NYP : yoghourt company eyed for consolidation.

Our financial sources suggest that some major snack food companies are ripe for consolidation, and the next target is very likely to be France’s Danone, best known for its yogurt products.

The company reported flat second-quarter sales, but on its earnings call last month suggested it would see growth in the second half.

“Someone is going to buy Danone,” said our tipster, who is following the space closely. “It could be bought by a Kraft or a Coke, and the French government would allow it,” the source speculated.

Danone’s CEO, rock-climbing enthusiast Emmanuel Faber, joined two years ago and has been remaking the firm as a healthy food purveyor. Faber has been an acquirer, too, snapping up WhiteWave, which makes Silk plant-based milk, for $12.5 billion last summer.

>>> Asian Update

Asia Mid-Session Market Update: China data softer than expected; NBS assures property market is cooling off; Japan registers faster than expected GDP growth in prelim Q2


***Asia Summary***
- Asian equity markets opened mixed before trending mostly higher. While regional focus over the weekend remained on North Korea and US trading threats, the Kospi traded higher the Won strengthened, ignoring the elephant in the room as usual. Japan reported stronger than expected Q2 preliminary GDP, with annualized GDP rising the fastest pace since Q1 2015. Notable subcomponent was private non-res investment (corporate CAPEX), 2.4% v 1.2%e. The yen continued to weaken in the session against the USD, A$ and Euro by 0.5-0.6%.

- Focus then shifted to China July industrial production which came in lower than expected at 6.4% v 7.1E, coal, crude and power output all rose; while oil output fell. Retail sales were also a bit weaker at 10.4%. The PBOC again strengthened the yuan to the strongest setting since September 2016. While Trump had said he would delay investigation into China intellectual property theft as a sign of good faith on backing UN sanctions against North Korea, it is now expected he will launch the probe tomorrow.


***Key economic data***
- (NZ) NEW ZEALAND Q2 RETAIL SALES (EX-INFLATION) Q/Q: 2.0% V 0.7%E; Y/Y: 5.4% V 4.2%E
- (CN) CHINA JUL INDUSTRIAL PRODUCTION Y/Y: 6.4% V 7.1%E; YTD Y/Y: 6.8% V 6.9%E
- (CN) CHINA JUL RETAIL SALES Y/Y: 10.4% V 10.8%E; YTD Y/Y: 10.4% V 10.5%E
- (CN) CHINA JUL FIXED ASSETS EX RURAL YTD Y/Y: 8.3% V 8.6%E
- (NZ) New Zealand Jul Performance Services Index: 56.0 v 58.6 prior

***Speakers and Press***
China/Hong Kong
- (CN) China Stats Bureau (NBS): Overheated property market has cooled somewhat; China economy to continue steady operation in H2; Normal for H2 GDP to see a slow down
- (CN) President Trump said to call on Trade Rep Lighthizer to announce a probe on China Monday, that will determine whether to investigate Chinese trade practices that force US firms operating in China to turn over intellectual property
- (HK) Hong Kong Financial Services Chief Chan: No plan to ease anti-property cooling steps
Australia/New Zealand
- (AU) RBA Assistant Gov Kent: Will be some time before RBA normalizes rates
Korea
- (KR) White House: in teleconference President Trump and China President Xi Jinping reiterated mutual commitment to the denuclearization of the Korean peninsula
- (KR) South Korea Finance Min Kim: Tensions with North Korea are impacting global market uncertainties; market sees current North Korea-US tension as more severe than in the past
Japan
- (JP) Japan Econ Min Motegi: No change to view that Japan economy is in gradual recovery trend; not considering fresh stimulus steps
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.7%, Hang Seng +1.2%, Shanghai Composite +0.4%, ASX200 +0.6%, Kospi +0.7%
- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.5%, Dax +0.5%, FTSE100 +0.4%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.1835-1.1805; JPY 109.54-108.96; AUD 0.7919-0.7885; NZD 0.7331-0.7306
- Dec Gold -0.1% at 1,293/oz; Sept Crude Oil +0.1% at $48.84/brl; Sept Copper -0.2% at $2.91/lb
- (AU) Australia sells A$500M in 2028 bonds; avg yield 2.6464%; bid-to-cover 4.85x
- USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT: 6.6601 V 6.6642 PRIOR (strongest setting since Sept 22, 2016)
- (CN) China PBoC OMO injects CNY210B in v CNY130B prior in 7 and 14-day reverse repos
- (KR) Bank of Korea (BOK) sells KRW1.06T v KRW1.1T offered in 1-yr monetary stabilization bonds; avg yield 1.52% v 1.47% prior
- OLAM.SG Sees cocoa trading at $1,500-1,700/lb range; sees strong palm oil output recovery in Malaysia and Indonesia

***Equities notable movers***
Hong Kong/China
- Yue Yuen Industrial, 551.HK Reports H1 Net profit $259M v $249M y/y, Rev $4.45B v $4.28B y/y; announces special dividend; +6.2%
Japan
- Taikisha, 1979.JP Reports Q1 Net ¥265M v ¥791M y/y; Op ¥503M v ¥1.0B y/y; Rev ¥43.4B v ¥38.1B y/y; -10%
- Cosmo Energy, 5021.JP Reports Q1 Net ¥4.7B v ¥4.8B y/y, Op ¥12.1B v ¥12.6B Rev ¥563.0B v ¥478.7B y/y; +13%
- Nexon, 3659.JP Reports H1 Net ¥39.4B v ¥1.3B y/y, Op ¥56.0B v ¥17.1B Rev ¥121.9B v ¥95.6B y/y; +11%
Australia
- Ansell, ANN.AU Reports FY17 Net profit $148M v $159M y/y; EBIT $217.8M v $230Me; Rev $1.60B v $1.57B y/y; -2.3%
- JB Hi-Fi, JBH.AU Reports FY17 Net A$172.4M v A$191Me; Rev A$5.63B v A$5.6Be; -2.2%
South Korea
- Korea Aerospace, 047810.KR Weakness attributed to North Korea tension; -5%

>>> Trian Fund Management (Nelson Peltz) discloses updated portfoli

Trian Fund Management (Nelson Peltz) discloses updated portfolio positions in 13F filing: Slightly increases GE PG PNR increased positions

Highlights from 2017 Q2 filing as compared to 2017 Q1 filing:
  • Increased positions in: GE (to ~70.85 mln shares from ~68.98 mln shares), PG (to ~37.61 mln from ~36.72 mln), PNR (to ~15.2 mln from ~14.34 mln)
  • Maintained positions in: SYY (~43.97 mln shares), DD (~9.39 mln shares), BK (~32.38 mln shares)
  • Decreased positions in: MDLZ (to ~42.5 mln shares from ~44.23 mln shares), WEN (to ~39.04 mln from ~44.54 mln)