>>> Dean Foods misses by $0.04, beats on revs; reaffirms FY17 EPS in-line (19.1

Dean Foods misses by $0.04, beats on revs; reaffirms FY17 EPS in-line (19.10)
  • Reports Q1 (Mar) earnings of $0.13 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus of $0.17; revenues rose 6.2% year/year to $2 bln vs the $1.96 bln Capital IQ Consensus.
  • Co reaffirms guidance for FY17, sees EPS of $1.35-1.55 vs. $1.40 Capital IQ Consensus Estimate
  • Total volume across all products was 633 million gallons for the first quarter of 2017, a 1.3% decline compared to total volume of 641 million gallons in the first quarter of 2016
  • Based on fluid milk sales data published by the USDA through February, fluid milk volume decreased 3.4% year-over-year quarter to date in the first quarter of 2017 on an unadjusted basis
  • However, when adjusting for the extra selling day in 2016 due to Leap Year, the category decline was 1.8%
  • On this same basis, Dean Foods' share of U.S. fluid milk volumes increased by 10 basis points year-over-year
  • Raw milk costs in the first quarter of 2017 of $17.03 per hundred weight increased roughly 6% from the fourth quarter of 2016 and increased 18% from the first quarter of 2016

>>> US Early premarket gappers

Early premarket gappers
Gapping up:
  • CLNT +32.1%, EGY +26.3%, ROKA +14.6%, VRX +12.2%, ORIG +10.3%,NVMI +10.1%, FN +9.8%, CAMT +8.2%, QTNA +7.7%, DHXM +7.1%, SBRA+6.6%, CHEK +6.6%, GNRT +6.6%, DQ +6.5%, REPH +6.5%, TDOC +6.1%,AEZS +5.6%, RGR +5.4%, MAR +5%, NVAX +4.9%, BLDR +4.8%, EGLE+4.5%, ZBRA +4.5%, RAD +4.4%, TCMD +4.3%, SXE +3.9%, NRG +3.6%, SSH+3.4%, ARLZ +3.3%, LNTH +3.2%, DLA +3.2%, XXII +3.1%, SAND +3%, P+2.9%, BKD +2.8%, XRAY +2.8%, GPOR +2.6%, AR +2.2%, NEOS +2.2%,VVV +2%, MXL +2%, ACRX +1.8%, BBL +1.7%, DPLO +1.6%, BHP +1.5%,IONS +1.5%, SRRA +1.5%, SHPG +1.4%, DXC +1.3%, AZN +1.3%, JD +1.2%,NXST +1.2%, CS +1.1%, ORA +1.1%, OAS +1.1%, GFI +1%, RBC +1%, AMC+1%, FHCO +1%, DB +0.9%, BSM +0.9%, PEGI +0.9%, SYKE +0.8%, ATW+0.8%, ODP +0.8%
Gapping down:
  • SCYX -24.4%, HTZ -17.2%, PLUG -15%, ALIM -13.8%, NVRO -13.4%, CYTK-10.5%, OTEX -9.6%, ARTX -7.6%, CBI -7.1%, MEET -6.5%, ALLT -6.3%,ADUS -5.1%, APTS -5%, CASC -4.9%, MPO -4.7%, CTSO -4.3%, PRCP -4.3%,AHH -4.2%, AKAO -4.2%, JCOM -4.2%, FRGI -4.1%, GAIN -4%, POST -4%,FTR -3.9%, AXSM -3.6%, PLOW -3.5%, AU -2.9%, GDP -2.5%, BONT -2.3%,HMY -2.3%, CAR -2.2%, PAA -1.7%, AFSI -1.7%, SLW -1.5%, FOGO -1.5%,CRZO -1.3%, GOLD -1.2%, TSO -1.1%, HMC -1%, NVO -1%, IFF -1%, INSY -0.7%

Fwd:>>> Carrefour - Update - stock is not trading as expected - don't break resi

stock didn't closed below the 20.90 - and managed to break the downside trend, look more bullish here could trade higher - have a look :


From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 05/04/17 16:38:22
Subject: Fwd:>>> Carrefour - Update - stock is not trading as expected - don't break resi
Stock is underpressure this pm, tested again its 50d MA and didn't manage to break it again today...see a support on 20.90...look bearish if we close below the 20.90

From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 05/03/17 09:32:53
To: LAURENT CHEKROUN (MAKOR SECURITIES LO)
Subject: Fwd:>>> Carrefour - Stock has massively underperformed - Time to Buy to play reb
Carrefour - still trading in Downtrend range move not validate yet - but Outperfoning slightly today

From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 05/02/17 12:18:19
Subject: Fwd:>>> Carrefour - Stock has massively underperformed - Time to Buy to play rebound
>>> Carrefour - Stock has massively underperformed - trading better since investor day

* CA Underperf EurosToxx 50 by 14% YTD & 23.5% on 1y, at the same time SXRP Underperf. only 5% & 13%,
* French env. for Food Retail has been tought recently but end of uncertainties with the election we can hope some better momentum and some quick measures to boost consumption.
* Carrefour look confident situation will improve during the year.
* Macron scenario is smal positive but should help the sentiment...even if biggest part of the move has been played after the 1st round of the election.
* Stock trading more than 8% below its average 3y PE, 12.95 vs 14.2
* Chart configuration - Stock look to have bottomed and rebound on long support and find resistanceon its 50d MA (+/- 21.80) if we break this level (need to close above the 21.85) we can quickly test the 200d MA (22.60) with a gap to fill (22.36/22.50), next resistance 23.07, 23.29, 23.75
* Consensus in the Street is still mixed some banks (UBS) still thinks Carrefour will be impact by margin pressure, few banks are more positive thinking that new models implemented by the group will drive some more growth, less depedance to hyper will help improve the sentiment (increase of eCommerce & new concept)

Chart :

>>> Europe Pre-Market indications

BAML:
COMMERZBANK - Clean pretax 10% beat but retail NII weaker v BAML est (9.7)..+3%
W.HILL - Decent growth across all divs; net revs +9% & margins better (306).+2%
PANDORA - Revs 1.4% and EBITDA 5% ahead of ests. Interim divi DKK9 (746)....+2%
ADECCO - Solid Q1 update with sales inline and EBITA 6% ahead of cons (76)..+1%
BKIR - Considers ING's former CFO Patrick Flynn for CEO; Irish indep (0.26).+1%
K+S - EBITDA -5% on one-off, ex this would be +7.6%. Guidance unch (22.75)..+1%
ORKLA - Revs small light but EBIT 1.5% ahead of cons. EPS NOK 1.08 (80.3)...+1%
GEA - Numbers inline with pre-release and so expect a muted reaction (84.9).u/c
MINERS - Copper -0.18%, Iron Ore fut -0.7% and BHP OZ +0.5%, RIO OZ +0.32%..u/c
GRAFTON - Reads well with group revs +6.1% YoY. Have had a strong run (772).u/c
SYMRISE - Top line & EBITDA broadly inline. 1Q LFL growth touch light (64.9)u/c
UNIPER - EBITDA slight beat +2.1%. FY17 EBITDA and div guidance reit'd(16.2)u/c
SPIRAX - Org growth & op profit both up YoY. FY17 expectations unch (5185)..u/c
PAYSAFE - Strong cash conversion and reiterates its FY guidance (462.5).....u/c
POPULAR - Preparing sale of 2.85% stake in Merlin; El Confidential (0.758)..u/c
ENDESA - Very weak with NI -30% YoY on a LFL basis. Shares been strong(22.5)-1%
EON - Adj NI 4.4% miss and EBIT a 4.6% miss. EBIT & NI guidance reit'd (7)..-1%
MUNICH RE - Weak with an operating profit miss, weaker P&C re result (176.5)-2%
ZALANDO - EBIT miss at 20.3 v est 26.2m, EBIT margin 2.1%. Confirms FY (40).-2%
HISCOX - Not much in IMS but flagging quite big £9m hit from Ogden (1143)...-2%
DIALOG - Mixed. Q1 beats but op profit 13% ahead but Q2 guide a miss (42.2).-2%
AKER - Revs 10% miss and EBITDA 8% miss to cons whilst NI inline (315.6)....-2%
FRAPORT - Q117 EBITDA of €137m,c12% below cons on one off items in qtr (72).-3%
MICROFOCUS - HPE software trading looks like a miss with revs -10% YoY(2533)-4%


RBC:
*ABE: -1% EL CONFIDENCIAL: mulling €16 per share bid for ABE.
*ADECCO: +2% Q1'17 EBITA 7% beat, solid numbers, market remains strong.
*AKSO: -2% Q1'17 revenue miss, net income light.
*ATL: -1% EL CONFIDENCIAL: mulling €16 per share bid for ABE.
*CBK: +1% Q1'17 headline beat, net income better, structural challenges still there.
*CMCX: 0% will comply with Bafin proposals, require negative balance protection.
*CONTI: +1% FY'17 sales targets raised, strong run into numbers.
*DENERG: -2% placing of 10.5M shares @ DK270 per share, up sized.
*DLG: -1% Q1'17 revenues better, but guidance light.
*ENDESA: -1% Q1'17 EBITDA & net income touch light, FY'17 guidance reiterated.
*EON: -1% Q1'17 profits light, timing issues, FY'17 guidance confirmed.
*FRAPORT: 0% Q1'17 miss due to one-offs & Greece, numbers in line.
*GEA: 0% no FY forecast range due to economic uncertainty.
*GET: +1% debt refinancing announced overnight.
*HASTINGS: -3% placing of 35M shares @ 300.5 per share.
*HISCOX: +2% Q1'17 trading statement solid, premiums & invest returns better.
*K+S: -1% Q1'17 op profit light, due to lower prices & environmental restrictions.
*PNDORA: +2% Q1'17 revs slightly ahead, BUT retail LFL disappointing @ 8%.
*MCRO: -1% HPE business weaker, trading in line.
*MITIE: +1% new chairman Derek Mapp to takeover from Roger Matthews.
*MUV2: -1% Q1'17 net income miss, solvency ratio reduced @ 267%.
*SPIRAX: +1% Q1'17 profit beat, FY'17 outlook neutral.
*SYMRISE: -1% Q1'17 op profit in line, strong into numbers.
*UNIPER: 0% Q1'17 numbers bang in line, FY'17 guidance confirmed.
*WMH +1% Q1'17 in line, "positive start", FY'17 guidance confirmed.
*ZAL: -2% Q1'17 adj EBIT light, margin worse, not good enough.


MS:
ABE SM
- 2%
PRESS REPORTS ATLANTIA TO BID €16 PER ABERTIS SHARE
ADEN VX
+ 1%
EBITA 6% AHEAD OF CONS; REVS IN-LINE; OUTLOOK IN-LINE; PACE OF UPGRADES LOWER.
ALKHLEEJ AB
- 2%
NI MISS BY 11% ON LOWER REV. FROM TRAINING AND UNIV. PROJECTS
ALR PW
UNCH
Q1 NET PLN 82m IN LINE WITH CONS 78m
APPS SM
+ 1%
RESULTS A TOUCH BETTER, ORGANIC GROWTH -1.4% VS. -2.5% MSE, REITERATES FY GUIDANCE
ASELS TI
+ 1%
Q1 NET 321m BEAT CONS 175m ON OTHER INCOME, EBITDA TOUCH BETTER
BIMAS TI
+ 1%
Q1 NET TRY 198m BEAT CONS 185m ON BETTER MARGINS
CBK GY
+ 2%
UNDERLYING 9% BEAT - DRIVEN BY FEES & TRADING REVS - STRATEGY ON TRACK - CET1 STABLE @ 12.5%
DLG GY
UNCH
NUMBERS IN-LINE / Q217 OUTLOOK MIXED
ELE SM
+ 1%
RESULTS BROADLY IN LINE, REITERATES FY TARGETS AND 2017 DIVI OF €1.32/SH IN LINE
EOAN GY
- 1%
Q1 SLIGHT MISS, REIT FY GUIDE
EVK GY
+ 2%
SOGEN UPGRADES EVONIK TO BUY FROM HOLD
FRA GY
- 1%
MIXED SET OF NUMBERS / CONFIRMED FY17 OUTLOOK
GFTU LN
- 1%
GRAFTON REV IN 4-MO TO APRIL 30 UP 5% AT CONSTANT FX,CAUUTIOUS ABOUT PROSPECTS IN UK
HAR SJ
+ 2%
SOLID 3Q PRODUCTION REPORT
HSX LN
+ 2%
HISCOX 1Q GROSS WRITTEN PREMIUMS £751.2 MLN,HAD STRONG START TO THE YEAR CITING HISCOX RETAIL
JARIR AB
+ 4%
REPORTING BIG BEAT BY 21% FOR 1Q EARNINGS ON THE BACK OF STRONG SCHOOL SALES AND SMART PHONES
MRL SM
- 1%
PRESS REPORTS BANCO POPULAR TO SELL 2.85% STAKE IN MERLIN PROPERTIES
MUV2 GY
- 1%
OP.PROFIT & NET INCOME MISS - CONFIRM FY OUTLOOK RANGE EU 2-2.4B
NETS DC
+ 3%
1Q REV DK 1.90B VS BLOOMBERG CONS DK 1.86B,SEES FY ORGANIC REV +5%TO +6%
PAYS LN
UNCH
PAYSAFE GROUP REITERATES FY17 GUIDANCE
PNDORA DC
+ 5%
REVS A SHADE BETTER, RETAIL LFL +8% VS CONS +7%. EBITDA A 5% BEAT. GUIDANCE UNCH. DESPITE BOUNCE FROM LOWS, WE'VE SEEN ADDITIONAL SHORTS GO ON, SHOULD SQUEEZE.
RICHT HB
+ 2%
Q1 NET HUF 19.8b BEAT CONS 16b ON FX GAINS, REVENUES STRONG
SDF GY
+ 1%
NUMBERS IN LINE, EBIT 1 137m vs CONS 141m. CONFIRMS FY. SI STILL AT 8% OF FF.
SPX LN
- 1%
SPIRAX SARCO VIEWS OF ORGANIC GROWTH FOR FY UNCHANGED,EXPECTS TO MAKE FURTHER PROGRESS IN 17
SY1 GY
- 1%
NUMBERS IN-LINE / CONFIRMED OUTLOOK
TSH SJ
+ 2%
POSITIVE FY TRADING STATEMENT
WDH DC
UNCH
TRADING UPDATE SUGGESTS WILL HIT TOP HALF OF FY EBIT TGT RANGE. ENOUGH TO HOLD A GREAT RUN
WMH LN
+ 2%
WILLIAM HILL IN LINE W/17ESTIMATES ASSUMING NORMAL MARGINS,POSITIVE START TO YR
ZAL GY
- 2%
FINAL Q117 A TOUCH WEAKER


Winterflood:
••• FTSE350:
* CMC MARKETS (CMCX) +1%; BAFIN requires the implementation of negative balance protection, CMC already offers this in Germany, CMC is the mkt leader in Germany, might be small relief there was nothing worse.
* GLENCORE (GLEN) +2%; Agrees $85/tonne deal with a Japanese utility company to supply Thermal coal for a year, $10 above market price with Glencore's cost of production at $44 (Source FT). Macquarie and Credit Suisse reiterating positive stance today.
* GRAFTON (GFTU) UNCH; T/S, Solid update with LfL growth across the board (except Belgium -3.4%). Selco continues to trade well and new branches are in line. Outlook positive overall, cautious re UK as documented. Might see some profit taking the back of cautious UK comment.
* HASTINGS GROUP (HSTG) -2-3%; Investco stock placing, c.35m shares (5.3% ISC) via ABB at Barlcays, priced at 3% disc to last nights close.
* HISCOX (HSX) UNCH; IMS – Gross written premiums grew by 17.3% to £751.2m thanks to Hiscox Retail, particularly in the small business sector. Hiscox London market continues to face challenging conditions going forward although has written premiums in line with the previous quarter
* MICROFOCUS (MCRO) -3%; Performance has been in line with expectations and, as announced previously, all regulatory approvals for the acquisition of HPE Software have been received. However, HPE's revenues are down 10% YoY due to a decline in licences.
* MINERS +1%; Relief, sector hit hard yesterday. Coking coal lower overnight, Glencore deal in Thermal coal should support that market short-term. Base metals UNCH overnight.
* OIL UNCH; WTI held above $46 as OPEC members discuss deepening output cuts, however nervousness about US stockpiles remain ahead of meeting.
* PAYSAFE (PAYS) UNCH; Continues to perform in line with management expectations, reiterates its FY 2017 guidance of low double-digit organic revenue growth, confident statement, historically a statement like this hasn't been enough for PAYS to continue the upward momentum.
* SPIRAX SARCO (SPX) +2%; Expects to make further progress in 2017. has cash of 60mln. fx tailwinds of 8%. organic growth inline.as expected sales growth is better then same time last year. had a good run but should go a bit further.
* WILLIAM HILL (WMH) +2%; TS, positive start to the year, 24% increase in new accounts across Cheltenham and Aintree festivals, growth in wagering and net revenue across all four divisions particular strength in Australia, in line with market expectations for 2017.
••• AIM & Small Cap:
* 4IMPRINT (FOUR) +1%; WINS traded c.480k yesterday, ongoing business. Revenue growth and order intake were both up 9% over prior year. See's FY in line with expectations.
* CAMBRIA AUTO (CAMB) +3%; H1 rev up 21%, div up 25%. New car sales -4.6%, however offset by increased margin per unit. Expecting FY slightly ahead.
* CELLO (CLL) UNCH; Trading statement, good start to year, strong outlook but key contracts aren't expected to hit until later in year. This is not expected to affect overall profits.
* CENTAUR MEDIA (CAU) -2%; Trading in line with expectations. Headwinds in print and digital advertising have continued. Net debt reduced, and cash flows has improved.
* CENTRALNIC (CNIC) +5%; +VE finals. All 3 divisions performing well. Continue to seek new M&A targets. Confident 2017 outlook.
* GB GROUP (GBG); Placing & Acquisition - 17m shs @ 340 via ABB. Funds raised will be used to purchase Postcode Anywhere (PCA) for £73.8m.
* GEAR4MUSIC (G4M) +2%; Strong finals Revs +58% EBITDA +115% to £3.6m. +VE FY18 outlook. Only -VE is that no div is to be paid due to the £5.3m property acquisition.
* HORIZON DISCOVERY (HZD) +10%; Strong uptake of gene editing products and services. 40% organic increase on '16.
* HYDROGEN GROUP (HYDG) UNCH; Acquisition of Argyll Scott (fellow recruiter) for £3.3m.
* INTERCEDE GROUP (IGP) UNCH; Further contract wins, this time with some rev detail. Combined with yesterday worth $1.5m over 5 years. Not world beating but +VE signs none the less.
* LIDCO (LID) UNCH; CE Mark granted for its latest product, which is to be presented at the ERAS World Conference. Apparently it has a striking new slim wide-screen monitor so should go down well.
* NON STANDARD FINANCE (NSF) UNCH; AGM Trading Update - In Line with management expectations & CMD.
* OPTIBIOTIX (OPTI) +3%; Signs licencing deal with Italian pharmaceutical firm Nutrilinea.
* OXFORD PHARMA (OXP) -10%; More disappointing feedback from FDA, however any share price fall will be mitigated by the co's cash balance which remains £21m.
* PURETECH (PRTC) +1%; Positive Phase 2b results from respiratory drug.
* RAMBLER (RMM) -10%; Mill feed grade less than guidance which will continue into Q2.
* RANDALL AND QUILTER (RQIH); Returning 5.2p by creation of an X share.
* REDSTONECONNECT (REDS) UNCH; Bookbuild to raise £6.5m @ 1.5p to fund aquisition of Anders + Kern. Proposing a 1:100 consolidation.
* SAREUM (SAR) UNCH; To present at BioTrinity.
* SEPURA (SEPU) +10%; Update. Secretary of State for Business is proposing to accept statutory undertakings set out, which would avoid the need to refer to competition authority.
* SOLO OIL (SOLO) UNCH; Update from Helium one in Tanzania (10% and option for 10%).
* STANLEY GIBBONS (SGI) -20%; Sale of loss making interiors division for £2.4m which will be used to pay down debt which is close to the limit of the facility. Improved annual cost savings since restructuring will be outweighed by the negatives of subdued current trading and potential lawsuits in the US and a counterclaim in the UK.
* THE PROP FRANCHISE (TPFG) -3%; In line but with slightly bearish note with fall of sales.
* TREATT (TET) +2%; Interims. Rev £51.8m vs £40.9m. PBT £5.5m vs £3.4m. Interim div 1.45p vs 1.35p. All key categories performing well, confident will meet its revised expectations, expect them to open up but will see profit taking after the run.
* TYRATECH (TYR/TYRU) -25%; Net loss at $2.3m despite increased sales. "...the company lacks the necessary resources from operating cashflow to fund the next phase of its growth...".
* WATERMAN (WTM) +70%; Recommended cash offer, 140p a share from CTI engineering. AB traction and Hargreave Hale agree to sell stakes (26.44%).


Mainfirst:
*ADECCO-NI 176m(172.5),Gross Margin 18.8%,Rev March/April +5/6%....+1.5%
*CBK-OP 314m(206.8),NI 217m(74),LLP 195m (196.5),CET1 12.5%.........+4%
*FRAPORT-Rev 592.6m(591.3),Ebit 55.1m (70.4 ,Ebitda 137.3m(152).....-1%
*ORKLA-Ebit 900m(886.4),PT 1.3b(1.26),Rev 9.08b(9.14),NI 1.1b......+1%
*ICA-Sales 25b(25),OP 996m(981),Slightly weak volume Development...-0.5%
*K&S-Rev 1.13b(1.14),Op Inc 137m(131.3),Confirms f/c for 2017......-0.5%
*PARMALAT-Rev 1.56b(1.54),Sales Grth 11% ,Confirms FY guidance......+1%
*ATLANTIA-Mulling €16 a share bid for Abertis (clse €16.4)-Press....-0.5%
*BILFINGER-Sees growth potential in Pharma Sector says CEO.........-1%
*UNIPER-Ebit 514m(504),NI 751m(377.5),FY Ebit .09-1.2b(1.11b)......+0.5%
*EON-Net Inc 525m(548.5),Ebitda 1.52b (1.57) ,Confirms FY f/casts....-0.5%
*GEA-Rev 1b(966.6),Ebitda 96m(97.5),Ebit 76.3m (63),o/lk mixed......-0.5%
*MUNICH RE-OP 952m(978.8),Comb Ratio 97.1%,NI 554m(622.1)..........-1%
*ELRINGKLINGER-Sales 433.3m(417),Ebit 37.9m (38.85),Confirms FY.....+3%
*SYMRISE-Sales 765.2m(768),Ebitda 165.5m (164.5),FY Confirmed.......-0.5%
*ENDESA-Net Income 253m(249.8),Ebitda 702m (711.4)..................-1%
*DIALOG-Rev 271m(246.13),GM 45.3%,Sees Q2 Rev 235-265m(251)........-1%
*PANDORA-Rev 5.16b(5.09),Ebitda 1.88b(1.79),NI 1.36b(1.26),SI 4.3%.+4%
*NETS-Rev 1.9b(1.86),Ebitda 626m(603),NI 202m (167.3),FY OR 5/6%....+2%
*BCO POP-Preparing to sell its 2.85% stake in Merlin Prop €150m....+1%
*ALSTRIA OFFICE-Sales 45.4m(46),Net 30.90m (26),FFO 18C(18).........-0.5%
*KOENIG & BAUER-Rev 259.1m(265),Ebit 5m (5.3) ,Margin 1.9%(1.9)......-1.5%
*ZALANDO-Rev 980.2m(981.8),Ebit 20.3m (26.2) ,Ebit Margin 2.1%.......-2.5%


JPM:
ADECCO +2%
EBITA 5.8% beat vs cons, debt lower
COMMERZBANK +2%
Op profit 10% ahead - driven by corp centre & non-core. CET1 10bp ahead
DIALOG -2%
Q2 Guidance miss - related to AAPL & power conversion biz
DONG
Placed at DKK270/Shr; 1.8% Below Close
EON -2%
Adj Net Income €525m v cons €548.5m
K+S -2%
Ex one offs, figs 2% miss vs cons
MUNICH RE -1%
Top line beat vs cons, combined ratio miss at 97.1% vs 95.2% cons
NETS +2%
Revs and EBITDA ahead vs cons. Raises FY EBITDA mgn guidance
PANDORA +5%
Revs & EBITDA ahead vs cons. Asia stronger, EU & UK weaker
SYMRISE unch
Q1 org growth +5.3% vs Cons +5.5%. Group margins 20bps above cons
UK UTILS -4%
Press discussing absolute price caps from Theresa May
UNIPER unch
Inline w JPMe
WILL HILL +1%
Groups rev growth +9% vs +6% expected.
ZALANDO unch
Q1 17 results at mid-point of recent guidance


N+1 Singer:
MICRO FOCUS (MCRO) Unch * Trading and transaction update / FY rev. within guidance of flat to -2%. Shareholders will also be asked to approve a $500m return of value via B shs.
RANDGOLD (RRS) Unch * Downgraded to Hold at Panmure Gordon. PT 6495p

UK 250
CLOSE BROTHERS (CBG) -0.25% * Cut to Underperform at Macquarie, PT 1430p
EUROMONEY (ERM) UNCH * Initiated with Neutral at UBS, PT 1135p
HENDERSON (HGG) +0.25% * Raised to Buy at UBS, PT 275p
HISCOX (HSX) -1% * Q1 written premiums rise 17.3%, London market faced challenging Q1, no improvement in big ticket rates so far in 2017
PAYSAFE (PAYS) UNCH * reiterates FY 2017 to see low digit organic revenue growth, strong cash conversion, strong start to 2017
SPIRAX SARCO (SPX) -1% * Organic growth views unchanged, 4 month op profit ahead on constant currency basis, against tougher comparatives for rest of year
WILLIAM HILL (WMH) +1% * Group rev up 9%, growth across al divisions, online gaming revenue up 8%, on track for £40m annualised cost savings, trading in line

SMALL CAP
4IMPRINT (FOUR) +1% *Says trading in first 4 months encouraging. Rev. growth and order intake in line+9%. Sees FY in line with views.
CENTAUR MEDIA (CAU) AGM/UNCH *Says Q1 tradingQ1 in line. Advertising remaining weak. Home interest sale progressing.
HSS HIRE GROUP (HSS) -1% *New Sell at Liberum, PT 46p
PURETECH HEALTH (PRTC) UNCH *Initiation of Phase 2b mTORC1 Inhibitors study in elderly patients at increased risk of respiratory tract infections.
SPIRENT (SPT) +1% *Raised to Buy at Citi, PT 145p

BEST OF AIM
CAMBRIA AUTO (CAMB) +7% * Strong interims see pbt +20% vs our exp +8%. We upgrade FY by 6%. (Note attached).
CELLO GRP) +2% *Positive AGM, says good start to year especially in US,
CENTRALNIC (CNIC) UNCH *Finals, rev. +113%, adj. EBITDA +68%. Confident outlook.
FRONTIER SMART (FST) -2% * Accounting adjustment sees £1.67m increase in loss from discontinued ops.
GB GRP (GBG) * Proposed £58m placing at 340p to fund £c74m acquisition of PCA Predict.
HORIZON DISCOVERY (HZD) +1% *Update on immune-oncology activities. Generated £1.5m of rev. YTD. Reiterates guidance of £30-35m of FY17 rev.
GOALSSOCCER (GOAL) Unch *Reassuring AGM update. Says trading in line and sales ahead of last year. No LFL figures given.
MYSALE (MYSL) UNCH *N+1 Singer upgrade EPS forecasts by 9.1%/11.8% in FY18/FY19. (Note attached)
OXFORD PHARMA (OXP) -10% * Update on OXPzero TM Ibuprofen programmes post FDA response.
WATERMAN (WTM) * Recommended 140p cash offer by CTI Engineering Co.
Exane:
Zalando (-) Q1 results broadly inline with mid-point at pre-release (but slightly behind consensus sitting above that)....-2%
Adecco - EBIT and organic growth solid.... +2%
Dialogue Semi Q1 - numbers a little weak, may reassure in conf call.....-2%
Endesa - weak numbers after strong performance....-2%
Symrise: Q1 in line... UNCH
Munich Re: Mixed... UNCH


Investec:
UK
* CENTRICA/SSE-May to enforce cap on energy bills(The Sun)........CNA-3%/SSE-1%
* GB GROUP-Placing of 17m shs @ 340p to fund PCA Predict acq's(closed 352p).-1%
* HASTINGS-GS Merchant Banking sells 35m shs at 300.5p(closed 309.5p).......-1%
* HISCOX-Update.Good start to yr led by HSX Investment.London 'challenging'.unch
* MICROFOCUS-Update.FY Rev within guidance.HPE software down.No upgrades....-2%
* MITIE-Appoints Derek Mapp as Chairman elect.Good track record.............+1%
* PAYSAFE-IMS.Trading remains in line, reits FY17 guidance.................unch
* SPIRAX-SARCO-Update.Strong #'s. FY ontrack. 1st to mention £ rally......-1-2%
* TREATT-H1.Number in line with March trading statement.Net debt better....unch
* WATERMAN GRP-Recommended 140p/sh cash offer from CTI.(closed 76.5p)....70-80%
* WILLIAM HILL-Update.net Rev +9%(exp +8%)Cost savings on track.............+2%
* VIRGIN MONEY-Sale of CoOp bank faltering(Times) VM/ possible buyer.......unch
EU
* ADECCO-Q1 revs 1% beat, revs +5-6% organically in Mar/Apr from +4-5%......+1%
* CBK-Q1 net €217m (est €74m), provisions in line, confirms FY..............+3%
* DIALOG SEMI-Q1 rev in line, Q2 guidance looks in line w/recent guidance...-1%
* ENDESA-Q1 net 1% ahead of ests, guarantees min €1.32 div (in line)........U/C
* EON-Q1 adj net inc 4% miss, keeps FY outlook, comment to follow...........-1%
* ICA-Q1 net sales in line,op profit small beat,slightly cautious comments..-1%
* K&S-Q1 rev in line, op income beats, confirms FY..........................U/C
* MUNICH RE-Q1 op profit 3% miss, cyclone Debbie cost €100m, confirms FY....-2%
* NETS-Q1 rev & profit beat,reit FY rev f/casts, poor performer since ipo...+2%
* ORKLA-Q1 revs slightly light,ebit/net inc ahead.Press spec on Sapa........+1%
* PANDORA-Q1 rev,ebitda,net all sml beat,reit o/look,US trade ‘difficult’...+2%
* SYMRISE-Q1 sales and ebita in line, confirms FY f/cast....................U/C
* UNIPER-Q1 ebit €514m, looks top end of ltd range, confirms outlook........+1%
* WM DEMANT-encouraging start to yr, ebit top half of range most likely.....+2%
* ZALANDO-Q1 rev in line, ebit low end, strong into number..................-2%


Berenberg:
ADECCO +1% revs beat est +7% , Italy surges
ALSTRIA OFFICE -20bp (yet to trade) solid Q1, recent acq €169m portfolio may lead to uplift
COMMERZBANK +2.5% 1Q big NI beat, driven by NII+trading line, & fees. CC 8am London
DIALOG SEMI -1% sees Q2 FY Gr Margin in line Q1
ELRINGKLINGER +1% Q1 revenue beat; EBIT in-line, guidance unch. We argue on a P&L basis the beat looks relatively weak
EO.N -50bp profits lower on Atomic outage & grid fees
FRAPORT -1% Q1 Ebit looks a miss
HAMBORNER +50bp Q1 in line, FY outlook reiterated, we think conservative
MUNICH RE -1.5% confirms est, Q1 combined ratio 97.1%
SYMRISE -50bp (scrap traded) Q1 3% underlying EBITDA miss.
organic growth in line; strong perform in Flavour & Nutrition, Fragrances soft.
ZALANDO -2% Q1 adj ebit misses, await comment


Commerz:
*AIR -0.1% More A400m military trouble
*AOX +0.2% 1Q net income doubles, rental revenues decline
*DLG -1.1% Q1 ok, Q2 outlook a bit soft, positive tone on 2017 unchanged
*EOAN +0.2% 1Q adjusted Net falls 20% to €525mn, missing estimate
*EVK +1.0% SocGen raises to Buy (Hold) – PT €36 (31.5)
*FRA –1.6% Confirms forecast, Q1 EBITDA misses forecast
*GBF -0.6% Sees growth potential in pharmaceutical sector
*G1A -0.2% Final Q1 in line with prelims, however, earnings quality looks poor
*MUV2 –1.4% Q1 with weak underlying
*SDF –0.6% Good start in Q1, outlook confirmed
*SIX2 –0.2% Hertz Q1 rather neg for segment but pos x-read from Europcar Q1
*SY1 -0.4% Solid Q1, strong Flavor/Nutrition, weak growth in S&C, outlook conf
*UN01 +0.8% Profit falls 41% as one-tzime trading effects don’t repeat
*WDL -0.6% Slow start to the year, growth still low
*ZAL -0.9% Final Q1 in line with prelims, sales good and clean margins improve
*ZIL2 +2.2% Q1 with lower margins and CF


CS:
AA UNCH CS INITIATE with NEUTRAL (Stiff headwinds)
Adecco +1% 1Q Net EUR176M Vs Net EUR144M
Aker Sol -3-4% Q1 miss driven by top line, gudiance in line
Alstria M/P Q1 revs inline, confirms guidance for 2017
Applus +1% Revenues 2% ahead of cons, guidance unchanged
Commerzbank +2-3% Q1 net and revenues better, slightly higher costs
Dialog -5-7% Revs inline, Q2 guidance poor
E.ON -1-2% Q1 Adj. EBITDA slightly light, net debt inline
Elringkling +2-3% Solid sales/EBIT and good order intake. Confirms FY targets
Endesa -1% EBITDA slightly light, net income slightly ahead
Europcar -1% Q1 Revs 0.5% light, confirms target for FY
Fraport -2% EBITDA €137.3m vs cons €153.8m, guidance unchanged
GEA Group +0.5% 1Q revs ahead but co not giving any guidance
Hiscox +1% Retail strong, London challenging
K+S AG UNCH Profit miss due to prices, 20m one off payment
Miners +1% Copper -0.10%, Brent +1.55%, Iron Ore -1.00%, China -0.30%
Munich Re -1% Profit 1.8% higher vs cons, net income 7% light
Orkla M/P Q1 revs 0.5% light, adj EBIT 1.5% ahead
Pandora +3% 1Q Revs 1% ahead, EBITDA 5% ahead, confirms outlook
Symrise -2% Numbers inline but guidance a little underwhelming
Unilever M/P FT spec that it is nearing a deal to sell spreads division
Will Hill +1-2% Online growth +9% and UK +11%
Zalando -2-3% Q1 Revs 980.2mln cons 981.8mln, guidance confirmed


Macquarie:
* CMC Markets CMCX-Welcomes outcome of BaFin consultation in Germany, Will comply with changes in full & no further changes required. Unch
* Hastings HSTG-Placing of 35m shs at 300.5p. (309.5p close). -2%
* Hiscox HSX-Strong start to year, GWP up 17% to £751.2m. Has a £9m provision due to Ogden. +1-2%
* IFG Group IFP- AuM increased 5% to £28bn. Legacy issue at James Hay has been addressed & expects to see improved financial performance from H2 2017. Unch
* INPP- Raised £330m via placing upsized from £250m, 3x oversubscribed. Unch
* Paysafe PAYS- Continues to perform Inline with mgmt expectations, reiterating 2017 FY Guidance. Strong start to 2017. +2%
* Unilever ULVR- Press Spec of being close to doing a deal on Spreads Business (was up c2% yday). +1%
* William Hill WMH-Online growth 9%, Retail net rev’s up 1%. Inline with expectations for 2017. +1%


Citi:
UK
* IHG - Marriot +5% after hours post Q1 beat and revpar raise +1%
* Severn Trent- Theresa May says Conservatives to introduce price cap -1%
* SSE - " " " " " " " " -1%
* Centrica - " " " " " " " " -1%
* Spirax Sarco- fy org growth guid unch,expects to make further progress unch
* William Hill- gp revenues/online beat, positive start to year +3%
* Micro Focus - sees revs within range of management guidance unch
* Hiscox - Q1 op profit in line,sees org revs in line with 2016 +1%
* Paysafe - cont's to perfrom in line,reiterates fy guidance +1%
* Grafton - 4m revs +5%,co cautious about UK prospects -2%
* Kingfisher - Grafton cautious about UK prospects,B&Q read across -1%

EU
* Commerzbank - Q1 net income/op profit beat,mix poor,costs higher -1%
* K&S - Q1 op income beat,ebit miss,confirms ebitda target -2%
* Fraport - Q1 ebitda/ebit miss,revs beat,confirms 2017 forecast -1%
* Aker Sol - Q1 revs/net income miss,still sees 2017 revs -10/15% -2%
* ICA - Q1 net sales in line,op profit beat,weak vol development -1%
* Adecco - Q1 revs/net income beat,price pressure to intensify +2%
* Alstria Off - Q1 revenues light,confirms 2017 guidance +1%
* Orkla - Q1 revs light,ebit/net income beat +1%
* Uniper - Q1 ebit/net income beat,confirms fy div plan/ebit guid unch
* Elringklinger- Q1 sales beat,ebit light,confirms 2017 guidance +1%
* EON - Q1 adj net beat,adj ebitda light,confirms fy forecast -1%
* Dialog Semi - Q1 revs beat,sees Q2 revs $235-265m vs cons $250m +2%
* Gea Gp - Q1 revs/ebit beat,ebitda light,gives no fy forecast +1%
* Pandora - Q1 revs/ebitda/net income beat,reits fy ebitda/rev guid +2%
* Symrise - Q1 sales light,ebitda in line,confirms fy forecast -1%
* Europcar - Q1 revenues beat,ebitda miss,confirms 2017 guid,had run -1%
* Koenig & Bau - Q1 sales/ebit beat,targeting ebit margin of around 6% +2%

(Fortune) Sohn Conf 2017 : These Are Hedge Funds’ Best Stock Picks From the Sohn

New York hedge fund managers from Bill Ackman and David Einhorn to Silicon Valley venture capitalist Chamath Palihapitiya pitched their top investment ideas Monday at the Sohn Investment Conference, the annual gathering of some of Wall Street's highest-profile stock pickers.
Also known as the Ira Sohn conference, the event has been the site some of hedge funds' best—and worst—calls in recent years. Last year, for example, so-called "bond king" Jeffrey Gundlach, the CEO of DoubleLine, told the conference audience that Donald Trump would be America's next President, a prediction that was considered outlandish at the time. In 2015, Ackman, the founder of hedge fund Pershing Square, announced his multi-billion dollar bet on Valeant Pharmaceuticals (VRX, -3.58%); he proceeded to lose nearly his entire investment, or $7.7 million every day for about two years, as Valeant stock sank 95%.
This year, the Wall Street bigwigs stuck to many lesser-known companies, but their picks—both bullish and bearish, with several investors recommending shorting stocks, or betting that their prices will fall—moved market prices in several cases. Here's a roundup of their best ideas.
David Einhorn, Greenlight Capital
The Greenlight Capital hedge fund manager is shorting oil services company Core Laboratories (CLB, -2.36%), whose stock fell more than 2% after his presentation. Einhorn thinks Core Labs stock will fall more than 45% as energy commodity prices are unlikely to recover as much as the company's management hopes. "We expect Core’s earnings to disappoint over the next few years," he said. The hedge fund manager said Wall Street analysts have gotten too excited about Core's growth prospects, when it's actually a "cyclical business" that is positioned very poorly in the current environment of low oil and natural gas prices.
"Unfortunately for Core, most of its opportunities are in shale," Einhorn said. "This time around, it's exposed to the least desirable parts of the sector."
Keith Meister, Corvex Management
The activist hedge fund manager and Carl Icahn protege is bullish on telecom provider CenturyLink (CTL, +5.08%) ahead of its acquisition of Level 3 Communications (LVLT, +3.16%). Meister's Corvex Management owns 5.5% of CenturyLink stock, which is now the hedge fund's largest holding, he said. He thinks Level 3 CEO Jeff Storey should take the reins of CenturyLink after the deal, positioning the newly combined company for growth.
"The Level 3 merger is game changing," Meister said at the Sohn Conference. "Would you pay a premium to buy the New England Patriots and then not start Tom Brady?" CenturyLink stock rose more than 5% Monday.
Debra Fine, Fine Capital Partners
The only female hedge fund manager to present at the Sohn Conference, Debra Fine suggested Canada-based content producer DHX Media (DHXM, +6.91%) was better positioned than Netflix to capitalize on television programing for kids, including its plans to bring back the 1990s hit, The Teletubbies.
DHX also produces shows including “My Little Pony,” “Inspector Gadget” and “Bob the Builder,” and can also take advantage of opportunities to sell related merchandise to children, according to the founder and president of Fine Capital Partners. “A Polly Pocket comforter is a much bigger seller than House of Cards sheets,” Fine said.
DHX Media stock surged as much as 7% following her presentation, and ended the day up more than 6%.
Bill Ackman
To some attendees' disappointment, Pershing Square hedge fund manager Bill Ackman did not unveil a new investment idea, but rather talked up his longtime stock holding, Howard Hughes Corp. (HHC, +3.75%). Ackman, who is also chairman of the Howard Hughes board of directors, said the real estate company was poised to thrive in the current economic environment, with many strong land development projects in its pipeline, from New York City's South Street Seaport in lower Manhattan to Hawaii beachfront property.
"I think this is one of the most attractive times in the history of the company to invest," Ackman said. Howard Hughes stock rose nearly 4% for the day.
Brad Gerstner, Altimeter Capital
One of the hedge fund managers behind an activist campaign at United Airlines explained why he's bullish on the company, now officially called United Continental Holdings (UAL, -0.43%). Citing Warren Buffett's statements from this weekend's Berkshire Hathaway annual meeting, where the Oracle of Omaha also explained his bet on airline stocks including United. Gerstner said he thinks United Airlines stock is worth double or triple its current share price of about $75, or even more, with his target price at as much as $235 a share.
"What do you need to believe to invest in United? You have to believe that the competitive dynamics really have changed as a result of consolidation," he said. "That these look more like railroads, as Charlie Munger said, and you have to believe that the historical skepticism that has been pounded into most financial analysts for decades is too negative." United Airlines stock still fell slightly on Monday.
Josh Resnick, Jericho Capital Asset Management
The founder and managing partner of private family office Jericho Capital had one of the harshest presentations of the day, announcing that he is shorting telecom company Frontier Communications (FTR, +4.79%). With Frontier stock already trading at just about $1.50 a share, Resnick said he thinks it will eventually be worth just pennies. "We think it’s going bankrupt," Resnick said, holding up an old corded landline phone, which he called "your grandma's traditional wireless phone."
"The problem is, even grandmas are switching to wireless," he said. The revenue declines in its landline and other legacy businesses will "wipe out" half of Frontier's pre-tax earnings in the next three years, he said, and force the company to cut its dividend entirely. Then, Resnick predicted, "We’ll be short a 20 cent stock, not a $1.5 stock." Frontier stock fell about 4% in after-hours trading following the presentation.
Larry Robbins, Glenview Capital Management
At last year's Sohn Conference, the founder and CEO of hedge fund Glenview Capital still believed that regulators would bless the mergers of health insurance companies whose stocks he owned, including Anthem, Cigna, Aetna and Humana. That didn't work out so well. Now, Robbins is betting on a few different companies whose tie-ups are likely to get a friendlier reception from antitrust officials, and which he thinks will create value in the combined businesses. Those companies are DXC Technology, which formed when Hewlett Packard Enterprises (HPE, +0.32%) spun off and merged its services unit with the firm formerly known as CSC; FMC (FMC, -0.60%), which acquired a business formerly owned by DuPont (DD, -1.08%) before it merged with Dow Chemical; and Quintiles (Q, +0.41%), a health data and clinical trials company that recently completed its merger with IMS Health."A lot of stocks were left for dead because they were in regulatory purgatory, they were in Armageddon land and no one wanted to touch them," Robbins said, noting that these three stocks are now trading at relative highs. "Those losers can become winners. Those winners have far to run."

BArrons : Novartis Has the Right Prescription for Profits (from this Week End)

After a period of weak financial performance, Novartis could be poised for a multiyear run of earnings gains starting in 2018. Improvements should be driven by new drugs for heart failure and psoriasis, and a promising pipeline. Yet the likely upswing in profitability isn’t reflected in the Swiss drug giant’s shares, which are up 5% in the past year to $78 and down from a 2015 peak of $106.
Novartis shares (ticker: NVS) are trading for 16 times projected 2017 earnings of $4.74 a share, and 15 times estimated 2018 profit of $5.23 a share. The valuation is about average for the drug group (see table). The dividend yield is 3%, after a 15% Swiss withholding tax. U.S. investors usually can get a tax credit for the withheld amount if the shares are held in a taxable account.

“Novartis is an out-of-favor company with a long-term growth profile that is better than the peer average,” says Tim Anderson, a Bernstein drug analyst, who calls the company’s new-product pipeline “underappreciated.” Anderson has an Outperform rating on the stock and a price target of $87 a share.
Anderson sees earnings per share growing at an average annual clip of about 9% from 2018 through 2022, to more than $7 a share. This year earnings are expected to fall slightly, relative to 2016, and come in below 2015’s $5.01 a share. Novartis’ first-quarter operating earnings were down 3%, to $1.13 a share—in line with expectations—as revenue fell 1%, to $11.5 billion.
Novartis is one of the largest drug companies in the world, with a market value of $204 billion and projected 2017 sales of $48 billion. The company, based in Basel, has three operating units. The largest is innovative medicines, which develops branded pharmaceuticals. The others are Sandoz, which makes generic drugs and biosimilars, and Alcon, which produces eye-care products.
Novartis is emerging from a tough couple of years. Gleevec, the company’s one-time blockbuster—which changed the course of treatment for chronic myeloid leukemia—lost U.S. patent protection in 2015. Alcon has had lackluster results, and the launch of Entresto, a heart-failure drug, was disappointing.
But the company is moving beyond these issues. “The long-term growth prospects for Novartis are quite positive,” says CEO Joseph Jimenez. “We expect to enter the next growth phase by the end of this calendar year.”
Jefferies analyst Jeffrey Holford wrote recently that it’s “time to get off the fence for investors.” He has a Buy rating on the stock and a price target of about $95. Wall Street could start to anticipate an uptick in revenue and profits in coming months.
Anderson argues that there is less risk with Novartis than with some rivals because of the company’s broad portfolio of branded drugs.
MANY INVESTORS favor focused drug companies, but the downside to that approach has been apparent at Bristol-Myers Squibb (BMY), once the hottest stock in the Big Pharma group due to its leadership in immuno-oncology drugs. Its shares have declined 22% in the past year, to $55, after one of the company’s leading immuno-oncology drugs had disappointing clinical trial results last summer.
Jimenez, 57, acknowledges that Entresto got off to a slow start last year, partly because Novartis underestimated U.S. doctors’ hesitation to prescribe it, even after favorable clinical trials showed reduced mortality in patients who took the drug, compared with those who received older drugs known as ACE inhibitors.
It turned out that Entresto needed to be marketed more intensively to cardiologists, and Novartis doubled its U.S. field of salespeople. “It is now on track,” Jimenez says. “When patients take the drug, they’re able to get off the couch, and that gives physicians more confidence to prescribe it to other patients.”
Novartis is projecting $500 million in sales this year and predicts that Entresto ultimately will be a blockbuster, with $5 billion in potential annual sales. The drug costs about $4,500 annually per patient.
THE COMPANY’S hottest new drug is Cosentyx, the leader in a new class of drugs to treat psoriasis. It could generate close to $2 billion in sales this year and ultimately reach $5 billion in annual sales, helped by usage in new treatments. The drug clears the skin of redness and scales caused by psoriasis.
Novartis’ pipeline includes siponimod for relapsed multiple sclerosis, crizanlizumab for sickle-cell anemia, and CTL019, a so-called CAR-T therapy for advanced acute lymphoblastic leukemia, which has few treatment options. CAR-T therapies are a form of personalized medicine in which a patient’s immune cells are harvested, treated with the drug outside the body, and then injected into the system. Novartis also has launched a drug for advanced breast cancer, Kisqali, that competes against one from Pfizer (PFE).
Novartis’ Sandoz unit is a leader in generics. Its first-quarter sales slipped 1%, but its biosimilar revenue gained 30%. Biosimilars, a hot area of the generics market, are developed using complex biological processes and require greater scrutiny from regulators than simpler generics. The biologics market is potentially lucrative, given huge sales of leading drugs like AbbVie’s (ABBV) Humira, for rheumatoid arthritis, Crohn’s disease, and other inflammation-related conditions.
Sandoz has developed biosimilars for Teva Pharmaceutical Industries ’ (TEVA) Copaxone, a multiple sclerosis drug, andAmgen’s (AMGN) Neupogen, used to treat low levels of white blood cells, often in cancer patients. It is developing a biosimilar for Humira.
Novartis is resisting pressure to make a major acquisition; Bristol-Myers has been mentioned as a potential target because Novartis trails in the development of immuno-oncology drugs. But Novartis has said it favors “bolt-on” deals in the $2 billion–$5 billion range. It also has told investors that it doesn’t need to narrow the focus of its drug development efforts.
Novartis offers the security of a broad drug portfolio, a 3% dividend, and the prospect of a prolonged period of earnings growth.

FT : Merkel and Schulz face re-engaged voters in key regional poll

Merkel and Schulz face re-engaged voters in key regional poll
Sceptical electorate puts German politicians to the test

It was planned as a routine engagement for Martin Schulz — open a new children’s playground, say a few words, sign some autographs and pose for selfies. 

But the event in a drab suburb of the industrial western town of Hamm was anything but an easy ride for the German Social Democrat leader, who is challenging Chancellor Angela Merkel in September’s parliamentary election. 

What began as a celebrity-style appearance soon became a grilling. A woman wanted to know why “Christian Germany” was “becoming Muslim” after the influx of refugees from Islamic countries. A man asked why the Afghan teenager he had fostered might face deportation. Another wondered how Mr Schulz might handle Donald Trump, the newly-elected US president.

The demands for answers show a clear trend: that German voters are refocusing on politics after years of disengagement. They are putting politicians under pressure in response to the domestic turmoil generated by the refugee crisis, which has seen the arrival of more than 1m asylum-seekers, and by shocks abroad, including Brexit and Mr Trump’s election.

Middle-of-the-road voters, worried by the rise of the rightwing Alternative for Germany party, are rallying around the mainstream parties — but asking difficult questions.

“There is a real increase in political engagement in Germany,” says Robert Vehrkamp, a researcher at the Bertelsmann Foundation, a think-tank. “After Brexit and the vote in the US, people realise something is at stake.” 

With the national election still more than four months away, voters in populous North Rhine-Westphalia (NRW), which includes the Ruhr industrial belt, are going to the polls on Sunday in what is widely seen as a “mini-Bundestag election”. 

As such, the key issue is whether Mr Schulz, who was in Hamm campaigning for the NRW poll, can capitalise on the support he has generated since taking over the SPD in January and sustain his hopes of toppling Ms Merkel, Europe’s most powerful political leader. 

He has already suffered two regional election setbacks: in March, Mr Schulz’s personal campaigning failed to unseat Ms Merkel’s Christian Democratic Union in Saarland. On Sunday, an SPD-led coalition was unexpectedly booted out of office by a triumphant CDU in Schleswig-Holstein.

After the SPD enjoyed a dramatic surge in its national opinion poll ratings from about 20 per cent to 30-32 per cent in March, bringing it close to the CDU, the party has slipped back, recording 29 per cent in a GMS research group poll last week, well behind Ms Merkel’s conservative Christian Democrat-led bloc on 36 per cent.

That still leaves the race open, says Holger Geissler, Germany research head at the YouGov research agency. “At the moment, there is still so much going on in the world that could affect the result, such as a terrorist attack.” 

North Rhine-Westphalia, with 18m people, is widely seen as a political testing ground.

While its economy bears the scars of post-industrial restructuring, it supports high-tech engineering, vineyards and extensive farmlands.

Its mosaic of traditional villages, depressed former coal mining towns and dynamic cities such as Cologne is home to an immigrant-rich mix including Germany’s largest Muslim community. The election has drawn no fewer than 31 parties, including representatives of vegans, animal welfare campaigners, neo-Nazis and Marxist-Leninists. 

Hannelore Kraft, the state’s feisty 55-year-old SPD chief minister, says that decades of restructuring in response to the decline of coal and steel has made NRW flexible and “unafraid of change”. 

The popular Ms Kraft enjoys a wide lead in personal ratings over her lacklustre CDU challenger, Armin Laschet. But her party has been dented by a patchy record in government including alleged failures to cut crime, adequately monitor terrorist suspects or boost the economy.

With the initial enthusiasm surrounding Mr Schulz also fading, the SPD, which had hoped for a comfortable win, has a fight on its hands. The latest opinion polls have the party and the CDU neck and neck on about 32 per cent. In 2012, the SPD won by 39 per cent to 26 per cent.

The AfD, which stood as high as 13 per cent in NRW opinion polls last year, has fallen as low as 6 per cent, amid internal disputes and a drift to the right that has made the party unacceptable even to some of its former supporters. 

Ms Merkel scents blood. Speaking after the CDU’s surprise win in Schleswig-Holstein, she pledged to fight personally in NRW. “I will still be campaigning there myself,” she said. “We’ll be going full speed ahead.”

Meanwhile, Mr Schulz is on the defensive. He faces an unresolved dilemma about whether to take the party left or right in the hunt for votes.

He has focused heavily on social inequality as his top priority, pledging to help the disadvantaged in words that appeal to the left.

But that has raised fears that he might seek a coalition with the leftwing Left party, drawn from the former East German Communists. That alienates moderates.

This week, Mr Schulz has gone out of his way to refocus on the middle ground, promising a business audience to exclude any uncosted election promises from his programme and allow “economic reason to prevail”. 

Mr Schulz gave no details, but as he found out in Hamm, he will almost certainly come under public pressure to do so.

Ms Kraft says: “Once people were reluctant to speak. Now, if you get 200 people to a meeting, you get 60 or 80 questions.”