>>> Brokers Upgrades & Downgrades - 03/04/2014

>>> Up
*ASOS RAISED TO HOLD VS SELL AT SOCGEN
*MITCHELLS & BUTLERS RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*TULLOW OIL RAISED TO BUY VS NEUTRAL AT UBS
*VTB RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*888 HOLDINGS RAISED TO OVERWEIGHT AT MORGAN STANLEY

>>> Down
*DEUTSCHE BANK CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*HSBC CUT TO HOLD VS BUY AT INVESTEC
*PERNOD RICARD CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*PRADA CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE; PT HK$63
*PRADA CUT TO SELL VS NEUTRAL AT BOCOM INTL, PT HK$52 VS HK$56
*SOLVAY CUT TO NEUTRAL VS BUY AT UBS
*STADA CUT TO SELL VS HOLD AT BERENBERG
*TRAKYA CUT TO UNDERPERFORM VS NEUTRAL AT BOFAML

>>> PT Change
*Atlantia PT Raised to EU18 vs EU17 at RBC
*PRADA PT CUT TO HK$60 VS HK$74 AT JPMORGAN, NEUTRAL KEPT
*Puma PT Cut to EU200 vs EU210 at Raymond James

>>> Initiation
*ABLYNX RATED NEW NEUTRAL AT GOLDMAN, PT EU10.5
*BG GROUP RATED NEW OUTPERFORM AT COWEN
*BP RATED NEW MARKET PERFORM AT COWEN
*GALAPAGOS RATED NEW BUY AT GOLDMAN, PT EU24
*PACE RATED NEW HOLD AT LIBERUM, PT 420P
*ROYAL DUTCH SHELL RATED NEW MARKET PERFORM AT COWEN

>>> Call
>> Stock
*DAILY MAIL ADDED TO CONVICTION BUY LIST AT GOLDMAN
*HERITAGE OIL REMOVED FROM UBS’S MOST PREFERRED LIST

WSJ : China's Mini-Stimulus Supports Shares

Chinese stocks rose on Thursday, after Beijing's announcement of stimulus measures to help the struggling economy, while Japanese stocks gained as positive economic data from the U.S. helped keep the yen soft.

The Hang Seng China Enterprise Index, a measure of Hong Kong-listed Chinese companies, was up 1% after China's State Council unveiled late on Wednesday a series of measure to add momentum to Asia's largest economy—including upgraded housing for low-income households and tax relief for small businesses.

Hong Kong's Hang Seng Index added 0.3% and the Shanghai Composite was up just 0.2%.

The measures also included additional spending on the railway companies, which resulted in a substantial boost for the companies that are involved in rail construction. China Railway Group 601390.SH +0.78% surged 7.7% and China Railway Construction 601186.SH +2.07% Corporation jumped 9.2%.

Concerns over the state of the Chinese economy have contributed to weak stock performances in both Hong Kong and mainland China in 2014, with Hong Kong down 3.1% for the year and Shanghai 2.5% lower.

In addition to China's stimulus measures, Asian stocks were helped by overnight data showing that U.S. businesses last month returned to the modest hiring pace seen before the winter weather dampened job growth in the world's largest economy. Private-sector payrolls increased by 191,000 new jobs in March, according to payroll processor Automatic Data Processing. ADP +0.22%

The data helped fuel hopes that the U.S. economy is building momentum, with the S&P 500 hitting another record high on Wednesday, and supported expectations ahead of the main monthly labor report, which is out late on Friday.

One of the biggest movers were Japanese stocks, with the Nikkei Stock Average up 0.7% as the yen continued to edge closer to the ¥104 to the dollar mark. The dollar added 0.2% on Wednesday and was last little moved at ¥103.88.

Elsewhere, stocks only made small gains as markets remained cautious ahead of the Friday jobs data. Australia's S&P/ASX 200 added 0.2% and South Korea's Kospi was up 0.4%.

In corporate news, shares in National Australia Bank Ltd NAB.AU -0.65% fell 0.5% after the lender's chief executive Cameron Clyne said that he will step down in August for personal reasons. He will be replaced by Andrew Thorburn, head of the bank's Bank of New Zealand subsidiary.

Barron's : Bubble or No Bubble?

Bubble or No Bubble?

So are we in a stock-market bubble or not? I think the answer depends on what data points you're using to support your narrative. A piece in the most recent edition of the Sunday New York Times starts with this short sentence: "It sure looks like a bubble." But the article by Jeff Sommer, a longtime editor with the Sunday business section, goes on to focus on a handful of pricey acquisitions and initial public offerings in the social-media, biotech and videogaming sectors as proof that investors are becoming as exuberant as they were during the tech bubble. (The article's headline broadcasts that: "In Some Ways, It's Looking Like 1999 in the Stock Market.") One has to go low in the piece to read that the bubble talk doesn't apply to the current valuation of the broader stock market. Barry Ritholtz, a popular financial blogger and columnist with Bloomberg, uses the Times' Sunday piece as a foil for his own view on whether a bubble exists. "Some of you may not have been around during the 1990s bull market. In its final year—1999—Wall Street was a three-ring circus of insanity," he writes. "The world today is nothing like it was then. The streets weren't paved with gold, then trading at a pitiful $250 an ounce, but rather cocaine and $2,000 a night escorts." He points to a Gallup poll in the first quarter concluding that half of all Americans think putting money into the stock market today is a bad idea. "In '99, a whopping 67 percent thought putting money into the stock market was a great idea," he adds. After reading both accounts, it's pretty clear that those who fear bubbles should tread lightly in the areas discussed in the Times article and feel not quite so put off by the broader stock market. Meanwhile, Nouriel Roubini, the New York University economist known by the nickname Dr. Doom, has written a piece in which he argues that there's a new set of risks for global investors. It's hard to summarize the piece since it lists a slew of risks that are subsiding and a slew of other risks that may be taking their place. Best to read the article for yourself. For example, he writes that "thanks to European Central Bank President Mario Draghi's famous "whatever it takes" speech, new financial facilities to stabilize distressed sovereign debtors, and the beginning of a banking union, the eurozone is no longer on the verge of collapse." But he argues that there are a whole new set of risks, including a growing chance of a hard economic landing in China, policy mistakes as the Federal Reserve exits monetary easing, and a "serious risk that the current conflict in Ukraine will lead to Cold War II—and possibly even a hot war if Russia invades the east of the country." He even points to a geopolitical risk that isn't getting nearly the ink of a looming Cold War II— that "Asia's terrestrial and maritime territorial disagreements (starting with the disputes between China and Japan) could escalate into outright military conflict." Thankfully, Roubini does not see any risk of a zombie invasion. Still, it's a long list, and any reader perusing it might be heartened to know that Roubini has made a career by keeping an eye on worst-case scenarios. I'll close with a Fortune article that discusses the reaction of former Securities and Exchange Commission Chairman Arthur Levitt's view of writer Michael Lewis' contention that the U.S. stock market is rigged. Levitt tells Fortune's senior editor, Stephen Gandel, that he disagrees with the view laid out in Lewis' book, Flash Boys, that high-frequency trading has been bad for individual investors, adding that he has seen no evidence it has made markets less fair. Gandel quotes Levitt as saying "I'm not persuaded the average investor is not getting a price that is just as good as a high frequency trader." But Gandel points out that Levitt is also an advisor to one of the biggest high-frequency trading firms, KCG Holdings. Don't you just love those revolving doors?

>>>Asian Update

Asian Market Update: China non-manufacturing PMIs retreat, Australia retail sales growth slows

***Economic Data*** - (CN) CHINA MAR NON-MANUFACTURING PMI: 54.5 V 55.0 PRIOR - (CN) CHINA MAR HSBC SERVICES PMI: 51.9 (highest reading since Nov 2013) V 51.0 PRIOR; COMPOSITE PMI: 49.3 V 49.8 PRIOR - (HK) HONG KONG MAR HSBC PMI: 49.9 V 53.3 PRIOR (lowest reading and first contraction since Aug 2013) - (AU) AUSTRALIA FEB TRADE BALANCE (A$): 1.2B (4th consecutive month of surplus) V 800ME - (AU) AUSTRALIA FEB RETAIL SALES M/M: 0.2% V 0.3%E (7-month low) - (AU) AUSTRALIA MAR AIG PERFORMANCE OF SERVICES INDEX: 48.9 V 55.2 PRIOR (3-month low) - (JP) JAPAN MAR MARKIT PMI SERVICES: 52.2 (highest reading since Oct 2013) V 49.3 PRIOR; PMI COMPOSITE: 52.8 (15th consecutive month of expansion) V 52.0 PRIOR - (JP) Japan investors sold net ¥763.6B in foreign bonds last week (2nd straight week of net sales) vs sold net ¥395.5B in prior week; Foreign Investors sold net ¥515.5B in Japan stocks (net sellers for 3rd week) v sold net ¥191.0B in prior week - (KR) SOUTH KOREA MAR FOREIGN RESERVES: $354.3B V $351.8B PRIOR - (BR) BRAZIL CENTRAL BANK (BDB) RAISES SELIC TARGET RATE BY 25BPS TO 11.00%, AS EXPECTED

Market Snapshot (as of 03:30 GMT): - Nikkei225 +0.9%, S&P/ASX +0.2%, Kospi +0.3%, Shanghai Composite -0.2%, Hang Seng +0.4%, Jun S&P500 flat at 1,883, Jun gold +0.1% at $1,291, May crude oil -0.2% at $99.42/brl

***Highlights/Observations/Insights*** - Shanghai Composite has reversed from the higher open, as soft non-manufacturing PMI prints appear to overshadow the "targeted stimulus" announced by policymakers overnight. Rail names rallied after China Cabinet unveiled accelerated investment in the sector along with tax reduction for small companies. However the index retreated, as both HSBC Composite Services PMI and non-manufacturing official PMI fell 0.5pts in March. HSBC chief economist noted that "combined with the weaker manufacturing PMI reading, the underlying strength of the economy is softening... which should ultimately weigh on the labour market."

- Softer growth in Australia retail sales drove AUD/USD down over 30pips below $0.9220, as modest 0.2% m/m increase marked a 7-month low. JPMorgan economists noted that while the drop-off is not disastrous, coming after several strong months, but the cautious spending does reflect a "soggy" labor market. Traders also shrugged a higher than expected trade surplus, with a look into the components showing a slowdown in exports to China to A$8.18B v A$8.39B prior and also a near-10% dro in shipments of coal. RBA Gov Stevens was similarly cautious in his remarks, indicating that despite some promising signs, the transition away from mining remains challenging.

- Brazil raised rates for the 9th time in the current tightening cycle, meeting expectations of a 25bp hike to 11% but also removing a passage reflecting "continuity" in policy adjustment from its statement.

- Chile experienced more strong aftershocks in the same region following last night's 8.2 quake - 7.4 and 7.7 - prompting more orders of evacuation of northeast parts of the country. May copper contract remained steady around $3.02, having erased much of the overnight gains.

***Fixed Income/Commodities/Currencies*** - (CN) PBoC to drain CNY50B in 14-day repos, CNY40B in 28-day repos (13th consecutive drain); drains net CNY62B this week v drained CNY98B prior (8th week of drain) - SLV: iShares Silver Trust ETF daily holdings fall to 10,208 tonnes from 10,212 tonnes prior

***Equities*** US markets: - GILD: Reports positive results from phase III study of Sofosbuvir among Hepatitis C patients in Japan; showed 97% response rate; +1.9% afterhours - CY: Guides Q1 Rev "to exceed the higher end" of previous guidance of $169-171M v $165Me; CFO Brad Buss to retire; +1.1% afterhours - ONNN: Acquires Truesense Imaging for $92M in cash; expects immediate accretion; +1.1% afterhours - CAH: To Acquire AccessClosure, a Leading US Manufacturer of Extravascular Closure Devices for $320M; -0.4% afterhours - JNPR: Determined to cease development of application delivery controller technology; To reduce global headcount by 6% - filing; -1.1% afterhours - CACI: Cuts FY14 $5.12-5.51 v $5.78e, Rev $3.5-3.6B v $3.69Be (previously guided $5.59-5.98, R$3.65-3.80B on 1/29), cites reduced and delayed government spending; -8.9% afterhours

Notable movers by sector: - Consumer Discretionary: ABC-MART 2670.JP +2.2% (press speculation on FY13/14 results); Fonterra FCG.NZ +1.5% (announces partnership with Woolworths for Victoria) - Financials: Steadfast Group SDF.AU flat (acquires asset); Sealand Securities 000750.CN +5.6% (private placement plan); Yango Group 000671.CN -2.8% (FY13 results) - Industrials: Zhejiang East Crystal Electronic 002199.CN -4.6% (FY13 results); China Railway Construction Corp 1186.HK +8.9%, China Railway Group 390.HK +6.7%, CSR Corp 1766.HK +3.7% (China announces targeted stimulus) - Technology: Sharp Corp 6753.JP +2.8% (to increase LCD shipments to China) - Telecom: Coolpad Group 2369.HK +2.1% (comments from CFO)

>>> Fed's Bullard (dove, FOMC non-voter in 2014): Taper has gone better than exp

Fed's Bullard (dove, FOMC non-voter in 2014): Taper has gone better than expected
- FOMC not yet decided on prodedure once balance sheet returns to normal. 
- Discussed with the FOMC need for regular press conferences. 
- Exit most difficult part of Fed's role, more discussions required. 
- Weather impact on economy should lift this spring; winter impact to be seen in spring data. 
- Sees low real US rates for a while to come. 
- US farm prices plateaued due in part to softer commodity prices. 
- Farm sector seems able to adjust to lower land prices.

>>> Gilead Sciences Inc Reports positive results from phase III study of Sofosbu

Gilead Sciences Inc Reports positive results from phase III study of Sofosbuvir among Hepatitis C patients in Japan; showed 97% response rate

- Announced topline results from a Phase 3 clinical trial (Study GS-US-334-0118) in Japan evaluating the once-daily nucleotide analog polymerase inhibitor sofosbuvir in combination with ribavirin (RBV) for the treatment of genotype 2 chronic hepatitis C virus (HCV) infection. The study met its primary efficacy endpoint of superiority compared to a predefined historical control sustained virologic response (SVR) rate. In the study, 97 percent (n=148/153) of genotype 2 HCV-infected patients receiving 12 weeks of an all-oral regimen of sofosbuvir plus RBV achieved a sustained virologic response 12 weeks after completing therapy (SVR12). SVR12 rates among treatment-nave and treatment-experienced patients were 98 percent (n=88/90) and 95 percent (n=60/63), respectively. Of the 153 patients who received treatment, 11 percent (n=17) had documented cirrhosis. 
- Japan has one of the highest rates of liver cancer of any industrialized country, and the majority of cases are due to chronic HCV infection. An estimated two million people in Japan are living with HCV infection, and approximately 20-30 percent have the genotype 2 strain of the virus. Current treatment options for genotype 2 HCV infection in Japan involve up to 48 weeks of therapy with pegylated interferon injections, which may not be suitable for certain patients. 
- In Study GS-US-334-0118, 153 patients (100%) became HCV undetectable by treatment Week 4 and remained undetectable through the remainder of the 12-week treatment period. Post-treatment relapse accounted for five virologic failures. There were no treatment discontinuations due to adverse events and all patients completed the 12 week post-treatment follow-up visit. The most common side effects observed in the study, consistent with the population and safety profile of RBV, included nasopharyngitis, anemia, headache, malaise and pruritis. Full study results will be presented at a future scientific meeting. 
- Gilead established operations in Japan with the formation of Gilead K.K. in Tokyo in September 2013. If approved by the PMDA, sofosbuvir would be the first product to be launched and marketed by Gilead in Japan.

(BFW) Credit Suisse Changes M&A 15 List, Increases Exposure to Tech

Credit Suisse Changes M&A 15 List, Increases Exposure to Tech
2014-04-02 15:47:06.457 GMT


By Gaurav Panchal
     April 2 (Bloomberg) -- Corporate cash piles remain at
elevated levels, and in a low interest rate environment, this is
inefficient capital management, says Dan Scott, head of event
driven research at Credit Suisse.
  * Credit Suisse: Low corporate yields provide inexpensive form
    of financing, CEO confidence levels are rising
    * Overall M&A volumes remain abnormally low, even after a
      strong start to 2014
    * Maintains conviction M&A activity will trend higher as
      all main drivers remain supportive
    * Makes changes to “M&A 15” target list, adds exposure
      to telco, tech
    * Adds: Qlik Technologies, ThyssenKrupp, Bouygues
    * Removes: Meyer Burger, Mondelez, Actelion
    * Maintains Vodafone on list, says co. could be attractive
      asset for a telco major looking to gain exposure to
      Europe
    * M&A 15, a component of 2014 top investment idea “Cash-
      rich companies,” vs MSCI World: 12-mo. up 44.51% vs
      18.38%
  * April 25: Credit Suisse says drivers remain in place for
    increase in M&A



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

To contact the reporter on this story:
Gaurav Panchal in London at +44-20-7392-0511 or
gpanchal2@bloomberg.net
James Ludden

>>> US Close Dow+0,24% S&P+0,29% Nasdaq+0,20%

Closing Summary: S&P 500 Notches Fresh Record High
The stock market meandered inside a narrow range on Wednesday after posting solid gains on Monday and Tuesday. The S&P 500 added 0.3% and notched a fresh record closing high at 1890.90 while the Nasdaq (+0.2%) struggled to stay in the green throughout the session.

Equity indices began the day near their flat lines and maintained narrow ranges into the afternoon before breaking out to fresh highs during the final 30 minutes of action. That thrust placed the Dow Jones Industrial Average above its 2013 closing high of 16576.66 for the first time this year, but the index returned below that level by the close.

Meanwhile, the Nasdaq and S&P 500 extended their respective 2014 gains to 2.4% and 2.3%, but the Nasdaq had a tough time keeping pace with the benchmark index today as large cap tech names and biotechnology lagged.

The technology sector (-0.02%) spent the bulk of the trading day at the bottom of the leaderboard before clawing its way back to the flat line the close. Chipmakers lagged throughout the session with Intel (INTC 25.89, -0.10) falling 0.4% while the PHLX Semiconductor Index lost 0.2%.

For its part, biotechnology displayed strength at the open, but was unable to revisit its morning high as the day wore on. The iShares Nasdaq Biotechnology ETF (IBB 241.60, -0.05) ended little changed while the broader health care sector (+0.4%) finished a bit ahead of the S&P 500.

Elsewhere among influential sectors, financials (+0.1%) lagged while the discretionary sector (+0.7%) finished among the leaders. Homebuilders posted gains with the iShares Dow Jones US Home Construction ETF (ITB 24.71, +0.10) climbing 0.4% while retailers also displayed strength. The SPDR S&P Retail ETF (XRT 86.74, +1.24) jumped 1.5%.

Also of note, the smallest cyclical sector, materials (+0.6%), outperformed amid strength in miners. The Market Vectors Gold Miners ETF (GDX 24.32, +0.63) rose 2.7% while gold futures rose 0.9% to $1290.80/ozt.

Treasuries finished just above their lows after spending the entire morning in a steady retreat. The benchmark 10-yr yield added five basis points to 2.80%.

Participation was well below average with only 640 million shares changing hands at the NYSE.

Today's economic data included just two reports:
According to the ADP National Employment Report for March, employment in the nonfarm private business sector rose by 191K, which was below the increase of 215K expected by the consensus. The February reading was revised up to 178,000 from 139,000.
Factory orders increased 1.6% in February after falling a downwardly revised 1.0% (from -0.7%) in January. The consensus expected an increase of 1.1%. The upside surprise in factory orders was a result of stronger-than-expected nondurable goods orders. Nondurable goods orders increased 1.0% in February, which more than offset the 0.7% decline in January. Durable goods orders were unrevised from the advance report, up 2.2% in February after falling 1.4% in January. Excluding transportation, durable goods orders increased 0.1% in February, down from an originally reported 0.2% gain in the advance report.
Tomorrow, the Challenger Job Cuts report for March will be released at 7:30 ET while weekly initial claims (consensus 320K) and the February Trade Balance (consensus -$39.30 billion) will cross the wires at 8:30 ET. The final report of the day—ISM Services (consensus 53.5)—will be released at 10:00 ET.

Russell 2000 +2.6% YTD
Nasdaq Composite +2.4% YTD
S&P 500 +2.3% YTD
Dow Jones Industrial Average -0.02% YTD

>>> Fed's Lockhart (moderate, FOMC alternate): Reiterates first Fed rate hike wi


Fed's Lockhart (moderate, FOMC alternate): Reiterates first Fed rate hike will likely be in second half of 2015
GDP of around +3% is needed to justify rate hike
- Expects US GDP to approach 3% in Q2 of 2014 and beyond.
- At current rate, taper will be finished by the end of 2014. 
- Weather impacts on US data were meaningful in Q1. 
- There is still a considerable amount of slack in the economy, especially in the job market. 
- Inflation should firm up and be higher over the medium term.

(BFW) TeliaSonera CEO Says ‘Not Ruling Out’ Tele2 Norway Assets

+------------------------------------------------------------------------------+

TeliaSonera CEO Says ‘Not Ruling Out’ Tele2 Norway Assets 2014-04-02 16:58:33.247 GMT

By Adam Ewing April 2 (Bloomberg) -- TeliaSonera CEO Johan Dennelind declines to comment on whether the company is considering buying Tele2’s Norwegian assets, saying it’s “keen” to be part of European consolidation. * “We are evaluating options and opportunities where we are to strengthen our footprint. When the opportunity is there we will look,” Dennelind says in interview after AGM NOTE: Tele2 Considers Norway Asset Sale a Year After Russia Exit NSN N1YL3C6KLVRE<GO> March 5

Link to Company News:TEL2B SS <Equity> CN <GO> Link to Company News:TLSN SS <Equity> CN <GO>

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

To contact the editor responsible for this story: Adam Ewing at +46-8-610-0706 or aewing5@bloomberg.net