(GS) US Oil : 2014 Outlook: A new barbell – bullish refiners and XOM; XOM to Buy

2014 Outlook: A new barbell – bullish refiners and XOM; XOM to Buy, MRO to Neutral

*A new barbell, of sorts: Refiners + XOM
As we look ahead to 2014, we remain bullish refiners given the potential for wide (and volatile)
Brent-WTI crude oil spreads. However, our outlook for domestic oils is increasingly mixed,
given major restructuring are mostly in the past and considering downside risks to oil prices.

*Macro: Brent (=/-) and Brent-WTI (+/=)
Brent oil (=/-): Our base-case forecasts remain unchanged at $106.5/bbl for 2014E and $100/bbl for 2015E-2017N. However we see downside risks given improved non-OPEC supply ex-NAM, the potential for MENA disruptions to ease, and concern over EM demand. We will closely monitor all three areas.

*Brent-WTI (+/=): We believe it is premature to
call for “saturation” of light crude oil throughout the United States in 2014, though the possibilityhas increased for the 2015-2016 time frame. We expect Brent-WTI spreads to remain wide and volatile around our $10/bbl normalized forecast in
coming years to the benefit of MidCon/Gulf Coast refiners that can process light crude oil.

*Top picks and ratings changes
We upgrade XOM to Buy and downgrade MRO to Neutral as we see greater risk-adjusted upside
in super majors at this time and prefer to add a defensive element to our list of top picks. Among domestic oils, we keep Buys on OXY and SU for idiosyncratic reasons.

*Our Buy-rated refiner favourites remain HFC (CL),
MPC, DK, WNR, ALDW, and NTI, all of which have MidCon or Gulf Coast exposure to light crude oil spreads.

*Updated estimates, target prices
We have updated 2013E-2017N EPS estimates and target prices for our integrated/domestic oils and refiners to reflect a 4Q2013 commodity price MTM and generally minor company-specific changes. Our base-case Brent oil deck is unchanged. We now forecast $10/bbl Brent-WTI for 2014E-2017N versus $7/$10/$10/$9 before. We are now 8%/9% above consensus for integrated/domestic oils in 2014E/2015E and 23%/18% above for C-Corp refiners, respectively.

(BN) *GERMAN COMMISSION: GERMANY SHOULD SELL DEUTSCHE TELEKOM STAKE

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BN 12/16 10:14 *GERMAN MONOPOLY COMMISSION CITES POSSIBLE CONFLICT OF INTEREST BN 12/16 10:12 *GERMAN COMMISSION: FEW, LARGE TELCO PLAYERS MEAN HIGHER PRICES BN 12/16 10:11 *GERMAN COMMISSION SAYS FEWER PLAYERS WOULD LESSEN COMPETITION BN 12/16 10:11 *GERMAN MONOPOLY COMMISSION COMMENTS IN PRESS STATEMENT IN BONN BN 12/16 10:10 *GERMAN COMMISSION AGAINST FEW, LARGE PLAYERS IN TELECOM MKT

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*GERMAN COMMISSION: GERMANY SHOULD SELL DEUTSCHE TELEKOM STAKE 2013-12-16 10:14:04.344 GMT

--CORNELIUS RAHN

-0- Dec/16/2013 10:14 GMT

(Exane) Food Retail . Metro & Dia Upgraded - full note attached

Metro’s (= from -) emerging self-help and DIA’s (+ from =) greater margin resilience mean we raise each rating one notch. Fundamentally, we back the capital-light, proximity-discount formats (Jeronimo and DIA). UK brick & mortar grocery is considered ‘no-go’ – we sympathise, and expect little respite over Christmas, but think modest margin cuts and capex reduction in 2014 will improve the UK grocers’ relative appeal. They represent the ‘contrarian trade’, we play it through Tesco (+).

* UK margins will be pressured but capex cuts to offset
We expect Tesco will break from its 5.2% margin ‘guidance’ at its FY results in April, investing more in food, partially recouping the monies from an improved non-food offer. It will be about improving price perception and trust, not collapsing the industry P/L, but will be sufficient to take several tens of bp from quoted UK grocers’ margins. In compensation, we expect a lessening in space addition. Again we expect Tesco will lead, further curtailing its capex, with Morison following. With margin concerns already priced-in, greater capital discipline would be taken well.

* Continental grocers upping capex, often from a leveraged position
In contrast to the UK, the continental grocers need to spend more, having underinvested in the store fabric, expansion and multi-channel. The issue is that some operators’ balance sheets remain somewhat constrained against an industry backdrop where leverage needs to reduce in a low growth, multi-channel world.

* Minority listings and capital raises in vogue – who else may raise funds?
One solution to fill the funding gap, and demonstrate value is to sell minority stakes or raise new money. Carrefour has already flagged it will do so in Brazil and China, and Metro will do likewise in Russia. With these deals arguably ‘priced-in’, the question is who else will raise funds? Casino needs to delever and could sell cDiscount or its Thai business. Tesco needs to cut its international exposure to focus on fixing the UK.

* Greater need for differentiation and customer insight in a multi-channel world
Winning retailers increasingly will have ‘capital-light, P/L heavy’ propositions and ‘big data’ insights to personalise offerings and give consistent service across all shopping channels. ‘Bricks’ still matter but trust is increasingly key for a demanding consumer.

* Low food CPI should help gross margins, unless competition rises…France?
Food CPI will be low in H1 2014. That may ease ‘wage-squeeze’ but likely means a relatively soft top-line for the grocers. Gross margins should benefit unless competitive tension is elevated. The UK is ‘priced’ for this. France could be tougher as Leclerc responds to a recovering Carrefour. A recovering macro eases US tensions.

* Buy JMT, Ahold, DIA, Tesco, Casino…avoid Delhaize, Booker, Colruyt
Jeronimo and DIA sport the best capital-light models and Ahold best balances capital discipline and growth whilst evolving an on-line offering. We re-iterate our O/P ratings on JMT and Ahold and raise DIA to O/P, better recognising the potency of its franchise model. Tesco faces challenges but the shares know it. We think margins will erode less than feared, capex will come down and international assets will be sold – reiterate O/P.

* In contrast, Delhaize will need another big margin reset, and Colruyt and Booker are
just too expensive. Metro’s formats remain constrained but emerging self-help means we raise our rating to Neutral. We think competition in France will be tougher in 2014, keeping us Neutral on the well-travelled Carrefour equity. EM exposure and scope to deleverage keeps our interest in Casino.

(UBS) European Oil & Gas : 2014 Outlook: Remaining cautious

* Expecting inertia to prevail over mean reversion
With the macro not expected to improve, a lengthening track record of patchy execution across the value chain, and no obvious big valuation call we see little reason for the European Oil & Gas sector to reverse its underperformance of 2012 and 2013.

* Integrateds lack compelling bottom-up appeal
There is an absence of strong stories and continued failure to meet targets or expectations. While underperforming, the sector has risen with the market and is closer now to fair value. The 1Q reporting/outlook season may be important in re-setting targets and strategies as they relate to shareholder value but we would recommend waiting to see. Our top pick is BG Group (Buy, PT £14.00).

* Selective in E&Ps; negative in refiners
Faced with a flat/declining oil price, increased competition, cooling M&A, and project execution issues, clearly the environment is challenging for E&P equities. However the best should still be able to grow NAV and deliver returns in 2014. Our top picks share common threads of valuation upside, frontier drilling and/or exposure to Kurdistan: Afren (Buy, PT £2.00); Genel (Buy, PT £11.20); Africa Oil (Buy, PT SKr72.5); Lekoil (Buy, PT £1.10). We expect some respite from the low refining margins of 3Q/4Q13 but downstream conditions to remain under pressure. We see consensus expectations as risked to the downside and valuations as uncompelling. Our top pick and only buy
remains Motor Oil (Buy, PT €9).

* Cautious on Services
In the long term, we believe the case for oil services growth remains strong. However, in the near term, contract delays and a greater focus on capital discipline and value for money from the integrateds should impact earnings and sentiment across the sector. We think this will likely play out positively for the shares of Integrateds versus Services in 1Q14 at least. We prefer companies with high quality asset bases and good backlogs – this drives our positive view on Technip (Buy, PT €95) and PGS (Buy, PT NKr105). We also like Kentz (Buy, PT 730p) for its good earnings visibility and the earnings accretion from the Valerus transaction. We see the OCTG market as structurally challenged, with Tenaris (Sell, PT $41) our least preferred name in the sector.

(BFW) Vivendi 5% Holder Bollore Seems Poised to Control Co.: Bernstein

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Vivendi 5% Holder Bollore Seems Poised to Control Co.: Bernstein 2013-12-16 08:15:28.996 GMT

By Blanche Gatt Dec. 16 (Bloomberg) -- Vivendi’s appointment of Havas’ Herve Philippe as new CFO means co. could be “controlled” by 5% shareholder Vincent Bollore, Bernstein says in note. * Bernstein says Philippe will be seen as a “protege” of Bollore * Philippe is “low profile” and familiar to Bollore, which means Bollore is “effectively” in a position to control co. * Mkt would probably be “unhappy” if Bollore pushed for Vivendi to acquire Havas * Reiterates outperform, PT EU24 * 16 buys, 14 holds, 2 sells; avg. PT EU20 implies upside of 11%; shrs up 6% YTD: data compiled by Bloomberg * NOTE Dec. 13: Vivendi CFO Appointment Won’t Change Co.’s Direction: Liberum

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

--Editor: Andrew Rummer

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

>>> JP Morgan to ban staff from instant messaging services

JP Morgan to ban staff from instant messaging services
Clampdown on chats, used across the industry by bankers who were involved in rigging Libor and currency exchange rates, could be enforced as early as this week 

America's biggest bank, JP Morgan, is preparing to ban staff from using any kind of online messaging service other than traditional email.
The clampdown could be formalised as soon as this week and is likely to include services such as Bloomberg’s messaging platform, which has long been a mainstay of bankers’ communication.
JP Morgan has been considering such a move following a series of thorny legal cases against banks, in which regulators have homed in on instant messaging services as potential evidence.
Online chats were used across the industry by bankers who were involved in rigging Libor and currency exchange rates.
In its investigation into currency manipulation, the UK Financial Conduct Authority unearthed chatrooms for traders from different banks, with names such as “the Cartel”, “The Bandits’ Club” and “The Dream Team”. These chatrooms are thought to have acted as a forum for the $5 trillion (£3 trillion) scandal.
JP Morgan wants to stop traders committing incriminating messages to print. However, it also wants to scrap a forum often hijacked by staff for bragging games of one-upmanship.
According to insiders, the bank has been mired in red tape, trying to demonstrate to regulators that some of the messages posted by its staff are bragging without any real foundation.
Jamie Dimon, JP Morgan’s chief executive, has already warned staff to be “vigilant” about the information they post online, telling them: “Don’t exaggerate, don’t ruminate, don’t bulls**t.”
JP Morgan is not the only bank heading in this direction. Deutsche Bank has already stopped certain groups of traders from online chatting and Citigroup, Barclays, UBS and the Royal Bank of Scotland are reported to be considering bans of their own.
JP Morgan could still backtrack on its decision but it is understood that the bank is preparing to take the toughest line possible. If it does so, the rest of the banking industry is likely to follow in its slipstream, heralding a change in banking culture and landing a blow to companies such as Bloomberg.
The media business has already had difficulty convincing banks that its $20,000-a-year terminals are safe to chat on, following a security breach earlier this year. Bloomberg was forced to apologise to customers after its journalists used the machines for “spying” on users.

>>> T-Mobile US might attract Vodafone or Dish as rival bidders to Sprint

T-Mobile US might attract Vodafone or Dish as rival bidders to Sprint

Sprint Corporation is considering a takeover of T-Mobile US, the US telecommunications unit of German Deutsche Telekom. It might attract the UK Vodafone or the US Dish as bidders in addition to Sprint Corporation. Without citing a source the German daily Rheinische Post named Vodafone as a possible bidder, while another German daily, Sueddeutsche Zeitung speculated that Dish is a possible bidder.

Frankfurter Allgemine said Sprint has not yet decided whether to submit an offer. Wall Street Journal last week reported speculation that Sprint is preparing a USD 20bn offer which could be launched in the first half of 2014.


Source Rheinische Post, Sueddeutsche Zeitung, Frankfurter Allgemeine Zeitung