(BofA-ML) The Flow Show :

Key takeaways
* Alpha in bonds; inflows to active funds continue to outstrip passive
* AIpha in stocks: first ETF where stocks selected by robots launches amidst biggest Tech inflows in 38 weeks
* Tick-tock: risk-on equity & bond flows push B&B indicator up to 7.6

Talking Points
* Equities winning: $8.8bn into equities, $5.8bn into bonds, $0.4bn outflows from gold.
* Passive losing...in Bonds: $3.6bn into active bond funds this week vs $2.2bn into bond passives…active AUM fighting back in bondland...$1.04tn active bond inflows past 10 yrs vs. $0.93tn into passives (Chart 1)...v different trend past decade in stocks (Chart 2).
* Yield winning: $6.3bn inflows to IG+HY+EM bonds this week; investors continue to discount low-rate environment...US 5s30s yield curve (88bps) flattest since GFC... remarkable given the Philly Fed Employment outlook hit a 50-year high today (Chart 3).
* Japan losing (for a change): record $4.4bn outflows from Japan equities (86% ETF redemptions, possibly via BoJ); in contrast solid week of $7.5bn US equity inflows; post Sunday election we expect Japan TOPIX to revert to tracking US bond yields (Chart 4).
* Robots winning: this week's launch of the 1 ETF in which stocks will be selected by robots (AIEQ) comes as tech funds see biggest inflows in 38 weeks; AIEQ outperforming SPX thus far.
* GWIM ETFs: YTD flows show decisive cyclical shift by private clients, buying bank loans, financials, EAFE ETFs, shunning quality, utilities, large caps & dividends (Chart 6).
* BofAML Bull & Bear: BofAML B&B @ 7.6 as equity & bond flows, FMS equity & cyclical sector OWs push indicator toward "sell" signal of 8 (Chart 12)...tick-tock, tick-tock.

WWD : L’Oréal Teams With Station F

L’Oréal Teams With Station F
The beauty group has partnered with the startup campus as part of its open innovation strategy.


PARIS – L’Oréal keeps widening its digital reach. The French beauty giant said Friday it has inked a strategic partnership with Station F, considered the largest startup campus in the world, created and backed by Xavier Niel.

Specifically, the French beauty giant has become the partner for the development of early stage digital beauty startups around the globe.

Inside Station F, based in Paris, L’Oréal will also run its own beauty accelerator. “Through the accelerator, L’Oréal will finance 62 workstations on the Station F campus and support selected startups providing expertise in beauty and marketing, as well as networking and mentorship with the group’s key stakeholders and dedicated digital teams,” the company said in a statement on Friday.

“Digital is transforming beauty, and we see a shift toward augmenting the consumer experience through services such as color try-on, diagnostics, online breauty consultations, live broadcasting and personalization,” said Lubomira Rochet, chief digital officer of L’Oréal.

“Our partnership with Station F is strategic to help us connect, collaborate and support the rising generation of digital beauty entrepreneurs. We are excited to provide the resident beauty startups with access, networking and mentorship across the group’s brands, labs and business teams to accelerate their development,” she added.

Jean-Paul Agon, L’Oréal’s chairman and chief executive officer, said: “As a French company with a global reach, L’Oréal is proud to support Station F’s ambition to make France a global center of digital innovation. As a beauty industry leader, we are thrilled to empower the next generation of beauty-enthusiastic entrepreneurs.”

Roxanne Varza, director of Station F, said L’Oréal and the startup campus share “values of ambition and diversity.”

L’Oréal has made investment in other digital activities – such as venture capital firm Partech Ventures and Founders Factory, an accelerator and incubator – as part of its open innovation strategy.

WP : The race to save coffee

CENTROAMERICANO, a new variety of coffee plant, hasn’t sparked the buzz of, say, Starbucks’s latest novelty latte. But it may be the coolest thing in brewing: a tree that can withstand the effects of climate change.

Climate change could spell disaster for coffee, a crop that requires specific temperatures to flourish and that is highly sensitive to a range of pests. So scientists are racing to develop more tenacious strains of one of the world’s most beloved beverages.

In addition to Centroamericano, seven other new hybrid varieties are gradually trickling onto the market. And this summer, World Coffee Research ­— an industry-funded nonprofit group — kicked off field tests of 46 new varieties that it says will change coffee-growing as the world knows it.

“Coffee is not ready to adapt to climate change without help,” said Doug Welsh, the vice president and roastmaster of Peet’s Coffee, which has invested in WCR’s research.

Climate scientists say few coffee-growing regions will be spared the effects of climate change. Most of the world’s crop is cultivated around the equator, with the bulk coming from Brazil, Vietnam, Colombia, Indonesia and Ethiopia.

Rising temperatures are expected to shrink the available growing land in many of these countries, said Christian Bunn, a postdoctoral fellow at the International Center for Tropical Agriculture who has analyzed the shift in coffee regions. Warmer air essentially “chases” coffee up to cooler, higher altitudes — which are scarce in Brazil and Zimbabwe, among other coffee-growing countries.

Temperature is not climate change’s only projected impact in coffee-growing regions. Portions of Central America are expected to see greater rainfall and shorter dry seasons, which are needed to harvest and dry beans. In Peru, Ecuador and Colombia, rainfall is projected to decrease, potentially sparking dry periods.

These sorts of changes will pose problems for many crops. But coffee is particularly vulnerable, scientists say, because it has an unusually shallow gene pool. Only two species of coffee, arabica and robusta, are currently grown for human consumption. And farmers traditionally haven’t selected for diversity when breeding either plant — instead, essentially, they’ve been marrying generations of coffee with its close cousins.

As a result, there are precious few varieties of arabica that can grow in warmer or wetter conditions. In addition, diseases and pests that might be exacerbated under climate change could knock out entire fields of plants.

A disease of particular concern — coffee leaf rust, or “la roya” in Spanish — devastated coffee plantations across Central America in 2011. It effectively halved El Salvador’s coffee output and cost the region an estimated 1.7 million jobs.

Coffee farmers could see their livelihoods threatened, noted Aaron Davis, a British coffee researcher, because coffee trees are perennials with a 20- to 30-year life span: If a field is damaged by a bad season, farmers aren’t necessarily in a position to immediately replant it. And because coffee takes three years to mature, farmers face several years without income after new trees are planted.

“Under all these scenarios, farmers pay the biggest price,” Davis added.

While few experts expect these factors to drive coffee to extinction, they could severely reduce the global supply — and increase the hardship for coffee farmers.

“The major concern of the industry is that the quantity, and even the future, of good coffee is threatened by climate change,” said Benoit Bertrand, an agronomist with the French agricultural research group CIRAD and one of the world’s most respected coffee breeders. “So the question becomes: How can we address this with new technology and new innovations?”

Despite coffee’s global popularity, few growers have risen to the challenge. There has historically been no real market for improved coffee plants, Bertrand and Davis said: Unlike such major commodity crops as corn or soybeans, coffee is grown primarily by small farmers with low margins who can’t shell out for the latest seed or growing system.

As a result, coffee is coming late to the intensive breeding programs that have revolutionized other crops. But in the past 10 years, interest around plant improvement has exploded, driven in part by the growth of the specialty coffee market.

Plant breeders have begun cataloguing the hundreds of strains of arabica in existence and cultivating them in different growing areas. They’ve also begun to experiment with robusta, which grows in higher temperatures and fares better against diseases but often tastes bitter. There is some hope that new varieties of robusta, or robusta/arabica crosses, could capture that resilience without the bad flavor.

Lately, there has been a particular surge of interest in a type of plant called an F1 hybrid, which crossbreeds two different strains of arabica to produce a unique “child” plant. They can be made from any of the hundreds of varieties of arabica and bred for qualities such as taste, disease resistance and drought tolerance.

Because they are the first generation, F1 hybrids also demonstrate something scientists call “hybrid vigor” — they produce unusually high yields, like a sort of super plant.

Since 2010, eight such F1 hybrids have been released to the commercial market. Bertrand is currently testing a class of an additional 60 crosses with the support of World Coffee Research.

The researchers say that the top two or three — which are expected to become available to farmers as soon as 2022 — will offer good taste, high yields and resilience to a range of coffee’s current and future woes, from higher temperatures to nematodes.

“These hybrids deliver a combination of traits that were never before possible in coffee,” said Hanna Neuschwander, the communications director at World Coffee Research. “It’s the traits that farmers need with the traits that markets demand. People used to think the two were mutually exclusive.”

But the hybrids’ success remains largely untested at scale. Of the eight F1 hybrids on the market at present, only one — Centroamericano — has been planted in any significant volume, Neuschwander said. The variety is currently growing on an estimated 2,500 acres in Central America; for context, the U.S. Agriculture Department reports that Honduras alone grows coffee on more than 800,000 acres.

Farmers who have planted the new trees are seeing success. Starbucks has sold coffee made from F1 hybrids as part of its small-lot premium brand. Last spring, a batch of Centroamericano grown on a Nicaraguan family farm scored 90 out of 100 points in that country’s prestigious tasting competition, which some in the industry heralded as a major victory.

But the path to adoption will be steep. Breeders have developed these plants, Neuschwander said, but many areas of the world don’t have the seed industries and infrastructure in place to actually distribute them. That’s particularly true in the case of F1 hybrids, which — thanks to their particular genetics — can only be grown from tissue samples.

F1 hybrids are also expensive — as much as 21/2 times the cost of conventional plants. That puts them well outside the range of most smallholder farmers, said Kraig Kraft, an agroecologist and technical adviser with Catholic Relief Services’ Latin America division.

Kraft, who has worked with World Coffee Research to test F1 hybrids in Nicaragua, said that in his region, at least, only midsize and large plantations have switched to them.

“I think our position is that we need to really understand the requirements for all farmers to be able to use these new technologies,” Kraft said. “My concern is that small farmers don’t have access to the capital to pay for these investments.”

Even if they did, however, some experts caution that the new coffee varieties are only a piece of a much larger adaptation process. To cope with the effects of climate change, farmers may need to adopt other agricultural practices, such as shade-farming, cover-cropping and terracing, said Bunn, the researcher.

In some regions, those practices won’t be economical. And in that case, policymakers should focus on helping farmers transition to other crops or other livelihoods altogether, researchers stress.

“People sell [F1 hybrids] as a silver bullet,” Bunn said. “To be clear, those plants are indispensable, and I don’t question the value of the work . . . but we need more to adapt to climate change. And we need to accept the hard reality that some places will need to move out of coffee production.”

>>> European PRe-Market Indications

MainFirst Pre Mkt Indications
*ACCOR-Q3 Rev 504m(529),Sees FY Ebit €460m-€480m(499),SI 4.5%........-2%
*SOFTWARE-Q3 Rev 197.3m(212.6),Ebita 63.6m(65.4),Cons D/G 2%-3%......-5%
*VOLVO-Q3 Sales 77.2b(76),Adj OP 7.02b(6.27),overall mkt strong......+2%
*SWISS RE-Sees hurricane,quake claims at $3.6bln.....................+1%
*ZURICH INS-To explore sale of Endsleigh,(unlikely/small bizz).......+0.5%
*MICHELIN-Q3 Net Sales €5.34b(5.34),Vols +1%(+1.2%),SI 0.8%..........-1%
*DEUT BOERSE-Was inn talks about MSCI in 2015,2016 - Press...........U/C
*UCB-9m Rev 3.3b,Exps FY Rev €4.4b-€4.5b(4.4),EPS €4.1-€4.5..........+3%
*GECINA-9m Gross Rental Inc 379m,Raises o/lk for FY Net..............+2%
*FNAC-Q3 Sales 1.l79b,L-F-L Grth 5.8%,lifts Synergy goal 2017........+3%
*ERICSSON-GM 30%(29.8),Sales 47.8b(47.25),OP Zero(-655.5)............+2%
*DAIMLER-Q3 Ebit 3.46b(3.55),Rev 40.8b(40.41),FY Rev rising,Cons U/G.+3%
*METRO-Q4 Rev 9.2b(9.3),Wholesale +1.3%,Real unit rev down 1%........-1%
*SIXT-Q3 EBT 120m(120),Reits FY guidance of increase EBT,Rev Grth....-1%
*WIRECARD-Read across from Paypal co raised guidance +3.6% a/hrs.....+0.5%
*ASSA ABLOY-Q3 Sales 18.5b(18.76),Ebit 3.08b(3.15),Org Rev 3%........-2%
*METSO-Q3 Sales 673m(767.5)EPS 13c(29),Adj Ebita 43m,Orders 817m.....U/C
*CASTELLUM-Q3 Rental Inc 1.3b(1.29),rental mkt displays stable.......U/C
*SIXT LEASING-P/warning over risk provs for residual values..........-16%

Shore
ACACIA MINING - production -7%,revs -40% impacted by ban on exports..........-2%
IHG - Q3 RevPAR +2.3%,excellent start on plans to accelerate brand growth....+1%
INTERSERVE - wins five-yr facilities management contract worth £227m.........MKT
GULF KEYSTONE - production on target and is on track to meet FY g'dance.....UNCH
HENRY BOOT - Sees fy performance materially ahead of forecasts...............+5%
DECHRA PHARMA - Q1 performance in line with manangement expectations........UNCH
SOUTH32 - said to study bid for $1.6bn Rio coal portfolio (bloomberg).......UNCH
RECORD - record highest AUME in $ terms of $61.2bn,remains confident for H2..+1%

Handelsbanken:
VOLVB(+5%) q3 v strong, adj ebit 13% better on Trucks mgn, orders 15% ahead
ERICB(-5%) q3 adj ebit in line, gross profit miss with 14%, weak q4 sales growth
AKSO(+3%) q3 strong with adj ebitda 14% ahead, orders weak but new 1.6bn today
AHSL(+3%) q3 sales 2% better, ebita in line, outlook positive
BETSB(+1%) q3 sales 3% below but adj ebit 2% better, q4 start bit weaker
DUNI (-5%) q3 revs and ebit misses on higher raw material pxs

NYP : Tarantino on Weinstein: ‘I Knew Enough to Do More Than I Did’

Quentin Tarantino, the Hollywood director most closely tied to Harvey Weinstein, has known for decades about the producer’s alleged misconduct toward women and now feels ashamed he did not take a stronger stand and stop working with him, he said in an interview.

“I knew enough to do more than I did,” he said, citing several episodes involving prominent actresses. “There was more to it than just the normal rumors, the normal gossip. It wasn’t secondhand. I knew he did a couple of these things.”

“I wish I had taken responsibility for what I heard,” he added. “If I had done the work I should have done then, I would have had to not work with him.”

Allegations of sexual harassment and assault by Mr. Weinstein were disclosed this month in The New York Times and The New Yorker, which prompted other women to share their accounts of his alleged abuse, set off criminal investigations, roiled the entertainment world and triggered a social media movement of women from other industries and backgrounds telling their stories.

But Mr. Tarantino said in the interview on Wednesday that he had heard about Mr. Weinstein’s behavior long before those articles. His own former girlfriend, Mira Sorvino, told him about unwelcome advances and unwanted touching by Mr. Weinstein. Another actress told him a similarly upsetting story years later. He also knew that the actress Rose McGowan had reached a settlement with the producer.

But Mr. Tarantino said he had failed to consider whether the women he knew were part of a larger pattern of abuse. Though he continued to hear alarming stories over the years, he proceeded to make film after film with Mr. Weinstein, his greatest champion — a decision he now regrets.

Continue reading the main story
“What I did was marginalize the incidents,” he recalled, saying he wrote them off as mild misbehavior. “Anything I say now will sound like a crappy excuse.”

In the hourlong conversation, Mr. Tarantino, 54, apologized for not doing more while also explaining why; admitted his own culpability while also calling for sweeping change in Hollywood’s treatment of women; and condemned Mr. Weinstein, 65, while acknowledging their father-son closeness.

The producer and director have been symbiotic for decades: from 1992, when Mr. Weinstein distributed “Reservoir Dogs,” through “Pulp Fiction,” the “Kill Bill” films, “Inglourious Basterds” and “The Hateful Eight,” until a few weeks ago, when he threw Mr. Tarantino an engagement party.

When Mr. Tarantino read the articles about Mr. Weinstein, he was horrified by the scope and severity of the alleged abuse, especially the rape accusations, he said. But some of the accounts were deeply familiar to him. “Everyone who was close to Harvey had heard of at least one of those incidents” chronicled in the first few articles, he said. “It was impossible they didn’t.”

When he and Ms. Sorvino started dating in 1995, she told him that not long before, Mr. Weinstein had massaged her without asking, chased her around a hotel room and even showed up at her apartment in the middle of the night, a story she recently shared with The New Yorker.

“I was shocked and appalled” back then, Mr. Tarantino said. “I couldn’t believe he would do that so openly. I was like: ‘Really? Really?’ But the thing I thought then, at the time, was that he was particularly hung up on Mira.” She had won accolades for her performance in “Mighty Aphrodite,” and “I thought Harvey was hung up on her in this Svengali kind of way,” Mr. Tarantino said. “Because he was infatuated with her, he horribly crossed the line.”

The problem was resolved, he said he felt at the time, because he and Ms. Sorvino were dating. “I’m with her, he knows that, he won’t mess with her, he knows that she’s my girlfriend,” Mr. Tarantino said, describing his attitude back then.

Over the years, he learned of other accounts. Another actress friend told him a troubling story of unwanted advances by Mr. Weinstein in a hotel room. Mr. Tarantino confronted Mr. Weinstein, who offered the woman what the director described as a weak apology. (She confirmed the account to The Times but declined to be identified.)

Mr. Tarantino also knew that Ms. McGowan had reached a settlement with Mr. Weinstein after an episode in a hotel room during the Sundance Film Festival. Recently, she tweeted that Mr. Weinstein had raped her.

Mr. Weinstein has denied all allegations of nonconsensual sex made by Ms. McGowan and others.

There were rumors too, shadowy accounts that Mr. Tarantino continued to hear second- or thirdhand and never pursued further. Now Mr. Tarantino said he regretted not taking the women’s stories seriously enough. “I chalked it up to a ’50s-’60s era image of a boss chasing a secretary around the desk,” he said. “As if that’s O.K. That’s the egg on my face right now.”

In the interview, Mr. Tarantino issued several calls to action. In its treatment of women, Hollywood has been “operating under an almost Jim Crow-like system that us males have almost tolerated,” he said. “We allowed it to exist because that’s the way it was.”

On the discussion of who knew what about Mr. Weinstein and when, he said: “I’m calling on the other guys who knew more to not be scared. Don’t just give out statements. Acknowledge that there was something rotten in Denmark. Vow to do better by our sisters.”

He added, “What was previously accepted is now untenable to anyone of a certain consciousness.”

His own relationship with Mr. Weinstein, who has been fired from his own company and ousted from the Academy of Motion Picture Arts and Sciences, spanned deals and shoots, publicity tours and film festivals. But when Mr. Tarantino tried to call Mr. Weinstein several times recently after the disclosures, he said, he got no reply. Mr. Weinstein needs to “face the music,” he said.

Despite their closeness, he said he could offer no insight into Mr. Weinstein’s alleged misdeeds. “I don’t have an answer for why he could do this and be stripped of his entire legacy,” he said.

Asked how the news about Mr. Weinstein would affect how the public views his own record and body of work, Mr. Tarantino paused. “I don’t know,” he said. “I hope it doesn’t.”

>>> Abertis/Atlantia: banks vye to finance ACS' counter offer - report (translat

Abertis/Atlantia: banks vye to finance ACS' counter offer - report (translated)
20 OCT 2017
Several banks not involved in Atlantia’s [BIT:ATL] offer for the Spanish toll-road group Abertis [BME:ABE] are vying to finance the counter offer table by ACS [BME:ACS] through its German unit Hochtief’s [FRA:HOT], Expansionreported.
ACS has a EUR 14.963bn underwriting from JPMorgan, which will now share the risk in two deals, Expansion said citing financial sources: a short-term bridge loan and a second a long-term loan adding to EUR 15bn.
BBVA is well placed for a top position in the financing and the structuring of the offer, according to the report. The Spanish bank, through its subsidiary in Milan, is a lender of Atlantia in its bid for Abertis. This has not, however, prevented the bank from obtaining the position of intervening and liquidating ACS’ counter offer and is expected to have one of the main roles, financial sources told the Spanish-language paper.
The same sources pointed to CaixaBank as another possible relevant lender to ACS, Expansion said.
Santander, however, a lender and financial adviser of Atlantia, could be out. Sources with knowledge of the matter said that Santander has had access to confidential information and signed an exclusivity deal with Atlantia.
Sabadell and Deutsche Bank could also finance ACS, the report added citing market sources. Commerzbank and Bankhaus Neelmeyer are working for Hochtief and BayernLB and Landesbank Baden-Württemberg could join them, according to the report.

FT : European telco chiefs protest over proposed new rules



From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 10/19/17 22:30:43
Subject: FT : European telco chiefs protest over proposed new rules
European telco chiefs protest over proposed new rules
Letter from 30 chiefs says European Parliament changes would deter network investment

The chief executives of 30 of Europe’s largest telecoms companies and equipment vendors have written to heads of state and national telecoms ministers, in a lobbying effort against changes in regulations that they say would deter investment in new networks.

Their letter represents the latest attempt by the industry to get a reform of telecoms regulations back on track, after the European Parliament derailed European Commission proposals this year, which were aimed at deregulating companies to encourage billions of pounds of investment in 5G and full-fibre networks.

The parliament has added various amendments, including proposals around “joint dominance” to tackle potential “oligopolies” in some European telecoms markets. Proposals to lengthen spectrum licences, to harmonise auctions of airwaves and to impose new retail regulation on international calling rates within the bloc are also being objected to by the industry. It had widely supported the commission’s original proposals around the new Electronics Communications Code.

The letter, seen by the Financial Times, has been signed by the chief executives of Deutsche Telekom, BT Group, Orange, Telefónica and other incumbent operators. Telecom Italia’s executive chairman Arnaud de Puyfontaine has signed as have the chief executives of Ericsson and Nokia, who sell the equipment needed to build faster networks. The companies spend a combined £26.6bn a year in Europe, according to the document.

The letter says that the uncertainty introduced into the Electronic Communications Code has turned what looked like a much-needed overhaul of the rules to encourage investment into “bad news for all those who understand the strategic necessity of building a European Gigabit Society”. It even argues that it would be preferable to keep the current rules, long the bane of a sector facing structural decline, rather than adopt the amended proposals.

The document also notes that uncertainty around the proposed reforms has created a “sharply negative” sentiment for investors in telecoms, who are increasingly reticent to invest in companies facing huge spending commitments to build new networks but also more onerous regulation. It says that a deterioration in the investment climate is expected following the European Parliament’s amendments.

The letter was sent ahead of separate meetings of European heads of state and telecoms ministers in Luxembourg next week.

The European Parliament’s proposals to introduce new regulations reflects concerns in countries including Belgium and the Netherlands that telecoms oligopolies are forming at the expense of competition.

A study by Jones Day and Compass Lexecon, commissioned by Vodafone, has criticised the amendments to the Electronic Communications Code for not bringing the framework in line with competition law, regarding significant market power and joint dominance. “It is highly probable that if these criteria are kept in the code, they will generate a high degree of inconsistent regulatory interventions,” the paper concludes.