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Johnson Matthey 1H Pretax Profit Beats Estimate, Raises Dividend 2013-11-21 07:15:41.366 GMT

By Chiara Remondini Nov. 21 (Bloomberg) -- Johnson Matthey 1H underlying pretax GBP212.9m, est. GBP206.7m (3 ests.). * 1H underlying EPS 84.9p, est. 80.8p (3 ests.) * Rev. GBP6.41b vs restated GBP4.89b * Rev. ex. precious metals GBP1.49b vs restated GBP1.31b * Div. 17p/shr vs 15.5p/shr, in line with BDVD forecast * CEO Neil Carson says 1H results exceeded co.’s expectations * Sees 2H performance in line with 1H if impact of loss of Anglo Platinum contracts is excluded * NOTE July 25: Johnson Matthey said FY expectations unchanged, saw “steady progress” in 2013-2014 notwithstanding loss of revenue from Anglo Platinum from Jan. 1 2014  * NOTE Nov. 15: Johnson Matthey to benefit from end-market upturn: Redburn * Statement

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

--Editor: Jurjen van de Pol

To contact the reporter on this story: Chiara Remondini in Milan at +39-02-8064-4241 or cremondini@bloomberg.net

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

Goldman Sach Strategist: ECB will ensure O/N Enonia rates stay at or below 25bps through 2014 and for majority of 2015 - Risks skewed in direction of a deposit cut or unconvention easing

Up

*DERWENT LONDON RAISED TO BUY VS NEUTRAL AT GOLDMAN *ERSTE RAISED TO BUY VS HOLD AT DEUTSCHE BANK *LEGAL & GENERAL RAISED TO BUY VS NEUTRAL AT BOFAML *METRO RAISED TO NEUTRAL VS REDUCE AT ODDO *RAIFFEISEN RAISED TO BUY VS HOLD AT DEUTSCHE BANK

Down

*ANTOFAGASTA CUT TO NEUTRAL VS BUY AT UBS *LABORATORIOS ROVI CUT TO NEUTRAL VS BUY AT UBS *RESOLUTION CUT FROM BOFA’S EUROPE 1 LIST *SARAS CUT TO HOLD VS BUY AT SOCGEN *SEVERN TRENT CUT TO NEUTRAL AT MACQUARIE *SIXT CUT TO NEUTRAL FROM OVERWEIGHT AT HSBC *SODEXO CUT TO NEUTRAL VS BUY AT CITI *STAFFLINE CUT TO HOLD AT LIBERUM *TESMEC CUT TO NEUTRAL VS OUTPERFORM AT MEDIOBANCA

PT Change

*Generali PT Raised to EU21 vs EU20 at JPMorgan

Initiation

*AGGREKO RATED NEW HOLD AT LIBERUM, PT 1,500P *APR ENERGY RATED NEW SELL AT LIBERUM, PT 890P *ASHTEAD RATED NEW BUY AT LIBERUM, PT 765P *KENMARE RESOURCES RATED NEW NEUTRAL AT MACQUARIE, PT 21P *MUNICH RE RATED NEW BUY AT UBS, PT EU177 *SIERRA RUTILE RATED NEW UNDERPERFORM AT MACQUARIE, PT 37P *SPEEDY HIRE RATED NEW BUY AT LIBERUM, PT 88P *SWISS RE RATED NEW NEUTRAL AT UBS, PT SF83

Country Sector Stock Call

*EUROPE CAPITAL GOODS CUT TO CAUTIOUS VS NEUTRAL AT GOLDMAN *EUROPE BANKS, UK HOMEBUILDERS RAISED TO OVERWEIGHT AT GOLDMAN *EUROPEAN TELECOMS RAISED TO NEUTRAL AT GOLDMAN *EUROPEAN MEDIA CUT TO NEUTRAL AT GOLDMAN *CHEMICALS, OIL SERVICES CUT TO UNDERWEIGHT AT GOLDMAN *INDUSTRIAL GOODS CUT TO UNDERWEIGHT AT GOLDMAN *Bayer Added to Analyst Focus List at JPMorgan *EADS REMOVED FROM UBS’S KEY CALL LIST *GLAXO REMOVED FROM CITI'S LEAST PREFERRED LIST *GREAT PORTLAND ADDED TO CONVICTION BUY LIST AT GOLDMAN *JCDECAUX REMOVED FROM MEDIA MOST PREFERRED SHRS AT BOFAML *MTG ADDED TO MEDIA LEAST PREFERRED SHRS AT BOFAML *PUBLICIS ADDED TO MEDIA MOST PREFERRED SHRS AT BOFAML *REED ELSEVIER REMOVED FROM MEDIA LEAST PREFERRED SHRS AT BOFAML *ROCHE REMOVED FROM CITI'S MOST PREFERRED LIST *SEGRO CUT FROM CONVICTION BUY AT GOLDMAN, STILL A BUY

US Market closed lower after FED Minutes..USD bid higher while US treasuries sold off after Fed meeting minutes revealed the start of QE taper may still begin in anticipation of the improved outlook; Markets reprice possibility of a December move despite the dovish sentiment from Yellen and Bernanke in recent days...VIX @ 13.40 flat...BRazil- closed ... PBoC conducted open market operations on 2 separate occasions this week - marks first weekly net liquidity injection in 5 weeks...China Nov HSBC flash manufacturing PMI falls to 3-month low as New Orders component fall into contraction territory; Chief HSBC economist noting growth momentum has softened in November, while muted inflation allows Beijing to keep policy accommodative...BOJ on hold with policy and also keeping economic assessment unchanged for the 3rd month as widely expected; Statement mentions "lackluster performance" in overseas economies but still sees exports as "picking up", disappointing some expectations of a more direct acknowledgement of risks to overseas shipments...Nikkei +1.92%...Shanghai -0.15%

Eur$ 1.3429 S&P Fut -0.10% European Fut -0.65%

Keep an eye on :

- AOIL SS : Alliance Oil 3Q Ebitda $175m vs Est. $185m; Ebitda Margin Falls - ATCOA SS : Atlas Copco interested in further acquisitions - Dagens Industri - BWO NO : BW Offshore 3Q Net $18m vs $22.3m in 2Q; Declares $0.03/Shr Div - CSGN VX : Credit Suisse to Change Structure From Mid 2015 - JMAT LN : on the tape... - UG FP : Peugeot Is Set to Reduce French Capacity, Le Figaro Says - UG FP : according to China press Dongfeng could buy 20% stake in PSA - PRS SM : Prisa puts its Mediaset stake up for sale (17.3% bought for €490 in 2010, could be worth €692m) -El Confidential - RBREW DC : Royal Unibrew Raises 2013 Outlook for Revenue, Ebitda, Ebit - SAB LN : SABMiller 1H Ebita $3.27b; Est. $3.2b - TEL2B SS : Russia Delays Rostelecom Mobile Merger With Tele2: Kommersant - TCG LN : Thomas Cook Boosts Stake in JV With Intourist, Kommersant Says - TIT IM : Telecom Italia CEO willing to sell TIM Brasil if other growth options can be found  - UHR VX : Switzerland Oct. Watch Exports Rose 1.1%

See Full note attached

1. Showtime for the US/DM Recovery 2. Forward guidance harder in an above-trend world 3. Earn the DM equity risk premium, hedge the risk 4. Good carry, bad carry 5. The race to the exit kicks off 6. Decision time for the ‘high-flyers’ 7. Still not your older brother’s EM... 8. ...but EM differentiation to continue 9. Commodity downside risks grow 10. Stable China may be good enough

Telecom Italia eyes sale of Brazil unit

Telecom Italia is prepared to sell its prized Brazilian business but would first need an alternative investment plan, according to the new chief executive of the heavily indebted Italian telecoms group. Marco Patuano told investors at a Barcelona conference that the company would not sell the business simply because it would reduce its substantial debts. TI, whose net debts are close to €30bn, recently sold its Argentine operations after receiving an unsolicited $860m bid, leading to speculation that its stake in TIM Brasil could be next.

Mr Patuano said that he would have to evaluate not just the “size of the cheque” for TIM Brasil, but whether he could present shareholders with an alternative source of growth. Telecom Italia has laid out a three year strategy to turn around the domestic business. Analysts from Macquarie on Wednesday said a Brazilian “sale will still happen in late 2014”, which would buy the group time to improve conditions in its home market. “Just repaying debt seems to me a strategy that is a little short-sighted,” said Mr Patuano at the Morgan Stanley conference. Asked whether he had a sufficient plan, he said, “The answer is, sorry, gentlemen and ladies, I’ve had five weeks [in the job].” The sale of the Brazilian business is seen by analysts as supported by Telefónica, which took control of a key shareholder group in Telecom Italia earlier this year. However, Mr Patuano suggested that the most likely buyer of TIM would not be one of the current players in Brazil, such as Carlos Slim’s America Movil. “It would be the only and last chance [for another telecoms operator] to enter Brazil,” he said. He said that, unlike Italy, the Brazilian market was large enough for at least four operators to operate profitably. Analysts say that Telefónica would, however, prefer to reduce the number of companies in Brazil to bolster its own business.

Mr Patuano said that slower growth in Brazil’s voice market means that operators are now focused on investing in data connectivity to allow consumers faster access to internet content. “I personally asked my guys to change the plan versus the previous one [so that capital expenditure in Brazil increases],” said Mr Patuano. The Telecom Italia stake in the Brazilian business is valued at about €6bn. Telecom Italia wants to reduce an adjusted net debt of €28.2bn to less than €27bn by the end of 2013. Telecom Italia is also progressing with plans to sell its mobile phone masts and media business.

Dongfeng Motor investigating possibility of buying 20% stake in PSA, mandates a bank to work on proposal

Dongfeng Motor [Dong Feng Qi Che], the Hubei-based Chinese auto maker, is in the preliminary stage of investigating the possibility of buying a 20% stake in French peer PSA Peugeot-Citroen, the Chinese-language China Business News reported.

The item cited an unidentified Dongfeng Motor source who said the company has mandated an investment bank to help work on the deal plan. The report also said that Dongfeng Motor and French government will each invest around EUR 1.5bn (CNY 12.4bn) to acquire a 20% and a 30% stake in PSA and the talks are being held by and between a French delegation and Dongfeng Motor.

Source China Business News

Veteran UK fund manager Anthony Bolton believes that China’s “momentous” package of economic reforms, revealed last week, will be the catalyst that draws foreign investors back to one of the world’s worst performing equity markets. On Friday, China’s top leaders released a blueprint for change covering various aspects of economic, social, and financial policy. Some economists have described it as the most important political development in China for more than 20 years.

Mr Bolton, a perennial China bull, steps down from running Fidelity’s China Special Situations fund in April next year. He sees these sweeping changes as the key to reversing years of entrenched antipathy towards Chinese equities among global investors. “What I think is really impressive is the extent of what they’re doing, and the amount of reform that they’re doing. . . When you add all this up, I think it is pretty significant,” said Mr Bolton. “There hasn’t been a catalyst, particularly to get foreign interest back in China. I think this could be the catalyst that brings that money back,” he added. “I think this will be the new story.” China’s stock market has been among the world’s worst performers since Mr Bolton set up his fund in April 2010. The H-share index of Chinese companies listed in Hong Kong has fallen 12 per cent, while the FTSE 100 has risen by one-fifth and the S&P 500 is up by about 50 per cent. Much of the negativity has come from fears that bad debts are building up in the banking sector, something that is much less of a concern for Mr Bolton. “I’m much less worried about the financial things that have worried other China bears,” said Mr Bolton. “There are certainly issues out there, but I think China . . . can move money around in the system to alleviate these problems and push them into the future.” Mr Bolton, who made his name as one of the UK’s most successful stock pickers, has overseen a patchy three years in charge of Fidelity’s flagship China fund. Many criticised his early attempts to apply western-style investing logic to China’s complex and opaque market, while the fund’s performance was hit by accounting scandals at some listed Chinese companies including Sino-Forest, which Mr Bolton had invested in. By September 2012, the fund had lost one-third of its value. However, Mr Bolton has enjoyed a recent reversal in fortunes. The fund is up 26 per cent this year, compared with a 2 per cent rise in the MSCI China index against which its performance is measured. After more than two years underwater the fund’s share price is finally back into positive territory. While most analysts agree that China’s reform package will prove positive for the longer term health of the economy, opinion is divided over whether it will be good news for investors. China’s stock market is dominated by large state-owned enterprises, which are expected to suffer during any overhaul of the country’s economic model.

Bank of Japan extends ultra-loose monetary policy

The Bank of Japan kept its policy settings on hold on Thursday, judging that fragility in overseas economies is not serious enough to threaten steady progress towards its ambitious inflation target. In a statement, the BoJ said it would continue buying enough assets to pump up the monetary base at a rate of about Y60tn-Y70tn a year, in order to achieve stable annual price rises of 2 per cent.

The bank reiterated its generally positive view of the domestic economy, previously expressed at a policy meeting at the end of October, noting a pick-up in investment by businesses, continued strength in public spending and “resilient” private consumption. The two-day board meeting concluding on Thursday was the first since the government announced that Japan’s growth rate roughly halved from the second to the third quarter, thanks largely to a drop-off in net exports and private consumption. Growth in the first half had been the highest of any developed economy, buoyed by fiscal stimulus and the profit-boosting effects of a weaker yen. In September, the government declared an end to stagnation, saying that the economy was “on the way to recovery at a moderate pace”. It is expected to keep that assessment intact for a second month on Friday, with Akira Amari, economy minister, noting encouraging trends in industrial production, capital investment and consumer spending. At the same time, surveys of households and bond market participants suggest that inflation expectations are climbing. “It would appear – at least on the surface – that the “sticky” deflationary psychology ... that took root during Japan’s 15 years of deflation has finally been wiped away,” said Jun Ishii, chief fixed-income strategist at Mitsubishi UFJ Morgan Stanley. However, there are fears that domestic demand is being pulled forward by the consumption tax increase in April. Several indices of consumer sentiment fell heavily after the prime minister’s announcement last month that the tax increase would go ahead, suggesting that households are concerned about another burden on finances amid a backdrop of price rises caused by the lower yen. An “anxiety index” published by the Nippon Research Institute, which measures how consumers view the coming 12 months in terms of the economy, employment, incomes and prices, rose to 148 in October – higher than the 145 reading last December, when Shinzo Abe returned to power vowing to shake off deflation. Meanwhile, external conditions are not providing much support. On Thursday, the BoJ gave another airing to its concerns over the European debt problem, the stop-start US recovery and patchy growth in emerging economies. Some analysts predict that the central bank is ready to supply even more stimulus in the first few months of next year. Recent dovish remarks from board members “could tip the balance in favour of additional easing at the earliest signs that growth and inflation are slowing,” said Izumi Devalier, economist at HSBC. As usual, board member Takahide Kiuchi suggested on Thursday that the BoJ adopt an alternative wording for its main policy pledge, to emphasise that the radical easing programme adopted in April is an intensive measure which should run for about two years, rather than “as long as is necessary” to hit the 2 per cent target. His proposal was struck down by eight votes to one.

Asian Market Update: China flash PMI slows to 3-month low; BOJ keeps policy and economic assessment unchanged

***Observations/Insights*** - USD bid higher while US treasuries sold off after Fed meeting minutes revealed the start of QE taper may still begin in anticipation of the improved outlook; Markets reprice possibility of a December move despite the dovish sentiment from Yellen and Bernanke in recent days. - PBoC conducted open market operations on 2 separate occasions this week - marks first weekly net liquidity injection in 5 weeks. - China Nov HSBC flash manufacturing PMI falls to 3-month low as New Orders component fall into contraction territory; Chief HSBC economist noting growth momentum has softened in November, while muted inflation allows Beijing to keep policy accommodative. - BOJ on hold with policy and also keeping economic assessment unchanged for the 3rd month as widely expected; Statement mentions "lackluster performance" in overseas economies but still sees exports as "picking up", disappointing some expectations of a more direct acknowledgement of risks to overseas shipments.

***Economic Data*** - (CN) CHINA NOV HSBC/MARKIT FLASH MANUFACTURING PMI: 50.4 V 50.8E (3-month low) - (JP) BANK OF JAPAN (BOJ) POLICY STATEMENT: REITERATES TO INCREASE MONETARY BASE AT ANNUAL PACE OF ¥60-70T (AS EXPECTED) - (JP) JAPAN OCT SUPERMARKET SALES Y/Y: 0.5% V 0.4% PRIOR - (JP) Japan investors bought net ¥349.9B in foreign bonds last week vs bought net ¥357.1B in prior week (6th straight week of net purchases); Foreign Investors bought net ¥1.29T in Japan stocks v bought net ¥273.1B in prior week - (KR) SOUTH KOREA OCT DISCOUNT STORE SALES Y/Y: -6.4% V -5.3% PRIOR; DEPARTMENT STORE SALES Y/Y: -2.2% V +2.8% PRIOR - (AU) AUSTRALIA OCT RBA FX TRANSACTIONS (A$): 648M V 663M PRIOR - (NZ) NEW ZEALAND OCT CREDIT CARD SPENDING M/M: -0.8% v -0.1% PRIOR; y/y: 3.2% v 5.1% PRIOR (5-month low) - (NZ) NEW ZEALAND OCT ANZ JOB ADVERTISEMENTS: 4.5% V 1.3% PRIOR - (SG) SINGAPORE Q3 FINAL GDP Q/Q: +1.3% V -0.3%E; Y/Y: 5.8% V 5.3%E; Raises 2013 GDP forecast to 3.5-4.0% from 2.5-3.5% prior

***Fixed Income/Commodities/Currencies*** - (CN) PBoC to inject CNY33B in 14-day reverse repors; Injects net CNY59B this week (first injection in 5 weeks) v drained CNY15B prior - (CN) China MOF sells CNY2B in 5-yr RMB bonds at Hong Kong, avg yield 3.09%; CNY5B in 3-yr RMB bonds, avg yield 2.60%

- USD/CNY: (CN) PBoC sets yuan mid point at 6.1366 v 6.1305 prior setting (weakest Yuan setting since Nov 10th) - GLD: SPDR Gold Trust ETF daily holdings fall 2.7 tonnes to 860.3 tonnes (lowest since Feb 2009)

- USD/JPY hit 2 1/2 month highs at ¥100.50 as less dovish than expected Fed meeting minutes lifted the greenback across the board. AUD/USD was down about 40pips at session lows below $0.93 handle, with added AUD headwinds coming from disappointing China PMI. NZD/USD also saw its lows after the China data, falling over 30pips below $0.8240. EUR/USD largely consolidating the sharp decline in US session within a 25pip range, supported by 100day EMA around $1.3420.

***Speakers/Political/In the Papers*** - (CN) China Qinhuangdao coal price in China rises to CNY560-570/t, highest level since early Aug - Chinese press - (CN) China Fin Min Lou Jiwei: China to cut tax for property transactions while raise for possessing properties - People's Daily - (CN) China Ministry of Housing and Urban Rural Development: China won't significantly change property curbs in short term - Chinese press - (CN) Former PBoC adviser Li Daokui: Chinese economy must experience "temporary pains"; China economic growth may slow down to 7% in the next 2-3 years - Chinese press

- (JP) Japan Cabinet Office to keep its economic assessment unchanged for the 2nd consecutive month in its monthly November report - Nikkei News - (JP) Japan, China agree to increase economic cooperation - Japanese press

- (KR) Bank of Korea (BOK) policy board member: Economic transition in China poses risks to South Korea's export growth - Korean press - (KR) Korea Center for International Finance (KCIF): South Korea CPI will likely accelerate in 2014 - Korean press - (KR) South Korea Fin Min Hyun: State-run companies' debt is a big concern to govt

- (DE) German Finance Ministry releases monthly report: Supports govt 2013 GDP forecast of 0.5% - financial press - (EU) ECB's Noyer: Sees no signs of deflation in the euro zone - financial press

- (CA) BOC Gov Poloz: Substantial stimulus in Canada still appropriate; Economic outlook roughly unchanged since Oct monetary policy report; BOC maintaining a neutral policy stance - (US) Goldman Sachs Chief Economist: Fed minutes were for the most part neutral; reiterates March is the most likely start for tapering QE, but December is still an option

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 +1.5%, S&P/ASX -0.2%, Kospi -1.3%, Shanghai Composite -1.0%, Hang Seng -0.7%, Dec S&P500 -0.1% at 1,777, Dec gold -0.9% at $1,247, Dec crude oil flat at $93.35/brl

US markets: - WSM: Reports Q3 $0.58 v $0.54e, R$1.05B v $1.03Be; +6.2% afterhours - GMCR: Reports Q4 $0.89 v $0.74e, R$1.05B v $964Me; GMCR: Board approves $1B buyback program (10% of market cap); initiates quarterly dividend of $0.25/shr; +4.6% afterhours - JCI: Announces 3-yr $3.65B (11% of market cap) share repurchase program; raises quarterly dividend by 16% to $0.22/shr from $0.19/shr; +4.2% afterhours - JACK: Reports Q4 $0.45 (adj) v $0.39e, R$338M v $336Me; +4.0% afterhours - RTN: Increases share repurchase authorization by $2.0B (7.3% of market cap); +0.8% afterhours - LTD: Reports Q3 $0.31 v $0.28e, R$2.17B v $2.17Be; -3.3% afterhours

Notable movers by sector: - Consumer discretionary: Peak Sports Products Co Ltd 1968.HK -2.7% (Q2, Q3 guidance) - Industrials: Jiangsu WELLE Environmental Co Ltd 300190.CN -3.7% (FY13 guidance); Downer EDI DOW.AU -3.5% (analyst action); Honda Motor Co Ltd 7267.JP +3.2% (production plans); Daewoo Shipbuilding & Marine 042660.KR +0.4% (awarded order); Komatsu Ltd 6301.JP +1.6% (to begin rental business in North America; analyst action) - Materials: Paladin Energy Limited PDN.AU +0.5% (trading update); BHP Billiton Ltd BHP.AU -0.1% (AGM comments) - Financials: New China Life 601336.CN -3.6% (investment plans); Dexus Property Group DXS.AU -1.0% (provides update on acquisition); Ping An Insurance 601318.CN -2.9% (to issue convertible bonds) - Utilities: TEPCO 9501.JP -2.0% (closes two reactors); Taiyo Nippon Sanso Corp 4091.JP +1.8% (announces acquisition)