>>> What to look at today - 31st of january 2018

Dow -1.37% S&P -1.09% Nasdaq -0.86% Russell -0.96%
U.S. equities tumbled for the second day in a row on Tuesday, with health care and energy shares leading the retreat, as investors took another round of profits following solid gains over the first four weeks of 2018--the S&P 500's best start to a year since 1987.10 of 11 sectors finished Tuesday in the red. The heavily-weighted health care group showed particular weakness, losing 2.1%, after Amazon (AMZN 1437.82, +20.14), Berkshire Hathaway(BRK.A 323000, -499), and JPMorgan Chase (JPM 115.11, -1.09) announced that they're forming a company focused on reducing health care costs for their U.S. employees. Health care providers like UnitedHealth (UNH 236.65, -10.76), Anthem (ANTM 243.44, -13.58), and Cigna (CI 207.89, -16.01) lost between 4.4% and 7.2% in reaction to the announcement. energy sector was especially weak, losing 2.0%, as the price of crude oil declined for the second consecutive session; West Texas Intermediate crude futures dropped 1.6% to $64.54 per barrel and now sit about 2.5% below the three-year high they touched last Friday. US After Hours SFLY +18% following earnings/acquisition news, KNX +8% / EA +6% higher and JNPR -9.4% / ALGN -3% lower following earnings/guidance. Asian stocks reversed earlier gains to trade lower as investors continued to mull the implications of the recent run-up in bond yields. The dollar slipped after President Donald Trump delivered his first State of the Union speech in Washington. The MSCI Asia Pacific Index declined for a third session led by industrial, energy and real estate shares. Equities in Australia and Hong Kong advanced while those in Japan underperformed. The MSCI All-Country World Index had suffered its biggest two-day slide since September 2016 on Tuesday. U.S. 10-year Treasury yields ticked lower though remained close to the highest since April 2014.

Nikkei -0.83% Hang Seng +0.40% CSI +0.40% Shanghai -0.28% Shenzen -1.68%

Eur$1.2436 CNH 6.3048 CNY 6.2987 JPY 108.73 GBP 1.4189 CHF 0.9324 RUB 56.2874 WTI 64.06 -0.68%

S&P +0.17% EuroStoxx +0.11% FTSE -0.18% DAX +0.10% SMI -0.17%

Macro :
- Drugmakers May Move as Trump Repeats Call for Lower Drug Prices
- May Seeks to Work Together With China to Tackle Overcapacity: FT
- Facebook Bans Bitcoin Ads


Keep an eye on :
- ABE SM : Spain State Lawyers Back CNMV Criteria for Abertis: Expansion
- ABI BB : AB InBev Executive Patricio Buys $8M Worth of Co. ADR/ADS: FSMA
- APAM FP : Aperam Fourth Quarter Operating Profit 1.7% Below Estimates, Aperam 4Q Results Solid, Ebitda a 3% Beat to Consensus: JPMorgan
- MT NA : ArcelorMittal Fourth Quarter Ebitda 3.4% Above Estimates, *ARCELORMITTAL PROPOSES DIV POLICY STARTING AT $0.10/SHR IN 2018
- BPI PL : Banco BPI Full Year Net Income EU10.2 Mln
- BNS IM : Beni Stabili in Talks to Buy Deutsche Bank Milan HQ: Sole
- BUCN SW : Bucher Full Year Orders CHF2.87 Bln
- DEC FP : JCDecaux 4Q Organic Growth of 6.5% Beats Company’s Nov. Outlook
- DORIAN NO : HNA Investment Reports 0% Stake in Dorian LPG as of Jan. 26
- ECONB BB : Econocom Group Board Member Roesch Sells EU1.69M of Stock: FSMA
- ELISA FH : Elisa Fourth Quarter Ebitda 2.0% Above Estimates
- ERICB SS : Ericsson Fourth Quarter Net Sales 1.7% Below Estimates
- ERICB SS : Ericsson Sells 51% of Media Solutions to One Equity Partners
- GAS SM : CVC Demands Price Cut for Gas Natural Stake, Expansion Says
- HMB SS : H&M Full Year Dividend Per Share 1.2% Above Estimates
- IFX GY : Infineon Cuts Full Year Sales Forecast
- ING NA : ING Fourth Quarter Underlying Profit Misses Lowest Estimate
- BAER SW : Julius Baer Says in Good Position for Hiring and Expansion, Julius Baer to Acquire Brazilian Wealth Manager Reliance Group
- JNPR US : Juniper 1Q Adj EPS View Misses Lowest Est.; Shares Fall 6.6%
- KPN NA : KPN 4Q Adjusted Ebitda From Continuing Ops EU596 Mln
- KPN NA : KPN Plans to Appoint De Jager as CFO for Second Four-Year Term
- LDO IM : Leonardo CEO: Stock Drop Due to Lower Than Hoped 2018 Guidance
- LONN SW : Lonza Full Year Core Ebitda Matches Estimates
- MS IM : Mediaset Targets EU115m Ad Sales From World Cup: MF
- RAIVV FH : Raisio Considers Divestment of Feed Businesses, Plans Job Cuts
- RIEN SW : Rieter Full Year Sales Miss Lowest Estimate
- SAN SM : Santander Fourth Quarter Net Income Beats Estimates
- SRT GY : Sartorius Full Year Adjusted Ebitda Meets Estimates
- SEBA SS : SEB Full Year Dividend Per Share 1.5% Below Estimates
- SIE FY : Siemens 1Q Industrial Profit Beats; FY2018 Forecast Confirmed
- SIE GY : Siemens Surprised with Extremely Strong Order Intake: Metzler
- SREN SW : Swiss Re Appoints Regional Board of Directors for Asia
- TEL NO : Telenor Fourth Quarter Ebitda Meets Estimates
- TEMN SW : Temenos Gets Street-High PT at Citi on Banking IT Opportunities
- FP FP : Total Eligible for Maersk’s North Sea Tax Deal, Information Says
- VOLVB SS : Volvo Fourth Quarter Adjusted Operating Profit Meets Estimates
- VOLVB SS : Volvo Says Most Truck Markets on High Levels or in Upward Trends

>>> Europe : Brokers Upgrades & Downgrades - 31st of January 201

>>> Up
* Autoliv Upgraded to Outperform at Baird; PT $192
* SMCP Upgraded to Overweight at JPMorgan; PT 25 Euros
* Telenet Raised to Equal-weight at Morgan Stanley; PT 67.80 Euros
* Tryg Upgraded to Hold at Deutsche Bank

>>> Down
* Apple Downgraded to Market Perform at BMO; PT $162
* Asos Downgraded to Hold at HSBC; PT 75 Pounds
* Kvaerner Cut to Hold at Pareto Securities; PT Set to 17 Kroner
* SSP Downgraded to Sell at Goldman
* Temenos Downgraded to Hold at Deutsche Bank
* Visiativ Downgraded to Reduce at Gilbert Dupont; PT 45.40 Euros

>>> Initiation
* Advicenne SACA Rated New Buy at Gilbert Dupont; PT 20.80 Euros
* FinTech Group Rated New Buy at Berenberg; PT 40 Euros
* Temenos Rated New Buy at Citi; PT 175 Francs

>>> Call

>>> US After Hours Summary: SFLY +18% following earnings/acquisition n


After Hours Summary: SFLY +18% following earnings/acquisition news, KNX +8% / EA +6% higher and JNPR -9.4% / ALGN -3% lower following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SFLY +17.8% (also acquires Lifetouch for $825 mln in cash), KNX +8.1%, EA +6.3%, MOD +2.8%, CA +1.5%, ILMN +1.1%

Companies trading higher in after hours in reaction to news: KONE +28.4% (reported prelim 2017 results / delayed Annual Report; to purchase interests of LK Technology and subsidiaries), SIEN +7.4% (provides update on FDA review of U.S. manufacturing facility), IMMR +7.1% (enters into multi-year patent license agreement with Marquardt), X +3.1% (attributed to positive mention on CNBC Fast Money), CSLT +2.9% (modestly rebounding -- with boost from upgrade after the close at Cantor Fitzgerald following today's sell-off), TRI +2.1% (ticking higher; Thomson Reuters confirms Blackstone to acquire 55% interest in F&R and Full-year 2017 results expected to meet or exceed guidance), ATVI +1.9% and TTWO +1.4% (following EA results), MOBL +1.8% and AMPE +1.7%(extending today's moves higher -- both were up ~7%), RTN +1.3% (awarded $2.3 bln Army contract)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SMCI -14.8% (also appoints new CFO following Howard Hideshima resignation; delays SEC filings - Audit Committee completed previously disclosed investigation), JNPR -9.4%, CACC -3.4% (very light volume), ALGN -3%, SYK -2.9%, CHRW -1%

Companies trading lower in after hours in reaction to news: BLCM -36.7% (received FDA notice that U.S. studies of BPX-501 have been placed on clinical hold following three cases of encephalopathy deemed as possibly related), MYSZ -12.5% (proposed public offering of common stock), CERS -8.4% (commences registered underwritten public offering of $50 mln of its common stock), SYRS -4.8% (commences $40 mln common stock offering), CSCO -0.9% (following JNPR results)

>>> US Close: Health Care, Energy Lead Wall Street Lo


Closing Market Summary: Health Care, Energy Lead Wall Street Lower for Second Day in a Row

U.S. equities tumbled for the second day in a row on Tuesday, with health care and energy shares leading the retreat, as investors took another round of profits following solid gains over the first four weeks of 2018--the S&P 500's best start to a year since 1987.

The Dow Jones Industrial Average tumbled 1.4% to 26076.89, the S&P 500 dropped 1.1% to 2822.43, and the Nasdaq Composite declined 0.9% to 7402.48. The three indices opened Tuesday solidly lower and kept within a pretty narrow range throughout the session. Adding in Monday's decline, the S&P 500 is down 1.8% for the week, while the Dow and the Nasdaq hold week-to-date losses of 2.0% and 1.4%, respectively.

10 of 11 sectors finished Tuesday in the red. The heavily-weighted health care group showed particular weakness, losing 2.1%, after Amazon (AMZN 1437.82, +20.14), Berkshire Hathaway (BRK.A 323000, -499), and JPMorgan Chase (JPM 115.11, -1.09) announced that they're forming a company focused on reducing health care costs for their U.S. employees. Health care providers like UnitedHealth (UNH 236.65, -10.76), Anthem (ANTM 243.44, -13.58), and Cigna (CI 207.89, -16.01) lost between 4.4% and 7.2% in reaction to the announcement.

Meanwhile, drug maker Pfizer (PFE 37.80, -1.22) and health care provider Aenta (AET 187.89, -5.85) lost 3.1% and 3.0%, respectively, despite reporting better-than-expected earnings for the fourth quarter. Pfizer also issued upbeat guidance for fiscal year 2018.

Like health care, the energy sector was especially weak, losing 2.0%, as the price of crude oil declined for the second consecutive session; West Texas Intermediate crude futures dropped 1.6% to $64.54 per barrel and now sit about 2.5% below the three-year high they touched last Friday.

On a positive note, the consumer discretionary sector (-0.5%) performed relatively well, even though McDonald's (MCD 172.48, -5.29) tumbled 3.0% after beating Q4 earnings and revenue estimates, and Harley-Davidson (HOG 50.84, -4.45) dropped 8.1% after a disappointing fourth quarter and downbeat motorcycle shipment guidance for fiscal year 2018. Amazon (AMZN 1437.82, +20.14), which climbed 1.4% to a new all-time high, helped keep the sector's loss in check.

The lightly-weighted utilities sector (+0.2%) was the lone advancer, but the telecom services sector (unch) finished not far behind.

In the bond market, U.S. Treasuries ended Tuesday mostly lower, with longer-dated issues showing particular weakness. The yield on the benchmark 10-yr Treasury note climbed three basis points to 2.73%, while the 2-yr yield finished unchanged at 2.12%. Yields move inversely to prices.

Elsewhere, equity indies in the Asia-Pacific region settled lower, with Japan's Nikkei (-1.4%) leading the retreat, while the Euro Stoxx 50 lost 0.9%. The U.S. dollar lost 0.1% against the euro (1.2396), 0.5% against the British pound (1.4144), and 0.1% against the Japanese yen (108.82).

At 9:00 PM ET, President Trump will deliver his first State of the Union address. The president is expected to look both forwards--by pushing for a bipartisan deal in Congress on immigration and infrastructure spending--and backwards--by touting the GOP's victory on tax reform.

Reviewing Tuesday's economic data, which included the Consumer Confidence Index for January and the S&P Case-Shiller Home Price Index for November:

  • The consumer confidence reading for January increased to 125.4 (consensus 124.0) from the prior month's revised reading of 123.1 (from 122.1).
    • The key takeaway from the report is that consumers' expectations improved despite some ambivalence about their income prospects over the coming months, which the Conference Board said could be related to some uncertainty regarding the tax plan.
  • The Case-Shiller 20-city Index increased 6.4% in November, while the October increase was revised to 6.3% from 6.4%.

On Wednesday, investors will receive the weekly MBA Mortgage Applications Index at 7:00 AM ET, the ADP Employment Change report for January (consensus 190K) at 8:15 AM ET, the Employment Cost Index for the fourth quarter at 8:30 AM ET, the Chicago PMI for January (consensus 61) at 9:45 AM ET, and Pending Homes Sales for December (consensus +0.6%) at 10:00 AM ET.

In addition, the Fed's latest policy directive will be released at 2:00 PM ET.

  • Nasdaq Composite: +7.2% YTD
  • S&P 500: +5.6% YTD
  • Dow Jones Industrial Average: +5.5% YTD
  • Russell 2000: +3.1% YTD

>>> Bank of England's Carney speaks in UK House of Lords - Reuters News

HIGHLIGHTS-Bank of England's Carney speaks in UK House of Lords - Reuters News
30-Jan-2018 16:04:05
LONDON, Jan 30 (Reuters) - Bank of England Governor Mark Carney appeared on Tuesday before the Economic Affairs Committee in the upper house of Britain's parliament, the House of Lords.
Below is a selection of his comments.
 
MONETARY POLICY FOCUS INCREASINGLY ON INFLATION
"The important thing with policy now ... is that as the trade-off has been removed, in other words, as slack in the economy has been taken out, we move into a more conventional area for monetary policy, where the focus is increasingly on returning inflation sustainably to target over an appropriate horizon."
 
UK BUSINESS INVESTMENT NOT UP AS MUCH AS IT SHOULD BE
"Business investment is not up any way to the degree that the world economy growing at over 4 percent with the easiest financial conditions, most supportive financial conditions in over a decade, with the strongest balance sheets in probably 25 years and huge opportunities in an environment of greater certainty."
 
UK BUSINESSES WAITING TO SEE FUTURE EU TRADE TIES
"It's understandable that our businesses, on the whole ... not all businesses but on average, on the whole, are waiting to see what their future arrangements are going to be with the EU and where the bigger opportunities are going to be outside. That's understandable ... and we conduct policy accordingly."
 
BOE DOES NOT HAVE A BIAS ON BREXIT
"We don't have a bias, in terms of the outcome. We look at the economic forces ... however the negotiations go ... how it affects the exchange rate, how it affects the supply side of the economy, and how it affects demand."
 
UK ECONOMY OUTPERFORMANCE VS BOE FORECAST AUG 2016
"If you look at the 1 percent difference between the two, what caused the discrepancy, with hindsight, the first fact is the world economy is much, much stronger and the European is much stronger.
"Second factor is improved financial conditions, relative to the conditions at the time, and our expectations of those financial conditions ... There's a tiny bit one could add as well for the loosening of fiscal policy ... (or) the reduced pace of tightening of fiscal policy would be the most accurate description there."
 
BOE GOT BROAD ECONOMICS RIGHT ON IMPACT OF BREXIT
"I'm going to reiterate the point about getting the broad economics right, which I think we did. We got the broad economic channels right, and taking what I, even with the wisdom of hindsight, very firmly believe was the right course of action to support the economy and to balance the return of inflation sustainably to target but also to support the economy during a period of some uncertainty."

Fwd:MAKOR - ABLYNX - THE CHECKLIST

ABLYNX (ABLX BB)                            

THE CHECKLIST   

Sanofi announced its intention to launch a voluntary offer on ABLYNX for EUR45 cash per share, EUR310.992 per CB and EUR45 equivalent per ADS. The offer is subject to the following conditions:

 

·         Offer document approval by the FSMA

·         75% acceptance level (Shares, ADS, Warrants and Convertible Bonds aggregate).

·         Approval from the FTC under HSR Act and German FCO.

·         No MAC that would incur a EUR500M negative impact on NAV of Ablynx excluding general market conditions and any impact of the offer on clients, employees or contracts of the company.

·         No financing condition (Financing provided by BNP Fortis NV)

·         Offer document expected to be filed by Mid to late Feb,

·         Offer period expected to run during Q2 2018 with closing at the end of Q2. If no counter-offer emerges, we would assume a late April, beginning of May closing.

It is unclear whether Ablynx ran a structured sales process prior to accepting and recommending the Sanofi bid but on the Due Diligence side:

 

·         Sanofi confirmed during the conference call that they acted very quickly and there is not so much to say about the competitive process. We underline that Sanofi signed a strategic collaboration contract with Ablynx in July 2017 to develop nanobody product candidates: summary of the agreement is an upfront payment by Sanofi to Ablynx of EUR23m on top of which Ablynx will receive research funding estimated to EUR8m for the initially selected targets. Furthermore, what is more of importance, and this has been subject to long due diligence by Sanofi into Ablynx, Sanofi agreed to pay EUR2.4bn to Ablynx plus tiered royalties up to low double digits on the net sales of any products originating from the collaboration in immune-inflammation. Looking at the other partnerships Ablynx do have (Abbvie, Boehringer, Edding Pharm, Novartis, Novo and Taisho), but none of them represents such a high value compared to Sanofi’s agreement with Ablynx except Ablynx’s partnership with Merck in immuno-oncology which could generate milestones of EUR4.1bn. We are of the view that these agreements represent a sort of poison pill, leaving a doubt about Merck’s reaction

 

·         Material Adverse Change Clause: In the official press release filed with the FSMA, the MAC (“Evenement significatif defavorable”) clearly undermines that the EUR500Mio impact on the NAV excludes in point (iii) any resulting negative effect or arising from the announcement or the anticipated completion of any public offering acquisition including such effects on employees, customers, vendors, suppliers, resellers, partners, creditors, contractors or other third parties. In our view, it confirms that any decision taken by one of the product development partners of Ablynx would not have any negative effect on the deal. Clearly in our view the EUR500m clause relates to any negative event / decision that might arise on the Marketing Authorization and the Fast track approval process of Caplacizumab in Europe and the US.

 

·         Caplacizumab: this is the lead nanobody treatment of Ablynx in the treatment of the rare disease aTTP (Acquired Thrombotic thrombocytopenic purpura).

 

o    In Europe, the MAA (Marketing Authorization Application) has been filed on Feb. 2017 and the process usually takes 240 days for review unless the clock is stopped for further questions. Per the last update on the EMA website (European Medicines Agency), at the last meeting held on 22 January, the clock has been stopped at 180 days and should restart shortly when the company has answered questions asked by the Agency. Any preliminary decision made by the CHMP, (Committee for Medicinal Products for Human Use), regarding marketing authorization should be announced in Mid to late May 2017, assuming the clock is not stopped again.

 

o    In the US, the medicine is under a “Fast Track process”: this process is designed to facilitate the development and expedite the review of drugs to treat serious conditions and fill an unmet medical need. This process has been engaged in July 2017 and allows the company to be in constant discussions with the FDA about the different Phase of the trial (Caplacizumab is actually in the Phase III named Hercules and it should be formally notified to the FDA in Q2 2018: if it receives priority review for fast track designation, this clearly represents an upside in terms of pricing for Ablynx).

 

Based on the premium paid by Sanofi, we would advise investors to build initial positions in Ablynx not discounting the optionality of the Merck partnership but also to keep some powder dry as any perceived negative news (e.g. announcement of further delays to the EMA or the FDA process) is likely to adversely affect the spread. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research Disclaimer
This research has been prepared by Makor Capital Limited (“Makor Capital”) and is intended for professional or qualified investors only. Makor Securities London Ltd (“Makor Securities”) is distributing this material to its clients who are Eligible Counterparties or Professional Clients under FCA Rules. It may also be disseminated to persons who are Investment Professionals within the meaning of the Financial Services and Markets Act 2000 (Financial Promotion Order 2005). In the United States, Makor Capital only distributes this research material to major US institutional investors (as that term is defined in Rule 15a-6 of the Securities and Exchange Act of 1934) and to SEC-registered broker-dealers or banks acting in a broker–dealer capacity. This material is not intended for distribution to any other persons and should not be redistributed. If you do not fall into any of these categories you should disregard it.

Disclaimer
This publication has been prepared by Makor Capital Limited (“Makor Capital”) and is intended for professional or qualified investors only. Makor Securities London Ltd (“Makor Securities”) is distributing this material to its clients who are Eligible Counterparties or Professional Clients under FCA Rules. It may also be disseminated to persons who are Investment Professionals within the meaning of the Financial Services and Markets Act 2000 (Financial Promotion Order 2005). In the United States, Makor Capital only distributes this material to major US institutional investors (as that term is defined in Rule 15a-6 of the Securities and Exchange Act of 1934) and to SEC registered broker-dealers or banks acting in a broker–dealer capacity. This material is not intended for distribution to any other persons. If you do not fall into any of these categories you should disregard it.
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