(BofA-ML) Flow Show: Weekly flows show big $13bn inflows to equity funds vs firs

>>> Asset class flows
* Equities: $12.6bn inflows (driven entirely by $13.8bn inflows to ETFs - SPY, IJH, VUG) (inflows boosted by RIA re allocation trade) (Table 1)
* Bonds: $2.3bn outflows (first redemptions in 15 weeks)
* Precious metals: $0.2bn outflows (3rd straight week)

>>> Equity flows
* US: $8.4bn inflows (all via ETFs)
* US Growth funds: first inflows ($0.4bn) in 13 weeks
* By sector, record $1.2bn inflows to Utilities
* EM: $1.4bn inflows (Table 2)
* Japan: $0.2bn outflows (3 straight weeks)
* Europe: $1.1bn inflows (3 straight weeks)
>>> FICC flows
* First outflows from HY bond funds in 19 weeks ($0.7bn)
* Big $5.4bn outflows from Govt/Tsy funds (largely attributable to RIA re-allocation out of IEF & UST ETFs)
* $0.6bn outflows from floating-rate debt (10 straight weeks of outflows)
* $0.6bn inflows to EM debt funds (12 straight weeks) (Chart 3)
* $3.7bn inflows to IG bond funds (26 straight weeks)
* 9 straight weeks of inflows to MBS

FT : GE looks beyond Paris with revised bid

General Electric’s Jeff Immelt, an archetypal US chief executive from his love of (American) football to his Harvard MBA, has often seemed something of a fish out of water in France.
Announcing GE’s revised offer for Alstom’s energy businesses in Paris on Thursday, though, he could afford to laugh about the cultural divide. As his words were laboriously translated, he joked: “If I had known about this, I would have taken French at school.”

In spite of Mr Immelt’s lack of language skills, GE seems to be making progress in assuaging the French government’s opposition. A senior French official described its offer as running “neck and neck” with the rival bid from Siemens of Germany and Mitsubishi Heavy Industries and Hitachi of Japan, but GE’s revised proposal meets many of the concerns that the government has raised.
There are some outstanding questions over the deal, including its valuation, but if it does go through on the proposed terms it would still look like an attractive piece of business for GE, analysts say, even after the concessions that Mr Immelt has made.
The reason is that while the French government has been a central actor in the drama of the bid battle, the motives for the deal have very little to do with France.
Alstom is a global company that earned 90 per cent of its revenues outside France last year, and 67 per cent outside western Europe. The big opportunities for growth are not in developed countries, but in emerging economies in Asia, Africa and Latin America that have fast-growing demand for electricity.
The changes GE has made to its offer to answer concerns about issues such as job creation and control of technology for nuclear plants have made the deal more complex.
Instead of an outright takeover of Alstom’s energy operations, as first proposed in April, GE is now planning to leave parts of them in three new 50/50 joint ventures: one for grid equipment, one for renewable energy, and one for steam turbine technology for nuclear plants.
It is also offering to sell its rail signalling business to Alstom, which would become principally a train company, and promising to create 1,000 jobs in France over the next three years.
However, Mr Immelt argues the heart of the deal as it was originally conceived is intact.
The real prize is the businesses GE would own outright, particularly the operations outside France manufacturing and servicing steam turbines used in coal-fired and gas-fired power plants. That would give GE a stronger position in coal-fired generation as well as its traditional base in gas-fired power. It would also enable GE to create a combined network to service the two companies’ installed base of plants around the world.
Mr Immelt says that 86 per cent of the cost savings expected from the deal, rising from $300m in the first year to $1.2bn by the fifth, will come from Alstom businesses that will be wholly owned.
GE’s successful record with CFM, its aero engines joint venture with Safran of France, has encouraged hopes that similar partnerships might also be effective.
The sale of the signalling business, meanwhile, is only a footnote to the main transaction. GE does not report its revenues or earnings separately, but it is part of the rail management business that had sales of about $500m in 2011. The Alstom energy operations have annual revenues of about $20bn.
Final judgments will have to wait until GE has filled in some of the blanks in its proposal, including the cash cost of the new offer.
“It’s still a bit muddy,” says Christian Mayes at Edward Jones. “They haven’t given us a lot of specifics.”
The company says the valuation it originally put on the Alstom businesses in April, giving an enterprise value of $13.5bn, remains unchanged, but the final price for the deal will be reduced by the agreed values of the operations included in the joint ventures, which have yet to be determined.
However, the original price looked attractive at about eight times pro forma earnings before interest, tax, depreciation and amortisation, and providing the valuation does not depart too much from that, it is also likely to be welcomed by investors. GE’s shares rose about 1 per cent to $26.93 after the new offer was announced.
Daniel Holland, an analyst at Morningstar, says completing the Alstom deal will mark an important step for Mr Immelt’s strategy of reducing the group’s reliance on GE Capital, the financial services division, which provided 47 per cent of its earnings last year.
When the North American retail credit business is spun off as a new company called Synchrony Financial, in a process scheduled to start this year, and if the Alstom deal is done, GE would by 2016 cut the share of its earnings coming from financial services to just 25 per cent.
Mr Holland said that would be welcomed by shareholders. “If an investor wants exposure to GE’s great franchises in industrial businesses, at the moment they have to have exposure to financial services, too,” he says. Reducing the group’s reliance on GE Capital would enable investors to decide for themselves how much exposure to financial services they wanted.
Mr Mayes cautions, however, that investors should not harbour unrealistic expectations about Alstom being a transformational deal for GE. Although in dollar terms it would be the company’s largest acquisition, it would still be worth only 5 per cent of GE’s market capitalisation.
While success or failure will make a big difference to Mr Immelt’s prestige, it may make rather less of a difference to the fortunes of GE.

WSJ : Porsche China Boss Praises Business

Porsche China Boss Praises Business
Deesch Papke Says Sales Drop in May Expected

SHANGHAI— Porsche AG PAH3.XE +0.91% expects low double-digit sales growth in China this year, according to its China CEO, amid a push to increase dealerships there by close to 50% by the end of next year.

The German luxury sports car maker's forecast comes despite a May sales drop in China, which the executive said was expected.

In May, car sales by Porsche fell 1.3% from a year earlier to 3,164 vehicles. The company didn't give reason for the decline when it issued the report two weeks ago.

In an interview on Friday, Deesch Papke, president and chief executive of Porsche (China) Motors, said the figure means it sold about 40 fewer cars compared with May 2013. The result is "not really a drop," he said, adding, "The marginal drop was preplanned. It was in the budget."

Car sales by Porsche AG in China rose 9.5% in the first five months of this year to 16,465 cars.

"We're confident that the year is going to be double digit in any case on last year," Mr. Papke said. "For us the business is going extremely well." He added that he expects "low double digit" sales growth.

Last year Porsche's China sales rose 20% to 37,425 cars.

One element to increasing sales will be adding distribution outlets. Porsche currently has 68 dealers in operation. It aims to have 85 by the end of this year and just over 100 by the end of next.

"We're well placed in the eastern part of the country and we're now looking for opportunities in the center," he said.

In China, models such as Cayenne and Primavera are popular. Porsche hopes to increase sales of its core sports cars including the 911, Boxster and Cayman. "Year-on-year we get stronger and stronger in sports cars" in China, he said.

Mr. Papke said the recently launched Macan would be available at dealers in China beginning in July. He declined to give specific figures for preorders but said some models were sold out for the rest of the year. "Every day the orders are coming in. We look forward to having the same success as Cayenne."

Mr. Papke was speaking on the sidelines of a Porsche event in Shanghai for customers and dealers.

He said it will take time for China to embrace motor sports—which helps raise the image and demand for high-performance sports cars—to the extent it is in Europe. "It will come. Maybe 10 or 15 years from now, we'll have a Chinese world Formula One champion. That would be fantastic," he said. "One needs to be patient and consistent."

>>> Index Rebalancing Tomorrow 20/06 - a lot of names!!!!!!!!



From: LAURENT CHEKROUN ()
Subject: >>> Index Rebalancing Tomorrow 20/06 - a lot of names!!!!!!!!
+ : Buy / - : Sell

There is more changes that these ones, I have tried to put all the main ones, if you need more details and more precise list let me know

DAX :
VOW3 +0.41 mil. shares to trade (33% ADV)
DBK +9.92mil shares to trade (74% ADV)

IBEX
EBRO SM : -2.41mil shares to trade (-565% ADV)
ABG/P SM : +14.79mil shares to trade (122% ADV)
ACS SM : +1.23mil shares to trade (104% ADV)
FER SM : +2.87mil shares to trade (106% ADV)
FCC SM : +0.40mil shares to trade (30% ADV)
GAS SM : +2.35mil shares to trade (47% ADV)

CAC
FR FP : +2.15mil shares to trade (461% ADV)
VK FP : -3.27mil shares to trade (-182% ADV)

AEX
None

BEL
None

STOXX (Main only)
ALPHA GA : +19.189mil shares to trade (64.6% ADV)
ATC NA :.+ 0.262mil shares to trade (53.2% ADV)
BMPS IM : +6mil shares to trade (10.6% ADV)
BBVA SM : +3.59mil shares to trade (10.6% ADV)
SAN SM : +7.72mil shares to trade (12.8% ADV)
BNP FP : +2.41mil shares to trade (33.1% ADV)
CABK SM : +1.79mil shares to trade (13.8% ADV)
DLG LN : +2.1mil shares to trade (28.7% ADV)
EDP PL : +0.985mil shares to trade (9.3% ADV)
FUM1V FH : +2.862mil shares to trade (119.5% ADV)
GALP PL : +0.295mil shares to trade (16.3% ADV)
GFC FP : +0.025mil shares to trade (23.3% ADV)
GENL LN : -0.106mil shares ot trade (-11.4%ADV)
HPOLB SS : +0.127mil shares to trade (+256.8% ADV)
HOLMB SS : -0.255mil shares to trade (-149.7% ADV)
HUFVA SS : -0.592mil shares to trade (-157.6% ADV)
IBE SM : -6.343mils hares to trade (-19.5% ADV)
SDF GY : -3.32mil shares to trade (-170.5% ADV)
KCR1V FH : -0.252mil shares to trade (-95.8% ADV)
LLOY LN : +42.472mil shares to trade (+18.9% ADV)
LUX IM : +0.117mil shares to trade (+14% ADV)
MEO1V FH : -0.108mil shares to trade (-13.5% ADV)
MUV2 GY : -0.271mil shares to trade (-39.3% ADV)
NOVOB DC : -0.601mil shares to trade (-19.2% ADV)
ORP FP : +0.176mil shares to trade (+117.6% ADV)
REP SM : +4.109mil shares to trade (+10.4% ADV)
RXL FP : +0.128mil shares to trade (+7.8% ADV)
RDSA NA : +0.439mil sahres to trade (+5.8% ADV)
SGO FP : +0.968mil shares to trade (+32.6% ADV)
SCHP VX : -0.013mil shares to trade (-8.6% ADV)
SHB LN : +0.126mil shares to trade (+15.5% ADV)
SKAB SS : +0.092mil shares to trade (+6.9% ADV)
SOW GY : -0.02mil shares to trade (-5.9% ADV)
SXS LN : +0.029mil shares to trade (+8.5% ADV)
SZU GY : -0.39mil shares to trade (-18% ADV)
SREN VX : +0.134mil shares to trade (+11.2% ADV)
SY1 GY : +0.049mil shares to trade (+9.9% ADV)
TKA AV : -0.096mil shares to trade (-8.5% ADV)
TOP DC : +0.023mil shares to trade (7% ADV)
TUI1 GY : +0.136mil shares to trade (+10.3% ADV)
UCB BB : +0.052mil shares to trade (+17.1% ADV)
WDI GY : +0.051mil shares to trade (+11.6% ADV)

>>> What to look at today - 20/06/2014 - >>> Big Rebalancing today ask for detai

US Market closed near the flat line, see some weakness in tech & Financials but S&P managed to closed on new record high a t top of the day, volume were ligth but should higher with the rebalancing of S&P at the close today. volume @ 634mil shares..VIX @ 10.65 +0.38%...Gold +3.6%...After Hours JRJC +4.9%, SWHC -11.7%, ORCL -5.6% (missed on numbers), AKS -5.0%, TIBX -0.3% MJNA +0.5% (WSJ reporting that New York plans to legalize medical marijuana, according to reports)- China indices are mixed going into Sunday's flash PMI release. The most recent figure of 49.4 was a 5-month high, albeit the 5th consecutive month in contraction. Among notable local press reports, PBoC official actually suggested the China property market correction is "necessary", "reasonable", and "beneficial" in the wake of this week's troublesome price data for May. Recall the all-70 new home prices saw their first m/m drop in 2 years, while y rate of increase slowed by 1.3pts to 5.4%.

Eur$ 1.3626 S&P Fu t-0.06% EuroStoxx -0.06%

Keep an eye on :
- ALO FP : Mitsubishi Heavy, Siemens Raise Cash Portion of Alstom Offer {NSN N7GALG6K50XX <go>}
- ALO FP : Alstom Says It Will Meet by June 23 to Review Bids
- ALO FP : France’s Royal Says Remains To Be Seen Which Alstom Bid Best
- BES PL : Banco Espirito Santo Shares Suspended, Euronext Says
- DTE GY : Sprint Said Closer to Financing $40b T-Mobile Deal: Reuters
- SMDS LN : Overweight DS Smith, JPMorgan Says Ahead of FY
- EDF FP : Royal Says French Electricity Price Decision to Be After Oct. 1
- F IM : Fiat to Sell Treasury Shares, Holding in CNH Industrial: FT {NSN N7FGC36JTSFA <go>}
- FNC IM : Finmeccanica Says Aerospace, Defense to Become Divisions
- GTO NA : Gemalto Says U.S. Appeals Court Did Not Support Claim
- DEB LN : Debenhams 3Q LFL Sales In Line, Offering GBP200m Senior Notes
- MAU FP : Maurel & Prom Bought Back 16m Convertible Oceanes
- MIT IM : Carlo Tassara May Sell Its 15% Stake in Mittel, Sole Says
- NEX FP : Nexans Faces Pricing Risk, Prysmian Deal Unlikely: Credit Suisse
- RR/ LN : Overweight Rolls-Royce, Sustained Rally Likely, JPMorgan Says
- SOLB BB : Solvay Is Preferred Play on Global Recovery, Credit Suisse Says
- TEF SM : Telefonica Czech Republic in Network Sharing Talks With Rivals
- TEL NO : Norway to Divest in Telenor, Kongsberg Gruppen for $7.7b
- TIT IM : Telefonica Said to Sell EU103m in Telecom Italia Mand Conv Bonds
- UBSN VX : UBS Faces U.S. Probe in Puerto Rico Bond Fund Sales:Reuters Link
- UCG IM : Unicredit’s Ghizzoni Says Dividend 40% of Net Income: BZ
- VONN SW : Vontobel Intends to Buy Back 12.5% Raiffeisen Participation
- VOW3 GY : Volkswagen Lowers India Market Share Target: Times of India Link
- VOW3 GY : VW to Produce New Seven-Seat Offroader in U.S., FAZ Says


--> Rebalancing Details :
DAX :
VOW3 +0.41 mil. shares to trade (33% ADV)
DBK +9.92mil shares to trade (74% ADV)

IBEX
EBRO SM : -2.41mil shares to trade (-565% ADV)
ABG/P SM : +14.79mil shares to trade (122% ADV)
ACS SM : +1.23mil shares to trade (104% ADV)
FER SM : +2.87mil shares to trade (106% ADV)
FCC SM : +0.40mil shares to trade (30% ADV)
GAS SM : +2.35mil shares to trade (47% ADV)

CAC
FR FP : +2.15mil shares to trade (461% ADV)
VK FP : -3.27mil shares to trade (-182% ADV)

AEX
None

BEL
None

STOXX (Main only)
ALPHA GA : +19.189mil shares to trade (64.6% ADV)
ATC NA :.+ 0.262mil shares to trade (53.2% ADV)
BMPS IM : +6mil shares to trade (10.6% ADV)
BBVA SM : +3.59mil shares to trade (10.6% ADV)
SAN SM : +7.72mil shares to trade (12.8% ADV)
BNP FP : +2.41mil shares to trade (33.1% ADV)
CABK SM : +1.79mil shares to trade (13.8% ADV)
DLG LN : +2.1mil shares to trade (28.7% ADV)
EDP PL : +0.985mil shares to trade (9.3% ADV)
FUM1V FH : +2.862mil shares to trade (119.5% ADV)
GALP PL : +0.295mil shares to trade (16.3% ADV)
GFC FP : +0.025mil shares to trade (23.3% ADV)
GENL LN : -0.106mil shares ot trade (-11.4%ADV)
HPOLB SS : +0.127mil shares to trade (+256.8% ADV)
HOLMB SS : -0.255mil shares to trade (-149.7% ADV)
HUFVA SS : -0.592mil shares to trade (-157.6% ADV)
IBE SM : -6.343mils hares to trade (-19.5% ADV)
SDF GY : -3.32mil shares to trade (-170.5% ADV)
KCR1V FH : -0.252mil shares to trade (-95.8% ADV)
LLOY LN : +42.472mil shares to trade (+18.9% ADV)
LUX IM : +0.117mil shares to trade (+14% ADV)
MEO1V FH : -0.108mil shares to trade (-13.5% ADV)
MUV2 GY : -0.271mil shares to trade (-39.3% ADV)
NOVOB DC : -0.601mil shares to trade (-19.2% ADV)
ORP FP : +0.176mil shares to trade (+117.6% ADV)
REP SM : +4.109mil shares to trade (+10.4% ADV)
RXL FP : +0.128mil shares to trade (+7.8% ADV)
RDSA NA : +0.439mil sahres to trade (+5.8% ADV)
SGO FP : +0.968mil shares to trade (+32.6% ADV)
SCHP VX : -0.013mil shares to trade (-8.6% ADV)
SHB LN : +0.126mil shares to trade (+15.5% ADV)
SKAB SS : +0.092mil shares to trade (+6.9% ADV)
SOW GY : -0.02mil shares to trade (-5.9% ADV)
SXS LN : +0.029mil shares to trade (+8.5% ADV)
SZU GY : -0.39mil shares to trade (-18% ADV)
SREN VX : +0.134mil shares to trade (+11.2% ADV)
SY1 GY : +0.049mil shares to trade (+9.9% ADV)
TKA AV : -0.096mil shares to trade (-8.5% ADV)
TOP DC : +0.023mil shares to trade (7% ADV)
TUI1 GY : +0.136mil shares to trade (+10.3% ADV)
UCB BB : +0.052mil shares to trade (+17.1% ADV)
WDI GY : +0.051mil shares to trade (+11.6% ADV)

>>> Brokers Upgrades & Downgrades - 20/06/2014

>>> Up
*MAN GROUP RAISED TO NEUTRAL VS SELL AT CITI
*ROLLS-ROYCE RAISED TO HOLD VS SELL AT SOCGEN

>>> Down
*BNP CUT TO UNDERPERFORM AT JEFFERIES
*CASINO CUT TO NEUTRAL VS BUY AT ODDO
*INFINIS ENERGY CUT TO HOLD AT DEUTSCHE BANK; PT RAISED TO 240P
*NEXANS CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*PRADA CUT TO EQUAL-WEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*TMK CUT TO NEUTRAL VS BUY AT UBS

>>> PT Change
*LUXOTTICA PT RAISED 6% TO EU47 AT BOFAML; KEPT AT BUY
*PRADA PT CUT TO HK$61.5 VS HK$87 AT MORGAN STANLEY
*SAIPEM PT RAISED TO EU21 VS EU16.5 AT UBS; KEPT AT NEUTRAL

>>> Initiation
*KERING RESUMED OVERWEIGHT AT MORGAN STANLEY, PT EU189
*TOMRA RATED NEW BUY AT DNB, PT NOK60

>>> Call
>> Stock
*AFREN ADDED TO MOST PREFERRED OILS AT BOFAML
*DNB ADDED TO CITI FOCUS LIST EUROPE
*PREMIER OIL REMOVED FROM MOST PREFERRED OILS AT BOFAML
*SAIPEM ADDED TO LEAST PREFERRED OILS AT BOFAML
*VALLOUREC REMOVED FROM LEAST PREFERRED OILS AT BOFAML

>>> US Close

Closing Summary: Stock Market Takes a Back Seat

It was some day in the capital markets on Thursday. The major stock indices managed to hold fairly steady in what was a seesaw day of trading; longer-dated Treasuries experienced a notable reversal that left the 10-yr note down 12 ticks and yielding 2.63% while the front of the curve remain propped up with buying interest; commodity prices were higher with precious metals prices moving up sharply; and the US Dollar Index was down 0.3%

A 3.6% jump in gold prices to $1318.00/troy ounce and the weakness at the back end of the Treasury curve were cited as expressions of inflation concerns with market participants acting uneasy about the Fed's seemingly complacent view of inflation.

The explanation was not entirely out of bounds, but it also wasn't above reproach given that the dollar failed to bounce and the front of the Treasury curve held up just fine. Accordingly, it is too early to say if there were genuine inflation concerns today.

Nonetheless, it was a line of thinking that left equity investors reluctant to make any big moves outside of some individual story stocks like Coach (COH 35.69, -3.50), which issued a sales warning, and Kroger (KR 49.66, +2.39), which reported better than expected earnings and gave reassuring guidance.

Broadly speaking, the moves that were made fit the bill of a more cautious mindset than the one that prevailed following Wednesday's FOMC announcement and press conference. The best-performing sectors today were the utilities (+0.9%) and consumer staples (+0.6%) sectors. Energy (+0.6%) also fared well in the face of rising oil prices that were helped along by the weaker dollar and continued rumblings about the destabilizing situation in Iraq

Relative weakness in the technology (-0.2%) and financial (-0.2%) sectors acted as a restraint on the S&P 500 which ultimately managed to close near its best level of the day. In the process of doing so, it also established another new closing high.

Alas, there wasn't as much fear and loathing in the equity market as there was cheer and loafing. The buy-the-dip mentality shined through again in an otherwise laborious day of trading that saw the stock market take a back seat to other capital markets.

Aside from the advertised inflation concerns, longer-dated Treasuries also got pinched by a batch of encouraging economic data:

* Initial claims for the week ending June 14 (the week in which the household survey for the June employment report was conducted) dipped by 6,000 to 312,000 * The Philadelphia Fed Index for June increased to 17.8 from 15.4 in May, paced by broad-based gains in its various components; and * The Leading Indicators Index for May increased 0.5% on top of a 0.3% increase in the prior month

Trading volume picked up on Thursday with 636 mln shares changing hands at the NYSE versus 614 mln on Wednesday. Volume should be even higher on Friday with the S&P rebalancing at the close.

Overall, one could say there was some risk aversion in the stock market on Thursday, but there wasn't risk avoidance. To that end, the CBOE Volatility Index (VIX 10.65, +0.04) was up a scant 0.4% after plummeting 12% on Wednesday and money rotated within the market as opposed to rotating out of it completely.

* S&P 500 YTD +6.0% * Dow Jones Industrial Average YTD +2.1% * Nasdaq Composite YTD +4.4% * Russell 2000 YTD +1.8%

American Apparel Ripens as Target After Founder Ousted: Real M&A

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

American Apparel Ripens as Target After Founder Ousted: Real M&A 2014-06-19 23:00:01.5 GMT

(For a Real M&A column news alert: SALT REALMNA <GO>.)

By Brooke Sutherland June 20 (Bloomberg) -- Dov Charney’s ouster at American Apparel Inc. may bring out the bargain hunters. The maker of T-shirts and neon spandex leggings climbed as much as 22 percent yesterday amid speculation the $120 million company could be sold after the board pushed out founder Charney because of misconduct. While American Apparel hasn’t had an annual profit since 2009, the brand is still attractive and its foothold in the 19- to 30-year-old demographic -- a lucrative one for retailers -- could lure suitors, said Brean Capital LLC. Even after yesterday’s gains, buyers can get it on the cheap: The company remains a penny stock and traded at the lowest sales multiple of any similar-sized retailer. American Apparel’s eclectic vibe may make it a good fit for Urban Outfitters Inc., said Jennifer Black & Associates LLC. Charney could also team up with another buyer to take the company private, Brean Capital said, estimating a deal valuation of $1.50 a share, or about $500 million including debt. “This has gone from being on no one’s radar to being something interesting,” Eric Beder, a New York-based analyst at Brean Capital, said in a phone interview. American Apparel has a “very desirable market. It’s a market that we’ve seen mainline players trying to get into and fail miserably.”

Charney Departure

American Apparel’s board said June 18 that it suspended and will fire Charney amid an investigation into unspecified misconduct. Yesterday, Allan Mayer, the company’s now co- chairman, said the ousting wasn’t in preparation for a sale or bankruptcy. “We are not pursuing any transaction,” Mayer told Bloomberg News. “We have no intention to sell the company.” A representative for Los Angeles-based American Apparel declined to comment further. Charney’s divorce from the company still could put his 27 percent stake, as well as the rest of the company, in play, said Beder of Brean Capital. Shares of the retailer closed 6.7 percent higher yesterday. The company’s strong brand may appeal to buyers, said Craig Johnson, president of Customer Growth Partners LLC, a New Canaan, Connecticut-based consulting firm. American Apparel, which promotes its products as “Made in USA,” has almost 250 stores across 20 countries, including France and Japan. It had about $634 million in sales last year. “The brand itself and the kind of style viewpoint it represents, we think has value beyond the company’s current either financial or CEO-level challenges,” Johnson said in a phone interview. “There’s no tarnishing of the brand generally in consumer land. The company can be rebuilt and re-energized. It may take a little bit of time.”

Hip, Trendy

American Apparel has a strong international presence, particularly in Asia, and it counts “hip, urban” young adults as its core customers, said Beder of Brean Capital. “That 19- to 30-year-old customer wants something authentic that they can make their own and that’s tough for a lot of retailers,” Beder said. A larger company could buy it for access to “a customer that they don’t really get.” With a price-sales multiple of 0.12, American Apparel is cheaper than any specialty apparel retailer valued at more than $100 million, according to data compiled by Bloomberg.

Buyer List

One retailer that may find American Apparel appealing is Urban Outfitters, said Beder and Jennifer Black of Jennifer Black & Associates. The $4.7 billion company operates the Anthropologie and Free People stores, as well as its namesake retail operations. “That customer is kind of trendy, yet buys a lot of different stuff,” Black, chief executive officer of the Lake Oswego, Oregon-based firm, said in a phone interview. “That’s who would come to my mind.” A representative for Philadelphia-based Urban Outfitters, didn’t respond to requests for comment. Still, suitors may be hesitant to buy a company that’s so unstable financially, said Jaime Katz, a Chicago-based analyst at Morningstar Inc. “You’re not turning a profit, and you haven’t turned a profit for an extended period of time, and the space is getting increasingly competitive,” Katz said. “It would be hard to think about who a strategic buyer for that sort of business would be.” American Apparel’s stock has been plummeting since 2007, as sales growth slowed and a costly new distribution center didn’t perform as expected.

Cash Burn

The company’s missteps have translated into negative free cash flow in four of the last five quarters. At this rate, it will burn through its cash in less than eight months, according to data compiled by Bloomberg. Charney’s dismissal may trigger a notice of default under its credit agreements, the company said. In February, Intercontinental Exchange Inc.’s NYSE MKT threatened to delist American Apparel’s stock, citing the chain’s financial state and its inability to meet obligations. Charney had been working to create some breathing room for the troubled company, attracting an investment from Johannes Minho Roth of FiveT Capital AG earlier this year to help pay its bills. If a strategic buyer is too wary to pursue a transaction, Beder of Brean Capital said Charney could find a partner to help him take the company private. “Could Dov come back and try to be the white knight to save his old company? Maybe.” Beder said. Still, a strategic buyer “could do the same thing too.”

For Related News and Information: American Apparel Chairman Says There’s No Plan to Sell Company NSN N7FJGH6TTDSH <GO> American Apparel Investor Expects CEO to Fight Termination NSN N7FDRW6TTDTD <GO> American Apparel Finds Latest Believer in Form of Swiss Firm NSN N3S67G6KLVR5 <GO> NSN M2A5FF6VDKIT <GO> American Apparel’s deal news: APP US <equity> TCNI MNA <GO> Top deal news: DTOP<GO> Real M&A columns: NI REALMNA <GO>

--With assistance from Lindsey Rupp and Matt Townsend in New York.

To contact the reporter on this story: Brooke Sutherland in New York at +1-212-617-0448 or bsutherland7@bloomberg.net To contact the editors responsible for this story: Beth Williams at +1-212-617-2307 or bewilliams@bloomberg.net Whitney Kisling

>>> Asian Update

Asian Market Update: Precious metals spike as investors question Fed's inflation tolerance; China mixed ahead of Sunday's flash PMI

***Economic Data*** - (US) NORTH AMERICA MAY SEMI BOOK/BILL RATIO: 1.00 V 1.03 PRIOR - (NZ) NEW ZEALAND MAY ANZ JOB ADS: -5.2% (first decline in 5 months) V 2.1% PRIOR - (NZ) NEW ZEALAND JUN ANZ CONSUMER CONFIDENCE INDEX: 131.9 V 127.6 PRIOR; M/M: +3.4% V -4.4% PRIOR

Market Snapshot (as of 03:30 GMT): - Nikkei225 +0.4%, S&P/ASX -0.5%, Kospi -1.0%, Shanghai Composite -0.2%, Hang Seng +0.2%, Sept S&P500 flat at 1,950, Aug gold -0.1% at $1,312, Jul crude oil +0.3% at $106.70/brl

***Highlights/Observations/Insights*** - Gold prices saw the largest margin of increase in nearly a year today as investors expressed much more confidence in the Yellen Fed tolerating inflationary pressures to the benefit of reducing unemployment. Recall Yellen dismissed the latest CPI data as noisy and saw inflation being contained, as yesterday's FOMC statement disappointed those looking for greater acknowledgement of rising prices. Metals markets appear to be increasingly more critical of the Fed's inflation-curbing credentials however, piling into the "store of value" trade that is further justified by continued geopolitical turmoil in Ukraine/Iraq and overextended bearish positioning. Goldminers in US, Australia, and China were also up in high single digits.

- China indices are mixed going into Sunday's flash PMI release. The most recent figure of 49.4 was a 5-month high, albeit the 5th consecutive month in contraction. Among notable local press reports, PBoC official actually suggested the China property market correction is "necessary", "reasonable", and "beneficial" in the wake of this week's troublesome price data for May. Recall the all-70 new home prices saw their first m/m drop in 2 years, while y/y rate of increase slowed by 1.3pts to 5.4%.

- In US tech, shares of Oracle were down 5% afterhours following a miss on top/bottom lines for Q4, while Q1 guidance was in line with consensus. Apple also rallied modestly into the close following reports of the iWatch production starting next month and retail release coming in October.

***Speakers/Political/In the Papers*** - (CN) China may announce more minor stimulus measures; Tunes of micro-stimulus has not been changed - Chinese press - (CN) PBoC official: Current correction in China housing price is "necessary and inevitable"; Reasonable correction beneficial for economic reform and development of reasonable price structure - Chinese press - (CN) China iron ore traders see drop in bank credit; May force small traders to sell their stocks - financial press - (CN) China Ministry of Industry and Information Technology (MIIT): May telecom industry total Rev CNY150.2B, +15.8% y/y; Top 3 telecom companies Rev CNY105.2B, +9% y/y - (JP) Japan Defense Min Onodera to travel to US in early July to update Defense Sec Hagel on govt plans regarding collective self-defense constitution changes - Nikkei - (JP) Japan's GPIF and other pension funds sold a net of about ¥1.8T in Jan-Mar; Suggesting GPIF may be rebalancing portfolio sooner than expected - Nikkei - (IQ) President Obama: Could take targeted military action against ISIS if and when it is needed, to consult with Congressional leaders

***Fixed Income/Commodities/Currencies*** - (AU) Australia MoF (AOFM) sells A$700M in 5.25% 2019 Bonds; avg yield: 3.0436%; bid-to-cover: 4.35x - (CN) PBoC sets yuan mid point at 6.1524 v 6.1531 prior setting (strongest Yuan setting since June 13th) - (US) Weekly Fed Balance Sheet Total Assets Week ending June 18th: $4.37T v $4.34T prior; Reserve Bank Credit: $4.33T v $4.30T prior; M1: +$3.3B v +$59.1B prior; M2: -$9.3B (first decline in 7 weeks) v +$10.9B prior; M1 y/y change: 10.3% v 10.4% w/w; M2 y/y change: 6.3% v 6.3% w/w

***Equities*** US markets: - FDO: Icahn discloses amended stake and new letter to the company, urges immediate sale of the company, asks for 3 board seats; +2.6% afterhours - TMUS: Sprint said to have lined up as many as 8 banks for over $40B debt financing in proposed acquisition of T-Mobile - financial press; +0.5% afterhours - AKS: Guides Q2 adj loss -$0.06 to -$0.02 v +$0.09e; -2.6% afterhours - ORCL: Reports Q4 $0.92 v $0.95e, R$11.3B v $11.5Be; -5.0% afterhours - TRGP: Responds to press rumors and trading activity regarding acquisition by ETE; previously engaged discussions on potential business combination were terminated; -10.2% afterhours - SWHC: Reports Q4 $0.44 v $0.40e, R$170.4M v $163Me; Guides initial FY15 GAAP $1.30-1.40 v $1.42e, Rev $585-600M v $618Me; -11.2% afterhours

Notable movers by sector: - Consumer Discretionary: Isetan Mitsukoshi 3099.JP +0.1% (speculation on Op profit) - Materials: Zhongjin Gold 600489.CN +2.8%, Shandong Gold Mining 600547.CN +2.9% (gold futures traded higher by over 3% during US session); Sandfire Resources SFR.AU +0.8% (drilling plans) - Healthcare: Takeda Pharmaceutical 4052.JP -0.4% (investors oppose appointment of president) - Telecom: China Unicom 762.HK -1.7% (May subscriber data) - Financials: Fosun International 656.HK +2.8% (investment in Greece) - Industrials: Austin Engineering ANG.AU +6.8% (awarded contracts)