FT : Ghosn to cede chief’s role at Nissan to focus on three-way alliance

Ghosn to cede chief’s role at Nissan to focus on three-way alliance
Saikawa named successor as Ghosn seeks to boost ties with Renault and Mitsubishi

Carlos Ghosn is to relinquish the chief executive role that he has held for 16 years at Nissan as he turns to focus on strengthening an expanded alliance involving France’s Renault and scandal-bruised Mitsubishi Motors.

Hiroto Saikawa, who was appointed as co-CEO in November, will take over as chief executive in April while Mr Ghosn will remain chairman of Nissan’s board of directors, chief executive of Renault, and chairman of Mitsubishi. 

The reshuffling of the roles leaves few people in doubt that the 62-year-old will remain in full command as he aspires to catapult the three-way alliance to the top league of global car giants alongside Volkswagen and Toyota.

“You can see pressures for consolidation everywhere,” Mr Ghosn told the Financial Times. “We really want to make sure that this alliance . . . continues to extend the scale and the synergies possible, not only between the three companies but eventually with other companies.”

The expansion of the Franco-Japanese alliance, which is nearly two decades old, comes as the car industry faces new technological and cost challenges in autonomous driving and electric vehicles. Toyota is expanding its ties with Suzuki Motor and Mazda, while PSA, the maker of Peugeot and Citroën cars, is in talks to buy the European operations of General Motors.

Mr Ghosn is also grappling with fraught relations between Renault and the French government, which commands about 20 per cent of voting rights in the company. The state voted last April against Mr Ghosn’s pay package at Renault, which wields effective control over Nissan through a 43 per cent stake.

Mr Ghosn, born in Brazil to Lebanese parents and educated in France, stressed on Thursday that he would remain the chief executive of Renault as he completes its transformation.

The change at Nissan had been expected as Mr Ghosn has said in October that he wanted to focus on turning round Mitsubishi, which suffered a plunge in domestic sales after admitting to cheating on its vehicles’ fuel economy data last year. Following the scandal, Nissan purchased a 34 per cent stake in Mitsubishi.

Analysts say closer ties between Nissan and Mitsubishi, makers of the Leaf and i-MiEV electric vehicles respectively, will give them the scale to cut costs to compete against rival Tesla, while helping Nissan address its weakness in Southeast Asia where Mitsubishi has a robust network.

Takaki Nakanishi, a former Merrill Lynch analyst who now runs his own research group, says the enlarged alliance, with global annual sales of nearly 10m vehicles, is unlikely to threaten the two-way competition between Volkswagen and Toyota unless they can find strengths beyond scale.

“Mr Ghosn built scale with the Renault-Nissan alliance but the next step is to foster a robust automotive group that can reign over the global industry on a sustainable basis. That will still take time,” Mr Nakanishi said.

Mr Saikawa, a 40-year veteran at Nissan, has long been viewed as the frontrunner to succeed Mr Ghosn. The two men met in 1999, the year Mr Ghosn joined Nissan to implement a drastic restructuring plan that saw the Japanese carmaker rebound from near collapse.

As Nissan’s representative on the Renault board until last year, Mr Saikawa, 63, built his name as a tough negotiator with the French government in 2015 after Paris moved to increase the voting rights it holds in the Japanese carmaker.

The incident exposed the limits of the alliance’s cross-shareholding system with the French group now the smaller partner in terms of annual production, market capitalisation and operating margin. Nissan has no voting rights at Renault, despite outgrowing its French parent and holding a 15 per cent stake in the company,

Mr Ghosn reiterated that the two companies “do not relate to each other through shareholding.” But analysts say Mr Saikawa, whom Mr Ghosn has described as “very loyal to the company”, is a safe choice in a period of tension, since he is unlikely to challenge Mr Ghosn’s authority and is expected to run day-to-day operations without a major shift in policy.

“I’ve always said my wish is to one day pass the baton to a Japanese CEO so it’s done. It’s a change of person but it is a change in continuity,” Mr Ghosn said.

WSJ : Treasury Secretary Steven Mnuchin Sees Tax Overhaul by August

Treasury Secretary Steven Mnuchin Sees Tax Overhaul by August
Economic growth at 3% or higher is also among Trump administration’s ambitious goals, he says

Treasury Secretary Steven Mnuchin laid out ambitious goals to secure a U.S. tax-code overhaul by August and to deliver economic growth at rates not seen in more than a decade.

Mr. Mnuchin, in his first interview since his confirmation last week as Treasury secretary, said slower economic growth since the financial crisis had primarily been an anomaly and a result of Obama administration policies that can be reversed. He said the Trump administration is aiming for a sustained 3% or higher annual growth rate, a projection not widely shared by other forecasters.

“We think it’s critical that we get back to more normalized economic growth. More normalized economic growth is 3% or higher,” Mr. Mnuchin said.

Sustained growth at rates above 3% could be difficult to achieve. The Federal Reserve projects a long-run annual growth rate of 1.8% and the Congressional Budget Office has a similar view.

The U.S. faces slower economic growth in part because the labor force is expanding less briskly than in the past as baby boomers retire. Slow worker productivity growth has also held back the economy. Output has grown about 2% on average annually over the past decade, and other wealthy economies facing similar demographic challenges have seen slower growth rates.

Still, a strong reversal of weak productivity growth or an upturn in labor force growth could send output growth higher. The Trump administration is betting tax and regulatory reform could spark such changes.

Stronger growth would make it easier for the Trump administration to balance competing goals of cutting taxes and boosting spending on the military and infrastructure without sending deficits much higher. The new administration is working on a budget blueprint due out next month that will be a first step toward reconciling its objectives.

“We will have our own set of financial projections,” he said.

Mr. Mnuchin said the administration was working with House and Senate Republicans to smooth over differences among them on tax policy, with the aim of passing major legislation before Congress leaves for its August recess. He added, “that’s an ambitious timeline. It could slip to later in the year.”

In his first week on the job, Mr. Mnuchin has spoken with around 10 foreign counterparts and other leaders, including International Monetary Fund Director Christine Lagarde. He also has met with Mel Watt, the director of the Federal Housing Finance Agency, the independent regulator of mortgage companies Fannie Mae and Freddie Mac, which are under the effective control of that agency and the U.S. Treasury as a result of their 2008 bailouts.

Mr. Mnuchin, whose confirmation process was the longest for a Treasury secretary of a new administration in U.S. history, brought a handful of advisers to the agency with him, but it will likely be months before other senior positions that require Senate confirmation are filled. The White House hasn’t nominated anyone for other posts at the department that require Senate approval.

The secretary has been in close contact with National Economic Council director Gary Cohn, his former colleague at Goldman Sachs Group Inc., who emerged as a powerful economic policy maker while Mr. Mnuchin awaited confirmation. The two men have a close relationship, a Treasury official said.

One big question is whether the Trump administration will go along with House Republican plans to make a tax overhaul revenue neutral—meaning lower tax rates won’t add to the deficit. Mr. Mnuchin wouldn’t discuss the administration’s view on that question and instead pointed to stronger economic growth as an engine that will reduce the urgency for major trade-offs in any tax bill.

The House GOP plan doesn’t count solely on growth. It also features limited deductions and a border-adjustment provision that taxes imports and removes taxes from U.S. exports. The plan is projected to generate about $1 trillion over a decade.

The border adjustment provision has run into criticism from large retailers and other importers. U.S. Senators have piled on, too, leaving the idea in trouble without a major presidential push that hasn’t happened and might never come.

Mr. Mnuchin said the administration is “looking seriously” at the House plan that includes border adjustment and was well aware of concerns raised by specific industries. The Treasury Department had its own concerns, he added, “about what the impact may be on the dollar” from a border-adjusted tax.

His comments underscored the challenge the new administration and congressional Republicans face reconciling competing objectives.

With the House plan in potential trouble, a Senate plan nonexistent and the Trump plan incomplete, the GOP’s tax agenda is in search of a guidepost at a crucial moment. Mr. Mnuchin called for a combined plan that would address developing fractures in the party over tax policy.

As Treasury secretary, Mr. Mnuchin also takes on the role as the Trump administration’s leading voice on U.S. currency policy, meaning his every word on the dollar will be closely followed in financial markets.

Mr. Trump has expressed frustration that other countries—most notably China—have used weak currency policies to boost exports. The comments during his campaign and since his election carried with them an implication that the new administration might favor a weaker currency to support the U.S. trade position.

But Mr. Mnuchin avoided taking confrontational positions on the dollar. He said the strong U.S. dollar is a reflection of confidence in the U.S. economy and its performance compared with the rest of the world and was a “good thing” in the long run. The comments echoed remarks Mr. Mnuchin made in a confirmation hearing last month.

The dollar has appreciated by 23% over the past three years and added to those gains since the November election.

“I think the strength of the dollar has a lot to do with kind of where our economy is relative to the rest of the world, and that the dollar continues to be the leading currency in the world, the leading reserve currency and a reflection of the confidence that people have in the U.S. economy,” Mr. Mnuchin said.

The past several administrations have for the most part signaled support for a strong dollar, even though at times an appreciation of the currency has hurt exports.

Mr. Mnuchin demurred when asked about China’s currency and said he looked forward to “healthy bilateral relations” with the world’s second- largest economy.

“There’s trade issues that will make sense to look at, and I think there’s investment issues that will make sense to look at,” he said. “There are many things that we will need to collaborate on.”

During the campaign, Mr. Trump repeatedly promised to brand China as a currency manipulator, but over the past 18 months, China has taken steps to bolster its currency. The Obama administration said that was a sign Beijing had moved away from seeking an unfair trading advantage by keeping the yuan undervalued.

Mr. Mnuchin said those were two separate issues. “One is the issue of currency manipulation, and then one is the issue of whether there’s unfair trading advantages,” he said Wednesday. “They may or may not be related.”

(iShares) ETP Flows: Factoring in the flows into Value

For Professional and Institutional Investors Only

 

 

iShares by BlackRock

iShares Follow the Flow


Exclusive report on ETP market trends

 

FULL REPORT

 

Highlights from the week ending
February 17th, 2017

Factoring in the flows into Value

Equity ETPs attracted $14.7bn (77% of the total inflows), this means that equity inflows have been greater than fixed income for 14 out of the last 15 weeks.

 

Fixed income and commodity ETPs took in $3.2bn and $1.1bn respectively; U.S. investment grade and gold dominated these asset classes.

 

The two themes of the week are factor rotation into value and out of minimum volatility, and IG credit vs EM debt.

 

 

 

 

FULL REPORT

 

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>>> AccorHotels considers making acquisitions in South America, regional CEO say

AccorHotels considers making acquisitions in South America, regional CEO says
22 FEB 2017
AccorHotels (AC:EN), the French hotel giant, considers making acquisitions to expand its brand portfolio in South America, Patrick Mendes, South America CEO, said.
When asked if the Paris-based group was currently in talks with South American hotel brands, Mendes said he could not answer the question. Accor operates 16 hotel brands, including low-cost Ibis, midscale Mercure and upscale Sofitel.
Brazil is the group’s main market in South America and is still a country of interest, Mendes said. Argentina, Chile, Colombia, and Peru are also under the group’s radar, he added.
The French company has 289 hotels in South America, 252 of them in Brazil, 12 in Argentina, eight in Chile, seven in Colombia and five in Peru. By 2020, AccorHotels plans to have 500 hotels in the region and part of this expansion will be made through acquisitions, Mendes said.
The executive did not specify a minimum size for potential regional targets, but noted that Accor does not rule out buying small hotel chains “with three or four” units, as long as they own appealing brands in the luxury and lifestyle segments, which cater to consumers that look for a more intimate and authentic travel experience.
In Brazil, Accor is interested in resorts in traditional leisure destinations, such as the beach towns of Costa do Sauipe, in Bahia state, and Guaruja, in Sao Paulo state, and also in “urban resorts” located in large cities like Sao Paulo and Rio de Janeiro, Mendes said. Unlike traditional urban hotels, urban resorts attract people that not only want to enjoy the destination, but also are looking for a pleasing stay, with perks like clubs, restaurants, bars and health spas, he explained.
The company is also eyeing regional technology businesses that offer solutions to hotel chains and travelers, Mendes said. Potential targets are not limited to firms that can add features to the company’s booking platform Fastbooking, but also apps that can make its guests’ stay easier, he said. As an example, Mendes mentioned a solution that allows guests to open their rooms with their mobile phones.
Regional strategy
Accor’s M&A strategy in South America, Mendes explained, is closely linked to the company’s inorganic worldwide growth plans that are founded in three pillars: diversifying the group’s brand portfolio, especially in the luxury and lifestyle segments; expanding its concierge services offering; and enhancing its technological platform to be in a better position to market itself directly to guests through the Internet.
But unlike with past acquisitions, where Accor would purchase hotels and later incorporate them into one of its hotel brands, the company’s current M&A strategy focuses on “acquiring skills and preserving the targets’ DNA,” Mendes said.
As a way to illustrate this, the executive cited the group’s 2014 purchase of a 35% stake in the French hotel chain Mama Shelter, which enabled Accor to venture into the design-oriented lifestyle brand. As part of the deal, Mama Shelter preserved its original brand name and their solid reputation helped AccorHotels gain knowledge and credibility in this niche market, he said.
On 19 January, Accor also announced it had signed a “master franchise” agreement to convert eight hotels of family-owned Colombian hotel chain German Morales e Hijos (GMH) to its Mercure brand, as reported. As part of the deal, the eight hotels will preserve part of its name and will continue to be operated by GMH.
Accor plans to fund future acquisitions primarily through the sale of a majority stake in its HotelInvest property business, which owns and operates 1,000 hotels, said Mendes. Hotelinvest's portfolio was valued at EUR 7.3bn at the end of June 2016, according to a published report.
On 16 January, the group announced it was already in talks with potential buyers for a stake in HotelInvest. Mendes said Accor plans to sell a 60% stake in the property business by June.
Proceeds from the sale would also help the company finance greenfield projects and hotel renovations worldwide, he added.
The French hotel group also considers teaming up with regional private equity firms or family offices interested in funding the build of lifestyle hotels or luxury hotel chains, Mendes added.

WSJ : Carlos Ghosn Steps Back From Nissan CEO Role

Carlos Ghosn Steps Back From Nissan CEO Role
Co-CEO Hiroto Saikawa to replace Ghosn, who will remain chairman of auto maker

Carlos Ghosn is leaving his chief executive role at Nissan Motor Co., a company he rescued from near-collapse and led for nearly two decades, to take a broader oversight role of the alliance that links Nissan with Renault SA and Mitsubishi Motors Corp.
Mr. Ghosn, 62, will hand the reins at Nissan in April to Hiroto Saikawa, his recently appointed co-CEO, the company said Thursday in Japan. Mr. Ghosn will remain chairman of the Japanese auto company and is expected to stay active in charting Nissan’s path.

“There comes a time where you have to make some choices. I chose to pass the baton at Nissan,” Mr. Ghosn said in an interview Thursday in Tokyo.

Born in Brazil to Lebanese parents and educated in France, Mr. Ghosn is revered in the global auto industry for engineering Nissan’s comeback and its alliance with Renault, a model in the car industry where the need for investment in new technology has increasingly outpaced the ability of any single company to respond.

The Nissan CEO handover addresses one part of the transition to a post-Ghosn era at the alliance, but the largest questions remain unresolved. One is whether the current shareholding arrangement—in which Renault holds 43% of Nissan and Nissan holds 15% of Renault—is sustainable. The other is whether anyone can replicate the role Mr. Ghosn has built as a globe-trotting leader of both companies.

Pressure is likely to grow on Nissan and Renault to merge, analysts say. “That pressure is coming from the French government, and Renault management people. but Ghosn has been protecting Nissan,” said Takaki Nakanishi, a Japanese auto analyst who owns his own research firm.

>>> What to look at today -23rd of February 2017

Dow +0.16% S&P -0.11% Nasdaq -0.09% Russell -0.46%
US Market Closed Mixed with Dow higher & S&P, Nasdaq slighlty lower...Russell even more. FOMC minutes showed that many FOMC members see a rate hike "fairly soon if incoming information on the labor market and inflation was in line with or stronger than their current expectations." And while recent hotter than expected ISM Index, Nonfarm Payrolls, PPI, CPI, Retail Sales, Housing Starts, and Existing Home Sales readings met the rate hike prerequisite, the statement's vague "fairly soon" clause gives little indication as to the timeline of said rate hike. fed funds futures market now points to May as the most likely time for the next rate hike to be announced with an implied probability of 52.1%, up from 45.9% yesterday. The implied probability of a March rate hike increased to 22.1% from yesterday's 17.7%. TOL +6.1% on ern. Financials (+0.1%) and telecom services (+0.1%) closed in line with the consumer discretionary sector while technology (+0.2%), materials (+0.3%), and utilities (+0.4%) performed a bit better. Energy (-1.6%) led the five remaining sectors lower with Crude oil -1.4% @ $53.59/bbl. US After Hours SQ +9%, CTRP +5%, OCN +4%, HPQ +2%, TSLA +1.5% following earnings/guidance... TSRA -13.5%, LB -13% following earnings/guidance, ORIG -36.1% on earnings/financing update. Asia equity markets are modestly lower as investors digest the implications of the latest Fed policy minutes. Fed noted it may be appropriate to raise rates "fairly soon", while some members urged going at the upcoming meeting to give FOMC more flexibility. However, traders looked for a more concrete signal as March Fed funds futures probability remained below 20%, even as the odds for May has risen above 50%. The caveat is that May does not have an accompanying press conference while March does, and the Fed has never raised rates in a meeting when the Fed chair did not take the podium. USD weakened in US hours on release of the Fed minutes and remains under pressure in Asian session. Rate decisions from Brazil and South Korea were also on the docket today. Brazil was unanimous to cut for the 4th straight time by 75bps - in line with consensus. After yesterday's property price data from China, Commerce Ministry official said the govt will continue to stabilize housing market and also doing preparation to roll out a property tax, while planning to maintain differentiated curbs across the cities. Japan's pension fund GPIF had raised its holdings of short-term assets due to negative interest rates; Will switch to JGBs when rates rise

Nikkei -0.04% Hang Seng -0.41% CSI -0.77% Shanghai -0.63%

Eur$ 1.0555 CNH 6.8643 CNY 6.8778 JPY 113.25 GBP 1.2435 CHF 1.0106 RUB 57.9088 WTI$54.04 +0.82%

S&P -0.04% EuroStoxx +0.06% Dax -0.03% SMI -0.07% FTSE +0.07%

Macro :
- Don’t Rush to Buy VIX Calls Despite Low Volatility: Weeden
- Mnuchin Says Strong Dollar Reflects Confidence in Economy: WSJ
- FOMC Saw Risks That May Call for Different Policy Path: Minutes

Keep an eye on :
- ARL GY : Aareal Bank Raises Dividend, Sees Operating Profit Drop in 2017
- ADP FP : ADP Says Low-Cost Airline Traffic in Paris Grew 13.1% in 2016
- AF FP : Air France Flight Attendants Will Seek to Block New Airline
- CS FP : Axa 2016 Full-Year Net Income EU5.83B; Est. EU5.96B ,Axa Will Keep Developing JV With Monte Paschi: CFO Harlin
- BSLN SW : Basilea Takeover Speculation Lifts Shares on Wednesday: Reuters
- BKIA SM : Bankia Proposes 1-for-4 Reverse Stock Split
- EN FP : Bouygues Sees Improvement in Profitability in 2017
- CO FP : Cnova Filed to De-List From NASDAQ From March 3
- CMBN SW : Cembra Money Bank 2016 EPS Increases, Raises Dividend
- CNP FP : CNP Assurances FY Net Income EU1.2B; Est. EU1.12B
- DAI GY : Daimler to Increase Supervisory Board Member Pay by 20%: BZ
- DECB BB : Deceuninck Sees Further Growth; 2016 Adj. Ebitda Climbs 16%
- DL NA : Delta Lloyd 2016 Solvency Ratio at Lower End of Target Range
- DEXB BB : Dexia CET1 Ratio Drops to 16.2% After AFS Exemption Expires
- DIA SM : DIA 2016 Net EU174m, Misses EU180.2m Average Estimate
- DLG GY : Dialog Semiconductor Sees 1Q Rev. $255m to $285m
- DUE GY : Duerr 4Q Sales Fall 4% to EU965.1m, Order Intake Rises
- EDEN FP : Edenred FY Net EU180m; Est. EU185m
- EDF FP : EDF Said to Hire Santander for Fotosolar Sale: Economista
- EDP PL : EDP Renovaveis Sees Rise in Payment With Spain Regulatory Review
- FGR FP : Eiffage FY Net Jumps 33%; Forecasts Earnings Growth in 2017
- XOM US : Exxon Mobil Cuts Proved Reserves by 3.3B BOE on Oil Rout
- FIE GY : Fielmann Profit Beats Estimates as 2016 Market Share Set to Rise
- G IM : Generali Expects 28% of New Business From Asia by 2020: Il Sole
- HEIJM NA : Heijmans 2016 Underlying Operating Loss Increases to EU66m
- HEN3 GY : Henkel 4Q Adj. Ebit Beats Estimates; Expects 2017 Growth
- INGA NA : ING Belgium Said to Name Erik Van Den Eynden CEO: De Tijd/L’Echo
- IPS FP : Ipsos FY Net Income Climbs 15%; Posts Organic Revenue Growth
- JMT PL : Jeronimo Martins 2016 Net EU593m Vs. Est. EU607m
- KINVB SS : Kinnevik to Sell Half of Its Stake in Rocket Internet (6.60%)
- LUPE SS : Lundin Mining 4Q EPS Beats Highest Est.
- MBWS FP : Marie Brizard Signs China Distribution Accord With Cofco: Echos
- MAU FP : Maurel & Prom Estimates 2016 Total Loss of EU30m
- ORA FP : Orange 2016 Adj. Ebitda EU12.68B; Analyst Est. EU12.59B
- UG FP : May and PSA Have Desire to Protect Jobs at Vauxhall: Statement
- UG FP : France Says Backs PSA Plans to Buy GM’s European Business
- PM US : Philip Morris Boosts 2017 EPS Guidance; Shares Hit Session High
- DPW GY : Postbank Sees Income Gain From Account Management Fees: SZ
- PSM GY : ProSiebenSat.1 Sales Beat Estimates; Proposes EU1.9 Dividend
- RECIB SS : Recipharm 4Q Sales Beat Estimate, Ebitda Misses
- RNO FP : Carlos Ghosn Says He’ll Remain Renault Chief Executive Officer
- ROG VX : Roche Reports Death in ACE910 Study, EU Hemophilia Group Says
- RKET GY : Kinnevik Sold Rocket Internet Shares at EU19.25 a Share
- SIE GY : Siemens CEO Plans Holding Structure for Company: Handelsblatt
- S32 LN : South32 Proposed Buy of Peabody’s Metropolitan Hits Speed Bump
- SREN VX : Swiss RE 4Q Net Income $517M; Plans Up To CHF1B Share Buyback
- SYNN VX : Chemchina Extends Public Tender Offers for Syngenta to April 28
- TEG GY : TAG Immobilien FY Rental Rev. Beats Top Est., Lifts Forecasts
- TECH FP : Technicolor FY Sales Misses Ests., Sees Slide in 2017 Ebitda
- TEF SM : Telefonica 4Q Oibda EU3.2B; Est. EU3.3B
- TEF SM : Telefonica’s O2 Extends Entertainment Venue Sponsorship a Decade
- TEL NO : Telenor Says Transaction With Bharti Will Not Trigger Impairment
- TEN IM : Tenaris 2016 Capital Spending $787m; Est. $863.5m, Tenaris 4Q Has Modestly Positive Impact for Stock: Evercore ISI
- TSLA US : Tesla 4Q Adj. Loss/Share Narrower Than Est.; Shares Rise
- TKA GY : Thyssenkrupp Readies for EU Steel Consolidation: Handelsblatt
- TIF US : higher in after hours on Jana 13D, 4.9% passive stake
- UCB BB : UCB Sees 2017 Revenue at EU4.25b-EU4.35b, Below Estimates
- VRX US : Allergan CEO Says He Has ’No Interest’ in Buying Valeant
- VK FP : Vallourec Sees Signs of Recovery in Energy Industry Demand: FT
- VIE FP : Veolia FY Current Net EU610M; Div. EU0.80/Share
- DG FP : Vinci-Led Group Wins EU926m Paris Region Metro-Tunnel Contract
- VOD LN : SoftBank Denies It’s Looking for a Stake in Merged Vodafone-Idea
- WDH DC : William Demant FY Rev. Matches Est.; Sees Ebit Growth in 2017
- WOOD LN : Wood Group mulls acquisitions

>>> Europe : Brokers Upgrades & Downgrades - 23rd of February 20

>>> Up
*Airbus Raised to Overweight at JPMorgan, PT EU88.50
*Anglo American Raised to Market Perform at Avior, PT ZAR245
*Banque Cantonale Vaudoise Raised to Neutral at Credit Suisse
*BHP Raised to Market Perform at Avior, PT ZAR235
*CaixaBank Raised to Reduce at AlphaValue
*Drax Raised to Buy at Investec
*Hays Raised to Outperform at Credit Suisse
*Hispania Activos Inmobiliarios SOCIMI Raised to Buy at Deutsche
*Inmarsat Raised to Outperform at Macquarie, PT GBP8.50
*OMV Raised to Buy at Citi, PT EU41
*UniCredit Raised to Buy at Berenberg, PT EU15
*Vidrala Raised to Buy at Ahorro Corporacion, PT EU55.80

>>> Dowm
*Allianz Cut to Market Perform at Bernstein, PT EU165
*Amplifon Cut to Neutral at Main First Bank AG, PT EU10.60
*Beni Stabili SpA SIIQ Cut to Hold at SocGen, PT EU0.60
*Berkeley Energia Cut to Hold at Liberum
*Bravida Holding Cut to Hold at SEB Equities, PT SEK63
*HALFORDS Cut to Sell at Peel Hunt
*PCAS Cut to Hold at Portzamparc, PT EU13.50
*St Galler Kantonalbank Cut to Underperform at Credit Suisse
*SECTRA CUT TO HOLD VS BUY AT NORDEA
*Wallenstam Cut to Sell at DNB Markets

>>> Initiation
*Nexus Rated New Buy at Berenberg, PT EU23

>>> Call

>>> Financiere Turenne Lafayette second round auction attracts more than ten su

Financiere Turenne Lafayette second round auction attracts more than ten suitors – report (translated)
23 FEB 2017
The second round auction of troubled privately owned food processing group Financière Turenne Lafayette has attracted more than ten parties, French daily Le Figaro reported, citing several sources. Turnaround funds, which could later sell the group piecemeal, are among the potential buyers, they added.
However, executor for the estate of Monique Piffaut, the now-deceased owner and head of the France-based company, said that the French government will not allow turnaround funds to acquire the company.
The report went on to say that a sale of Financière Turenne Lafayette by division is likely and could value the group at between EUR 200m and EUR 400m. A sale of the delicatessen and cooked meats division, including the Madrange and Paul Predault brands, is understood to have attracted the interest from competitors Bigard, Cooperl, and Fleury Michon, it added.
The Fresh pasta division, with revenues of about EUR 64m annually, is believed to be eyed by French supermarkets group Intermarché ITM.
The canned food division, which included brands such as William Saurin and could be worth between EUR 120m - EUR 150m if relaunched, is believed to be of interest to competitor D’Aucy (formerly known as Cecab).
Finally, the report said, without citing sources, that Brazilian meat giant JBS [BVMF:JBSS3], a German industrial food group and a consortium from China are also believed to be interested in acquiring the entire group, though they will have to quickly detail their intentions.
The French government and creditor banks have granted Financiere Turenne Lafayette a EUR 66m loan in order to finance the payment of wages and suppliers for a period of one year while the search for buyers goes on, the article said. Rothschild is the financial advisor for the sale while Accuracy is assisting with accounting.
A deal concerning most of the assets could be finalised by summer.
Financiere Turenne Lafayette has 3,200 employees in 21 production sites in France.

>>> Asian Update

Asia Mid-Session Market Update: Austalia CapEx falls more than expected; BOK on hold; Fed minutes lift likelihood of a May hike

***US Session Highlights***
- (US) JAN EXISTING HOME SALES: 5.69M V 5.55ME (highest since Feb 2007)
- OPEC Committee reports sees Jan OPEC cuts compliance at above 90%, sees non-OPEC cuts compliance near 60% - press
- (US) Pres Trump: to submit a healthcare reform plan by mid-March
- (US) Minutes from the previous FOMC meeting showed the committee said it would be appropriate to raise rates “fairly soon” should jobs and inflation come inline with expectations

***US markets on close: Dow +0.2%, S&P500 -0.1%, Nasdaq -0.1%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Energy
- Biggest gainers: GRMN +7.3%, DOW +4.0%, DD +3.4%, VFC +2.1%, AET +1.9%
- Biggest losers: FSLR -8.3%, NFX -8.1%, CXO -6.8%, NEM -3.9%, MRO -3.8%
- At the close: VIX 11.7 (+0.2pts); Treasuries: 2-yr 1.22% (-2bps), 10-yr 2.42% (-1bp), 30-yr 3.04% (flat)

***US movers afterhours***
- UCTT: Reports Q4 $0.36 v $0.27e, R$174.5M v $173Me; Guides Q1 adj $0.40-0.45 v $0.26e, R$190-197M v $165Me; +13.8% afterhours
- SQ: Reports Q4 $0.05 v -$0.09e, R$452M v $453Me; Guides Q1 adj 0.00-0.02 v -$0.10e; EBITDA $14-18M, adj Rev $440-452M v $450Me; +8.6% afterhours
- CTRP: Reports Q4 $0.17 v -$0.01e, Total Rev $746M v $734Me; +5.0% afterhours
- HPQ: Reports Q1 $0.38 v $0.37e, R$12.7B v $11.8Be; +2.4% afterhours
- TSLA: Reports Q4 -$0.69 v -$0.13e, R$2.28B v $2.20Be; Model S and Model X K deliveries 22.3K units, -10% q/q, +27% y/y; +1.5% afterhours
- FIT: Reports Q4 -$0.56 v -$0.48e, R$573.8M v $576Me; +1.2% afterhours
- CAKE: Reports Q4 $0.67 v $0.67e, R$603.1M v $594Me; announces $100M share repurchase plan (3.6% of market cap); -0.5% afterhours
- NVDA: Nomura Cuts NVDA to Reduce from Buy, price target: $90; -2.4% afterhours
- SAM: Reports Q4 $1.75 v $1.19e, R$219.4M v $226Me; Guides initial FY17 $4.20-6.20 v $6.35e; -7.7% afterhours
- JACK: Reports Q1 $1.18 v $1.24e, R$487.9M v $498Me; -9.7% afterhours
- ARRS: Reports Q4 $0.79 v $0.70e, R$1.76B v $1.69Be; Guides Q1 $0.36-0.40 v $0.67e, R$1.44-1.49B v $1.66Be; -10.4% afterhours
- LB: Reports Q4 $2.03 v $1.90e, R$4.49B v $4.50Be; Guides Q1 $0.20-0.25 v $0.50e; Guides initial FY17 $3.05-3.35 v $3.70e; -13.1% afterhours
- TSRA: Reports Q4 $0.45 v $0.61e, R$70.1M v $72.0Me; changes name and stock symbol; -13.6% afterhours

***Asia Key economic data:***
- (BR) BRAZIL CENTRAL BANK (BCB) CUTS SELIC TARGET RATE BY 75BPS TO 12.25%; AS EXPECTED
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.25%; AS EXPECTED
- (AU) AUSTRALIA Q4 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: -2.1% V -0.5%E
- (JP) JAPAN JAN PPI SERVICES Y/Y: 0.5% V 0.5%E

***Asia Session Notable Observations, Speakers and Press***
- Asia equity markets are modestly lower as investors digest the implications of the latest Fed policy minutes. Fed noted it may be appropriate to raise rates "fairly soon", while some members urged going at the upcoming meeting to give FOMC more flexibility. However, traders looked for a more concrete signal as March Fed funds futures probability remained below 20%, even as the odds for May has risen above 50%. The caveat is that May does not have an accompanying press conference while March does, and the Fed has never raised rates in a meeting when the Fed chair did not take the podium.
- USD weakened in US hours on release of the Fed minutes and remains under pressure in Asian session. USD/JPY is down over 30pips from the highs below 113.10, EUR/USD up 30pips above 1.0570, while NZD/USD is up 40pips at 0.7215. AUD/USD is the only exception among the majors, trading unchanged on the day around $0.77 after falling some 30pips on soft headline Q4 Australia Capex data below $0.7670.
- Australia Q4 capex declined for the 4th straight quarter, and while the decline was bigger than expected, it was also the smallest decline of the past four. Components are typically more critical for this release, and here the picture was more mixed. Economists found the 0.4% rise in Plant/Machinery spending vs decline of 1.9% prior especially noteworthy and shrugged off the initial estimate for next year's spending slowing to A$80.6B from the revised A$112.2B for this year. AUD/USD initially fell on the headline and then recovered all of its lost ground toward the market close.
- Rate decisions from Brazil and South Korea were also on the docket today. Brazil was unanimous to cut for the 4th straight time by 75bps - in line with consensus - citing mixed economic activity signs and affirming next year's inflation outlook. BOK stood pat for its 9th straight time and also voted unanimously, though policymakers pledged to monitor external risks of protectionism and US-China policy along with domestic factors such as rising household debt.
- After yesterday's property price data from China, Commerce Ministry official said the govt will continue to stabilize housing market and also doing preparation to roll out a property tax, while planning to maintain differentiated curbs across the cities.

China:
- (CN) Morgan Stanley raises CNY forecast for 2017-end to CNY7.1 from CNY7.3 - press
- (CN) China Deputy Housing Minister: China has the ability and methods to stabilize housing market

Japan:
- (JP) Japan's pension fund GPIF had raised its holdings of short-term assets due to negative interest rates; Will switch to JGBs when rates rise - press
- (JP) Bank of Japan (BOJ) Member Kiuchi (dissenter): Must make 2% inflation target a medium to long term target
- (JP) BOJ considering dates of planned JGB buying operations ahead of time to avoid a jump in yields due to market uncertainty - Nikkei

Australia/New Zealand:
- (AU) Economists with AMP, ANZ, and JPMorgan note today's Australia Q4 CAPEX data looks worse than it is given the rise in Plant/Equipment spending - SMH

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.2%, Hang Seng -0.5%, Shanghai Composite -0.4%, ASX200 -0.3%, Kospi flat
- Equity Futures: S&P500 -0.1%; Nasdaq flat; Dax -0.1%; FTSE100 -0.2%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0540-1.0565; JPY 113.10-113.45; AUD 0.7665-0.7700; NZD 0.7175-0.7210
- Apr Gold +0.4% at $1,238/oz; Apr Crude Oil +0.9% at $54.08/brl; Mar Copper -0.6% at $2.72/lb
- (US) Weekly API Oil Inventories: Crude: -0.9M v +9.9M prior; first draw in 5 weeks
- JGB: (JP) Japan's MoF sells ¥1.0T in 0.6% (0.6% prior) 20-year JGBs; Avg yield: 0.669% v 0.589% prior; bid-to-cover: 4.05x (highest since 2014) v 3.54x prior
- (CN) PBOC SETS YUAN MID POINT AT 6.8695 V 6.8830 PRIOR; first stronger Yuan setting in 4 sessions
- (CN) PBOC to inject combined CNY50B v CNY120B prior in 7-day, 14-day and 28-day reverse repos
- SWIFT: CNY use in international transactions: 1.68% of total in Jan v 1.68% prior

***Asia equities / Notables / movers by sector***
- Consumer discretionary: 493.HK Gome Electrical Appliances Holding +3.7% (profit warning); 2020.HK Anta Sports Products -2.3% (FY16 result); QAN.AU Qantas Airways +5.1% (H1 result); CWN.AU Crown Resorts +8.3% (H1 result); Invocare +9.0% (FY16 result); FLT.AU Flight Centre -2.6% (cuts guidance)
- Consumer staples: AHY.AU Asaleo Care +7.4% (FY16 result)
- Financials: AAD.AU Ardent Leisure -21.1% (H1 result); MMS.AU McMillan Shakespeare +3.2% (Citi raises rating)
- Industrials: 7201.JP Nissan Motor Co -0.6% (names new CEO); RCR.AU RCR Tomlinson +7.2% (H1 result)
- Technology: ISD.AU iSentia Group -7.5% (Deutsche Bank cuts rating); XIP.AU Xenith IP Group -19.3% (H1 result)
- Materials: ILU.AU Iluka Resource -2.1% (FY16 result); AWC.AU Alumina -1.2% (FY16 result); AGO.AU Atlas Iron -9.3% (H1 result); ABC.AU Adelaide Brighton +4.3% (FY16 result)
- Healthcare: EHE.AU Estia Health +12.6% (affirms guidance)
- Utilities: EPW.AU ERM Power +5.4% (H1 result)