(Les Echos) BNP Paribas : les négociations avec les Etats-Unis dans la dernière

BNP Paribas : les négociations avec les Etats-Unis dans la dernière ligne droite


L'accord devrait être bouclé rapidement.
Il ne sera pas rendu public immédiatement, ce qui permettra à la banque de s'organiser.
La négociation entre BNP Paribas et les autorités américaines s'est accélérée ces derniers jours, au point que les grands principes d'un accord seraient en passe d'être calés. Ce « settlement » pourrait donc être bouclé rapidement. Même si son ton devait être très dur pour la banque, il lui permettrait d'éviter un procès. Interrogé hier sur le sujet au « Grand Rendez-Vous Europe 1 - "Le Monde" - iTélé », le ministre des Finances, Michel Sapin, s'est montré confiant : « Nous avons progressé vers des sanctions plus équitables et qui n'obèrent pas de manière trop forte l'avenir. » La banque est accusée d'avoir violé les embargos économiques américains au Soudan, en Iran et à Cuba, en réalisant dans ces pays des opérations en dollars. Si les termes exacts de l'arrangement restent à fixer, BNP Paribas doit s'attendre à trois types de sanctions sans précédent.
En premier lieu, la banque devra verser une amende qui pourrait s'établir au total entre 8 et 10 milliards de dollars. Le département de la Justice américain (DoJ) avait commencé sa négociation à 16 milliards de dollars et, selon nos informations, la banque française aurait dans un premier temps fait une contre-proposition à un peu moins de 5 milliards de dollars. A ce jour, la banque a provisionné dans ses comptes 1,1 milliard de dollars.
Deuxième sanction : la suspension temporaire de l'autorisation de compenser des opérations en dollars pour le compte de clients vers ou depuis les Etats-Unis. Le périmètre de cette restriction et sa durée ne sont pas encore arrêtés. Selon l'endroit où seront placés les curseurs, les conséquences seront très différentes. La Banque de France a affirmé qu'une telle disposition pourrait être de portée systémique. Certains banquiers français sont plus mesurés. Le PDG de la Société Générale, Frédéric Oudéa, a estimé mercredi que la dimension systémique posée par le contentieux juridique de BNP Paribas aux Etats-Unis ne devait pas être « exagérée ». Mais, pour la banque, cinquième acteur mondial du « clearing » en dollars, le volume de transactions à faire transiter par un ou plusieurs intermédiaires est tel qu'il engendrerait bien une part de risque pour le système bancaire. La mise en place de cette sanction est en outre si complexe qu'elle nécessiterait, selon un expert, un délai de mise en oeuvre. Ce que les autorités américaines seraient prêtes à accorder à la banque, selon nos informations.
Reconnaissance de culpabilité
Enfin, le troisième volet des pénalités concerne l'obligation pour la banque française de « plaider coupable ». Le groupe a mis toute son énergie à échapper à cette reconnaissance de culpabilité par la maison mère ou même par sa filiale suisse, responsable de la plupart des opérations considérées comme frauduleuses. Le plaider coupable peut en effet entraîner un retrait de licence bancaire par les régulateurs locaux des pays où BNP Paribas opère. Il pourrait également pousser certains clients, en particulier américains, à ne plus travailler avec la banque française. Toutefois, la banque ne devrait pas pouvoir y échapper.
Même s'il est signé très prochainement, l'accord ne sera pas immédiatement rendu public. Dans le meilleur des cas, il ne devrait donc pas être révélé avant le début du mois de juillet. « Pour Credit Suisse, il y a eu trois semaines entre la signature et l'annonce du plaider-coupable », indique une source bien informée. Ce délai devrait permettre à BNP Paribas d'élaborer un plan B pour la compensation de ses transactions en dollars et de contacter les différents régulateurs nationaux concernés pour s'assurer qu'ils ne remettront pas en cause sa licence. Une assurance que Credit Suisse avait obtenue dans cette période intermédiaire auprès de la Fed, de la Suisse et du Royaume-Uni

>>> Allergan shareholder rights plan ruling sought by Pershing Square, Valeant

Allergan shareholder rights plan ruling sought by Pershing Square, Valeant 

A joint venture of Pershing Square Capital Management and Valeant Pharmaceuticals International has requested that a court rule that its push for a special shareholder meeting to dislodge the majority of Allergan's board members won't lead to an anti-takeover defense, according to a newswire report.

Bloomberg cited Pershing Square CEO Bill Ackman as saying Friday that "this lawsuit" is a result of Allergan's refusal to confirm that its shareholder rights plan "does not apply to" the pursuit of "a special meeting." According to the article, Pershing Square owns a 9.7% interest in Irvine, California-based Allergan as part of a joint venture entity -- PS Fund 1 LLC -- with Laval, Quebec-based Valeant.

PS Fund filed with the Securities and Exchange Commission a preliminary proxy on 2 June to kick off the process for a special shareholder meeting, and the JV entity sued Allergan Friday in a Delaware court and requested that the judge find that the quest for a special meeting won't activate the company's shareholder rights plan against takeovers. According to the article, PS Fund pursued the course of action it did because it was concerned that if it secured backing from one-quarter of shareholders to move ahead with a special meeting, it would be deemed 25% "beneficial owners" of the takeover target, thereby activating the shareholder rights plan.

RTR - Airbus, Safran team up on response to SpaceX -sources

* Airbus, Safran set to form jv in space launchers -sources
* Move follows warnings over impact of low-cost rival SpaceX
By Tim Hepher and Cyril Altmeyer
PARIS, June 15 (Reuters) - Airbus Group and Safran are set to boost co-operation with a joint venture in space launchers, aiming to galvanize Europe's competitive response to U.S. low-cost rival SpaceX, people familiar with the matter said.
The heads of the two companies, both leading contractors on the Ariane space launcher, are due to meet French President Francois Hollande early on Monday, Hollande's office said, but no official reason for the meeting was provided.
Two people familiar with the matter said space would top the agenda, amid growing pressure from industrial groups for a shake-up of Europe's public-private system of building rockets.
The move is expected to involve closer partnership between Airbus Defence & Space, which builds the Ariane launcher, and the Herakles space propulsion unit of French aerospace group Safran, which makes its solid rocket motors.
It is the first concrete step towards consolidation after Airbus Group Chief Executive Tom Enders, speaking exclusively to Reuters last month, called for a shake-up to prevent Europe becoming "irrelevant" in the $6.5 billion space-launch industry.
His call for a bigger say for industry was triggered by the arrival of low-cost U.S. based Space Exploration Technologies (SpaceX), run by electric car mogul Elon Musk.
But industry sources say there have been disagreements with France's CNES space agency over the right strategy to adopt.
Musk's SpaceX company offers lightweight rocket launchers to send up communications satellites at lower prices than those currently on the market, including Europe's Ariane 5.
Europe aims to replace the Ariane 5 rocket launcher with an Ariane 6 by 2021, but is wrestling with complex structures behind the design, manufacture and marketing of space launchers as well as strict conditions on the national share of work.
Under the current system, government agencies such as CNES in France and the DLR inGermany design launchers, and pass the designs to Airbus Group to manufacture the product, which is then passed to a third party, Arianespace, to market.
Airbus Group owns around 30 percent of Arianespace, whose biggest shareholder is the French space agency, CNES. Safran owns just under 11 percent.
By seizing the industrial initiative, Enders and Safran Chief Executive Jean-Paul Herteman are effectively offering to lead Europe's fight-back against SpaceX but must also tackle sensitivities among public bodies involved, observers said.
Enders has likened the threat posed by SpaceX to a wake-up call that forced European planemaker Airbus to reorganize after rivals Boeing and McDonnell Douglas merged almost 20 years ago.
Without a new industrial set-up, Ariane 6 and the intermediary Ariane 5 ME will be a failure, he believes.
Les Echos newspaper, also reporting a new co-operation venture, said Airbus and Safran would propose a new technical configuration for Ariane 6 as part of the move. France andGermany have been at odds over the rocket's design, which must be resolved ahead of a ministerial meeting in December.

Telegraph : At some point there will be a reckoning on house prices

At some point there will be a reckoning on house prices
Supply and demand may rule the market but there are many classic signs of a speculative bubble

This week my attention turns to a subject that I always approach with trepidation – house prices.
I argued in 2003 that the housing market was becoming dangerously over-valued and that at some point average prices would fall by about 20pc. I made my prediction too early. Prices continued to rise. But by 2007 they had indeed started to fall. From peak to trough, national average prices fell by 20pc and they even fell sharply in prime central London.
I am returning to this subject now because both people actively in the market and economic policy-makers are concerned about the extent to which a new bubble could be developing.
If it is then, when it bursts, a new period of financial and economic instability could lie before us.
The initial danger is that, as interest rates go up, borrowers find that they cannot afford their mortgage payments. They would then cut their spending, leading to an economic downturn. Further effects would follow from the resulting damage to banks as many of their loans turned sour. And falling house prices would clobber wealth and confidence.

The indications as to whether or not this is a realistic danger now are mixed. On the consoling side, mortgage lending is low and average house prices are still below their previous peaks. Moreover, the proportion of first-time buyers’ incomes that they have to spend on mortgage payments is just below the long-term historical average, implying that mortgages are readily affordable.
True, prices in London are well above their previous peaks but London is a separate country – a combination of the world’s playground, work hub and bolthole. It dances to a different beat.
Yet this consoling picture starts to seem less convincing when you look more closely.
My favourite measure of long-term value, the ratio of average house prices to average incomes, is currently standing at about 6.3, below its recent peak of 7.5pc but still in line with the previous peak reached in the boom of 1989. The fact that prices are not yet back to the recent bubble’s peak is hardly reassuring.
The affordability measure is seriously flawed because it reflects the effects of interest rates. These are currently at all time lows. Even though, in my view, they are unlikely to rise very soon, at some not too distant point they will rise. A Bank Rate at 3pc would imply mortgage rates of 5pc. That would be devastating for many borrowers.
Furthermore, the proportion of income taken by mortgage payments for an initial borrower is not the same as the proportion taken by a mortgage over its lifetime.
In the bad old days, when they took out a mortgage, many people borrowed up to the hilt, confident that over time their incomes would rise sharply, in line with general inflation, while the mortgage payments would remain the same. Accordingly, however difficult things might be at the beginning, before long the burden would become easily bearable.
Not anymore. Because of low inflation, pay is not rising so fast and accordingly the burden of mortgage debt is not being eroded as quickly. So mortgage affordability at a given level for initial borrowers does not amount to the same thing that it used to.
The fact that property prices in the rest of the country have not increased as much as they have in London is not consoling. London prices usually lead. If the rest of the country is not yet in boom mode that may merely reflect the usual time lag.
Whenever I opine on this subject people write in to tell me that I do not understand: this is simply a matter of supply and demand. As an economist, of course, I have never thought of this. It is true that in a small island with limits on the availability of land for building and a growing population, property prices are bound to be relatively high and to rise over time.
But that does not justify the current real level of prices or the current rate of increase. Interestingly, over the past 15 years the rate of house-building has been above the rate of household formation.
Sharp changes in market prices are always caused by changes in demand. There are a number of indications that this is true now.
First, the ratio of rents to house prices is low. If there were an absolute housing shortage you would expect to see rents bid up along with house prices. Indeed, over the past 15 years, the ratio of average rents to average incomes has fallen sharply.
Meanwhile, since 1965, whereas house prices have risen more than 50 times, equity prices have risen by only 35 times.
If the explanation for the UK’s housing market strength is the UK’s own peculiar supply situation, how does this square with the fact that, as the IMF has recently warned, the same phenomenon has been witnessed across a range of countries, including Sweden, Canada, Australia and Belgium. The common feature all these countries share is very low interest rates. The particularly UK factor is the Government’s “Help to Buy” scheme.
The market has recently been showing many of the classic signs of a speculative bubble: middle-class parents saying that if they don’t help Johnny or Sarah to buy a flat then they will never be able to afford one: and people happy to leave property idle because “its value only ever goes up”.
I am waiting for one of my favourite stories to resurface, that is the Knightsbridge garage/cupboard/walk-in wardrobe going for £1m.
Meanwhile, because of the UK’s ludicrous system of taxation and the history of large gains on houses, millions of properties are under-occupied as people think that it suits best to hang on to as much property as possible.
The UK’s property market is an unmitigated disaster – born of misguided public policy, reinforced by the worst sort of short-term politics, of which “Help to Vote” is the most egregious recent example.
At some point soon there will have to be a reckoning. This is not to say that someone planning to buy a home to live in should desist. There are all sorts of pecuniary and non-
pecuniary advantages to owning your own home and there is more to life than money. But anyone who thinks that residential housing currently presents an attractive medium-term investment needs to have their head examined – and their finances.

(Les Echos) Espace : rapprochement entre Airbus et Safran au

Espace : rapprochement entre Airbus et Safran autour d’Ariane

EXCLUSIF - Les patrons d’Airbus et de Safran sont reçus lundi à l’Elysée. Ils vont annoncer un co-entreprise et une nouvelle configuration d’Ariane 6.

L’onde choc de Space X n’en finit pas de bouleverser la filière Ariane. François Hollande reçoit lundi à 8 heures du matin Tom Enders, le PDG d’Airbus, maître d’oeuvre industriel de la fusée européenne, et Jean-Paul Herteman, son alter ego de Safran, responsable de la propulsion. A la clé : l’annonce d’un futur rapprochement de leurs activités dans le domaine des lanceurs. Sera également présente, Geneviève Fioraso, secrétaire d’Etat en charge de l’enseignement supérieur et de l’Espace.

Depuis que Space X enchaîne les mises en orbite de satellites avec succès pour un prix imbattable, toute la filière Ariane est en ébullition. Malgré une fiabilité qui n’est plus à démontrer, Ariane souffre d’une organisation industrielle trop éclatée, plombée par la pratique des retours géographiques, ce qui nuit gravement à sa compétitivité. Même si elle est subventionnée dans les grandes largeurs par la Nasa, la société américaine, elle, travaille de manière totalement intégrée. Qui plus est, son patron, le très flamboyant Elon Musk (celui de Paypal ou des voitures électriques Telsa), a choisi de faire du neuf avec du vieux quand les ingénieurs de la vieille Europe se sont toujours complu dans dans la surenchère technologique.

Le Cnes et l’Agence Spatiale européenne, l’ESA, ont évidemment réagi. Il s’agit d’abord de développer une évolution importante d’Ariane 5, baptisée Ariane 5 ME, pour un premier tir atendu en 2018. Puis, de lancer le développement d’un nouvelle génération de fusée – Ariane 6 – censée pouvoir faire jeu égal avec Space X. Mise en service envisagée vers 2021, mais plus probablement quelques années plus tard.

Le top départ des premières études d’Ariane 6 a été donné à Naples fin 2012 lors de la conférence ministérielle de l’ESA. Depuis, rien ne va plus car le DLR, le Cnes Allemand – avec le soutien tacite d’Airbus – ont remis en cause la configuration technique du futur lanceur au niveau de la propulsion. A telle enseigne que Geneviève Fioraso a récemment déclaré que la France était prête à des « adaptations » (« Les Echos » du 20 mai).

La réunion à l’Elysée a donc pour principal objet de prendre acte de la nécessité pour Airbus et Safran, de mieux travailler ensemble, le plus vite possible, pour préparer au mieux les projets Ariane 5 ME et Ariane 6. Et sans attendre la prochaine conférence ministérielle de l’ESA, en décembre à Luxembourg.

C’est donc l’ébauche d’une rationalisation de la filière lanceur européenne qui se dessine. Elle pourrait prendre, à terme, la forme d’une co-entreprise entre les deux industriels les plus importants d’Ariane, chacun conservant son domaine de prédilection. Mieux, Airbus et Safran vont proposer une nouvelle configuration technique pour Ariane 6 susceptible de tenir l’objectif d’un coût au lancement de 70 millions d’euros et de contenter Paris et Berlin d’un point de vue industriel. « C’est le seul moyen de résister à Space X », commente un bon connaisseur du dossier. Contactés, ni Airbus ni Safran n’ont souhaité commenter.

WSJ Siemens, Mitsubishi Heavy Near Joint Alstom Offer

Siemens, Mitsubishi Heavy Near Joint Alstom Offer
Partners Set Up Potential Bidding War With GE for French Firm's Energy Unit


An Alstom employee inspects the wiring on a turbine at Alstom SA's turbine refurbishment plant in Rugby, U.K. Photo: Bloomberg News
By EYK HENNING and WILLIAM BOSTON
FRANKFURT—German engineering company Siemens AG and Japanese peer Mitsubishi Heavy Industries Ltd. were close on Sunday to finalizing an offer for much of Alstom SA's energy business, potentially entering a bidding war with General Electric Co. for one of France's industrial jewels, said people familiar with the companies' plans.
As part of the potential offer, Mitsubishi aims to buy as much as 10% of Alstom from Bouygues SA, which holds a 29.3% stake, two of the people said. French public investment bank BPI France would buy another portion of the Bouygues stake, possibly alongside the French government, these people said.


Talks were continuing late Sunday in Europe, these people said, and the final structure of the deal wasn't set.
A Bouygues spokesman said Sunday that Mitsubishi hadn't approached the company to discuss buying its Alstom holdings. He reiterated that Bouygues is committed to keeping its Alstom stake for the long run.
Under the planned bid, which could be unveiled as soon as Monday, Siemens would buy Alstom's gas turbine business for around €4 billion ($5.41 billion) in cash. Mitsubishi and Hitachi Ltd., with which Mitsubishi already has an energy joint venture, would buy a stake of roughly 40% in Alstom's steam and nuclear-turbine business to form a strategic alliance, said a person familiar with the matter.
Separately, Mitsubishi intends to cooperate with Alstom's energy-grid operations and take a stake of around 20% in that business, this person said.
The proposed joint bid calls for Siemens to transfer its rail-technology operations to Alstom, the person said. The German and Japanese companies would commit to job guarantees in France and Germany for three years after closing the deal.
The planned offer is aimed at winning over the French government and Alstom managers by enabling France to build a European champion in train construction and rail engineering, the people familiar with the talks said. It would leave Alstom's structure largely intact, but with strong foreign partners in specific divisions.
Such a bid could derail an earlier offer from U.S.-based GE, whose $17 billion bid for Alstom's energy assets has been tentatively approved by the French company. The board's approval doesn't mean GE has won the Alstom assets. GE has set June 23 as a deadline for Alstom to formally approve its offer.
French Economy Minister Arnaud Montebourg has criticized the GE bid, saying it was unacceptable and threatened France's economic sovereignty. Mr. Montebourg has encouraged Siemens to make its own offer for Alstom's businesses, which includes a rail division that manufactures TGV high-speed trains.
GE is continuing to press its case in meetings with French officials. The company has stationed top executives in Paris, and plans more talks with those officials in coming days.
A person familiar with GE's thinking said it had no plans to raise the dollar value of its bid, but that its first offer has continued to evolve. Since first presenting the offer, GE has added a 1,000-job guarantee and offered to develop partnerships that would allow French investment in some of Alstom's energy business. GE also is discussing the creation of a unit that would preserve French ownership of Alstom's steam turbines for nuclear-power plants, a key concern of Mr. Montebourg.
And the Alstom name will live on in the energy business under GE's proposal, this person said. The structure of a deal preserving French control of some Alstom's assets still is being negotiated, including the possibility of French investment.

(BFW) UBS Says Buy Japan Stocks on Dips; Topix May Gain 15%


UBS Says Buy Japan Stocks on Dips; Topix May Gain 15% by Yr-End
2014-06-16 01:48:37.176 GMT


By Jennifer Tan
     June 16 (Bloomberg) -- Nikkei 225 Index fairly valued, to
remain range-bound with limited upside in near term; investors
should buy on dips at ~14,000 and sell into strength at
15,000-15,500, until Bank of Japan unveils further monetary
policy easing, Toru Ibayashi, Head of Japan Equities at UBS
Wealth Management, says in interview.
  * Nikkei 225 seen peaking at 17,000 in 2H; expect 15% upside
    for Topix by end-2014 in best-case scenario
  * UBS remains neutral on Japan stks, after cutting from
    overweight in late 2013; mkt now trading at ~13.8x forward
    PE vs historical PEs of 23x-24x
  * BOJ likely to ease further in July-Oct. by increasing
    purchases in JGBs, ETFs and J-REITs; govt will also decide
    in Oct.-Nov. whether to raise VAT to 10% from 8%, and if
    parliament approves another VAT increase, expect higher
    public investment and further monetary loosening, which
    should boost equities
  * Weaker yen trend to continue: UBS sees USD/JPY at 103 by
    end-2014, and at 105 in 12 mos.; key is widening of yield
    gap between U.S. and Japan
  * Key sector picks:
    * Japan exporters
      * Automakers, machinery and specialty chemical cos.,
        are best-positioned to take advantage of weaker yen,
        global economic recovery
      * Exporters also trading at discount of ~12.5x PE vs
        avg mkt PE of ~14x, are likely to post higher EPS
        growth this yr and next yr
      * 2013 “losers” may become “winners” this yr; most
        have reported sluggish results and carried out major
        business restructuring
    * J-REITs
      * They offer attractive 3.5%-4.5% annual yields, are
        well-positioned to take advantage of lower office
        vacancy rates and higher monthly rents from mid-yr
      * Govt Pension Investment Fund (~$1.27t AUM) will also
        start investing in J-REITs, while BOJ is expected to
        buy more J-REITs at next policy meeting
    * Stks tied to China’s economy
      * Japanese steelmakers underperformed Nikkei last yr
        due to China’s slowing economy and are oversold
      * While there aren’t clear signs of recovery in
        China’s steel industry yet, Japanese steel cos. will
        benefit from lower iron ore prices and the industry
        rebound may not be too far away
  * While there aren’t clear signs of recovery in
    China’s steel industry yet, Japanese steel cos. will
    benefit from lower iron ore prices and the industry
    rebound may not be too far away</li></ul></li></ul>


Related stories:
  * Abe Plans Company Tax Cut in 2015 as Kuroda Warns on Budget
  * Tokyo May Office Vacancies 6.52%, Lower Than a Month Earlier
  * LDP Yamamoto: BOJ Needs Easing Even After Reaching Goal:
    Reuters
  * BOJ Sticks With Easing as Analysts Delay Extra Action Calls
  * Abe Predecessor Warns of Market Turmoil If Sales Tax Not
    Raised
  * Japan Stocks Offer Low Returns, Poor Earnings Growth:
    Templeton


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

To contact the reporter on this story:
Jennifer Tan in Singapore at +65-6212-1114 or
jennifertan@bloomberg.net
To contact the editors responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net

>>> Asian Update

Asian Market Update: Equities turn lower as geopolitical jitters in Iraq and Ukraine justify caution


***Economic Data***
- (NZ) NEW ZEALAND Q2 WESTPAC CONSUMER CONFIDENCE: 121.2 V 121.7 PRIOR
- (NZ) NEW ZEALAND REINZ MAY HOUSE PRICE INDEX: 3,925 V 3,971 PRIOR; M/M: -1.2% V +0.1% PRIOR; HOUSE SALES Y/Y: -14.8% V -20.2% PRIOR
- (NZ) NEW ZEALAND MAY PERFORMANCE SERVICES INDEX: 54.2 V 58.5 PRIOR
- (UK) UK JUNE RIGHTMOVE HOUSE PRICES M/M: 0.1% (6-month low) V 3.6% PRIOR; Y/Y: 7.7% V 8.9% PRIOR

Market Snapshot (as of 03:30 GMT):
- Nikkei225 -0.6%, S&P/ASX falt, Kospi -0.1%, Shanghai Composite +0.1%, Hang Seng -0.1%, Sept S&P500 -0.3% at 1,922, Aug gold +0.5% at $1,280, Jul crude oil +0.3% at $107.22/brl


***Highlights/Observations/Insights***
- Energy and safehaven precious metals are bid higher to start the week while equities are under pressure with Middle East and Ukraine conflicts increasingly resembling a full-blown civil war. Despite the reports of a counter-attack by govt-forces in Iraq, ISIS fighters are still perceived to be on the offensive. Rebels had reportedly extended their attacks to the west of the country and posted photos of mass Shia soldier executions, prompting the US Navy to move an aircraft carrier into the Persian Gulf and for Pentagon to actually contemplate joint efforts with its arch-enemy Iran to deal with the Iraq conflict. Also over the weekend, a suicide explosion in Baghdad killed 9 people, forcing US embassy to boost its security and move some staff out of the country. July crude oil contract opened up $0.70, reaching $107.50/brl high in electronic trade.

- Tensions are also high in east Ukraine where rebels downed a govt military supply plane and killing 49 army personnel, presumably with some of the anti-aircraft weapons alleged to have been shipped from Russia. In response, a mob of protesters in Kiev attacked the Russian embassy while Ukraine foreign min Deshchytsia drew ire from his Russian counterpart for publicly cursing Putin. It was hardly surprising when talks between Gazprom and Ukraine negotiators over gas prices broke down again on Sunday with just hours to go to the 6amGMT deadline before gas shipments are halted. US State Dept scolded the Kiev authorities for doing little to stop the attack on Russian embassy, calling on Ukraine to provide adequate security for the diplomatic mission.

- In weekend M&A, Medtronic confirmed earlier speculation that it will acquire Covidien for $42.9B in cash and stock. Bidding war for France's Alstom also shifted into higher gear - Japanese press reported Mitsubishi Heavy may take a direct stake of about 10% in the company, while French Fin Min Sapin said GE may also improve on its $17B offer.

***Speakers/Political/In the Papers***
- (CN) PBoC academic: China economy manages soft landing; growth still within controllable range - Chinese press
- (CN) China National Energy Administration (NEA): China May power consumption +5.3% y/y, up from 4.6% in April - Shanghai Daily
- (AU) Australia Housing Industry Association (HIA): New home building to reach 2nd highest level on record in 2014 - Australian press
- (AU) HSBC chief economist Bloxham: AUD is behaving more like a safe-haven asset; Investors may be flocking to Australian debt or currency because of its AAA status - SMH
- (NZ) New Zealand Fin Min English: Economy is not as dependent on the dairy industry as critics believe - NZ press
- (NZ) New Zealand Institute of Economic Research (NZIER) Raises outlook for 2014/15 growth to 3.8% from 3.1% prior in Mar; sees growth in 2016 at 2.8%, 2017 at 2.1% - financial press
- (EU) ECB's Weidmann: Rejects calls from France and Italy for a deliberate devaluation of the euro - German press
- (UK) BOE's Bean: Higher interest rates should be welcomed as a sign that Britain's economy is returning to normal

***Fixed Income/Commodities/Currencies***
- (JP) BOJ offers to buy ¥300B in 1-3 yr JGB , ¥200B in 3-5yr JGB and ¥400B in 5-10yr JGB as well as ¥450B in CP and 1.0T in T-bills
- (KR) South Korea (MoF) sells 10-yr govt bonds at average yield of 3.315%
- GLD: Spot gold rises above $1,280/oz; 2-week high
- SLV: Spot silver rises above $19.80; 1-month high
- USD/CNY: PBoC sets yuan mid point at 6.1537 v 6.1503 prior setting (weakest setting since Jun 6th)

***Equities***
US markets:
- LMT: Pentagon said to have temporarily grounded the entire F-35 fighter jet fleet due to engine problems - financial press
- COV: Medtronic confirms it will acquire Covidien for $42.9B in cash, stock; deal accretive to Medtronic FY16 earnings and significantly accretive thereafter

Europe:
- ALO.FR: Follow-up: Mitsubishi Heavy may take an increased stake of about 10% (from Bouygues) as part of partnership in a bid with Siemens - Nikkei
- SKYD.DE: BSkyB said to be looking to acquire Sky Deutschland and Sky Italia in a €10B deal - financial press

Notable movers by sector:
- Consumer Discretionary: Huiyin Household Appliances 1280.HK +7.7% (enters online lottery business); Echo Entertainment Group EGP.AU +6.9% (issues trading update); Shimamura 8227.JP -2.0% (speculation on Q1 results); Flight Centre Limited FLT.AU +2.7% (JV deal);
- Materials: Zhejiang Weixing New Building Materials 002372.CN +5.1%, Xinjiang Guotong Pipeline 002205.CN +3.0%, Ningxia Qinglong Pipes Industry 002457.CN +5.7%, Goody Science & Technology 002694.CN +3.3%, Fujian Newchoice Pipe Technology 300198.CN +7.6% (China to enhance underground pipelines development); LG Chem 051910.KR +3.3% (awarded electric battery order)
- Energy: Shenzhen Woer Heat-Shrinkable Material 002130.CN +3.6%, Sufa Technology Industry 000777.CN +2.7% (China Pres Xi comments on nuclear energy); Drillsearch DLS.AU -2.3% (increases bid for Ambassador)
- Industrials: Fantasia Holdings Group 1777.HK -2.1% (to spin-off and separate list unit); Mitsubishi Heavy Industries 7011.JP -1.8% (speculation to increase bid for Alstom)
- Technology: Asustek Computer 2357.TW +1.2% (business plan)

>>> What to look at this Week end


Macro :
- BlackRock’s Fink Says Spanish Banking Crisis Is Over: ABC
- ECB's Weidmann: Rejects calls from France and Italy for a deliberate devaluation of the euro


Keep an eye on :
- ALO FP : France’s Sapin Says GE May Improve Bid for Alstom Energy Assets
- ALO FP : Siemens, Mitsubishi Heavy to Make Joint Bid for Alstom: WSJ
- ALO FP : Siemens Said Preparing Alstom Cash Offer to Gain Gas Turbines {NSN N782FV6VDKHX <go>}
- BPE IM : Popolare Emilia Favors Potential Mergers, CEO Tells Sole
- BG/ LN : Centrica’s Laidlaw Not Interested in BG Group Role, Sky Reports
- BNP FP : France’s Sapin Sees Progress Toward ‘Fairer’ Sanctions on BNP
- EN FP : Bouygues Telecom Must Reduce Cost Base, CEO Roussat Says
- BSY LN : BSkyB May Pay Up to EU8.5b for Fox Italy, Germany Units: Times
- CO FP : Casino rumoured to be considering buyout of CBD, Co has a 41,7% stake in CBD (Market Cap $12,7b)
- CGG FP : *CGG SAYS IT’S NOT AWARE OF ANY POTENTIAL TAKEOVER BID
- F IM : Fiat Approves Merger Plan for Fiat Chrysler Automobiles,Approves Bond Sales of Up to EU4b or Equivalent
- F IM : Ferrari Says Reports It Will Quit F-1 Are ‘Pure Speculation’
- PUB FP : Could be interested by Interpublic - NYT
- MB IM : Mediobanca Prepares New Shareholders’ Pact, Corriere Says
- REP SM : Repsol Has EU9B for Purchases, CFO Martinez Tells El Economista
- RWE GY : RWE Sale of Dea Unit to Russian Investor Faces German Probe
- SIE GY : Siemens Shareholder Opposes Alstom Offer, Tagesspiegel Says
- SIE GY : Siemens Said Preparing Alstom Cash Offer to Gain Gas Turbines
- SKYD GY : BSkyB hires Barclays and Morgan Stanley to advise on acquisition of German and Italian assets from Fox
- SN/ LN : Medtronic in talks to combine with Covidien - WSJ
- TIS IM : Tiscali Reports FY Net €4.8M v €15.8M y/y, EBITDA €52.4M v €44.3M y/y, Rev €223.4M v €233.8M y/y - FY 13 in line with targets. 2014 targets show Revenues and EBTDA in line with 2013.

>>> BSkyB hires Barclays and Morgan Stanley to advise on acquisition of German a

BSkyB hires Barclays and Morgan Stanley to advise on acquisition of German and Italian assets from Fox
BSkyB has engaged Barclays and Morgan Stanley to advise on the acquisition of 21st Century Fox’s interests in Sky Italia and Sky Deutschland, The Sunday Times reported.

The report did not cite a source for the information, but said Nasdaq-listed Fox, controlled by the media magnate Rupert Murdoch, could see up to EUR 8.5bn from the deal. Senior figures from the finance and media sectors believe the transaction for the European pay-TV assets could be agreed within the next few months, the report said, although it added that others believe an agreement will take significantly longer.

Fox is the sole owner of Sky Italia, which is worth EUR 3bn-5bn, and has a 57% interest in Sky Deutschland, a German-listed company with a value of approximately EUR 3.5bn, the report said. It noted that Fox also holds 39% of BSkyB and will keep that level of ownership once the UK-listed company has acquired its European sister businesses.


Source Sunday Times