*ITALY'S FIVE STAR AT 29.5%, LEAGUE UP TO 27.5% IN SWG POLL
Ten-year Treasury yields fell, taking the dollar down against the yen, after Italy’s political impasse triggered a risk-off mood in holiday-hit markets. Oil prices retreated further, sending West Texas crude to its lowest in six weeks.
Stocks declined, with shares of iPhone screen makers tumbling on a report that Apple Inc. is shifting to next-generation technology. The stronger yen left the Topix index of shares with a seventh straight session of declines, the longest losing streak since September 2016. FTSE 100 futures declined in early London trading as U.K. traders return following a holiday. Ten-year Treasury yields fell below 2.90 percent for the first time this month, while U.S. equity futures were flat.
Nikkei -0.55% Hang Seng -0.64% CSI -0.36% Shanghai -0.23% Shenzen -0.21%
Eur$ 1.1601 CNY 6.4145 CNH 6.4146 JPY 108.92 CHF 0.9935 GBP 1.3295 WTI$ 66.74 -1.64%
S&P -0.24% EuroStoxx -0.98% Dax -0.77% SMI -0.59%
Macro :
- Italy Woes Mispriced in Volatility Markets, Morgan Stanley Says
- EU to Review Mifid II if Brexit Talks Falter: Financial News
- U.K. Is Said to Agree to ’Open Skies’ Deal With U.S.: Telegraph
Keep an eye on :
- ABG SM : Abengoa Bondholders Seen Rejecting Waiver Proposal: Confidencial
- AIR FP : Airbus Open to U.S. Talks to Settle Dispute on Subsidies
- AF FP : Air France Signs Agreement With Pilots on Flying Boeing 787
- ATC NA : Regulator Rejects Altice Remedies for Media Capital Deal: Jornal
- AT1 GY : Aroundtown First Quarter Adjusted Ebitda EU133.6 Mln
- BKIA SM : Credit Agricole, Bankia to Form Consumer Credit Joint Venture
- BMPS IM : Morelli Likely to Be Confirmed as Monte Paschi CEO: Repubblica
- BUCHN SW : Burckhardt Full Year Sales Beat Highest Estimate
- ACA FP : Credit Agricole, Bankia to Form Consumer Credit Joint Venture
- DAI GY : Germany Bans 1.6L Mercedes Vito Euro6 Registration: Stuttgarter
- DSY FP : French Billionaire Serge Dassault Dies in His Office at Age 93
- DBK GY : Deutsche Bank’s Union Rep Has Doubts About Job Cuts, FR Reports
- ELIOR FP : Elior Group Sees Full Year Ebitda Margin 7.5% To 7.8%
- ENI IM : Saudi, Russia Spook Oil, Eni Drops on Politics: EU Energy Wrap
- GMM GY : Grammer AG Confirms Talks With Ningbo Jifeng for Takeover Offer
- GEN DC: Genmab Plunges Amid Darzalek Trial Setback: EU Health Care Wrap
- GIMB BB Gimv Being Probed by Belgian Fiscal Authorities: De Tijd
- ITV LN : ITV Is Said to Mull GBP1B Pact With BBC to Buy UKTV: Telegraph
- IWG LN : Prime Opportunities Says IWG Rejected Offer, Plans Further Bid
- KVW NA : VolkerWessels Inactive Units Probed Over St. Maarten Projects
- NESN SW : Nestle Japan to Sell DNA Tests to Give Nutrition Advice: Nikkei
- NDA SS : Nordea to Accelerate Push Into Paid Company Analysis, DI Reports
- NHY NO : Norsk Hydro Closer to Meeting Demands, Brazil Prosecutors Say
- NOVN SW : Novartis: Improvement in Quality of Life Domains With Entresto®
- OCDO LN : Ocado Lacks Major Catalysts Beyond Kroger Deal: Morgan Stanley
- RBS LN : U.K. Is Said to Pursue RBS Stake Sale as Soon as This Week: Sky
- ROG SW : Roche’s Tecentriq Plus Chemo Met Endpoints in IMpower130 Study
- RKET GY : Rocket Internet First Quarter Ebitda Loss EU24 Mln
- SAB SM : Norges Bank Notifies 3.1% Stake in Sabadell: Filing
- SIK SW : Sika: Final Allocation of Sika CHF1.65 Bln Convertible Bonds
- SLA LN : *STANDARD LIFE PLANS TO RETURN UP TO GBP1.75B TO SHAREHOLDERS
- WAF GY : Tiger Global Takes 0.65% Net Short in Siltronic: German Gazette
- TEF SM : Telefonica Revenue to Drop 5% in 2018, Renta 4 Says; Cuts TP
- FP FP : Total Starts Zinia 2 Development in Deep Offshore Block 17
- FP FP : Total, Sonangol Sign Deals for Block 48, Service-Stations JV
- VED LN : Vedanta Falls in Mumbai as India Copper Plant Ordered to Shut
>>> Up
* ACS Upgraded to Buy at AlphaValue (Yesterday)
* IAG Upgraded to Buy at AlphaValue
* Fresnillo Upgraded to Outperform at BMO; PT 16.50 Pounds
* Red Electrica Upgraded to Neutral at Goldman; PT 17 Euros
* Sacyr Upgraded to Buy at AlphaValue
* SES GDRs Raised to Equal-weight at Morgan Stanley
* Zardoya Upgraded to Add at AlphaValue
>>> Down
* Aeffe Downgraded to Neutral at MedioBanca
* Amplifon Downgraded to Neutral at MedioBanca
* Anima Downgraded to Neutral at MedioBanca
* BPER Banca Downgraded to Neutral at MedioBanca
* Cancom Downgraded to Hold at Berenberg; PT 94 Euros
* Centamin Downgraded to Hold at Arqaam Capital; PT 1.55 Pounds
* Centamin Downgraded to Neutral at Goldman (Yesterday)
* Enagas Downgraded to Sell at Goldman; PT 22 Euros
* Novartis Downgraded to Hold at HSBC; PT 79 Francs
* Ocado Downgraded to Equal-weight at Morgan Stanley
* Poste Italiane Downgraded to Neutral at MedioBanca
* Remy Cointreau Downgraded to Neutral at Natixis
* Schoeller-Bleckmann Cut to Hold at Raiffeisen Centrobank
* Snam Downgraded to Sell at Goldman; PT 3.40 Euros
* UBI Banca Downgraded to Neutral at MedioBanca
* Unieuro Downgraded to Neutral at MedioBanca
>>> Initiation
* JOST Werke Rated New Buy at Bankhaus Lampe; PT 48 Euros
>>> Call
Overall flows were very strong net sellers last week (-11%, strongest selling pressure YTD).
Funds recorded their strongest sells in two years (-14%). Private & Retail investors remained net sellers (-14%, for the eighth week in a row). Hedge funds were broadly neutral (-1%).
Flows were strong net sellers for all client regions: US (-20%), Continental (-11%) and UK (-8%).
Flow imbalances by country. See pages 14 and 11.
Italy and Switzerland show the lowest 3M client imbalances among European countries (-8% and -7% respectively, see page 4).
Last week, the strongest selling pressure was seen in Germany-Austria (-19%), followed by Spain* (-17%). Italy also saw net selling flows(-14%) , for the third week in a row, amid the recent political uncertainty.
Flow imbalances by sector. See pages 7 to 10.
Oil & Gas saw their second strongest selling pressure YTD (-40%), in accordance with market performances. Flows were also very strong net sellers in Basic Materials (-27%, strongest YTD) and Industrials (-20%, strongest YTD).
Last week’s most popular stocks (by number of clients). See pages 17 and 19.
TOTAL was by far the most popular stock among large caps last week, and it also showed the largest number of sellers. ANHEUSER BUSCH was the most bought stock by number of clients.
In 1995, Steve Jobs Explained Exactly How Apple Will Fail
With Apple's share price hitting record highs as the mainstream media, asset-gatherers, and commission-takers once again reflect on it as a "no brainer" investment that everyone and their pet rabbit should own, we are reminded of none other than Steve Jobs 'lost interview' from 1995 on how tech monopolies die...
"I have my own theory about why the decline happens at companies like IBM or Microsoft.The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important.The company starts valuing the great salesmen, because they're the ones who can move the needle on revenues, not the product engineers and designers. So the salespeople end up running the company."
Summarized more succinctly...
"Once you have a monopoly, new products don't help you, only better marketing. Soon, marketing people are running the company, and what made them great is gone...
Corporate Japan needs to ditch unnecessary ‘poison pills’
Country’s governance code has had little impact but tough new rules are planned
Investors scouring Japanese stocks ahead of the glut of annual shareholders’ meetings in June face a seasonal teaser: what do the makers of prefab houses, baby pushchairs and woollen yarns have that the makers of baggage handling equipment, meat-based seasonings and lingerie do not?
The answer is takeover defence measures — the “poison pill” mechanisms whose retention by so many Japanese companies has a long tradition of inflaming vocal activist condemnation of management. Even then, the complaints too often make only modest impact on the general shareholder support levels those managements enjoy come the AGMs.
But post-2015 progress on corporate governance has ratcheted the stakes on this issue, and pressure is due to be cranked up yet another notch in 2018 as the Financial Services Agency prepares to toughen the governance code ahead of the AGM season. Institutional investors that have historically waived through poison pills will, under the new conventions, need to account for having voted that way. Japanese managements worried about falling support rates and the rising feistiness of their shareholders can see that the poison pills give even very mild activism an easy line of attack.
Bulls on governance progress point to the fact that, as of last Friday, 20 Japanese companies with market capitalisations over ¥50bn have decided to scrap their takeover defences — a group that includes four of Japan’s largest private railway companies. When companies renewed their poison pills this year, say analysts at Goldman Sachs, they did so with average support rates 5.6 percentage points lower than in 2017.
The same report calculates that companies with a market cap over ¥300bn that have abandoned their takeover defences since January 2013 (a group that includes Panasonic, Yamaha Motor and Shimano) have outperformed the benchmark Topix index by an impressive annual rate of 6 per cent.
Viewed optimistically, all this suggests companies are becoming more conscious that the poison pills are shareholder unfriendly, are more worried about how a more scrutinised roster of investors will vote at that AGMs and have clocked that there is even a valuation upside to improved governance.
But it is too soon to declare a real breakthrough as long as Japanese shareholder registers remain definitions of the word “cosy”. Research by Jefferies strategist Zuhair Khan suggests that, with or without governance code revisions, a third of companies in the Topix 500 have more than 50 per cent of their shares held by “allegiant shareholders” guaranteed to vote with management, and another third have between 33-50 per cent held by that type of investor.
The reality for the great majority of companies is that the poison pill is unnecessary as long as the allegiant shareholders remain in place — those that have ditched the takeover defences have spotted that they can score a free tick in the “improved governance” box and a blip of outperformance without actually laying themselves open to takeover.