(Kepler-Cheu) Iliad Reduce : Bouygues Telecom set to fight back on fixed

>>> Bouygues Telecom set to fight back on fixed
* Bouygues Telecom announces price war in fixed
* The end of the fixed broadband oasis
* A move against Iliad
* That reinforces our Reduce rating


*Bouygues to initiate a price war in fixed
In a very aggressive interview with Le Figaro, Martin Bouygues said he's going to start a price war in fixed and will offer a discount of EUR12.5 (per month) from 2014 (annual savings of EUR150 for consumers). He says he has been working for a year on the launch of a new offer to be announced in 2014, which will provide new innovations and services. He ends with a very defiant remark, saying "I want to see if Xavier Niel can do it too". Martin Bouygues also criticises Arcep for remaining silent in the ongoing 4G debate.

* The end of the stable fixed market
Over the last years, the fixed broadband segment had been pretty stable as operators have tried to ring fence their fixed broadband cash flow in light of the price competition in the mobile segment, but ARPU´s have been stable or have even shown some growth (Iliad and Numericable around +1%). However, this announcement could imply a spill-over into the fixed segment

*A move against Iliad
Iliad is using its fixed broadband cash flow to be quite disruptive in mobile. Bouygues and the other players had hoped 4G could provide them with a lever, but Free Mobile’s decision not to charge extra for 4G (and raise the data allowance) might have been a big blow to Bouygues (the one that made the strongest push on 4G). Now, Bouygues may have decided that it needs to inflict some damage on Iliad´s cash cow (we also note the animosity between Xavier Niel and Martin Bouygues).

*Our negative view is reinforced
To some extent, Bouygues (and SFR) as a mainly mobile player has less to lose. On fixed Bouygues has 1.941m customers vs 5.6m for Iliad. Bouygues can also gain from the volume effect. But today Iliad generates 100% of its cash flow from fixed broadband (that uses to fund mobile). We estimate every EUR1 ARPU decline would have a 6% impact on EBITDA.

(BFW) Mediaset Raised on Better Macro; Pay-TV News Cherry on Cake: JPM

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Mediaset Raised on Better Macro; Pay-TV News Cherry on Cake: JPM 2013-12-20 08:23:08.867 GMT

By Blanche Gatt Dec. 20 (Bloomberg) -- Mediaset upgraded to overweight from neutral at JPMorgan on optimism about Euro area economy; PT raised to EU4.3 from EU3.7. * JPMorgan sees Mediaset ad rev. rebounding in 2014 after hitting “trough levels” in 2013 * Says co. has successfully cut operating costs, increased operating leverage * Potential development of single, stand-alone Pay-TV co. would be “cherry on the cake,” JPMorgan says * Potential spin-off could add EU0.4 to new PT of EU4.3 * Shares up as much as 3.1% today, extending yday’s 16% jump; vol. 71% of 3-mo. daily avg. at 9:15am CET * Mediaset has 6 buys, 10 holds, 10 sells; avg. PT EU3.4 implies upside of 0.6%; up 118% YTD: data compiled by Bloomberg * NOTE yday: Mediaset Jumps; Banca Akros Lifts to Hold on Pay- TV Potential * NOTE Dec. 18: Mediaset Mulls Turning Pay-TV Activities Into Standalone Co.

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

--Editor: James Cone

To contact the reporter on this story: Blanche Gatt in London at +44-20-7392-0351 or bgatt@bloomberg.net

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

>>> ECB's Weidmann: Reiterates risk that gov't and private sector get used to ch

ECB's Weidmann: Reiterates risk that gov't and private sector get used to cheap money, ECB ready to act if needed
- Reiterates low interest rates have side effects that increase the longer rates stay low.
- Reiterates deflation risk is very limited.
- Skeptical of central banks trying to force banks to lend to certain sectors and regions.
- If the ECB does more LTROs, it should discourage carry trades related to sovereign debt. >- Stress test should consider sovereign bond risk.
- Euro crisis not over yet.
- Bitcoin not an alternative to money

>>> Brokers Upgrades & Downgrades

>>> Up
*ASHMORE RAISED TO BUY VS NEUTRAL AT UBS
*MEDIASET RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*MEYER BURGER RAISED TO BUY VS NEUTRAL AT UBS
*MEYER BURGER RAISED TO NEUTRAL VS UNDERWEIGHT AT HSBC
*SMITH & NEPHEW RAISED TO BUY VS NEUTRAL AT BOFAML
*TELENET RAISED TO BUY VS NEUTRAL AT GOLDMAN

>>> Down
*ALGETA CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*DOMINO’S PIZZA CUT TO NEUTRAL VS BUY AT GOLDMAN
*POLYMETAL CUT TO SELL VS NEUTRAL AT CITI
*POSTNL CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*SAS CUT TO NEUTRAL VS BUY AT CITI
*TEVA CUT TO STRONG SELL VS SELL AT S&P CAPITAL IQ

>>> PT Change
*SMITH & NEPHEW PT RAISED TO 980P VS 775P AT BOFAML

>>> Initiation
*DUFRY RESUMED NEUTRAL AT GOLDMAN
*MERLIN ENTERTAINMENTS RATED NEW NEUTRAL AT HSBC, PT360P
*UNIQA INSURANCE RATED NEW NEUTRAL AT JPMORGAN, PT EU11.35


>>> Country Sector Call
>> Stock
*ELECTROCOMPONENTS ADDED TO UBS’S MOST PREFERRED LIST
*HERITAGE OIL ADDED TO UBS’S MOST PREFERRED LIST
*SERCO REMOVED FROM MOST UBS’S PREFERRED LIST
>> Sector
>> Country
*UNITED KINGDOM ’AAA/A-1+’ RATINGS AFFIRMED AT S&P
*IRELAND RATINGS AFFIRMED AT S&P; OUTLOOK REMAINS POSITIVE

>>> What to look at

US Market closed lowers with Nasdaq leading the move (-0.29%), best performers were the materials +0.3% and worst was financials down 0.7%...no much action...AAPL Coninue to trade lower (-1.2%)...MidCap were week too with Russel trading lower by 0.8%...Gold & Silver were also underpressure...volume @ 688mil. Shares still weak...VIX @ 14.15 +2.54%...NKE -1.2% on Numbers in after hours (watch ADS & PUM today in Europe)...Even with a weaker JPY, Japan didn't managed to closed much higher...still better than China that losing 1.91% as China money rates climb...Gold climbed in Asia after being on historical lows in US yest...European Union Downgraded at S&P; Loses Top Credit Rating...

Eur$ 1.3630 S&P Fut +0.12% European fut +0.46%

*UNITED KINGDOM ’AAA/A-1+’ RATINGS AFFIRMED AT S&P
*IRELAND RATINGS AFFIRMED AT S&P; OUTLOOK REMAINS POSITIVE

>>> Keep an eye on :
- ADS GY : Nike sees FY14 rev growth at a high single digit to low double digit rate
- AF FP : KLM May Intensify Cooperation With Brazil's GOL, Telegraaf Says
- APRI US : Apricus says France’s ANSM grantednational phase approval to Vitaros cream for treatment ofpatients with erectile dysfunction.APRI up 6.9% post-mkt
- AZA IM : Alitalia may see Etihad take stake by March 2014; Etihad confirms negotations are taking place
- BBVA SM : BBVA Says It’s Taking Part in Corpbanca Sale Process
- EN FP : Bouygues Telecom Plans Fixed-Internet Price Cuts, Figaro Says
- BKIA SM : Bankia Parent BFA Seeks to Give Up Operating as a Bank
- BVI FP : Bureau Veritas Says Announcement, Conference Call Suspended
- CA FP : Carrefour in Talks With Partners for India Retail, Standard Says
- CLS1 GY : McKesson Has About 50.72% of Celesio Shr Capital for Deal
- DBK GY : Deutsche Bank, Units Outlook to Negative, Affirmed by Moody’s
- HBH3 GY : Hornbach Holdings 3Q Net 16.3m vs EU6.6m, Sticks to Outlook
- HELN SW : Helvetia Group Raises Stake in Nationale Suisse by 5.27%
- IM NA : Imtech Sees Potential Non-Cash Margin Impact From Germany Plan
- LXS GY : Lanxess denies possible sale of entire rubber chemicals division
- MOBB BB : Mobistar Gets EU120m Credit Line From Parent to Pay for Spectrum
- NOVN VX : Novartis recalls millions of sample drugs over contamination concerns
- PVA SM : Pescanova Net Loss Widened to EU775.6 Million in 2012
- REL LN : Elsevier Fights Harvard, Others on Publishing: Wash. Post Link
- RESTA FH : Restamax Lowers Profit Guidance for 2013 Ebitda, Sales
- RIO LN : Rio Tinto CEO Says Company Still Focused on Reducing Capital
- SAS SS : SAS Considers Issuing Preference Shares, CEO Tells Berlingske
- SCHP VX : Schindler to Take Further Impairment on Hyundai Elevator Stake
- SGO FP : Saint-Gobain to Sell U.S. Fiber Cement Siding Unit to Elementia
- STL NO : Statoil Cuts Sverdrup Resource Estimate to 1.8b-2.9b boe
- TEC FP : Technip Forms Five-Year Deepwater Market Joint Venture in China
- TCH FP : Technicolor Closes Film Laboratory in California: L.A.Times Link
- TEF SM : Telefonica Has No Agreement With BlackRock Over Telecom Italia
- THR BB : Meditor Capital Management Cuts ThromboGenics Short Bet to <0.5%
- TIT IM : Tel. Italia Reserves Right to Take Action Against Access Fee Cut
- HO FP : Thales Wants to Double German Sales in 10 Years, Echos Says
- WPP LN : WPP Completes Purchase of Majority Stake in Kenya’s ScanGroup

>>> Nike beats by $0.01, reports revs in-line

Nike beats by $0.01, reports revs in-line (78.26 -0.29)
Reports Q2 (Nov) earnings of $0.59 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.58; revenues rose 8.0% year/year to $6.43 bln vs the $6.44 bln consensus.
  • Futures orders at end of Q2 (ex-FX) +13% vs street expectations of ~10% and +7% last year.
  • Revenues for the NIKE Brand were $6.1 billion, up 9% on a currency neutral basis, with growth in every product type, geography and key category.
    • Revenues for Converse were $360 million, up 11% on a currency neutral basis, driven by strong performance in our largest owned markets: North America, the United Kingdom, and China.
  • Inventories for NIKE, Inc. were $3.7 billion, up 11% from November 30, 2012. NIKE Brand wholesale unit inventories increased 7% to support future demand. Changes in foreign currency exchange rates and product cost drove an ~4 % point net increase in NIKE, Inc. inventory growth.
  • Gross margin increased 140 basis points to 43.9%. Gross margin benefitted from a shift in the mix of the Company's revenues to higher margin products and businesses, higher average prices, easing raw materials product input costs and continued strength in the higher margin Direct-to-Consumer business. These benefits were partially offset by unfavorable changes in foreign exchange rates and higher labor product input costs.
  • During Q2, co repurchased a total of 5.5 million shares for ~$402 million as part of the four-year, $8 billion program approved by the Board of Directors in September 2012.

European Union Downgraded at S&P; Loses Top Credit Rating

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BFW 12/20 05:23 *EUROPEAN UNION CUT TO AA+ FROM AAA AT S&P, OUTLOOK STABLE BFW 12/20 05:18 *S&P: EUROPEAN UNION TO AA+/STABLE FROM AAA/NEGATIVE

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European Union Downgraded at S&P; Loses Top Credit Rating 2013-12-20 05:27:44.738 GMT

By Grant Clark Dec. 20 (Bloomberg) -- Long-term rating cut to AA+ from AAA; outlook stable from negative: statement. * Overall creditworthiness of 28 members has declined * Budgetary negotiations have become more contentious, signaling rising risks to support of EU from some members Statement: {NSN MY3B3V3PWT1D <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: Grant Clark at +65-6212-1101 or gclark@bloomberg.net

US After Hours

After Hours Summary: RHT +10.9%, AIR +0.7%, KUTV -19.7%, TIBX -14.4%, NKE -1.1% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: RHT +10.9%, AIR +0.7%

Companies trading higher in after hours in reaction to news: APRI +7.4% (announced national phase approval for erectile dysfunction cream - Vitaros in France), TRAK +6.7% (announced agreement to acquire Dealer.com for 8.7 mln shares of common stock and $620 mln in cash), JNY +4.1% (to be acquired by Sycamore Partners for $15 per share in cash), CIM +2.6% (announced special dividend of $0.20 per share), GENT +2.4% (to be acquired by Jazz Pharmaceuticals for $57 per share in cash tender offer), EXEL +1.7% (COMETRIQ (cabozantinib) received positive opinion from CHMP for progressive, unresectable locally advanced or metastatic medullary thyroid carcinoma)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: KUTV -19.7%, TIBX -14.4%, NKE -1.1%, BTU -0.7%

Companies trading lower in after hours in reaction to news: IDCC -11.7% (co lost patent case against Nokia, Huawei, and ZTE), DHT -5.4% (filed for ~28.13 mln share common stock offering by selling shareholders), NAVB -3.7% (European Medicines Agency (EMA) has provided updated Day 180 feedback and has elected to continue the assessment of the Marketing Authorization Application (MAA) for Lymphoseek (technetium 99m tilmanocept) Injection), BSPM -2.8% (filed for $35 mln mixed securities shelf offering)