(BFW) Tullow Has Significant Onshore Exploration Upside, UBS Says

TLW +3.3% on this upgrade

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Tullow Has Significant Onshore Exploration Upside, UBS Says 2014-04-03 07:24:26.168 GMT

By Nadine Skoczylas April 3 (Bloomberg) -- Tullow up as much as 3.6%, in 3rd day of gains; best-performer in Stoxx 600 Oil & Gas index. * UBS writes that Tullow’s investment case has shifted, now seen with onshore exploration upside; raises stock to buy, cuts PT from 925p to 900p (20% upside) * Helped by available opportunities, change in competitive environment and some reduced risk tolerance * Development portfolio of Tullow “high quality,” affordable * Shares down 8.8% YTD vs 1.2% gain in SXEP * Of 34 ratings, 18 are buy, 14 hold and 2 sell; avg. PT 1,080p: Bloomberg data

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To contact the reporter on this story: Nadine Skoczylas in Jerusalem at +972-2-640-1103 or nelsibai@bloomberg.net To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net

(Citi) Food & HPC 1Q14 Preview

* Soft 1Q14 largely expected — Most companies offered cautious commentary with
their 2014 guidance in the recent 4Q reporting season, particularly with reference to
the first quarter of the year. The tone was echoed at CAGE, with companies
flagging slower EM demand, limited signs of a DM pick-up, fewer trading days (on
the timing of Easter) and bad weather, especially in the US. Combined with further
FX-driven downgrades to EPS, we do not expect a particularly good quarter for the
group as a whole, although we think this is quite well anticipated.

* Large-cap Food — Nestlé is likely to post the strongest organic growth amongst
the Food companies at 4.2% and the market will focus on the credibility of the
growth being 2H14-weighted. Unilever’s 1Q14 is likely to contain few surprises with
guidance for 1Q to be at the low end of the 3-5% range given for the full year. The
market will look for whether the recovery in EM growth in 4Q13 has been sustained.
Danone’s growth will be significantly held back by ongoing headwinds in China, we
forecast organic growth of 2.4% with Baby Nutrition -10%. ABF’s 1H14 results are
unlikely to surprise given a detailed pre-close; we forecast EPS of 45p (+9%) and
expect the market to focus on the extent of margin expansion for Primark.

* Large-cap HPC — The HPC companies continue to be slightly more resilient to the
EM slowdown than companies in other staples categories, but we still expect a
slight moderation in EM growth across the board. As a result, we prefer companies
where we see a DM offset in the current quarter and we see Beiersdorf (turnaround
sustaining its momentum in Western Europe) and Reckitt (further Health strength in
ENA, despite the difficult US flu comp) as best placed to deliver resilient growth.

* Changes to estimates & price targets — We make minor changes to estimates to
reflect updated currency assumptions. For ABF, Primark’s stronger LFL and margin
performance leads us to raise our FY14E EPS by 2% despite lowering out Sugar
estimates. However, lower Sugar estimates and currency headwinds lead us to
lower our FY15E EPS by 2%. We update and roll forward our SOTP valuation to
use ABF’s FY15E divisional mix. In valuing Primark we now apply a 20% premium
to Inditex to reflect the accelerating margin trajectory, as well as the high visibility of
~20% profit growth in the medium term. Our TP increases to £30.

(BFW) Kingfisher Says in Exclusive Talks to Buy Mr Bricolage

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BN 04/03 06:03 *KINGFISHER SAYS TOTAL ENTERPRISE VALUE IS AROUND €275M BN 04/03 06:03 *KINGFISHER TO BUY MR BRICOLAGE AT AGREED PRICE/SHR OF EU15 BN 04/03 06:02 *KINGFISHER TO BUY 26.2% OF MR BRICOLAGE FROM TABUR FAMILY BN 04/03 06:02 *KINGFISHER TO BUY 41.9% OF SHR CAPITAL OF BRICOLAGE FROM ANPF BFW 04/03 06:01 *KINGFISHER IN EXCLUSIVE TALKS TO BUY MR BRICOLAGE BN 04/03 06:00 *KINGFISHER KGF EXCLUSIVE TALKS TO BUY MR BRICOLAGE

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Kingfisher Says in Exclusive Talks to Buy Mr Bricolage 2014-04-03 06:08:02.840 GMT

By Cormac Mullen April 3 (Bloomberg) -- Kingfisher says has entered into exclusive negotiations with principal shareholders of Mr Bricolage to acquire their shareholding. * Says would acquire 41.9% of share capital from ANPF, 26.2% from Tabur family at agreed price per share of EU15 * Note Mr Bricolage closed yday at EU13.37 implying ~12% premium * Says overall enterprise value would be ~EU275m including net debt * Says whole process likely to take until end of Kingfisher’s 2014/2015 financial year * Says binding agreement would be entered into depending on outcome of meetings of French operating businesses of Mr Bricolage, Kingfisher with respective works councils

Link to Statement:{NSN N3FY0I3HHEDC <GO>} Link to Company News:{KGF LN <Equity> CN <GO>} Link to Company News:{MRB FP <Equity> CN <GO>}

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To contact the editor responsible for this story: Cormac Mullen at +353-1-523-9526 or cmullen9@bloomberg.net

>>> What to look at today - 03/04/2014

US MArket Closed higher to new records, financials (+0.1%) lagged while the discretionary sector (+0.7%) finished among the leaders, volume were below average @ 640mil shares...VIX @ 13,09 Unchanged...Brazil raised rates for the 9th time in the current tightening cycle, meeting expectations of a 25bp hike to 11%... Shanghai Composite has reversed from the higher open, as soft non-manufacturing PMI prints appear to overshadow the "targeted stimulus" announced
by policymakers overnight. Rail names rallied (1186 HK+8.9%, 390 HK +6.7% 1766 HK +3.7%) after China Cabinet unveiled accelerated investment in the sector along with tax reduction for small companies. However the index retreated, as both HSBC Composite Services PMI and non-manufacturing official PMI fell 0.5pts in March. HSBC chief economist noted that "combined with the weaker manufacturing PMI reading, the underlying strength of the economy is softening... which should ultimately weigh on the labour market." Nikkei+1.08%...HS+0.2%...Shanghai-0.65%

Eur$ 1.3760 S&P -0.05% European Future -0.616%

Keep an eye on :
- AZA IM : Alitalia may reach agreement selling 40% stake to Etihad by end of week
- BARN SW : Barry Callebaut 1H Sales Match Estimate, Confirms Targets
- BMPS IM : Monte Paschi New Shareholders to Nominate CEO, Stampa Says
- CSGN VX : Credit Suisse Says Kielholz, Brabeck To Step Down From Board, CHF468M Charge Primarily for U.S. Probe
- DNLM LN : Dunelm 3Q LFL Sales, Gross Margin Beat Ests.
- DPW GY : State Is Holder Like Any Other: Dt Post CEO Tells Handelsblatt
- ENI IM : Mozambique May Approve Eni Stake Sale of Gas Field: Reuters Link
- GSZ FP : GDF Suez Favorite for French Sea-Based Wind Power Tender: Echos
- HMB SS : H&M Says It’s Testing Markets in China’s 2nd, 3rd-Tier Cities
- ISG IM : Isagro Sees 2014 Rev. EU152m, Ebitda EU14.8m; Dividend in 2016
- JEN GY : UBS Placing 4.88m Jenoptik Shares, Terms Show
- LHA GY : Lufthansa CEO Franz Hopes for Quick Deal With Pilots: Bild
- MMB FP : Lagardere Sells 10 Magazines to Reworld Media, Rossel: Echos
- MRB FP : *KINGFISHER TO BUY MR BRICOLAGE AT AGREED PRICE/SHR OF EU15, SAYS TOTAL EV IS AROUND €275M
- KN FP : Natixis to Increase Japan Staff by 50% in Asian Expansion Push
- 1913 HK : Prada’s Bertelli Doesn’t See China Luxury Market Slowdown: Echos -6.88% in HK
- RECIB SS : Recipharm IPO Price Set at SEK78/Shr; Gross Proceeds of SEK815m
- RXL FP : Ray Investment Selling 27m Rexel Shrs in ABB
- SAN FP : Sanofi Chief Expects Strong Growth in Africa: Reuters Link
- TEF SM : Telefonica/E-Plus Deal Said to Get 2 Weeks More to Make EU Offer
- TLSN SS : TeliaSonera CEO Says ‘Not Ruling Out’ Tele2 Norway Assets
- TPL LN : Tethys to Export Kazakh Gas to China From January, Chairman Says
- VASTN NA : *VASTNED TO SELL UP TO EU110M OF CONVERTIBLE BONDS
- VIV FP : Vivendi Says Bailiff Attempted to Enter Its Offices Over SFR
- VOD LN : Vodafone to Open 150 Shops, Add 1,400 U.K. Jobs Over 12 Months
- WFT SW : Weatherford Board Approves Domicile Move to Ireland (Earlier)

>>> Brokers Upgrades & Downgrades - 03/04/2014

>>> Up
*ASOS RAISED TO HOLD VS SELL AT SOCGEN
*MITCHELLS & BUTLERS RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*TULLOW OIL RAISED TO BUY VS NEUTRAL AT UBS
*VTB RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*888 HOLDINGS RAISED TO OVERWEIGHT AT MORGAN STANLEY

>>> Down
*DEUTSCHE BANK CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*HSBC CUT TO HOLD VS BUY AT INVESTEC
*PERNOD RICARD CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*PRADA CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE; PT HK$63
*PRADA CUT TO SELL VS NEUTRAL AT BOCOM INTL, PT HK$52 VS HK$56
*SOLVAY CUT TO NEUTRAL VS BUY AT UBS
*STADA CUT TO SELL VS HOLD AT BERENBERG
*TRAKYA CUT TO UNDERPERFORM VS NEUTRAL AT BOFAML

>>> PT Change
*Atlantia PT Raised to EU18 vs EU17 at RBC
*PRADA PT CUT TO HK$60 VS HK$74 AT JPMORGAN, NEUTRAL KEPT
*Puma PT Cut to EU200 vs EU210 at Raymond James

>>> Initiation
*ABLYNX RATED NEW NEUTRAL AT GOLDMAN, PT EU10.5
*BG GROUP RATED NEW OUTPERFORM AT COWEN
*BP RATED NEW MARKET PERFORM AT COWEN
*GALAPAGOS RATED NEW BUY AT GOLDMAN, PT EU24
*PACE RATED NEW HOLD AT LIBERUM, PT 420P
*ROYAL DUTCH SHELL RATED NEW MARKET PERFORM AT COWEN

>>> Call
>> Stock
*DAILY MAIL ADDED TO CONVICTION BUY LIST AT GOLDMAN
*HERITAGE OIL REMOVED FROM UBS’S MOST PREFERRED LIST

WSJ : China's Mini-Stimulus Supports Shares

Chinese stocks rose on Thursday, after Beijing's announcement of stimulus measures to help the struggling economy, while Japanese stocks gained as positive economic data from the U.S. helped keep the yen soft.

The Hang Seng China Enterprise Index, a measure of Hong Kong-listed Chinese companies, was up 1% after China's State Council unveiled late on Wednesday a series of measure to add momentum to Asia's largest economy—including upgraded housing for low-income households and tax relief for small businesses.

Hong Kong's Hang Seng Index added 0.3% and the Shanghai Composite was up just 0.2%.

The measures also included additional spending on the railway companies, which resulted in a substantial boost for the companies that are involved in rail construction. China Railway Group 601390.SH +0.78% surged 7.7% and China Railway Construction 601186.SH +2.07% Corporation jumped 9.2%.

Concerns over the state of the Chinese economy have contributed to weak stock performances in both Hong Kong and mainland China in 2014, with Hong Kong down 3.1% for the year and Shanghai 2.5% lower.

In addition to China's stimulus measures, Asian stocks were helped by overnight data showing that U.S. businesses last month returned to the modest hiring pace seen before the winter weather dampened job growth in the world's largest economy. Private-sector payrolls increased by 191,000 new jobs in March, according to payroll processor Automatic Data Processing. ADP +0.22%

The data helped fuel hopes that the U.S. economy is building momentum, with the S&P 500 hitting another record high on Wednesday, and supported expectations ahead of the main monthly labor report, which is out late on Friday.

One of the biggest movers were Japanese stocks, with the Nikkei Stock Average up 0.7% as the yen continued to edge closer to the ¥104 to the dollar mark. The dollar added 0.2% on Wednesday and was last little moved at ¥103.88.

Elsewhere, stocks only made small gains as markets remained cautious ahead of the Friday jobs data. Australia's S&P/ASX 200 added 0.2% and South Korea's Kospi was up 0.4%.

In corporate news, shares in National Australia Bank Ltd NAB.AU -0.65% fell 0.5% after the lender's chief executive Cameron Clyne said that he will step down in August for personal reasons. He will be replaced by Andrew Thorburn, head of the bank's Bank of New Zealand subsidiary.

Barron's : Bubble or No Bubble?

Bubble or No Bubble?

So are we in a stock-market bubble or not? I think the answer depends on what data points you're using to support your narrative. A piece in the most recent edition of the Sunday New York Times starts with this short sentence: "It sure looks like a bubble." But the article by Jeff Sommer, a longtime editor with the Sunday business section, goes on to focus on a handful of pricey acquisitions and initial public offerings in the social-media, biotech and videogaming sectors as proof that investors are becoming as exuberant as they were during the tech bubble. (The article's headline broadcasts that: "In Some Ways, It's Looking Like 1999 in the Stock Market.") One has to go low in the piece to read that the bubble talk doesn't apply to the current valuation of the broader stock market. Barry Ritholtz, a popular financial blogger and columnist with Bloomberg, uses the Times' Sunday piece as a foil for his own view on whether a bubble exists. "Some of you may not have been around during the 1990s bull market. In its final year—1999—Wall Street was a three-ring circus of insanity," he writes. "The world today is nothing like it was then. The streets weren't paved with gold, then trading at a pitiful $250 an ounce, but rather cocaine and $2,000 a night escorts." He points to a Gallup poll in the first quarter concluding that half of all Americans think putting money into the stock market today is a bad idea. "In '99, a whopping 67 percent thought putting money into the stock market was a great idea," he adds. After reading both accounts, it's pretty clear that those who fear bubbles should tread lightly in the areas discussed in the Times article and feel not quite so put off by the broader stock market. Meanwhile, Nouriel Roubini, the New York University economist known by the nickname Dr. Doom, has written a piece in which he argues that there's a new set of risks for global investors. It's hard to summarize the piece since it lists a slew of risks that are subsiding and a slew of other risks that may be taking their place. Best to read the article for yourself. For example, he writes that "thanks to European Central Bank President Mario Draghi's famous "whatever it takes" speech, new financial facilities to stabilize distressed sovereign debtors, and the beginning of a banking union, the eurozone is no longer on the verge of collapse." But he argues that there are a whole new set of risks, including a growing chance of a hard economic landing in China, policy mistakes as the Federal Reserve exits monetary easing, and a "serious risk that the current conflict in Ukraine will lead to Cold War II—and possibly even a hot war if Russia invades the east of the country." He even points to a geopolitical risk that isn't getting nearly the ink of a looming Cold War II— that "Asia's terrestrial and maritime territorial disagreements (starting with the disputes between China and Japan) could escalate into outright military conflict." Thankfully, Roubini does not see any risk of a zombie invasion. Still, it's a long list, and any reader perusing it might be heartened to know that Roubini has made a career by keeping an eye on worst-case scenarios. I'll close with a Fortune article that discusses the reaction of former Securities and Exchange Commission Chairman Arthur Levitt's view of writer Michael Lewis' contention that the U.S. stock market is rigged. Levitt tells Fortune's senior editor, Stephen Gandel, that he disagrees with the view laid out in Lewis' book, Flash Boys, that high-frequency trading has been bad for individual investors, adding that he has seen no evidence it has made markets less fair. Gandel quotes Levitt as saying "I'm not persuaded the average investor is not getting a price that is just as good as a high frequency trader." But Gandel points out that Levitt is also an advisor to one of the biggest high-frequency trading firms, KCG Holdings. Don't you just love those revolving doors?