>>> AkzoNobel : Rejects second proposal from PPG valued at €88.72/shr (€56.22 ca

Rejects second proposal from PPG valued at €88.72/shr (€56.22 cash, 0.331 PPG shares) 

AkzoNobel today announces it has rejected a second unsolicited, non-binding and conditional proposal of 20 March from PPG Industries Inc. for all of the issued and outstanding ordinary shares in the capital of AkzoNobel. The proposal not only fails to reflect the current and future value of AkzoNobel, it also neglects to address the significant uncertainties and risks for shareholders and other stakeholders.

The Management Board and Supervisory Board of AkzoNobel, together with their financial and legal advisors, have thoroughly reviewed the second proposal taking into consideration the interests of AkzoNobel's shareholders, customers, employees and other stakeholders. 

The revised proposal represents a value of €88.72 (adjusted for final dividend) consisting of €56.22 (adjusted for final dividend) in cash and 0.331 PPG shares, as at 20 March 2017, per AkzoNobel share.

The unsolicited proposal does not warrant AkzoNobel's engagement with PPG. The Boards unanimously reject PPG's revised proposal.

The proposal does not address the concerns expressed by the Boards in their initial rejection of 9 March 2017. The revised proposal: 
1. Is not in the best interests of shareholders. It substantially undervalues AkzoNobel and fails to reflect the value creating opportunities of the new strategic direction and focus for both the Specialty Chemicals and the Paints and Coatings businesses, allowing them to build further on their respective leadership positions. 
2. Contains significant risks related to the increased stock component and the high leverage of the proposed combined businesses. 
3. Would result in a large number of substantial divestitures due to the major geographical and segment overlap of both companies across Decorative Paints and Performance Coatings, bringing into question value leakage. It does not address the significant risk and uncertainty, including timing, of deal completion due to extensive anti-trust concerns. These anti-trust issues would have a significant negative impact on employees and customers which will affect the integrity of AkzoNobel. 
4. Will lead to significant job cuts. It includes synergies which can be expected to result in the restructuring of the combined employee base, leading to job losses. PPG provides no substantive commitments to employees, creating potential uncertainty for thousands of jobs worldwide. 
5. Does not address fundamental stakeholder concerns and uncertainties, nor does it substantiate any tangible solutions in relation to, among others, R&D, pensions and employees. 
6. Does not meaningfully address our concerns regarding community contribution and sustainability and the significant culture gap between both companies, including how any issues arising from this would be addressed.

>>> What to look at today - 22nd of March 2017

Dow -1.14% S&P -1.24% Nasdaq -1.83% Russell -2.71%
US Market Closed lower. Financial -2.90%, The reversal of fortune had its roots in the inverse relationship between the yield curve and the banks. The former is flattening in a contradiction of the pro-growth narrative that has driven the stock market to record highs in the post-election period; meanwhile, the banks are getting flattened as investors re-think the high earnings expectations related to a widening yield spread that have driven many bank stocks sharply higher since the election. cyclical sectors absorbed the worst of the selling pressure with the consumer discretionary, industrials, materials, and technology sectors closing lower between 1.2% and 1.7%. Countercyclical groups outperformed amid the day's risk-off sentiment with the rate-sensitive utilities sector (+1.4%) closing atop the day's leaderboard. US After Hours DLTH +19% and FDX +2% following earnings/guidance, BEBE +9% rebounding... NKE -3.8% following earnings. Asian equity markets are down significantly, tracking the biggest loss of the year on Wall St where political risk has become increasingly amplified. Nikkei225 is the worst performing index in Asia, with added headwinds from overall decline in USD boosting JPY, as Financials is also the worst segment in Japan. conomic data centered around Japan, where Feb Trade Balance recovered from last month's multi-month lows.

Nikkei -2.13% Hang Seng -1.30% CSI -0.47% Shanghai -0.50%

Eur$ 1.0803 CNH 6.8658 CNY 6.8845 JPY 111.48 GBP 1.2479 CHF 0.9927 RUB 575822 WTI$ 48.02 -0.46%

S&P -0.23% EuroStoxx -0.33% Dax -0.60% SMI -0.52% FTSE -0.52%


Macro :
- Oil Closes at Lowest Since November as U.S. Supply Seen Rising
- Lazard Sees Risk for Europe Banks as Rules Ease for U.S. Rivals

Keep an eye on :
- ADS GY :  Nike 3Q EPS Beats Highest Est., Nike Falls After Revenue and Gross Margin Miss Estimates
- ATC NA : Altice CEO: Sees Ad Sales at Several Billion Euros in Few Years
- BAYN GY : Bayer Seen Notifying EC on Monsanto in Mid-April: CTFN
- BMW GY : BMW Aims to Sell 100,000 Electrified Vehicles in 2017
- CAI AV : CA Immobilien FY FFO I of EU91.7m 14% Above Previous Year
- AFX GY : Carl Zeiss Meditec Will Increase Share Capital by Up to 10%, Carl Zeiss Raises Around EU317m in Capital Increase
- CSGN VX : Credit Suisse Old Liabilities to Drop Significantly by 2018: FuW
- CSGN VX : Credit Suisse May Move ~1k Jobs to N.C.: Triangle Biz Journal
- DELB BB : Delhaize Belgium Reaches Deal to Halt Brussels Walkouts: Belga
- DDC US : Dominion Diamond Should Start Sales Process, M&G Tells Reuters
- EI FP : Gucci Owner Partners With Cartier in Luxury Eyewear Union (1)
- FCA IM : French Prosecutor Said to Open Probe on Fiat Emissions: Reuters
- GTO NA : Gemalto ‘Dead Money’ for Some Time After Warning, Natixis Says
- RMS FP : Hermes 2016 Net Income Matches Estimate; Outlook Confirmed
- KER FP : Cartier Owner Richemont to Buy Minority Stake in Kering Eyewear
- KU2 GY : Kuka Sees 2017 Sales Rev of Around EU3.1b, Proposes EU0.50 Div.
- SKB GY : Koenig & Bauer Sees 2017 Rev. as Much as EU1.25b
- MAERSKB DC : Maersk, Hapag Subpoenaed Last Week in Price-Fixing Probe: WSJ
- ORA FP : Orange in Exclusive Deal for HBO Content in France: CEO
- PLT IM : Lactalis Failure Indicates Parmalat Offer Price Too Low: Amber, Lactalis Fails to Reach 90% of Parmalat as Buyout Offer Ends
- PLT IM : Lactalis Reopens Offer Period for Parmalat for March 29-April 4
- RBI AV : Immigon Sells Up to 9.92m Raiffeisen Shares, 3% of Capital, Orders Below EU21 Likely to Miss: Terms
- CFR VX : Cartier Owner Richemont to Buy Minority Stake in Kering Eyewear
- SAN FP : Sanofi Sues Amgen Over Eczema Drug in Preemptive Patent Case
- TMG NA : De Mol Loses Court Case Push in Takeover Fight for Telegraaf
- UBG VX : UBS Applies Deposit Charge to Cash Balances Over 1 Million Euros

>>> Europe : Brokers Upgrades & Downgrades - 22nd of March 2017

>>> Up
*BBVA Raised to Overweight at Barclays
*Fraport Raised to Buy at DZ Bank, PT EU72
*Fraport Raised to Reduce at AlphaValue
*Hunting Raised to Overweight at Barclays
*Vallourec Raised to Buy at Goldman, PT EU7.40
*Wacker Chemie Raised to Overweight at JPMorgan, PT EU115
*William Hill Raised to Hold at Investec, PT 279p

>>> Down
*Aurubis Cut to Hold at Berenberg, PT EU62
*Bechtle Cut to Hold at Baader-Helvea
*Berendsen Cut to Underperform at Credit Suisse, PT 700p
*Bourbon Cut to Sell at SocGen, PT EU6
*Centrica Cut to Sell at Investec, PT 195p
*Fingerprint Cards Cut to Hold at Pareto Securities, PT SEK35
*Fingerprint Cards Cut to Hold at SEB Equities, PT SEK40
*Gemalto Cut to Neutral at Natixis
*Merlin Cut to Hold at Kepler Cheuvreux, PT EU11.30
*Peab Cut to Hold at DNB Markets, PT SEK90
*PSP Swiss Cut to Sell at Baader-Helvea, PT CHF86
*Raiffeisen Cut to Hold at Commerzbank, PT EU21
*Schroders Cut to Sector Perform at RBC, PT 3300p
*Talanx Cut to Sell at DZ Bank, PT EU31.20
*Wood Group Cut to Underperform at Jefferies, PT 650p
*Zodiac Aerospace Cut to Sell at AlphaValue

>>> Initiation
*Casino Guichard Reinstated Overweight at JPMorgan, PT EU60

>>> Call

>>> Asian Update

Asia Mid-Session Market Update: Trump rally skids off track as Health Care bill faces stiff opposition ahead of Thursday House vote

***US Session Highlights***
- (US) Mar Philadelphia Fed Non-Manufacturing General Business Conditions: 35.4 v 29.3 prior
- (US) Fed's Dudley (dove, FOMC voter): rules must make sure risk of big bank failure is really low - Q&A with reporters
- (US) President Trump: asked whether he can get health care bill votes, "I think so"
- (US) Rep Peter King (R-NY): does not know if health care bill has the votes to pass the House
- (US) House Speaker Ryan (R-WI): a lot of Freedom Caucus members are supporting Trump healthcare bill
- (US) 25 Freedom Caucus members are now 'hard no's' on the healthcare bill (GOP can only lose 21 Republican votes and still get the bill passed); unless the bill is dramatically changed by Wed night, the Freedom Caucus may issue a formal statement of opposition and House leaders may have to consider delaying the vote that is scheduled for Thursday - CNBC's Harwood

***US markets on close: Dow -1.1%, S&P500 -1.2%, Nasdaq -1.8%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Financials
- Biggest gainers: CMG +2.8%, DUK +1.9%, PPL +1.8%, D +1.8%, XEL +1.8%
- Biggest losers: KEY -6.5%, HBAN -6.1%, CMA -6.1%, BAC -5.8%, TDG -5.5%
- At the close: VIX 12.5 (+1.1 pts); Treasuries: 2-yr 1.26% (-4bps), 10-yr 2.44% (-4bps), 30-yr 3.05% (-4bps)

***US movers afterhours***
- DLTH: Reports Q4 $0.43 (adj) v $0.33e, R$174.7M v $163Me; Guides initial FY17 GAAP EPS $0.66-0.71, net sales $455-465M v $445Me, Adj EBITDA $47-49.5M v $41.2M y/y; +20.7% afterhours
- ACHN: USPTO grants composition of matter patent for small molecule complement alternative pathway Factor D inhibitors; +3.9% afterhours
- SLW: Reports Q4 $0.19 v $0.17e, R$258M v $253Me; raises dividend 16.7% to $0.07 (implied yield 1.05%); +3.4% afterhours
- FDX: Reports Q3 $2.35 v $2.63e, R$15.0B v $15.0Be; Cuts FY17 capex (incl TNT Express) $5.3B (prior $5.6B); CEO: expect an excellent Q4; +2.1% afterhours
- NKE: Reports Q3 $0.68 v $0.52e, R$8.43B v $8.45Be; Q3 Worldwide Futures orders -1% v +3.4%e; -3.7% afterhours

***Politics***
- (US) Pres Trump: Thursday's vote on healthcare legislation is crucial for Republican party - press
- (US) US Chamber of Commerce: supports Republican healthcare bill - letter to lawmakers
- (US) White House: Pres Trump plans to attend the NATO summit on May 25th - press

***Asia Key economic data:***
- (JP) JAPAN FEB TRADE BALANCE: ¥813B (10-month high) V ¥807BE; ADJ TRADE BALANCE: ¥680B (7-year high) V ¥551BE
- (AU) AUSTRALIA FEB WESTPAC LEADING INDEX M/M: -0.1% V 0.0% PRIOR
- (AU) AUSTRALIA FEB SKILLED VACANCIES M/M: 0.1% V 0.6% PRIOR

***Asia Session Notable Observations, Speakers and Press***
- Asian equity markets are down significantly, tracking the biggest loss of the year on Wall St where political risk has become increasingly amplified. US indices closed near the lows on late US session report that 25 members of Congressional Republican "Freedom Caucus" are united with a "hard no" position on Trump/Ryan version of Obamacare repeal/replace, which in turn puts into question the viability of White House plans for fiscal stimulus and tax reform. President Trump is making last ditch efforts to negotiate a deal, but also warned that dissenters risk losing their Congressional seats in the midterms. Treasuries were bid higher across the curve and low-beta Utilities rallied, while Financials and Materials took the most direct hit.
- Nikkei225 is the worst performing index in Asia, with added headwinds from overall decline in USD boosting JPY, as Financials is also the worst segment in Japan. Australia is also underperforming as miners slump on lower iron ore prices. In FX, USD/JPY fell below 111.50 for the first time since last November, and AUD's decline to 0.7650 was a 1-week low. NZD/USD was rangebound ahead of tomorrow's RBNZ decision after a brief rally in US hours on increasing dairy auction prices.
- Economic data centered around Japan, where Feb Trade Balance recovered from last month's multi-month lows. Exports spiked to a 2-year high 11.3% v 10.1%e, as shipments to Asia and China grew over 20% and US exports recovered from last month's loss with a flat print. BOJ Minutes from Jan meeting maintained view that economy is in moderate recovery trend, though most members agreed price momentum is not yet firm and inflation expectations remain in weakening phase. Recall that meeting preceded the latest BOJ statement when the medium-term outlook for inflation was improved.

China
- (CN) Chinese press op-ed speculates economy may face more downward pressure in H2; Govt should increase efforts to stabilize growth
- (CN) According to a PBoC survey in Q1, 52% of China urban households believe housing prices are "unacceptably high" - Chinese press

Japan
- (JP) BOJ Member Funo: Vintal for BOJ to continue with powerful easing; Must be mindful of downside risks to price outlook; Price momentum is still insufficient
- (JP) According to Recruit Jobs, average part time wages in Japan's Tokyo, Nagoya and Osaka metropolitan areas rose 2.3% y/y amid tighter labor market - Nikkei
- (JP) Japan Finance Ministry said to seek larger JGB bids from primary dealers in effort to avoid risk of undersubscription - Nikkei

Australia/New Zealand
- (AU) Australia Trade Min Ciobo: Relationship with China is very strong
- (NZ) Westpac: RBNZ statement tone tomorrow may be balanced and policy outlook expected to remain unchanged, leaving markets "roughly unmoved" - press
- (NZ) ANZ economist: Prices for New Zealand commodities are holding up better than expected, as highlighted by positive dairy auction overnight - NZ press

Korea
- (KR) North Korea may have launched several missiles today; South Korea military says the launches were not successful - Japan press

***Asian Equity Indices/Futures (00:30ET)***
- Nikkei -2.0%, Hang Seng -1.4%, Shanghai Composite -0.7%, ASX200 -1.6%, Kospi -0.6%
- Equity Futures: S&P500 -0.3%; Nasdaq -0.2%; Dax -0.2%; FTSE100 -0.2%

***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.0790-1.0820; JPY 111.45-111.80; AUD 0.7650-0.7690; NZD 0.7015-0.7045
- Apr Gold -0.1% at $1,245/oz; May Crude Oil -0.2% at $48.13/brl; May Copper -0.3% at $2.60/lb
- (US) Weekly API Oil Inventories: Crude: +4.5M v -0.5M prior (7th build in the past 9 weeks)
- SPDR Gold Trust ETF daily holdings rise 4.1 tonnes to 834.4 tonnes; First rise since Mar 15th
- (CN) PBOC SETS YUAN MID POINT AT 6.8889 V 6.9071 PRIOR; first stronger setting in 4 sessions
- (CN) PBOC to inject combined CNY90B v CNY80B prior in 7,14, and 28-day reverse repos
- (CN) China MoF sells 3-yr upsized bonds; avg yield 3.0289% v 2.91%e; bid-to-cover ratio 1.69x
- (JP) Japan MoF sells ¥500B in 0.4% 40-year JGB bonds, bid to cover: 2.95x v 2.99x prior
- (AU) Australia MoF (AOFM) sells A$800M in 2.25% 2028 Bonds; avg yield: 2.8595%; bid-to-cover: 2.19x-
- (KR) South Korea sells KRW300B in 50-yr govt bonds at 2.225%

***Asia equities / Notables / movers by sector***
- Consumer staples: 168.HK Tsingtao Brewery Co -3.4% (profit warning); FCG.NZ Fonterra -0.5% (H1 result)
- Financials: 1628.HK Yuzhou Properties -1.5% (FY16 result); 81.HK China Overseas Grand Oceans Group -3.4% (FY16 result); 7164.JP Zenkoku Hosho Co +7.6% (raises guidance); PMV.AU Premier Investments +4.6% (Deutsche Bank raises rating)
- Industrials: 1038.HK Cheung Kong Infrastructure -1.2% (FY16 result); NUF.AU Nufarm +3.1% (H1 result)
- Technology: 1070.HK TCL Multimedia Technology Holdings -0.8% (FY16 result)
- Materials: FMG.AU Fortescue -5.3%, BHP.AU BHP Billiton -2.6%, RIO.AU Rio Tinto -2.5% (iron ore declines); EVN.AU Evolution Mining +0.9%, SBM.AU St Barbara +2.6%, NCM.AU Newcrest Mining +2.0% (gold price rises)
- Energy: 6.HK Power Assets Holdings -1.4% (FY16 result); 2688.HK ENN Energy Holdings -1.9% (FY16 result)
- Telecom: TPM.AU TPG Telecom -2.3% (Credit Suisse cuts rating)
- Utilities: 902.HK Huaneng Power International -6.1% (FY16 result)

>>> After Hours Summary: DLTH +19% and FDX +2% following earnings/g


After Hours Summary: DLTH +19% and FDX +2% following earnings/guidance, BEBE +9% rebounding... NKE -3.8% following earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: DLTH +19.4%, VKTX +5.6% (thinly traded, ticking higher), HQY +3.1%, SLW +2.6%, FDX +1.6%

Companies trading higher in after hours in reaction to news: BEBE +9% (modestly rebounding), IDXG +6.1% (after closing near highs), ACHN +3.4% (announces that the U.S. Patent and Trademark Office has issued the first U.S. patent to Achillion resulting from its complement factor D research program), SNAP +1.2% (initiated with a Buy at Drexel Hamilton; $30 tgt)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: NKE -3.8%

Companies trading lower in after hours in reaction to news: RGNX -6.1% (to offer and sell $75,000,000 of its common stock in an underwritten public offering), ADAP -5.6% (thinly traded -  to offer and sell ADSs in underwritten public offering), DEA -3.7% (light volume; to acquire and complete the development of the Department of Veterans Affairs Outpatient Clinic; raises FY 17 FFO/share guidance; commences a public offering of 4.3 mln shares of common stock in connection with the forward sales agreements)

>>> US Close Dow -1.14% S&P -1.24% Nasdaq -1.83% Russell -2.71%

Closing Market Summary: Financials Pace Stock Market's Tuesday Tumble

Investors attempted to make the most out of some positive overnight developments on Tuesday morning, but a modest gain at the opening bell was the straw that broke the back of a stock market that may have extended itself a little too far. The major averages finished their worst day of 2017 solidly lower with the Nasdaq (-1.8%) leading the retreat. The S&P 500 settled lower by 1.2%, marking the first time since October that the index closed with a loss of more than 1.0%. That streak is the longest since 1995.

The financial sector (-2.9%), the poster child of the stock market's post-election rally, tumbled deep into negative territory on Tuesday, signaling the possible end of the new administration's honeymoon phase. The reversal of fortune had its roots in the inverse relationship between the yield curve and the banks. The former is flattening in a contradiction of the pro-growth narrative that has driven the stock market to record highs in the post-election period; meanwhile, the banks are getting flattened as investors re-think the high earnings expectations related to a widening yield spread that have driven many bank stocks sharply higher since the election.

As they have since the presidential election on November 8, most sectors followed the financial group's lead to finish the day solidly lower. The cyclical sectors absorbed the worst of the selling pressure with the consumer discretionary, industrials, materials, and technology sectors closing lower between 1.2% and 1.7%.

Countercyclical groups outperformed amid the day's risk-off sentiment with the rate-sensitive utilities sector (+1.4%) closing atop the day's leaderboard. The sector profited from the increased buying interest in the Treasury market, which left yields lower across the board; the benchmark 10-yr yield finished Tuesday's session three basis points lower at 2.43%.

Like its defensive peers, the health care sector (-0.8%) also outperformed the broader market, but it showed relative weakness within the countercyclical space as the debate on health care reform picked up steam in Washington. The GOP's proposed health care legislation will go the the floor of the House on Thursday, but reports indicate that the Republicans will not have enough votes to move the bill to the Senate.

Investors will keep their fingers crossed, hoping that a resolution can be worked out in the nation's capital so that lawmakers can move on to tax reform--another promise that has propped up the stock market.

Tuesday's lone economic report was fourth quarter Current Account Balance:

  • The current account deficit for the four quarter totaled $112.4 billion while the consensus expected the deficit to hit $128.2 billion. The third quarter deficit was revised to $116.0 billion from $113.0 billion.