(BFW) Siemens May Sell Diagnostics to Skip Investment, Kepler Says

Siemens May Sell Diagnostics to Skip Investment, Kepler Says
2014-02-18 09:25:17.189 GMT


By Chris Malpass
     Feb. 18 (Bloomberg) -- Siemens should sell its diagnostics
business before margins erode, to exit an area that needs
significant investment to remain competitive, KeplerCheuvreux
says in note.
  * Notes no one else sees Siemens disposing of diagnostics amid
    revamp
  * Potential disposals analysts have already identified include
    building tech, hearing aids, baggage handling, metals tech
    with total annual sales ~EU9b, and EV ~EU6.4b:
    KeplerCheuvreux
  * Diagnostiocs unit needs “major investments” to remain
    competitive vs Roche
    * 2013 underlying diagnostics margin 14.8% vs Roche 20.1%
    * Needs R&D boost, bolt-on acquisitions to keep up with
      Roche
    * Notes co. may be reluctant to sell as margin above avg
      for Siemens healthcare, business was revamped after
      being acquired in 2007: Kepler
  * Sees diagnostics sale 250bp accretive to ROCE:
    KeplerCheuvreux
  * NOTE: Siemens has announced 38 disposals in past 5 years of
    which 30 completed, 6 pending, 1 cancelled, 1 proposed;
    total value $4.4b: Bloomberg data
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Chris Malpass in Berlin at +49-30-70010-6234 or
cmalpass@bloomberg.net

To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net

(BFW) Lafarge, Holcim Cut to Sell at Goldman, Italcementi Upgraded

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

Lafarge, Holcim Cut to Sell at Goldman, Italcementi Upgraded 2014-02-18 08:31:21.653 GMT

By Cormac Mullen Feb. 18 (Bloomberg) -- Goldman adds Wienerberger to conviction buy list, upgrades Hochtief to buy from neutral, in Europe construction sector note. * Lafarge, Holcim cut to sell from neutral; Italcementi upgraded to neutral from sell at Goldman * Goldman says EM risks make sector bellwethers less interesting, sector valuations look high * Sees best risk-reward for Wienerberger * Kepler Cheuvreux says Holcim, Lafarge, Vicat, Boskalis preferred stocks in separate construction & materials sector note * Says CRH, HeidelbergCement, Wienerberger least-preferred * Says market has already priced in a “big chunk” of EM slowdown, FX headwinds * Lafarge falls as much as 2.8%, Holcim as much as 1.9%; Wienerberger rises as much as 3%, Hochtief as much as 2.8% * NOTE: Also, Lafarge Kenya Says Government Dispute May Hamper Expansion

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

To contact the reporter on this story: Cormac Mullen in Dublin at +353-1-523-9526 or cmullen9@bloomberg.net

To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net

>>> Japan BOJ Kuroda: Japan economy on track but won't hesitate to adjust policy


Japan BOJ Kuroda: Japan economy on track but won't hesitate to adjust policy if necessary; BOJ monthly purchase of JGB in range of ¥6-8T - post rate decision press conference
- BOJ to continue JGB bonds in flexible manner
- Loan program expansion aimed to boost QE transmission mechanism.
- Expects loan program to be big plus for lending.
- Expects export to pick up gradually and current account to improve.
- Expects production gap to narrow and turn positive ultimately.
- Do not expect external demand to continue falling sharply.
- Consumption likely to stay firm as jobs and income conditions continue to improve.
- GDP data confirms positive mechanism, virtuous cycle still works.
- BOJ met 2.7% growth target.
- Unchanged views on global economies.
- Decision on double lending incentives partially to make policies easy to digest.
- Q4 weak external demand due to imports rise implies strong domestic demand.
- Source TradeTheNews.com

(LesEchos) Penalized by the drop in energy markets in Europe, Alstom concerned g

Link to French Article : {http://bit.ly/1fuMucb}
Link to Google Translation : {http://bit.ly/1bgNGEf}

Penalized by the drop in energy markets in Europe, Alstom concerned government

Bouygues depreciates its stake in Alstom € 1.4 billion. The government questioned the prospects turbine manufacturer.

It is currently one of the key issues of the Ministry of Productive Recovery. On Monday, the giant BTP Bouygues announced a depreciation of its 29.33% stake in Alstom's capital to 1.4 billion euros due to a "significant reduction in flow forecasts cash financial analysts. "
This impairment comes as concern mounts about the Alstom file. According to our information, the government asked a few months ago to a consulting firm to conduct a study on the situation of the group, in order to assess its position in its various markets and strategic options. In late January, the group headed by Patrick Kron announced a delay prospects rebound in its operating margin. It should stay around 7% this year and mark a "slight decrease" in the year 2014 to 2015 while the group was expecting to fall on a margin of 8% within two to three years. Alstom should generate a "cash flow" free negative in the second half after a loss of 511 million in the first.
The group is in fact a delicate situation considered by many observers. Its main shareholder, the Bouygues group, first of all need cash, say banking and government sources, to invest in 4G and fixed telephony. The turbine manufacturer, trains and electrical equipment must then deal with the collapse of the energy markets in Europe, while facing strong competition in emerging countries.
In the rail, the group must face giants like China CNR and CSR, even though China is a key market with investments up 30% last year to 79 billion euros. "On this segment, the group faces a similar problem of French industry: it sells mid-range, which are too expensive compared to the competition, "says a consultant. Disputed by the group statement, which emphasizes that CNR and CSR do not sell outside of China. "The transport industry has not waned during the years of crisis," says one at Alstom. In the first nine months of the year, activity is indeed increased by 3%, but the backlog was down 13% over the period.
"Strategic decisions"
In coal, where Chinese actors have both the world's largest market and key technologies, "the department activity is doing well but is too small Alstom in capital equipment," says one in government. It is also absent from the market for small gas plants (less than 50 MW), while it is the only one not to have been eroded by the crisis in mature markets. The electricity transmission business is doing well by cons. Alstom also has strong expertise in the nuclear and remains the world leader in hydraulic equipment, but these two markets do not show strong growth.
"Alstom is not on the brink summary does one government, but the group must make strategic decisions for the future." In this context, the idea of approximation of certain professions is clearly mentioned as well as a check of the state, through a capital increase. An option denied by Alstom, which emphasizes that it is "not at all on the agenda."
Anxious to find the cash, the group announced plans to sell 1 to 2 billion euros of non-strategic assets by 15 months. An opening of the capital Alstom Transport is also the study, through a partnership with an industrial or background, or via an IPO.

(BFW) Ophir Energy Says Padouck Deep Drilling Operations Start

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

BN 02/18 07:09 *OPHIR ENERGY HAS 40% OPERATED INTEREST IN BLOCK BN 02/18 07:00 *OPHIR ENERGY OPHR GABON: PADOUCK DEEP DRILLING OPS BEGIN

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

Ophir Energy Says Padouck Deep Drilling Operations Start 2014-02-18 07:13:35.653 GMT

By James Cone Feb. 18 (Bloomberg) -- Co. (40% operated interest) says prospect estimated to contain Pmean recoverable resources of c.1.0bnbbls, “significant follow-on potential.”

Link to Statement:{NSN N16JGN3HBS3K <GO>} Link to Company News:{OPHR LN <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: James Cone at +44-20-7673-2572 or jcone@bloomberg.net

(KEP-CHEU) Peugeot - Reduce - Anything at all in the glass

* Anything at all in the glass?
In our view, Peugeot shares no longer simply reflect the expectation that the company won’t fail in the coming months, they also price in a scenario whereby it would be salvaged in its current form, as in the late 1980s. This is more than we can see, in a different world today. We understand the risk of a further squeeze on Wednesday but stick with our fundamental call: Reduce.

* The market has seen a glass half full since last June
We underestimated investor appetite for a potential recovery, a new management team, restructuring, exposure to Southern Europe and corporate action, which all led to a solid share price performance in the last 12 months. Peugeot shares are back to EUR12+.The market has been seeing a glass half full for Peugeot. Is there still something in the glass? We don’t expect the company to fail imminently, but is it going to thrive?

* Revolution tomorrow? Large dilution again, and leap of faith
An announcement of a large rights issue (EUR3bn-4bn counting possible warrants) along with a new ‘governance’ driven by the French State, Dongfeng and the Peugeot family, a new CEO (before a new head of supervisory board likely to be announced late March), a possible JV with Santander for BPSA (50%+) and a potential sale of all or part of Faurecia are now all expected. Short-interest is at record highs which may be the last trigger for the shares, should the announcement surprise positively.

* Our 2013 forecasts are surprisingly higher than consensus
We forecast Peugeot to publish a modest EUR49m positive group EBIT for 2013 (-EUR65m in H1) on Wednesday morning, surprisingly more than the company’s consensus figure (–EUR200m), implying sequentially higher losses in the Autos business in H2 2013 (-EUR510m in H1). We anticipate FCF to be at –EUR1.2bn versus consensus at –EUR1.4bn taking net debt to EUR4.1bn (consensus EUR4.4bn). Faurecia’s better net debt figure implies a EUR200m positive uplift to our and consensus estimates.

* We still see the glass as half empty (or less)
In our view, Peugeot remains a sub-scale OEM, rapidly losing share in Europe, with the wrong cost base (too many plants and employees in the wrong place), weak brands and overly ambitious aspirations. An alliance with DongFeng would not solve the scale and cost issues in Europe, LatAm or Russia (where Peugeot has never made money), in our view. Our top picks in European Autos remain Renault, VW, Daimler, Michelin and Plastic Omnium, profitable groups with exposure to Europe, but also strong balance sheets, proven track records on FCF and rising cash returns.

*

>>> Brokers Upgrades & Downgrades - 18/02/2014

>>> Up
*AIXTRON RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*DELHAIZE RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*INTESA RAISED TO BUY VS HOLD AT SOCGEN
*POP. MILANO RAISED TO HOLD VS SELL AT SOCGEN
*UBI RAISED TO BUY VS HOLD AT SOCGEN

>>> Down
*ANTOFAGASTA CUT TO SECTOR PERFORM AT RBC CAPITAL
*AQUARIUS PLATINUM CUT TO UNDERPERFORM AT MACQUARIE
*CENTRICA CUT TO SELL AT UBS
*INDITEX CUT TO NEUTRAL VS BUY AT CITI
*JULIUS BAER CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*ROLLS ROYCE CUT TO NEUTRAL VS BUY AT CITI
*UNICREDIT CUT TO HOLD VS BUY AT SOCGEN
*VONTOBEL CUT TO NEUTRAL VS BUY AT CITI

>>> PT Change
* Telecom Italia Ord. PT Raised to EU0.87 vs EU0.65 at JPMorgan

>>> Initiation
*AEOREMA COMMUNICATIONS RATED NEW BUY AT CANTOR; PT 90P
*CREDIT SUISSE RATED NEW BUY AT JEFFERIES; PT CHF34.1
*DEUTSCHE BANK RATED NEW BUY AT JEFFERIES; PT EU45.1
*KERING RATED NEW BUY AT BERENBERG; PT EU190
*SCHNEIDER REINSTATED AT OVERWEIGHT AT BARCLAYS; PT EU72
*UBS RATED NEW HOLD AT JEFFERIES; PT CHF19.7

>>> Call
>> Stock
*CENTRICA ADDED TO LEAST PREFERRED UTILITIES AT UBS

>>> What to look at today - 18/02/2014

US closed yesterday...Bank of Japan refrained from further policy easing in the wake of a soft Q4 GDP data, keeping its economic assessment unchanged for the 6th month and also reiterating its outlook on inflation and domestic economy. BOJ did boost its "Stimulating Bank Lending Facility" and the "Growth-Supporting Funding Facility" programs from ¥3.5T to ¥7.0T and also expanded the term of application to 4 years from 1-3 present. After the initial dive, Yen pairs are up moderately on the announcement....Daily Shibor fixings: O/N: 2.6800% v 2.9510% prior (6th consecutive
decline, lowest since May 14th)...Nikkei +3.13%...Shanghai -0.98%..

Eur$ 1.3710 S&P Fut +0.23% European Future +0.20%

Macro
- Emerging Markets at Risk From Carry Trade Unwinding, BofA Says {NSN N16IQC6JTSEG <go>}

Keep an eye on :
- AI FP : Air Liquide 2013 Net Beats Ests., Sales Miss; Confident on 2014, 2013 Efficiencies EU303m, Ahead of Forecast
- ALO FP : France Appoints Consultants to Study Alstom, Les Echos Says
- ATL IM : Atlantia Kept as a Top Infra Pick at BofAML
- BLT LN : BHP 1H Adj. Profit Beats Est.; Sees Strong Free Cash Flow, Rises for 9th Day, Trades Near 1-Year High
- CO FP : Casino Seeks Return to Organic Sales Growth in France in 2014
- CO FP : Mkt Conditions Ideal for Casino’s Cdiscount Listing, Citi Says
- ENG IM : Enagas 4Q Ebitda Beats, Net Income in Line, Rev. Misses Ests.
- GCY GY : Grand City Properties places EUR 150m 1.5% five-year CB
- LEAS BB : Leasinvest Re FY Adj. EPS EU5.37; Est. EU4.95; Raises Dividend
- MTX GY : MTU Aero Engines 2013 Sales Rise; Sees Stable Ebit, Net in 2014
- NOBN SW : Nobel Biocare 4Q Revenue Declines, Profit Rises; Dividend Beats
- SIE GY : Siemens, Stadler May Seek Rail Joint Venture: Handelsblatt
- 1T9 GY : Tarkett Predicts Profitable Growth as 2013 Net Rises 19%
- WCH GY : Wacker Chemie Raises Silicones Prices in Europe as of April 1

WSJ : Actavis in Talks to Buy Forest Labs for as Much as $25

Actavis in Talks to Buy Forest Labs for as Much as $25 Billion

Actavis PLC is in advanced talks to acquire rival drug maker Forest Laboratories Inc., FRX +1.49% in a deal that could value Forest at up to $25 billion, according to people familiar with the matter.

The deal is expected to be announced as early as Tuesday, the people said. It's possible the talks could still fall apart.

The proposed combination of Dublin-based Actavis ACT +0.13% and Forest, of New York, is partly designed to position the resulting company to deal with the changing health-care landscape in the U.S. Hospitals, insurers and doctors in the country are combining to make larger organizations that can negotiate directly to buy prescription drugs.

A combined Actavis-Forest could offer a range of generic and brand-name medicines, reaping economies of scale of its own.

Forest had a market capitalization of $19.3 billion as of Friday's close, compared with $33.4 billion for Actavis.

Actavis is known for its generic drugs, but it recently bought Warner Chilcott, a provider of branded treatments for gastrointestinal and urological conditions.

Forest also has a gastrointestinal business, including the constipation drug Linzess. Forest also sells a number of brand-name drugs for neurological conditions like depression, as well as Bystolic for hypertension.

New Forest Chief Executive Brent Saunders would stay at the combined company, the people said. His exact role is still being worked out.

One likely beneficiary of the sale is Carl Icahn, whose Icahn Associates owns 11.4% of Forest's shares, making it one of the company's largest shareholders. Mr. Icahn began agitating at Forest in 2011, but seemed placated by the company's appointment of Mr. Saunders as CEO. Still, he has held on to his stake in Forest.

Paul Bisaro, chief executive of Actavis, has been doing deals to make the company a bigger player in the fiercely competitive drug markets. Starting with generic-drug maker Watson, the company has gobbled up rivals including Actavis, another generic-drug maker—whose name it took.

Indeed, there has been a flurry of deals among midsize pharmaceutical companies, many of them producers of generic drugs, in the past year.

Forest in January agreed to buy specialty-pharmaceutical company Aptalis Holdings Inc. for $2.9 billion from private-equity firm TPG.

Forest has been looking to find new drugs to replace blockbusters, like the antidepressant Lexapro, that are facing competition from low-price generic versions. Some of the company's new drugs haven't met Wall Street expectations, and the U.S. Food and Drug Administration late last year delayed an approval decision on a schizophrenia treatment Forest is helping develop.

Mr. Saunders, who was named CEO last year after a stint running eye-care company Bausch & Lomb, has outlined plans to cut $500 million in costs by 2016 while using Forest's cash to buy drugs it can fold into its portfolio. Mr. Saunders has said he wants to complement Linzess with other drugs treating gastrointestinal disorders with deals that boost earnings and cash flow.

Mr. Saunders is no stranger to mergers and acquisitions, having agreed last year to sell Bausch & Lomb to Valeant Pharmaceuticals International Inc. for $8.7 billion including debt. According to one of the people, Mr. Saunders is expected to play a leading role at the combined company.

The deal would come as a welcome relief for an M&A market that has been in the doldrums as a result of tepid economic growth and CEO and boardroom sentiment that still hasn't completely recovered from the financial crisis. But coming on the heals of Comcast Corp.'s agreement last week to buy Time Warner Cable Inc. for $45 billion, the deal could be a sign that there is hope the deals market will turn in a respectable performance on 2014.

>>> Asian Update

Asian Market Update: BOJ extends and expands fixed rate loans scheme to boost lending; BHP rallies on strong H1 results

***Economic Data*** - (JP) BANK OF JAPAN (BOJ) POLICY STATEMENT: REITERATES TO INCREASE MONETARY BASE AT ANNUAL PACE OF ¥60-70T (AS EXPECTED); Extends fixed 0.1% rate loans scheme by one year and doubles ceiling of loans to ¥7T - (CN) CHINA JAN FOREIGN DIRECT INVESTMENT (FDI) Y/Y: 16.1% V 3.3% PRIOR (fastest pace in 6 months) - (AU) RESERVE BANK OF AUSTRALIA (RBA) FEB MEETING MINUTES: Lower AUD would assist balanced economic growth; Policy stimulus working to spur economy - (KR) SOUTH KOREA JAN PPI M/M: 0.2% V 0.2% PRIOR; Y/Y: -0.3% V -0.4% PRIOR (16th consecutive month of decline)

***Highlights/Observations/Insights*** - BHP is up over 2% in Sydney after posting a first half net profit of $8.1B v $4.4B y/y. BHP also reiterated FY14 production outlook, forecasting further improvement in global economic conditions and demand for iron ore outside of China rising. - Bank of Japan refrained from further policy easing in the wake of a soft Q4 GDP data, keeping its economic assessment unchanged for the 6th month and also reiterating its outlook on inflation and domestic economy. BOJ did boost its "Stimulating Bank Lending Facility" and the "Growth-Supporting Funding Facility" programs from ¥3.5T to ¥7.0T and also expanded the term of application to 4 years from 1-3 present. After the initial dive, Yen pairs are up moderately on the announcement. - RBA policy meeting minutes kept to the script of this month's statement, clarifying rationale for dropping the central bank's easing bias. RBA noted Australia trade partners' growth, rising inflation levels (albeit with the possibility of statistical noise), improvement in business conditions, and more forward-looking indicators of labor demand such as vacancies/advertisements data.

***Fixed Income/Commodities/Currencies*** - (CN) Daily Shibor fixings: O/N: 2.6800% v 2.9510% prior (6th consecutive decline, lowest since May 14th); 1-week: 3.7430% v 3.8790% prior (7th consecutive decline, lowest since Nov 12th) - (CN) PBoC to drain CNY48B in 14-day repos (first drain through repos since June)

- AUD and JPY currencies were notable movers coming out of a quiet US-holiday-thinned trading session. AUD/USD reversed the initial decline after the release of RBA meeting minutes containing a reiteration endorsing weaker AUD to help economic growth, spiking up about 40pip from pre-minutes level above $0.9075 - a 1-month high. AUD/NZD rose over 70pips from the opening lows to as high as NZ$1.0870, with an otherwise hawkish RBA statement spurring a rotation back into the Aussie. AUD/JPY rose 50pips after the minutes above ¥92.70 and then hit a 1-month high near ¥93 after the BOJ statement that produced some fairly heavy yen selling. USD/JPY also reversed the initial drop below ¥101.80 to trade above ¥102.60 in the hour following the BOJ decision release. GBP/JPY rose 140pips from the initial post-BOJ lows around ¥171.60 and EUR/JPY tested ¥140.70 - a 3-week high.

***Speakers/Political/In the Papers*** - (CN) Nomura: expects PBoC to cut Reserve Requirement Ratio (RRR) twice in 2014 to 19% from 20% - financial press - (CN) China Ministry of Commerce (MOFCOM) spokesperson Shen Danyang: China Jan trade figures are not inflated; Jan exports rise is due to strong demand from developed markets, govt policy and seasonal effect from Lunar New Year - (JP) Japan METI to issue Fukushima water treatment RFP in the next few months - financial press - (JP) Japan Fin Min Aso: GDP indicates moderate recovery in Japan; to carefully monitor external demand though expresses no concern - financial press - (JP) Japan PM Abe approval rating drops 3pct points to 47% - Asahi News - (KR) Bank of Korea (BOK): South Korea maintains economic recovery; Prepared to take action to stabilize financial markets - (KR) Bank of Korea (BOK) Gov Kim: South Korea must explore new export markets; South Korea economy to show stability despite US tapering - (KR) South Korea Dep Fin Min Eun: More trade needs to be settled in local currencies in Asia

**Europe** - (DE) German Bundesbank's Dombret: Sees no signs of risk yet from appreciation in domestic house prices; Low rates kept for too long can be the beginning of mispricing - financial press - (UR) Ukraine opposition leaders Yatsenyuk and Klitschko meet with German Chancellor Merkel; Request that EU imposes economic sanctions on Yanukovych govt - press

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +3.1%, S&P/ASX flat, Kospi -0.3%, Shanghai Composite -0.5%, Hang Seng flat, Mar S&P500 +0.2% at 1,838, Apr gold +1.7% at $1,321, Mar crude oil +0.4% at $100.70/brl

US markets: - DUK: To begin process to exit its 6.6GW Midwest generation business; sees $1-2B Q1 charge - HOLI: Reports Q2 $0.45 v $0.27e, R$153.4M v $114Me - FRX: Actavis said to purchase Forest Labs for as much as $25B; official announcement expected to be released Tuesday - financial press

Notable movers by sector: - Consumer Discretionary: Pacific Brands PBG.AU -10.4% (H1 results); Seven West Media SWM.AU -1.6% (H1 results); Coca-Cola Amatil CCL.AU -4.3% (FY13 results) - Financials: Shimao Property 813.HK -3.2% (Jan results); Huayuan Property 600743.CN +1.2% (prelim FY13 results) - Materials: BHP Billiton BHP.AU +2.1% (H1 result; reaffirms production guidance); Arrium Ltd ARI.AU -1.7% (H1 results); Tangshan Jidong Cement 000401.CN +1.9% (Demolishment of cement plant) - Industrials: Amcor Ltd A; MC.AU-5.6% (H1 results); MacMahon Holdings MAH.AU +10.0% (H1 results); Kawasaki Heavy 7012.JP +1.7% (US bidding plans) - Technology: Wuhan Fingu Electronic Technology 002194.CN +2.2% (prelim FY13 results); Semiconductor Manufacturing International Corp 981.HK -15.0% (Q4 results) - Healthcare: Shanghai Fosun Pharmaceutical Group 2196.HK +5.0% (acquires Chindex with TPG) - Utilities: TEPCO 9501.JP +0.9% (Japan METI to issue Fukushima water treatment RFP)