>>> US Early premarket gappers

Early premarket gappers

Gapping up: ULTA +7.2%, MFRM +6.2%, LMCA +3.5%, DK +3.1%, ANAC +3.1%, TSCO +1.7%, OUTR +1.3%, SI +1.3%, MT +1%, EGL +0.9%, FSYS +0.7%, BP +0.5%

Gapping down: ARO -14.4%, ZBB -13.5%, RPTP -10.8%, ZGNX -7.4%, BODY -6.7%,PLUG -5.9%, HIBB -5.8%, FCEL -4.5%, DYAX -3.9%, TICC -3.5%, ZUMZ -2.8%,GIS -2.6%, OMER -2.4%, CSIQ -2.1%, OPTT -2%, JKS -1.7%, FXEN -1.7%, X-1.6%, ITMN -1.1%

(BFW) Handelsbanken, SEB Cut to Sell at UBS on Tighter Regulation

Handelsbanken, SEB Cut to Sell at UBS on Tighter Regulation
2014-03-14 06:53:09.562 GMT


By Veronica Ek
     March 14 (Bloomberg) -- UBS expects positive earnings
momentum to become less relevant share price driver as
regulatory risks come back to fore ahead of Swedish general
election, in note.
  * While regulatory agenda to date has been targeted,
    transparent, easy to re-price, UBS says it fears 2014
    regulatory agenda will be less-targeted, untransparent, hard
    to re-price
  * SEB most disrupted by new target capital levels relative to
    UBS capital estimates, management’s targets
  * Handelsbanken valuation at 1.9x 2014E NAV looks “lofty”
  * Removes Swedbank from key call list; stock remains top pick
    in Nordics as stock represents “extremely attractive”
    risk/reward
  * Keeps Nordea at buy, raises PT to SEK101 fron SEK95

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

To contact the reporter on this story:
Veronica Ek in Stockholm at +46-8-610-0722 or
vek@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Cormac Mullen

>>> Wha to look at today : 14/03/2014

US Market Closed Lower on Ukraine worries & more warning from China, Tech sector lead the move to the dowmside, JPY Moved also pressured the market...Copper continue to trade lower -1,3% @ $2,923/lb...VIX @ 16,22 +12,1%..volume were below avrage @ 678mil shares...Asian shares lower for same reasons...more news in China on coporate default (Haixin - Steel producer)has formally defaulted on debt...Bk of Japan releaased the minutes from its feb meeting...Nikkei -3,30% HS-1,17%...Shanghai -0,80%

Eur$ 1,3856 S&P Fut +0,01% European Fut FTSE indicated -0,36%

- BofAML Cuts China, Brazil, Korea Ratings as Pessimistic on EM {NSN N2EOPC6S972Z <go>}

Keep an eye on :
- AI FP : Air Liquide to Invest EU100m in R&D in France: Le Figaro
- BMPS IM : BMPS attracts interest of JC Flowers - Il Messagero
- CA FP : Carrefour could ditch IPO for up to USD 2.1bn stake sale to investors including Abilio Diniz, Tarpon 
- DAI GY : Daimler to Sell 500m Yuan of Bonds in China
- DSY FP : Dassault Systemes extends tender offer for Accelrys to 25 March
- EDF FP : Belgium, GDF Suez, EDF in Agreement on Nuclear Plant, Tijd Says
- FUM1V FH : Fortum's Swedish energy grid sees interest from consortium of Swedish energy companies and China State Grid
- GWI1 GY : Gerry Weber 1Q Revenue Rises 3%; Sticks to 2014 Forecast
- NOK1V FH : Nokia to Name Rajeev Suri as CEO, Helsingin Sanomat Reports
- SPIE FP : Spie Shareholders Mandate Banks for IPO, Les Echos Says

FT : Haixin default to test China’s willpower for market reform

Haixin default to test China’s willpower for market reform


When Chinese Premier Li Keqiang said defaults in the Chinese economy were “unavoidable” at his annual press conference on Thursday, he was probably not talking specifically about debt-laden Haixin Steel in northern China’s arid Shanxi province.
But Haixin may become an early test of Mr Li’s determination to see more market-oriented behaviour in China’s state-dominated economy.
The private steel mill failed to pay back overdue bank loans last week in a default that has been felt far beyond the local economy where Haixin is entangled in a web of so-called triangular debt and shadow banking activity.

News of the default was cited by Chinese steel traders as one reason for the jitters that ran through global iron ore markets this week and led to prices dropping to their lowest level since the aftermath of the global financial crisis in 2009.
A general slowdown in Chinese growth is also dragging on commodity prices as factory production, investment and retail sales figures released by the government on Thursday showed a much weaker performance in the first two months of the year than many had expected.
If the slowdown in the world’s second-largest economy continues it will limit Beijing’s room for manoeuvre and could sap its determination to reform.
But, according to people familiar with the government’s thinking, Mr Li’s administration is intent on allowing some high-profile defaults to serve as a warning to China’s profligate lenders in both the formal and shadow banking sectors.
Haixin might just be one of these test cases as it ticks many of the boxes on the list of evils in the economy that the government has pledged to address.
Chinese steel mills are struggling with severe overcapacity, heavy debt loads and a softening market, and more than half of them are losing money by some estimates.
Haixin does not rank among the top 30 mills in China, so officials may be confident that letting it close would be enough to scare the market without posing any systemic risk.
They might be too optimistic. Steel traders fear Haixin is deeply entangled in triangular debts with coal suppliers and other local companies. Haixin was the lead investor, together with other local private companies in a credit guarantee company that backed other companies’ debts for a fee. Loosely-regulated credit guarantee companies are supposed to keep enough capital on hand for multiple defaults, but few are prepared for a cascade of bad loans.
In 2012, local governments and banks offered bridge loans to 62 different companies near the eastern city of Hangzhou to keep them afloat after the collapse of a single property developer at the centre of a web of reciprocal loan guarantees.
beyondbrics

Beyond brics
Emerging markets: News and comment from more than 40 emerging economies
Haixin’s problems have been well-flagged. A December report by the banking regulator’s local branch warned banks against lending to steel mills that had borrowed from multiple banks. It specifically named Haixin in an unusual public shaming. The Shanxi branch of Agricultural Bank of China ordered the local branch to stop lending to Haixin two years ago. BHP Billiton cut off iron ore supply about 18 months ago.
Haixin has also been repeatedly censured over the years for its environmental practices and that puts it directly in the line of fire in China’s newly-declared “war on pollution”.
The struggle with debt – its own, and other people’s – has plagued Haixin for many years.
In 2003, a heavily indebted former classmate and life-long friend killed Haixin’s founder, Li Haicang, with a single shot from a sawn-off shotgun, after Li refused to pay the requested amount for land occupied by the classmate’s defunct paper mill. His son Li Zhaohui, then 22, cut short his punk hairstyle and began running the business.
The younger Li soon came up against Chinese policies designed to forcibly consolidate the steel sector, policies that have resulted in state owned companies, which can access low-interest rate loans from state-run banks, taking over private companies which cannot.
Forced to expand to meet minimum size requirements or face takeover by state competitors, private companies, particularly steel mills and coal miners, have borrowed far too much and are now struggling to survive. Meanwhile, the policies have contributed to the overcapacity that now plague many of China’s industrial sectors.
In 2008, Shanxi province released a plan for its steel industry that envisioned state-owned Taiyuan Steel, the nation’s largest stainless steel producer, taking over all the other provincial mills. Haixin briefly shut in 2009, but got back on its feet after a national stimulus plan revved up Chinese steel demand. Mr Li planned to expand to 10m tonnes of steel a year, to meet the threshold for issuing bonds so he could stay independent, but never managed to reach that target.
By last summer, Mr Li’s options were narrowing. He sold a mining subsidiary to get cash, local land records show, but it was not enough.

FT : Haixin default to test China’s willpower for market reform

Haixin default to test China’s willpower for market reform


When Chinese Premier Li Keqiang said defaults in the Chinese economy were “unavoidable” at his annual press conference on Thursday, he was probably not talking specifically about debt-laden Haixin Steel in northern China’s arid Shanxi province.
But Haixin may become an early test of Mr Li’s determination to see more market-oriented behaviour in China’s state-dominated economy.
The private steel mill failed to pay back overdue bank loans last week in a default that has been felt far beyond the local economy where Haixin is entangled in a web of so-called triangular debt and shadow banking activity.

News of the default was cited by Chinese steel traders as one reason for the jitters that ran through global iron ore markets this week and led to prices dropping to their lowest level since the aftermath of the global financial crisis in 2009.
A general slowdown in Chinese growth is also dragging on commodity prices as factory production, investment and retail sales figures released by the government on Thursday showed a much weaker performance in the first two months of the year than many had expected.
If the slowdown in the world’s second-largest economy continues it will limit Beijing’s room for manoeuvre and could sap its determination to reform.
But, according to people familiar with the government’s thinking, Mr Li’s administration is intent on allowing some high-profile defaults to serve as a warning to China’s profligate lenders in both the formal and shadow banking sectors.
Haixin might just be one of these test cases as it ticks many of the boxes on the list of evils in the economy that the government has pledged to address.
Chinese steel mills are struggling with severe overcapacity, heavy debt loads and a softening market, and more than half of them are losing money by some estimates.
Haixin does not rank among the top 30 mills in China, so officials may be confident that letting it close would be enough to scare the market without posing any systemic risk.
They might be too optimistic. Steel traders fear Haixin is deeply entangled in triangular debts with coal suppliers and other local companies. Haixin was the lead investor, together with other local private companies in a credit guarantee company that backed other companies’ debts for a fee. Loosely-regulated credit guarantee companies are supposed to keep enough capital on hand for multiple defaults, but few are prepared for a cascade of bad loans.
In 2012, local governments and banks offered bridge loans to 62 different companies near the eastern city of Hangzhou to keep them afloat after the collapse of a single property developer at the centre of a web of reciprocal loan guarantees.
beyondbrics

Beyond brics
Emerging markets: News and comment from more than 40 emerging economies
Haixin’s problems have been well-flagged. A December report by the banking regulator’s local branch warned banks against lending to steel mills that had borrowed from multiple banks. It specifically named Haixin in an unusual public shaming. The Shanxi branch of Agricultural Bank of China ordered the local branch to stop lending to Haixin two years ago. BHP Billiton cut off iron ore supply about 18 months ago.
Haixin has also been repeatedly censured over the years for its environmental practices and that puts it directly in the line of fire in China’s newly-declared “war on pollution”.
The struggle with debt – its own, and other people’s – has plagued Haixin for many years.
In 2003, a heavily indebted former classmate and life-long friend killed Haixin’s founder, Li Haicang, with a single shot from a sawn-off shotgun, after Li refused to pay the requested amount for land occupied by the classmate’s defunct paper mill. His son Li Zhaohui, then 22, cut short his punk hairstyle and began running the business.
The younger Li soon came up against Chinese policies designed to forcibly consolidate the steel sector, policies that have resulted in state owned companies, which can access low-interest rate loans from state-run banks, taking over private companies which cannot.
Forced to expand to meet minimum size requirements or face takeover by state competitors, private companies, particularly steel mills and coal miners, have borrowed far too much and are now struggling to survive. Meanwhile, the policies have contributed to the overcapacity that now plague many of China’s industrial sectors.
In 2008, Shanxi province released a plan for its steel industry that envisioned state-owned Taiyuan Steel, the nation’s largest stainless steel producer, taking over all the other provincial mills. Haixin briefly shut in 2009, but got back on its feet after a national stimulus plan revved up Chinese steel demand. Mr Li planned to expand to 10m tonnes of steel a year, to meet the threshold for issuing bonds so he could stay independent, but never managed to reach that target.
By last summer, Mr Li’s options were narrowing. He sold a mining subsidiary to get cash, local land records show, but it was not enough.

>>> Carrefour could ditch IPO for up to USD 2.1bn stake sale to investors includ

Carrefour could ditch IPO for up to USD 2.1bn stake sale to investors including Abilio Diniz, Tarpon 

Carrefour (EPA: CA), the France-based supermarket operator, is considering a private stake sale of up to BRL 5bn (USD 2.1bn) instead of an IPO for its Brazilian operations, according to a newswire report.

Brazilian entrepreneur Abilio Diniz is partnering with a number of investors to invest in Carrefour, according a person with direct knowledge of the situation.

The person told Reuters that Carrefour, which is also the second largest retail chain in Brazil, sees the search for a private investor as more viable than an IPO at the present time.

Diniz, who left Companhia Brasileira de Distribuicao – CBD (PCAR4: BZ) last year via the sale of a large stake in the company, has allegedly joined forces with Tarpon Investimentos and a sovereign wealth fund which the person declined to name, to invest in Carrefour. Negotiations are at a very advanced stage, according to the person.

A second source said the deal could include a stake sale in Carrefour’s wholesale unit Atacadao.

According to a Portuguese-language version of the Reuters item, the second source said Carrefour could raise at least BRL 4bn (USD 1.6bn) in the transaction.


Source Newswire Round-up

(BFW) BofAML Cuts China, Brazil, Korea Ratings as Pessimistic on EM

BFW 03/14 02:36 *BOFA RAISES POLAND STKS TO OVERWEIGHT VS MARKETWEIGHT
BFW 03/14 02:35 *BOFA RAISES INDONESIA STOCKS TO OVERWEIGHT VS MILD UNDERWEIGHT
BFW 03/14 02:35 *BOFA RAISES INDIA STOCKS TO MILD OVERWEIGHT VS MARKETWEIGHT
BFW 03/14 02:35 *BOFA CUTS KOREA STOCKS TO MARKETWEIGHT VS OVERWEIGHT
BFW 03/14 02:34 *BOFA CUTS CHINA STOCKS TO MARKETWEIGHT VS OVERWEIGHT
 BN 03/14 02:34 *BOFA CUTS CHINA STOCKS TO MARKETWEIGHT VS OVERWEIGHT
 BN 03/14 02:34 *BOFA CUTS KOREA STOCKS TO MARKETWEIGHT VS OVERWEIGHT
 BN 03/14 02:34 *BOFA RAISES INDIA STOCKS TO MILD OVERWEIGHT VS MARKETWEIGHT
 BN 03/14 02:34 *BOFA RAISES INDONESIA STOCKS TO OVERWEIGHT VS MILD UNDERWEIGHT
 BN 03/14 02:34 *BOFA RAISES POLAND STKS TO OVERWEIGHT VS MARKETWEIGHT
BofAML Cuts China, Brazil, Korea Ratings as Pessimistic on EM
2014-03-14 03:08:00.766 GMT


By Weiyi Lim and Argin Chang
     March 14 (Bloomberg) -- BofAML reiterates pessimism on
emerging, Asia markets in report today, citing potential
reversal of carry trade, slowdown in China with heightened
probabilities of liquidation and defaults and geo-political
contraints.
  * Says EM equities “not out of the woods” on financial
    vulnerability
  * Downgrades China to marketweight from overweight, citing
    growth downgrades, debt defaults and yuan issues
  * Cuts Korea to marketweight from overweight
  * Cuts Brazil to marketweight from mild overweight
  * Also cuts Hong Kong to mild underweight vs mild overweight
    on China slowdown, high bank exposure to China, strong
    currency and property market risk
  * NOTE: China H-Shares Poised for Bear Market as Economy
    Concerns Deepen {NSN N2EKVH6TTDS2 <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:
Weiyi Lim in Singapore at +65-6212-1886 or
wlim26@bloomberg.net

To contact the editor responsible for this story:
Chan Tien Hin at +60-3-2302-7859 or
thchan@bloomberg.net