FT : Ecommerce leads vintage watches into the future

Ecommerce leads vintage watches into the future
Collectors were suspicious about buying them online, but the business is growing fast

While watch-lovers might once have spent their time trawling jewellers, antique shops and flea markets to find vintage watches, shunning the internet and its unverifiable merchants, ecommerce has now become an important channel for collectors.

Confidence in buying vintage online has grown as reputable, web-based dealers have established themselves. Those who specialise in more modern pre-owned watches include Watchfinder.co.uk, which had revenues of £85m in 2016-17, and Berlin-based Watchmaster.com. Both have a vintage offering on their sites.

Auction houses now offer online bidding facilities for vintage watches and feature high-resolution catalogue images on their websites, which can be enlarged to many times actual size. This makes it possible to see the condition of a watch almost as accurately as if the real thing were being examined under a loupe. Prospective purchasers can then bid from anywhere in the world, pay electronically and have it delivered to their door by courier.

In mid-2014, the popularity of such sales even led Christie’s to establish an online watch shop (ie at fixed prices). Within a week of going live, Christie’s Watch Shop sold 30 per cent of its inventory, having used its worldwide reach and reputation to attract buyers from all continents.

Almost four years on, John Reardon, the international co-head of Christie’s watch department, says online auctions and private sales represent the fastest-growing part of the department’s business. “Our greatest fear when we launched was that the clients would not be ready for it — but they were actually more ready than we were,” he says.

“The internet enables us to show great pictures and videos and tell the stories behind particular watches in a way that we can’t with a conventional auction catalogue. There are many examples of pieces making more online than they probably would have in a normal sale, and we’ve found that the number of women who bid and buy through the internet is considerably larger than the number who participate in live auctions.

“People also seem very keen for us to sell their watches in this way — we have more inventory than we can process — and we’ve been surprised to see that pocket watches sell far better online than they do at live sales.” Last year Christie’s watch department had sales of $91.9m, including $6.1m from ecommerce.


Mr Reardon believes the success of the online operation will bring an end to the blockbuster live sales where 400-plus lots come under the hammer. Instead, he says, traditional auctions will become more like the company’s December New York sale which featured just 99 high-end pieces.

The online vintage watch market is not just confined to large companies in big cities. Black Bough, a small gift and homeware shop which opened in the UK’s bustling market town of Ludlow, Shropshire, in 2011, has also developed a solid reputation as a source of vintage watches thanks to its easy ecommerce options and the expertise of its co-founder, Alex Barter.

Before setting up the business with his partner, Adam Withington, Mr Barter had spent 12 years as a specialist in the watch department at Sotheby’s in London, during which time he became a member of the Antiquarian Horological Society and was made a freeman of the Worshipful Company of Clockmakers.

He used his experience and contacts gained at Sotheby’s to establish the vintage watch side of Black Bough’s business, and he now finds stock from the UK and Europe to sell online around the world. “Visitors to the shop do buy our vintage watches, but the majority of the 15-20 that we sell each month are online purchases,” says Mr Barter.

“When we started, we were very conscious of the horror stories that are often told about people buying watches online — both from private individuals and unknown businesses — which turn out to be damaged, non-original, badly restored or, in the worst-case scenario, simply fake or non-existent.

“With that in mind we have made a point of being very clear about what we’re selling, so we provide a full, written description and show images of both the outside and the inside of the watch. We’re one of the few websites to do that, and we also include a short video that explains the functions of the watch. People like that, because it shows exactly how a particular piece looks on the wrist.”

The most expensive watch the company has sold over the web was a Patek Philippe for £8,750 and, perhaps surprisingly, Mr Barter says that the majority of his ecommerce clients are first-time vintage watch buyers.

For one of the most experienced dealers in the vintage watch world, however, the thought of buying or selling online is anathema. David Duggan set up his business in 1983 and some of his clients have remained loyal to his strictly over-the-counter methods for more than 30 years. “Quite simply, I would never dream of buying a vintage watch online and I will certainly never sell a vintage watch online,” says Mr Duggan who, as well as specialising in Patek Philippe and Rolex models, is an official specialist for Rolex sister brand Tudor.

“In my opinion, an online purchase takes a great deal of the pleasure away from buying a vintage piece because it lacks the thrill of the chase, the chance to glean knowledge from the dealer and the opportunity to develop the sort of rapport that true enthusiasts appreciate,” he says.

“Selling any watch by mail order also leaves a dealer very open to fraud. If someone calls us and wants to buy a watch that they have seen on our website, we will take a 10 per cent deposit over the telephone by card but insist that the balance is paid at the shop — that’s the only way we do business.”

He recognises that selling online has momentum, “but I hope it doesn’t take over — buying a year-old watch sight unseen is one thing, but buying a 30- or 40-year-old one on the basis of some online images and a description is very different.

“Perhaps we’re old-fashioned,” he says. “But that’s just how we like to do it.”

FT : HNA Group offers high interest payment as funding pressure builds

HNA Group offers high interest payment as funding pressure builds
Chinese conglomerate is offering to pay 11% to 12% for one-year financing

Acquisitive Chinese conglomerate HNA Group is offering unusually high interest payments for short-term financing, in the latest sign that the company faces a cash shortage.

Three intermediaries who market banker’s acceptances (BAs) for clients seeking to raise cash told the Financial Times that HNA is willing to pay 11 to 12 per cent for one-year financing, far higher than typical rates for high-quality Chinese borrowers. Two of them said that in mid-2017, comparable bills were yielding only 7.5 per cent.

The high yields are another sign that HNA — which has agreed to $40bn of acquisition deals since 2015 and is the largest shareholder in Deutsche Bank and Hilton Worldwide — is perceived as risky by potential creditors.

In November, it sold $300m of 363-day bonds in Hong Kong at a rate of 8.875 per cent, the highest ever for a bond from a Chinese company with a maturity of one year or less, according to Thomson Reuters data. 

A banker’s acceptance is a short-term credit instrument issued by a company and guaranteed by a bank or financial institution. It is commonly used by groups looking to shore up their cash needs in addition to borrowing from banks and capital markets.

The presence of a bank as guarantor means that BAs are normally viewed as low risk, regardless of the corporate issuer, and yields are generally low. But in the case of HNA, the guarantor was not an outside bank but another HNA subsidiary, HNA Group Finance. That suggests the ostensible guarantee provides little additional security.

In an interview in December, a company board member said he expected liquidity concerns to ease by the end of 2017. Last month HNA publicised its meeting with eight of China’s largest banks to discuss lending plans for 2018, an apparent effort to reassure markets that the company still enjoys the confidence of key creditors.

But pressure from China’s policymakers who have sought to rein in capital flight and foreign dealmaking is contributing to investor perceptions that HNA’s credit is risky. 

“The reason the yield is now so high is that the country is revoking overseas investment in favour of domestic investment. They’ve stopped a lot of foreign activity,” said one intermediary. 

In June, China’s banking regulator mentioned HNA alongside three other large, privately owned conglomerates as sources of possible “systemic risk” because of their heavy borrowing to finance foreign acquisitions. 

The total amount that HNA is seeking to raise is unclear because the BAs on offer are dispersed among various intermediaries. Three who spoke to the Financial Times are offering acceptances with face values ranging from Rmb500,000 to Rmb50m ($77,000 to $7.7m). One said he could obtain a Rmb100m draft for a buyer who was interested in that amount.

HNA declined to comment. 

An interest rate of 12 per cent is high by any standard. The People’s Bank of China’s benchmark one-year lending rate is 4.35 per cent. The benchmark yield on one-year commercial paper rated double A minus — equivalent to junk status in China’s onshore market — was 6.33 per cent on Thursday, according to China’s main bond clearing house.

HNA’s offer price puts its funding cost above even that of China’s peer-to-peer lending market, which is used by small businesses and consumers that cannot access credit from traditional financial institutions.

The average rate on P2P investment products was 9.54 per cent last month, according to Online Lending House, a website that tracks the industry.

Several bills for sale viewed by the FT were issued directly by HNA Group. Others were issued by Beijing Capital Airlines, a small carrier owned by HNA.

Last week, two of HNA’s listed subsidiaries suspended trading in Shanghai pending a big announcement and possible asset restructuring. The subsidiaries are Hainan Airlines, the company’s core aviation business and its major cash flow generator, and Tianjin Tianhai Investment, which owns IT group Ingram Micro.

FT Lex : Fast Retailing: rags to riches

Fast Retailing: rags to riches
Despite their high valuation, the Japanese group’s shares have room to run

If selling clothes was an indicator of success for Japan’s push to raise inflation, then Prime Minister Shinzo Abe should be pleased with Fast Retailing. The Japanese group, owner of the Uniqlo brand, posted a 10 per cent year-on-year boost to quarterly revenue. More importantly, the dependency upon domestic sales is ending. Despite a high valuation, the stock has room to run.

Clearly, the market sees something new. Fast’s share price has gained 65 per cent from September lows. Before the rally, disappointing performance in Japan was blamed on a warm winter followed by a cool summer. In the meantime, foreign sales were booming. First-quarter results released on Thursday revealed sales of ¥258bn ($2.3bn) from Uniqlo’s international operations. These exceed Japan’s for the first time.

Even better, December same-store sales in Japan increased 18 per cent compared with the year before. The group relies primarily on physical store sales, contradicting narratives of doom from online sales.

Fast Retailing shares are pricey. At Thursday’s close, the group’s market value amounted to 37 times its forward earnings. That is in line with its own five-year average. But local apparel sellers trade a third lower on average. Global peers, such as Spain’s Inditex, are cheaper still.

Yet the group has one of Japan’s few global apparel brands. And earnings per share, which have travelled sideways since 2013, should begin to grow again from this year. First-quarter operating margins increased 1.7 percentage points to 18.3 per cent compared with the corresponding quarter last year. Moreover, analysts at Goldman Sachs see potential for a further boost: currency contracts, used to hedge upcoming import costs, appear to be struck at more advantageous levels than in the past year. That could decrease the cost of sales

The group’s high earnings multiple would contract if its global expansion strategy trips. That is not likely. With margins high, the stock should head the same way.

FT : Saudi Aramco shrugs off electric car threat

Saudi Aramco shrugs off electric car threat
Oil group’s tech chief says making traditional engines more efficient is greener approach

Improving the efficiency of traditional vehicle engines is a more effective way of tackling climate change than waiting for electric cars to gain significant market share, Saudi Aramco’s technology chief said on the eve of the Detroit auto show.

“The internal combustion engine is here to stay,” Ahmad Al Khowaiter said on a tour of the world’s largest oil group’s research plant near Detroit, where it is investing in new technologies to improve fuel efficiency and reduce emissions.

While investors increasingly focus on the long-term threat that electric vehicles pose to the oil industry — and especially to Saudi Aramco ahead of its plans for a record-breaking stock market listing this year — Mr Al Khowaiter said his company was investing in improving internal combustion engines, which power 99 per cent of the world’s vehicles.

He said it was generally viewed that by mid-century about 90 per cent of transport would still be powered by the internal combustion engine, meaning the “greatest opportunity” to cut greenhouse gas emissions was by improving the engine.

He added that this would have a “dramatic effect on emissions from the sector immediately, whereas we have to wait for the growth of the alternatives to really have an impact”.

Saudi Arabia believes there will be future demand for its oil, as emerging economies in Asia and Africa grow. But as a global shift towards greener fuels takes place, the kingdom has sought to develop new industries and technologies — from chemicals to cleaner car engines — to prolong the life of Saudi oil.

Despite a push by the powerful Crown Prince Mohammed bin Salman to move the country’s economy beyond oil, Saudi Arabia — one of the lowest-cost producers in the world — still relies on its resource riches to generate the bulk of the kingdom’s revenues.

Mr Al Khowaiter’s comments come as several governments around the world threaten to ban traditional engines in future decades, leading global automakers to invest heavily in looking for alternative ways to power the vehicles of the future.

This week’s Detroit auto show takes place against a backdrop of unprecedented turmoil in the global auto industry, which is scrambling to prepare itself for a future in which cars increasingly are shared, drive themselves, and are powered by fuels other than petrol or diesel.

But traditional automakers are also investing heavily in improving the internal combustion engine at the same time, and Saudi Aramco is working closely with them to do so, Mr Al Khowaiter said.

Aramco’s Detroit research centre is working on technologies such as gasoline compression ignition (GCI) which delivers diesel-like fuel efficiency from petrol, with much lower emissions as well as on mobile carbon capture, a technology that allows vehicles to capture their own CO2 emissions and store them on board, to be offloaded later. But Mr Al Khowaiter said that technology was likely to be some years away from commercialisation.

>>> Barrons weekend summary: positive feature on Vivendi Cover story: In the fir

Barrons weekend summary: positive feature on Vivendi 

* Cover story: In the first installment of the Barron’s 2018 Roundtable, the panelists said they “generally expect more of the same in the months ahead—more gains for equities, large-cap and small” as economic growth continues; The Republican tax overhaul will help the economy and profits, prompting fresh investment as well as buybacks and more dividend payments. 

* Features: 1) Overview of Barron’s 2017 picks, which were up 8.1% from the date of publication to the end of the year, though they trailed their benchmarks; 2) Positive on Vivendi: As Spotify prepares to go public and streaming gains popularity, content providers such as Vivendi that receive royalties are on more solid footing than the streaming companies that pay them; 3) Driverless cars were a hot topic at CES, but while optimism about the market is growing among tech companies and consumers, numerous hurdles remain ( Positive on APTV, Lyft, BMW, GOOGL, TSLA, F, TM, GM, SNE, Kia, Nissan, Hyundai, Volkswagen); 4) MSFT co-founder Bill Gates says greater progress addressing developing world health problems could be made if pharma companies and startups were involved. 

* Tech Trader: Positive on QCOM: Company’s announcement at CES about new business in the radio frequency sector signals it plans to go on the offense against AVGO to thwart its takeover attempt, and that its business isn’t just about collecting royalties on phones. 

* Trader: Lori Calvasina of RBC Capital Markets and Julian Emanuel of BTIG expect the S&P 500 to hit 3000 by the end of the year; “The bond market’s brief selloff last week drew attention away from what might be the real issue: U.S. trade relations”; Positive on FB, AMZN, AAPL, NFLX, GOOGL: FAANG stocks seem more expensive than a year ago, and because they make up such a huge part of the S&P 500, any sustained weakness could be bad for the index and investors. 

* European Trader: Positive on Next: British retailer, which has about 700 stories selling clothes, shoes, and home furnishings, offers a good retail play for investors, though it remains heavily dependent on the U.K. 

* Asian Trader: Positive on Keyence: Japanese company, a key player in artificial intelligence and robotics, is among several cutting-edge tech-focused firms in Japan that are helping drive up the Nikkei 225. 

* Emerging Markets: Trade wars pose a potential problem for emerging market investors this year, but for now there is no reason to abandon the sector. 

* Commodities: Tightening global supplies and rising demand for crude oil helped prices start the year with a bang, and many analysts think they could rally to $80 a barrel. 

* Streetwise: “Tech’s deflationary powers—the ability to disrupt industries, increase efficiency, and lower prices—are the same ones driving a growing rebellion against tech,” says columnist Alex Eule, who also wonders why Jana Partners is targeting AAPL instead of FB, TWTR, SNAP, or GOOGL, which make the products that keep children tied to their phones.

>>> Puma could be potential takeover target of Anta Sports Products - report (tr

Puma could be potential takeover target of Anta Sports Products - report (Google translated)

Puma [FRA:PUM], the German sportswear group, could be a potential takeover target of Anta Sports Products [HKG:2020], a China-based sports footwear retailer, the online edition of Oriental Daily reported.
The Chinese- language news item noted that Kering [EPA:KPR], the French parent of Puma, had just announced that it would spin off Puma by distributing 70% of the company to its shareholders with Artémis becoming a long-term strategic shareholder of Puma with an ownership of about 29%.
It is speculated that after the share transfer by Kering, Puma will become a potential takeover target of Asian corporate such as Anta Sports Products, the report said.
Puma has a EUR 4.8bn market cap.

Barron’s: Vivendi Looks Cheap in Light of Spotify’s Valuation

Vivendi Looks Cheap in Light of Spotify’s Valuation

ByJack Hough January 13, 2018
Vivendi Looks Cheap in Light of Spotify’s Valuation

The spotlight is on Spotify, a London-based music-streaming service that’s planning an unusual debut on the New York Stock Exchange. But savvy investors should look to Paris, home of Vivendi, a holding company for media businesses.


That’s because the popularity of Spotify, and streaming in general, is making music rights more valuable. Vivendi’s biggest moneymaker, Universal Music Group, is the world’s top rights-holder for music, representing acts such as the Beatles, Katy Perry, and Kanye West.

The economics of owning rights and charging royalties are, unsurprisingly, more favorable than those of paying royalties and collecting subscriptions. Spotify loses money for now. Universal is quite profitable. Spotify is reportedly planning to list its shares for public trading as soon as March, bypassing investment banks and the costly process that companies typically go through to raise money.


If Spotify, which isn’t yet profitable, will soon be worth $20 billion, as some investors predict, Universal should be valued at more than $40 billion, argues JPMorgan analyst Daniel Kerven in a recent report.

What’s remarkable about that estimate is that Vivendi (ticker: VIV.France) recently had a stock market value of 30.3 billion euros, or $36.9 billion.

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“You pay for Universal Music, and you get everything else for free,” says David Marcus, whose Evermore Global Value fund (EVGBX) ranks among the top one-fifth of peers for five-year performance, according to Morningstar, and counts Vivendi as a top-five holding.

Marcus says he viewed Vivendi as a value trap for years, but warmed to it after 2012, when French industrialist Vincent Bolloré sold TV assets to Vivendi in exchange for shares, which he kept.


Vivendi Looks Cheap in Light of Spotify’s Valuation
BOLLORÉ IS PERHAPS NOT as well-known in the U.S. as he should be. Over the past 20 years, his Bolloré SA (BOL.France) has multiplied investors’ money 22 times, compared with six times for Warren Buffett’s Berkshire Hathaway (BRK.A). Today, Vincent Bolloré controls Vivendi via a minority stake and a French law that gives long-term investors enhanced voting power. “He has brought rational thinking to Vivendi,” says Marcus.

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He has also brought controversy. Under Bolloré, Vivendi sold assets, including telecoms in France, Morocco, and Brazil, and videogame company Activision Blizzard (ATVI). It invested some of the proceeds in Telecom Italia (TIT.Italy); videogame concerns Gameloft and Ubisoft Entertainment (UBI.France); and Havas, an advertising outfit. Analysts call Bolloré SA one of the most complicated business structures they’ve seen, designed to protect family control. Children of Vincent Bolloré run key businesses.

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The Havas deal raised eyebrows, because Vincent Bolloré was its chairman at the time, meaning he was, in a sense, both seller and buyer. And why does Vivendi need an advertiser? Bolloré says Havas can help monetize the company’s intellectual property in marketing campaigns; beyond music, Vivendi owns Canal+ Group, a film and television studio whose characters include Paddington Bear. Time will tell. In the near term, the opportunity at Vivendi could be large enough to make ignoring some of the warts worthwhile.

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In a typical music subscription costing $10 a month, $5 to $6 goes to the record label, which pays $1 to $2 to the artist; $3 to $3.50 goes to the retailer, like Spotify or streamin g services from Apple (AAPL) and Amazon.com (AMZN); and $1 to $1.50 goes to the publisher, who pays 50 cents to $1 to the songwriter. Universal controls 20% of publishing, second only to Sony (SNE), and 33% of recorded music, ahead of Sony and Time Warner (TWX).

Vivendi Looks Cheap in Light of Spotify’s Valuation
SPOTIFY HOPES TO BECOME profitable as its scale expands. It will have to compete with tech giants that might be willing to sacrifice margins to expand their digital ecosystems. Universal will benefit from worldwide competition for new streamers. This year, JPMorgan’s Kerven estimates, the division will bring in €5.95 billion in revenue and €868 million in earnings before interest, taxes, depreciation and amortization. In 10 years, he projects revenue of €13.4 billion and Ebitda of €3.89 billion. That’s more than triple the Ebitda all of Vivendi produced last year.

Valuing Vivendi is complicated because some of its assets produce little or no income. Its shares trade at 24 times the 2018 earnings consensus. Many analysts use a sum-of-the-parts analysis, rather than a price/earnings comparison in forming price targets.


JPM’s Kerven is a bit of an outlier, with a target of €42, implying 76% upside from a recent €23 and change. Evermore’s Marcus sees the stock moving “into the high €30s,” and says a Universal spinoff is a possibility, but he hopes Vivendi keeps it.

Three more points to consider: First, Universal collects more than one-third of its revenue in the U.S., and so benefits from the recent corporate tax cut. Second, last month the Copyright Royalty Board in the U.S. ruled Sirius XM Holdings (SIRI) must pay more in royalties; Universal gets a piece. Third, Vivendi stands to gain more than just investor focus on streaming economics when Spotify goes public. It owns a 5% stake.

The Bottom Line: Vivendi, with a hand in music, TV, and videogames, is valued at $37 billion. Its music holdings alone could be worth more than $40 billion, thanks to streaming.

>>> Weekly Update- 2

Weekly Market Update: Markets and Firms Respond Favorably to US Tax Cuts and Hawkish ECB

The rally in stocks extended into yet another week with 2018 looking very much like most of 2017 thus far. The NASDAQ and banks led early on, before cyclical groups like retailers and small caps took the lead as the week wore on. WTI crude prices probed fresh 2.5 year highs into the mid-$60 range while Brent approached $70/bbl. The energy complex saw a breakout to the upside with stock prices significantly outperforming the gains in oil. Utilities, REITS and other bond proxies lagged that of the overall market as rising Treasury yields served as a headwind. For the week the DJIA gained 2%, the S&P500 added 1.6%, and the Nasdaq rose 1.8%.

Rates moved up globally helped by a hawkish take of the latest ECB minutes, continued robust economic data including rising CPI figures, and upbeat corporate sentiment predicated on the anticipated effects of fiscal stimulus. The US 2-year Treasury yield crossed above the 2% mark for the first time since 2008 while German rates rose to levels not seen in months. Dollar weakness extended into another week, in part on the belief robust overseas growth will result in more aggressive policy from those central banks in an attempt to play catch up with the US Fed. There were some gyrations in the Mexican peso and Canadian dollar on reports that the Trump Administration may be moving closer to giving formal notice on dissolving the NAFTA agreement. The Euro rallied to a 3-year high with dealers citing building technical momentum for the move above 1.21. Cable climbed to levels not seen since late 2016 in the days following the Brexit vote. The exuberance for cryptocurrencies hit an air pocket after reports circulated that China and South Korea were drawing up plans to shackle trade on exchanges there.

In corporate news, the week was dominated by reports of holiday sales figures from some key retailers and the start of the Q4 earnings season. Big box retailer Target announced holiday SSS rose 3.4%, leading it to raise Q4 earnings guidance. Nordstrom reported holiday sales up a more modest 1.2% and narrowed guidance, but there was also a report that the controlling family has resumed efforts to take the company private. JP Morgan kicked off the earnings season for banks with a strong beat on the top and bottom lines. CEO Jamie Dimon made positive comments about the credit environment and said that tax reform will be positive for the country. Walmart joined the growing number of Fortune 500 companies announcing one-time bonuses and a higher minimum wage for new employees in response to the US corporate tax cut.


SUNDAY 1/7
(CN) China Dec Foreign Reserves: $3.140T v $3.127Te (highest since Sept 2016, 11th consecutive gain, biggest gain since July)

MONDAY 1/8
066570.KR Reports prelim Q4 (KRW) Op profit 366.8B v 464Be; Rev 16.97T v 16.3Te
*(EU) EURO ZONE JAN SENTIX INVESTOR CONFIDENCE: 32.9 V 31.3E
*(EU) EURO ZONE DEC BUSINESS CLIMATE INDICATOR: 1.66 (record high) V 1.50E; CONSUMER CONFIDENCE (FINAL): 0.5 V 0.5E
GPRO Reportedly has hired advisers to consider sale – CNBC
(US) Special Counsel Mueller reportedly likely to interview Pres Trump as part of Russia investigation in next few weeks - Wash Post
*(US) NOV CONSUMER CREDIT: $28.0B V $18.0BE (largest gain in 16 years); Total consumer credit annual rate +8.8% (Fastest pace in over two years)

TUESDAY 1/9
TGT Reports Nov/Dec SSS +3.4%; Raises Q4 $1.30-1.40 v $1.22e, SSS ~+3.4% (prior $1.05-1.25, SSS 0-2%)
INTC Microsoft spokesperson: chip flaw patch may significantly slow some servers; greatest impact on corporate data services – press
JWN Reports Nov/Dec combined net sales +2.5% y/y, SSS +1.2% y/y
DPZ CEO Patrick Doyle plans to leave company in June; Richard Allison named CEO; Russell Weiner as COO; effective June 30th

WEDNESDAY 1/10
*(FR) FRANCE NOV INDUSTRIAL PRODUCTION M/M: -0.5% V -0.5%E; Y/Y: 2.5% V 2.6%E
*(UK) NOV INDUSTRIAL PRODUCTION M/M: 0.4% V 0.4%E; Y/Y: 2.5% V 1.8%E
(CN) China Officials: Said to view treasuries as less attractive; Recommends slowing or halting Treasury buying
*(US) DEC IMPORT PRICE INDEX M/M: 0.1% V 0.4%E; Y/Y: 3.0% V 3.1%E
NVDA Announces world’s first functionally safe AI self-driving platform
(US) Association of American Railroads weekly rail traffic report for week ending Jan 6th: 415.9K carloads and intermodal units, -4.6% y/y
(CA) Canada officials reportedly increasingly convinced Pres Trump will soon announce a withdrawal from NAFTA – press
*(CN) CHINA FX REGULATOR SAFE: REPORT THAT CHINA IS CONSIDERING REDUCING OR STOPPING PURCHASES OF US TREASURIES COULD BE BASED ON WRONG INFORMATION - financial press

THURSDAY 1/11
TSCO.UK Reports Q3 UK LFL (ex-fuel, ex VAT) 2.3% v 2.4%e; Christmas Trading period UK SSS ex fuel and ex vat +1.9%
DAL Reports Q4 $0.96 v $0.89e, Rev $10.2B v $10.2Be
WMT To raise U.S. wages, provide $1,000 bonus and expand hourly maternity and parental leave
*(US) DEC PPI FINAL DEMAND M/M: -0.1% V +0.2%E; Y/Y: 2.6% V 3.0%E
*(US) TREASURY'S $12B 30-YEAR BOND REOPENING DRAWS 2.867%; BID-TO-COVER RATIO: 2.74 V 2.53 PRIOR AND 2.33 AVG OVER THE LAST 8 SALES (highest BTC since Dec 2014)
AMD Spokesperson: chip vulnerabilities are applicable to AMD processors; two exploits uncovered apply to AMD chips – press
(US) US Commerce Sec Ross: Submitted results of probe into national security impact of steel imports to President Trump
*(CN) CHINA 2017 TRADE BALANCE (CNY): +2.87T V +3.35T Y/Y
*(CN) CHINA DEC TRADE BALANCE ($): 54.7B V 37.0BE (highest monthly surplus since Jan 2016*)
*(CN) CHINA DEC TRADE BALANCE (CNY) 362.0B V 235.2BE

FRIDAY 1/12
(DE) German coalition negotiations said to have achieved a breakthrough; still working on a final deal - financial press
JPM Reports Q4 adj $1.76 v $1.69e, Rev $25.5B v $25.0Be
*(US) DEC ADVANCE RETAIL SALES M/M: 0.4% V 0.5%E; RETAIL SALES EX AUTO M/M: 0.4% V 0.3%E
*(US) DEC CPI M/M: 0.1% V 0.1%E; CPI EX FOOD AND ENERGY M/M: 0.3% V 0.2%E; CPI NSA: 246.524 V 246.372E
JWN Reportedly family members will resume efforts to take company private later this year - CNBC

>>> GKN suitor Melrose to meet with target shareholders next week

GKN suitor Melrose to meet with target shareholders next week
12 JAN 2018
UK turnaround specialist Melrose Industries [LON:MRO], whose unsolicited takeover offer for GKN [LON:GKN] was rejected by the British engineering firm, plans to meet with the target’s shareholders next week, according to a source close to the transaction and a person briefed.

Melrose hopes to meet as many GKN shareholders as possible and shareholder meetings will likely begin as early as next week, said the person briefed.
Melrose will likely meet with its own shareholders as well as GKN's, said the source.
Any offer would require Melrose shareholder approval under UK listing rules as GKN’s market capitalization exceeds Melrose's by more than 25%. Melrose’s market capitalization stood at GBP 4.4bn as of Friday close.
Melrose’s cash and share offer, presented to GKN on 8 January, values GKN equity at GBP 6.9bn based on Melrose's closing price on Thursday (11 January).

GKN on Friday (12 January) disclosed it had rejected the offer and said it would instead separate its aerospace and automotive divisions to improve profitability.

Melrose’s offer is for the entirety of the company, emphasised the source and the person briefed. Buying GKN’s businesses separately is not a proposition that is on the table, said the source.

GKN’s shares shot up to GBP 4.20 on Friday, but Melrose shares also rose on Friday, lifting the value of its offer to GBP 4.20.

Melrose’s offer tracked GKN’s share performance and there is no reason to amend the terms of the offer, said the source close.

Spokespeople for Melrose and GKN declined to comment.