $375 mln of cash and stock on a debt free, cash free basis), CODE +4.6% (disclosed 5.11% passive stake in 13G filing), AVGO +2.9% (to replace LSI in the S&P 500), AXAS +1.1% (announced production for the first quarter of 2014 averaged approximately 4,189 Boepd; sees 2014 production of 4600-4750 Boepd, LOE of $14-$15, Cash G&A $2.3-$2.5 mln, CAPEX $51.5-55.0 mln), MMP +1.1% (announced it is proceeding with its pipeline project to deliver refined petroleum products to Little Rock, Arkansas, supported by commitments from its recent open season), GTAT +0.5% (announced larger capacity ASF 165 sapphire furnace)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: ININ -15.9%, AEIS -12.3%, ECOM -10.6%, MED -10.4%, FN -10.2%, SGY -5.2%, PACD -4.2%, HCLP -3.2%, LF -2.9%, AIG -2.8%, SMG -2.5%, MTSC -2.3%, YY -2%, BNFT -2%, VECO -1.9%, CFN -1.2%, FLDM -0.4%, SZYM -0.4%, RPAI -0.3%, IDTI -0.1%

Companies trading lower in after hours in reaction to news: ATHN -11.5% (mentioned cautiously by Greenlight Capital's David Einhorn, says stock could fall 80%), LGF -0.5% (announced that Divergent, released on co's Summit Entertainment label, has broken the $250 million mark at the worldwide box office)