TheChek News Flow

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CREDIT: Fiat CDS Cut to UW-30% vs OW-30% at BofAML 2014-01-14 07:49:05.626 GMT

By Francesca Cinelli Jan. 14 (Bloomberg) -- Cuts recommendation on Fiat following deal to buy out remainder of Chrysler; downgrades Fiat bond curve, with some exceptions, to Underweight-70% (expected spread underperformance) from Underweight-30% (investment offers unattractive carry with spreads unlikely to widen) as spreads don’t reflect weak fundamentals at Fiat. * While sees continued growth in North America and Luxury division, and gradual recovery in Europe, expects cash generation to remain poor because of substantial increase in capex * Initiates on Fiat 7.75% 2016 bonds, 6.625% 2018 bonds and 6.75% 2019 bonds with an Underweight-70% * Keeps Overweight-70% (carry, plus some spread tightening expected) on Fiat 7.625% 2014, 6.875% 2015 and 5.625% 2017 bonds which benefit from joint-guarantee from CNH Industrial

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To contact the editor responsible for this story: Francesca Cinelli at +39-02-80644-252 or fcinelli@bloomberg.net

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Fossati Says Telecom Italia Brazil Unit Worth EU30b: Sole 2014-01-14 07:19:50.292 GMT

By Daniele Lepido Jan. 14 (Bloomberg) -- Findim Chairman Fossati wrote to Telecom Italia board, Il Sole 24 Ore reports. * 100% of Tim Brasil unit would be valued at as much as EU30b, considering premium prices, savings and country’s economic growth: Sole * Tim Brasil standalone value EU17b using multiples paid by Telefonica in 2010 for 50% of Vivo: Sole * New Telecom Italia board scheduled to meet Feb. 6 to change co. governance: Sole * NOTE: Telecom Italia Directors Said to Impede Brazil Unit Sale NSN MYU9RW6S972B <GO> * NOTE: Telecom Italia Should Alter Governance, Fossati Tells Messaggero NSN MZ8P2V6JIJUO <GO>

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To contact the editor responsible for this story: Daniele Lepido at +39-02-8064-4266 or dlepido1@bloomberg.net

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Campari Has Limited Upside from M&A/New Country Rollouts: BofAML 2014-01-14 07:23:16.823 GMT

By Francesca Cinelli Jan. 14 (Bloomberg) -- Doesn’t see major deals in S/T, highlights on-going integration of Appleton Rum coupled with operational challenges in core business. * Says Campari likely interested in picking up non-core brands from Beam; Suntory won’t need to make any disposals due to competitive overlaps because of limited presence in U.S., * Says positives (strong management, M&A track-record) more than priced in Campari shrs * Campari kept at underperform; PT EU5.6 * NOTE from yday: Suntory to acquire Beam for $16b {NSN MZCA006TTDSH <go>}

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To contact the editor responsible for this story: Francesca Cinelli at +39-02-80644-252 or fcinelli@bloomberg.net

After Hours Summary: QTM +14.8%, DRWI +8.6%, NLS +8.5%, BHE +3.1%, HLS +1.8%, BGFV -4.3%, BBW -3.1%, YUM -0.8% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: QTM +14.8%, DRWI +8.6%, NLS +8.5%, BHE +3.1%, HLS +1.8%

Companies trading higher in after hours in reaction to news: ABTL +12.3% (acquired AutoUSA subsidiary of AutoNation; expected to be accretive to Autobytel's 2014 results), DM +9.1% (announced it entered into the Seventh Amendment to its Third Amended and Restated Credit Agreement dated December 6, 2010), PTN +6.5% (stated its policy is not to comment on unusual market activity), FLR +1.9% (co and its joint venture with JGC was awarded an engineering, procurement and construction contract by Chevron Canada Limited), TWC 1.9% (confirmed proposed merger with Time Warner Cable (TWC)), NICE +1.3% (announced that for 2013 it surpassed $1 billion in bookings for the first time in its history)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: BGFV -4.3%, BBW -3.1%, WWW -2.4%, PRXI -1.8%, YUM -0.8%, MTN -0.3%

Companies trading lower in after hours in reaction to news: APU -4.7% (Heritage ETC, an affiliate of Energy Transfer Partners (ETP), to offer 8 mln AmeriGas common units), WDAY -2.0% (announced proposed follow-on offering of 6 mln shares), FULL -1.8% (announced public offering of 1.6 mln shares of common stock), PAL -1.4% (announced announces proposed financing: first tranch of $30 mln of 7.5% convertible unsecured subordinated debentures, second tranch of $20-45 mln of debentures and warrants), IHS -1.2% (announced 3.478 mln share secondary offering of common stock by Conscientia Investment Ltd.)

Asian Market Update: Equities slide as investors question the strength of recovery

***Economic Data*** - (JP) JAPAN NOV CURRENT ACCOUNT BALANCE: -¥592.8B V -¥368.9BE; ADJ CURRENT ACCOUNT: -¥46.6B (third consecutive deficit) V ¥27.9BE; TRADE BALANCE BOP BASIS: -¥1.25T V -¥1.23TE - (JP) JAPAN DEC BANKRUPTCIES Y/Y: -15.7% V -10.6% PRIOR - (JP) JAPAN DEC BANK LENDING EX TRUSTS Y/Y: 2.6% V 2.4% PRIOR; BANK LENDING INCL TRUSTS Y/Y: 2.3% V 2.2% PRIOR - (NZ) NEW ZEALAND DEC QV HOUSE PRICES Y/Y: 10.0% V 9.2% PRIOR (fastest pace in six years) - (NZ) NEW ZEALAND DEC RETAIL CARD SPENDING M/M: 0.6% V 1.0%E; TOTAL CARD SPENDING M/M: 1.0% V 0.2% PRIOR - (NZ) NEW ZEALAND Q4 NZIER BUSINESS OPINION SURVEY: 52 V 38 PRIOR (multi-year high) - (KR) SOUTH KOREA DEC EXPORT PRICE INDEX M/M: -0.3% V -0.8% PRIOR; Y/Y: -2.1% V -2.5% PRIOR; IMPORT PRICE INDEX M/M: +0.4% V -0.5% PRIOR; Y/Y: -3.5% V -4.9% PRIOR

***Observations/Insights*** - Time Warner Cable board formally rejects Charter Communications bid, deeming it "well below comparable transaction multiples". - Nikkei falls over 3% in afternoon trade, weighed down by stronger JPY and large decline in US indices. Separately, Japan posted a rise in current account deficit, prompting concern from cabinet officials. - PBoC was on the sidelines on open market operations for the 3rd week; Speculation over China 2014 GDP from analysts spanning a wide range - as low as 7.0% to as high as 8.6%. - US Q4 earnings focus turns to banks, with JPMorgan and Wells Fargo reporting results before market open.

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥250B in 1-3 yr JGB, ¥250B in 3-5 yr JGB, ¥400B in 5-10yr JGB and ¥2.5T in T-bills - (CN) PBoC won't conduct open market operations (OMO) in today's session (6th consecutive session of halted operations) - (CN) China Gold Association: China Nov gold production 44.5T v 39.8T m/m - financial press - USD/CNY: (CN) PBoC sets yuan mid point at 6.0930 v 6.0950 prior setting (record high setting for Yuan) - SLV: iShares Silver Trust ETF daily holdings fall to 9,894 tonnes (lowest since 9,890 on June 26th) from 9,954 tonnes

- USD/JPY and AUD/USD saw the largest moves among the USD majors, as both pairs consolidated some of the recent dollar weakness in the wake of poor jobs data. USD/JPY rose about 50pips from session-opening lows to as high as 103.50 before retreating from those highs, while AUD/USD fell over 30pips to $0.9020. Regional economic calendar is quiet until the Thursday release of Australia jobs data, and analysts appear to be divided on whether the unemployment rate will continue to edge higher toward 6%. Meanwhile, the focus turns to US retail figures in US session for confirmation of a tepid holiday season in December.

***Speakers/Political/In the Papers*** - (CN) 5 companies in China confirm to delay IPO listing after China Securities Regulatory Commission (CSRC) tightens IPO policies - financial press - (CN) Deutsche Bank sees China 2014 GDP as high as 8.6% - China Daily - (CN) CitiGroup: reiterates China 2014 GDP target 7.3% - (CN) UBS chief China economist: If China meets its major challenges properly, it can achieve 2014 GDP of 7.8%, up from expected 7.6% in 2013 - Shanghai Daily (update) - (CN) Several provinces in China release GDP expectations; Sees slower GDP growth rate in 2014 v 2013 - (CN) Fitch: Sees China 2013 GDP at 7.6% v 7.5% official target, sees 2014, 2015 GDP at 7.0% - Chinese press - (JP) Japan Econ Min Amari: need to focus on current account deficit - (KR) South Korea Trade Ministry: govt attempts to stabilize fx market against weaker Yen - financial press - (NZ) Westpac senior economist: Still believe that RBNZ will start raising OCR in March; To use next meeting on Jan 30th to signal rate hike - NZ press

- (US) Follow up: House, Senate appropriators unveil $1T US spending measure; would fund govt through to Sept 30

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -2.4%, S&P/ASX -1.5%, Kospi -0.2%, Shanghai Composite +0.6%, Hang Seng -0.2%, Mar S&P500 +0.1% at 1,816, Feb gold flat at $1,251, Feb crude oil +0.2% at $91.97/brl

US markets: - TWC: Board unanimously rejects 3rd proposal from Charter Communications; Proposal well below comparable transaction multiples +1.9% afterhours - BHE: Expects EPS, Rev to exceed high-end of Q4 guidance of $0.34-0.38 v $0.36e, Rev $685-715M v $677Me; +3.1% afterhours - FLR: Awarded order with JGC Corp from Chevron for LNG project in Canada; Total order to be around ¥500B - Nikkei News; +2.5% afterhours - HLS: Guides FY13 EPS higher to $2.50-2.52 ($2.43-2.46 prior); EBITDA higher to $542-545M ($533-538M prior); +1.8% afterhours - REGN: Enters into agreement with Bayer to develop new treatment option for wet age-related macular degeneration; REGN to receive $25.5M upfront payment; +0.1% afterhours - YUM: Reports Dec China SSS +2.0% v +1.0% m/m; -0.8% afterhours

Notable movers by sector: - Consumer Discretionary: China LotSynergy Holdings 1371.HK +12.0% (extends cooperation with China Mobile); FAW Cars 000800.CN +4.6%, Dongfeng Motor 600006.CN +7.0%, Shenyang Jinbei Automotive 600609.CN +10.0% (China issues statement on military-use vehicles); Great Wall Motor 2333.HK -11.5% (delays launch of Haval H8 Model) - Financials: Jiangsu Phoenix Property Investment 600716.CN +4.0% (strategic alliance); Shaanxi International Trust 000563.CN +2.2% (prelim FY13 results); Citychamp Dartong 600067.CN +3.6% (FY13 guidance) - Materials: Inner Mongolia Yuan Xing Energy 000683.CN +2.8% (FY13 guidance); Forge Group FGE.AU -17.6% (expects additional profit write-down); Regis Resources RRL.AU -5.5% (Q4 gold production) - Technology: Sumavision Technologies 300079.CN +5.7% (proposes special dividend); Ingenic Semiconductor 300223.CN +4.9% (positive comment from Chinese press); Sun King Power Electronics Group 580.HK +10.7% (positive profit alert); Synnex Technology International Corp 2347.TW +5.7% (Dec results) - Healthcare: Livzon Pharmaceutical Group 000513.CN +3.1% (prelim FY13 result)

Google to Buy Nest Labs for $3.2 Billion Google agreed to buy Nest Labs for $3.2 billion in cash, extending the company's reach into the home. Nest Labs makes household devices like thermostats and smoke alarms that can be controlled by an app.