WWD : Chanel Plots Year of Gabrielle – New Scent Included

Chanel Plots Year of Gabrielle – New Scent Included
The French brand is touting a new handbag model, its first new fragrance pillar in 15 years, along with campaigns about the founder.

NEW YORK — Long crazy about Coco, Chanel is now going gaga for Gabrielle.
That’s the name of the brand’s latest handbag hope, its communications thrust for 2017 and a forthcoming fragrance — the company’s first new pillar in 15 years, named after the house founder and exalting the rebellious, mold-breaking spirit of her early years before she became Coco.
The Gabrielle Chanel eau de toilette, described as an “abstract floral,” is scheduled to premiere in Chanel’s boutique network and on its web site in June before a broader rollout, eventually reaching the firm’s more than 10,000 fragrance doors around the world.
Bruno Pavlovsky, president of Chanel fashion, and Christine Dagousset, global president of fragrance and beauty at Chanel, disclosed the flurry of developments exclusively to WWD.
“This year will be unique because we are boosting at the same time fragrance and bags, which are the two most important categories in our business,” said Pavlovsky, interviewed jointly with Dagousset at Chanel’s plush, black-and-cream offices on 57th Street here. “We believe it makes a lot of sense to highlight Gabrielle in 2017 because in each of our businesses we have a lot to say and also we want to seduce a new clientele.
“We are emphasizing the DNA, the roots of the brand. I think that more than ever this is something that is very important to us,” he added.
The house’s watch and jewelry division, helmed by Frédéric Grangié, also plans to roll out Gabrielle-themed collections this year.
To be sure, Chanel is betting that the Gabrielle scent will catapult its global fragrance franchise.
“Our goal is to put it into the top 10, so it’s not a niche fragrance,” said Dagousset. She declined to discuss numbers, but industry sources estimate that a fragrance needs to generate $100 million in annual net sales to rank 10th in the world and nearly $250 million to hit number one.
The positioning of the new scent offers a sharp contrast to Chanel’s 96-year-old fragrance business.
Dagousset described the young Gabrielle as a free spirit: “She was a Leo actually, so she couldn’t be tamed.” She declined to break down the composition of the scent, saying only that it was created by Chanel’s fragrance creator Olivier Polge.
With the new fragrance pillar, “we were exploring this whole moment of before Coco — who she really was at the core and that’s what we wanted to express in this new fragrance,” she said.
Chanel’s year of Gabrielle kicks off Wednesday with a three-minute film, “Gabrielle, a Rebel at Heart” — a fast-paced ode to the founder’s audacity and her convictions about female empowerment, daring and freedom.
It’s the 18th chapter of the firm’s popular “Inside Chanel” video series and the first of four that will be focused on Gabrielle Chanel. Previous episodes have been devoted to the iconic Chanel jacket, Marilyn Monroe or the camellia. Last year, “Inside Chanel” videos generated 25.6 million views on social media, according to the company.
The “Rebel” clip unfurls like a manifesto, as a female voiceover declares, “I decided who I wanted to be, and that is who I am” as crisp black-and-white animations show women engaging in sports and adopting the comfort and simplicity of Chanel’s cardigan-like jackets and straight skirts — worlds away from the strangling frou-frou fashions of the turn of the century.
Part two of the Gabrielle communication onslaught debuts on April 3: A campaign lensed by its couturier Karl Lagerfeld and devoted to the Gabrielle handbag.
The ads feature four diverse personalities — including the first man in a Chanel handbag campaign: Pharrell Williams. Lagerfeld depicted him on a concert stage wearing a croc version of the bag cross-body. Kristen Stewart, Cara Delevingne and Caroline de Magret are also featured, each exuding a different allure — seductive, streetwise and quintessentially Parisian, respectively.
Slated to start arriving in stores in March, the Gabrielle bag is meant to become a “pillar” style for Chanel, and is considered the first major new model since the Boy, introduced in 2011.
“We have a lot of seasonal bags in our collections and six times a year we are coming out with a lot of new things,” Pavlovsky said. “And every four or five years, we want to put the emphasis on one new style and this time it’s the Gabrielle.”
Unveiled on the runway in October amid a “data center” set at the Grand Palais, the Gabrielle is one of those deceptively simple yet ingenious designs at which Lagerfeld excels. He got the idea from looking at virtual reality goggles and upending the shape. Cue a flat-bottomed neo hobo with a double chain handle that straddles both shoulders for ease of carrying and security.
The bag — which comes in about half-a-dozen iterations, and in a variety of colors and materials, from classic black lambskin to exotic leathers — is to retail from $3,000 up to $33,000 for a large alligator version.
“At Chanel, design comes first and afterward we try to maximize these creations to be able to make the brand as strong as possible,” Pavlovsky said. “We are working together to make this launch quite efficient in every single country in the world.”
Chanel plans to reprise its Paris-Cosmopolite show — the name for its pre-fall Metiers d’Art ready-to-wear collection embellished by the couture ateliers it owns — in Japan at the end of May, in tandem with a special event around the Gabrielle bag.
Chanel’s signature quilted, chain-handled bags — known as the 2.55 and 11.12 — remain its top sellers. “We put some quotas on these two bags because we don’t want to overload the market with them and we have been able to develop the Boy, which is doing very well — almost the same level as the iconic ones,” Pavlovsky said.
The forthcoming Gabrielle fragrance will be among powerful siblings. Coco Mademoiselle, originally designed as a flanker of the Coco fragrance with limited prospects, went on to become number one in the world, where it remains, according to the company.
The backbone of Chanel’s fragrance empire has long been No. 5, which Dagousset admitted was in need of restoration.
“It had been lately losing share of market in some countries, to be very honest,” she said. The solution was to launch No. 5 L’Eau, which was aimed at Millennials, last year and “boosted the overall fragrance business” with a more than 30 percent sales gain over a three-month period, she said. Dagousset indicated that she expects No. 5 will regain its second-place spot when 2016’s global rankings are released.
“Our goal was to put No. 5 back on the map,” Dagousset noted. “We had all types of women who loved the idea of No. 5 but didn’t like the juice and they found in L’Eau a juice that they really enjoyed,” she said.
Chance is the third Chanel women’s player in global fragrance rankings. Meanwhile, the Bleu de Chanel men’s fragrance hit number one in the 2015 male rankings.
So the stage was set for a new pillar. Describing the roles the fragrances are designed to play, Dagousset said, “No. 5 is more about femininity and accomplishment. What Mademoiselle Chanel has is this whole paradox of being vulnerable and invincible…and impertinent. Gabrielle is really who she was [as Gabrielle]. We really want it to be the expression of who she was at her core as a woman whose values are so modern today…to feature who she was before she became Coco. We’ve done a lot of research with Millennial women around the world and you see very clearly they don’t want to be put in boxes. They want to live their own lives, they want to be themselves, they want to choose their destiny.”
Chanel’s destiny arrived, fittingly enough, when she was performing on stage as a young, aspiring chanteuse in remote France belting out songs — “Ko Ko Ri Ko” and “Qui qu’a vu Coco” — that earned her a nickname that stuck for life and Coco was born.
The historic house is now showing off its rebellious side at a time when women around the world have mobilized in support of human rights in the wake of Donald Trump’s election as U.S. president.
“It’s in the air,” Pavlovsky demurred, noting that the same rebellious impulse was in the air three years ago when Lagerfeld’s spring 2015 show, on a Paris boulevard set, climaxed with a raucous demonstration, echoing the ferment that started bubbling in Paris over gay parenthood.
“It was a very symbolic and nice moment for the brand. These values are very important for what Chanel is today,” he said. “People who love this brand, the new generation, they want to be themselves, they want to do and they want to claim what they want to claim. And they know that Gabrielle Chanel in her time was already like that.”
The Gabrielle effort arrives amid strong business momentum for Chanel, according to Pavlovksy, who cited double-digit growth since the beginning of the year.
“We feel a very nice energy in our boutiques,” he said, also citing record orders for the latest Metiers d’Art collection, paraded in November at the Ritz Paris.
Starting in mid-2015, Chanel began harmonizing global pricing in an attempt to stamp out parallel markets and to ready the brand for an eventual online push. Pavlovsky acknowledged that “we suffered the first parts of the year” in 2016 as customers in Europe reeled from higher prices and Asian consumers watched price differentials of 30 to 60 percent evaporate.
“Now we are back to strong expansion. We are doing very well in China and the good news is we have seen Chinese customers coming back and buying our ready-to-wear, in China, and not just accessories,” he said. “[Price harmonization] was difficult, but a good decision and today we believe more than ever the customers are coming to Chanel because they love the product and not because they want to make money off the product.”
The Gabrielle focus trickles down to the house’s watch and jewelry division, which in January presented the Coco Avant Chanel high-jewelry collection inspired by the young Gabrielle Chanel and the signatures she had already developed in the early stages of her career as a hat designer, such as camellia flowers, lace and loose ribbons.
And at the Baselworld watch and jewelry fair in March, it will unveil its first ultra-exclusive ladies’ watch featuring a movement conceived entirely in-house.
The Première Camellia Skeleton watch contains the Calibre 2 movement, a tour-de-force that uses the wheels normally hidden inside mechanical watches to form a camellia pattern on the dial of a transparent, or “skeleton,” watch.
Among the handful of numbered editions on offer is a white gold version set with 7.85 carats worth of diamonds, including 246 tiny brilliant-cut diamonds nestled on the camellia skeleton, in what represents a feat of engineering.
Grangié, president of the division, said the creation was possible only because Chanel has worked in recent years to become totally independent in terms of its watch design and production.
“The caliber was first designed by our studio to illustrate the Chanel codes and to be as aesthetically pleasing as possible, and then handed over to our engineers,” he said in an interview in his office overlooking Place Vendôme, the square whose shape inspired the stopper on Chanel perfume bottles and the case of the Première watch, marking its 30th anniversary this year.
“That means that a model like this takes five years to develop, as opposed to buying a complication from an outside supplier and customizing it to achieve the desired look. Our process is strictly design-based and that, to my knowledge, is unique to Chanel,” he added.

FT : Telefónica sells infrastructure stake to KKR after scrapped IPO

Telefónica has sold 40 per cent of its Telxius towers and cables business to KKR, in a €1.275bn deal that will go at least some way towards easing the Spanish group’s debt worries.

Telxius is Telefónica’s infrastructure arm, with a portfolio that includes 16,000 telecommunications towers in five countries and 65,000km of submarine fibre optic cables. The Madrid-based operator tried to float the unit on the stock market last year, but had to pull the offering at the last minute due to lackluster demand from investors.

It was the latest in a series of disappointments for Telefónica – most notably the decision by regulators last year to block the sale of its O2 unit in the UK – that were aimed at reducing its €50bn debt pile. In October, the group announced it was cutting its dividend.

The deal with KKR implies an enterprise value for Telxius of €3.678bn and an equity value of €3.188bn. Telefónica said the deal “confirms the valuation established for Telxius at the time of the preparations for its initial public offering”.

Telefónica said it would remain the “anchor client” for Telxius’s tower and cable business. It will keep operational control of the business and consolidate it into its accounts.

Guillermo Ansaldo, chairman of Telxius said: “Our vision for Telxius is to capitalize on the exponential increase in data traffic forecast for the coming years by offering a first-class network in Europe and the Americas.”

The agreement includes the initial acquisition by KKR of 62m of shares, or 24.8 per cent of the total, for €790m, as well as the option to acquire and sell an additional 38m for at least €485m.

>>> Banco Popular hires JPMorgan, Deutsche Bank and Goldman Sachs to explore opt

Banco Popular hires JPMorgan, Deutsche Bank and Goldman Sachs to explore options - report (translated)
21 FEB 2017
Emilio Saracho, who took over as chairman of Banco Popular at the EGM on Monday (20 February), has appointed three banks to sound out the market over funding options, El Confidencial reported.
According to the report, which cited sources privy to the matter, JPMorgan, Deutsche Bank and Goldman Sachs have a mandate to explore a capital increase, a merger or the sale of the Spanish bank via several transactions.
Proyecto Sunrise, the EUR 6bn property-linked asset spinoff, has been put on hold, the Spanish-language item said. Instead, Saracho wants to focus on the sale of assets such as its insurance partnership with Allianz.
Banco Popular must present a new, credible business plan, the report went on to say. Analists point to Unicredit as an example to follow, according to the report.

>>> Walter Meier and Tobler Haustechnik to merge

Walter Meier and Tobler Haustechnik to merge
21 FEB 2017
Walter Meier Ltd. and Tobler Haustechnik AG are to integrate, creating a leading Swiss building technology provider.
Walter Meier is to pool its systems and service skills with Tobler’s retail and logistics expertise. The move to join forces will create a leading building technology company for Switzerland with a wide range for the wholesale of products, components and accessories and covering heating and cooling systems as well as the service business.
Tobler generated sales of around CHF 330m in the past financial year, employing some 700 staff. In terms of their current profitability, Tobler and Walter Meier are very similar, meaning that the two companies are set to merge in a ratio of 1:1. Rather than doubling, however, the number of Walter Meier Ltd. shares will only beincreased by 4,705,412 from its present level of 7,294,588. A payment of CHF 117.8m to Wolseley has been destined to cover the remainder and even out differences relating to items on the two companies’ balance sheets, with bank loans furnishing the necessary liquidity.
UK-based heating and plumbing distributor Wolseley will hold around 39.2% of Walter Meier shares once this transaction is complete. Current major shareholder Silvan G.-R. Meier, who holds his stake via Greentec AG, is backing the transaction.
He is to lose his majority stake in Walter Meier Ltd. and will hold 33.5% of Walter Meier shares. The capital increase that Walter Meier Ltd. is to carry out will see the current shareholders lose their subscription rights, which will be transferred to Wolseley. The two largest shareholders, Silvan G.-R. Meier (via Greentec AG) and Wolseley, will exercise joint control of Walter Meier Ltd. under a shareholders’ agreement.
As things stand, Walter Meier expects its net debt to increase to around CHF 170m as of year-end 2017. Walter Meier forecasts that the new company should be in a position to generate EBITDA of more than CHF 60m over the long term once the integration process is complete. A steady reduction in net debt should therefore be possible over subsequent years, even if the current dividend
policy is maintained.
Combination in 2017, new company to launch in 2018 As the situation stands, implementing the combination between Walter Meier and Tobler should be achievable in the second quarter of 2017. It will hinge on the Annual Shareholders’ Meeting of Walter Meier Ltd. approving the necessary capital increase and on the planned combination being passed by the Swiss Competition Commission.
The transaction will introduce a new Group Management team. The current CEO of Walter Meier Ltd., Martin Kaufmann, will remain responsible for managing the company. His deputy will be the present CEO of the Tobler Group, Arnold Marty, who will be in charge of sales, product management and marketing. The Tobler Group’s current CFO, Andreas Ronchetti, is to hold the same role in the new company and will also be the third member of its Group Management. His counterpart at Walter Meier Ltd., Matthias Ryser, will leave Group Management and be in charge of integrating the two companies.
The two companies will enter the market in early 2018 under a new, shared name.

>>> Renault withdraws from bidding for Proton; PSA makes binding offer - reports

Renault withdraws from bidding for Proton; PSA makes binding offer - reports (translated)
21 FEB 2017
The French car manufacturer Renault [EPA:RNO] has withdrawn from the bidding for Malaysian rival Proton Holdings, according to a Financial Times report. The newspaper cited two people for the information.
Renault offered no comment other than to say that it regularly considers fresh “business opportunities,” the item said.
The Malaysian conglomerate DRB-Hicom [KLSE:DBRM] owns Proton.
Geely Automotive [HKG:0175], a Chinese car manufacturer, will this week make an offer for all or part of Proton, the report said, citing two people familiar with the timing.
PSA Peugeot-Citroen [EPA:UG] (PSA), another French car manufacturer, is working on an offer for Proton, according to the newspaper.
It is understood that Geely’s main interest is in Proton’s plant in Malaysia, the article added.
Proton did not reply when asked for comment, the report said.
Another report from French daily Les Echos claimed that PSA has submitted a binding offer for Proton. An insider at PSA said that discussions were still ongoing and that the vendor could take a decision by Spring.
According to the report, PSA is looking to operate a production site in South East Asia by 2018 and Denis Martin, head of the China South-east Asia sector at PSA, oversees the negotiations. The report noted that Proton has already worked with PSA in the past, assembling cars for the French group in the 90s.
The report went on to say that PSA is expected to lock horns with Chinese group Geely. However, a person in the know claimed that Geely is especially interested in the Lotus sports car brand owned by Proton, which could therefore be split and sold to the two parties.

>>> Jalou Media mandates Arrowhead to seek investors for expansion (translated)

Jalou Media mandates Arrowhead to seek investors for expansion (translated)
21 FEB 2017
Jalou Media Group, the French privately-owned lifestyle publishing group, is seeking to raise EUR 10-15m from new investors for the international development of the business, French daily Le Figaro reported.
The report cited Chief Executive Benjamin Eymere as confirming the news. The report added that Jalou has appointed Arrowhead Bid to advise on the matter.
Jalou Media Group published titles such as Jalouse, L’Optimum, and L’Officiel, the latter generating revenues of EUR 75m in 2016.

>>> What to look at today - 21st of February 2017

Asia equity markets are slightly higher, though trading conditions remain muted after Monday's US holiday. Nikkei225 is one of the better performing indices on weakness in JPY, while tepid earnings season in Australia continues to weigh on S&P/ASX 200. USD traded firmer following hawkish set of comments from Fed voter Harker, particularly gaining vs JPY, NZD, and EUR. Harker reiterated that March meeting should be on the table for next rate hike, adding the Fed is not behind the curve, the economy is healthy, and job growth is steady. Japan flash manufacturing PMI offered a glimpse of February economic data, and the signs were positive. 53.5 was a multi-year high. PBOC says it is conducting an evaluation of a targeted RRR cut this month; Changes to take effect on Feb 27th; Adjustments to targeted rates will be made both upward and downward.

Nikkei +0.68% Hnsg Seng -0.60% CSI +0.18% Shanghai +0.26%

Eur$ 1.0586 CNH 6.8648 CNY 6.8821 JPY 113.51 CHF 1.0053 RUB 57.873 WTI$ 53.70+0.58%

S&P +0.15% EuroStoxx +0.03% Dax -0.05% FTSE -0.18% (HSBC) SMI +0.06%

Macro :
- Greece Misses Another Bailout Deadline as Talks Set to Resume
- EC Wants U.K. to Pay Into EU Projects Until End-2023: Telegraph

Keep an eye on :
- AAL LN : Anglo Said to Cap Value of Share Awards to Top Executives: Sky
- AF FP : Air France Wins Pilots’ Approval on Low-Cost Boost Airline
- BLT LN : BHP Billiton Board Approves Bond Buyback Plan of Up to $2.5b
- CABK SM : Caixa Picks 5 Banks to Advise on EU500m Bond Sale, ECP.pt Says
- COB LN : Cobham Said to Consider Rights Offering of GBP300m-GBP600m
- DGE LN : Diageo May Finalize United Spirits Open Offer This Week: CNBC
- ENEA SS : Enea Evaluates Possibility to Carry Out Directed Share Issue
- G IM : Generali Had 4.49% Holding in Intesa Sanpaolo as of Feb. 20
- HSBA LN : HSBC 4Q Adjusted Pretax Profit $2.62b; Est. $3.78b, HSBC 4Q Common Equity Tier 1 Ratio 13.6% -->-4& in HK
- LSG NO : Leroy 4Q Ebit Beats Estimates; Proposes NOK13/Share Dividend
- NOVOB DC : Novo Nordisk Deputy Chairman Tells JP He’s Not Running for Chair
- OSI FP : Randstad France to Implement Squeeze-Out Ausy Shares, ORNANE (€ 55.00 per Ausy share and € 63.25 (plus accrued interests), i.e. € 63.51, per Ausy ORNANE)
- ROG SW : Roche Wins EU Approval for Alecensa Lung Cancer Drug
- GLE FP : SocGen Deputy Corporate/Investment Banking Head Mianne to Leave
- SOLB BB : Solvay Raises Prices for All Silica Products by 10% as of April
- TEF SM : Telefonica to Sell Up to 40% of Telxius to KKR for EU1.28B
- WAC GY : Wacker Neuson Sounding Out Mkt Interest in Real Estate Co.
- WMN SW : Walter Meier, Tobler Haustechnik to Combine

>>> Europe : Brokers Upgrades & Downgrades - 21st of February 20

>>> Up
*Air France-KLM Raised to Buy at UBS, PT EU7.50
*Dialog Raised to Overweight at JPMorgan, PT EU52
*Hugo Boss Raised to Sector Perform at RBC, PT EU70
*Orange Raised to Buy at Natixis, PT EU17.30
*PGS Raised to Neutral at UBS, PT NOK27
*Philips Raised to Add at AlphaValue

>>> Down
*Ageas Cut to Hold at ING, PT EU39.50
*AO WORLD Cut to Underweight at Morgan Stanley, PT 135p
*Enagas Cut to Equal-Weight at Morgan Stanley, PT EU26
*Heidelberger Druck Cut to Reduce at AlphaValue*Interserve Cut to Neutral at JPMorgan, PT 253p
*Nordea Cut to Sell at DNB Markets, PT SEK99
*OHL Cut to Reduce at Kepler Cheuvreux
*Prosafe Cut to Sell at Pareto Securities, PT NOK30
*Repsol Cut to Neutral at Goldman, PT EU15
*SEB Cut to Sell at DNB Markets, PT SEK102
*Swedbank Cut to Sell at DNB Markets, PT SEK212

>>> Initiation
*Baloise Re-initiated Buy at Berenberg, PT CHF152
*Coats Group Rated New Buy at UBS, PT 80p
*Helvetia Re-initiated Buy at Berenberg, PT CHF650
*Johnson Matthey Rated New Market Perform at Bernstein, PT 3400p
*Kinnevik Rated New Buy at Deutsche Bank, PT SEK264
*Mail.Ru Group Resumed Overweight at Morgan Stanley, PT $24
*MLP Rated New Buy at Hauck & Aufhaeuser, PT EU7.40
*Swiss Life Re-initiated Hold at Berenberg, PT CHF310
*Umicore Rated New Outperform at Bernstein, PT EU64

>>> Call
>> Stock
*Euronext Exits Conviction Buy at Goldman; Volumes Lackluster
*TOTAL ADDED TO CONVICTION BUY LIST AT GOLDMAN

>>> Asian Update

Asia Mid-Session Market Update: Japan manufacturing PMI at multi-year highs; USD rallies on hawkish comments from Fed's Harker; HSBC earnings disappoint


***US Holiday Hours***
- CYH: Reports Q4 $0.46 v $0.12e, R$4.47B v $4.42B
- PLKI: Restaurant Brands International said to be near agreement to acquire Popeyes - press
- (GR) EU official: Meeting between creditors and Greek Fin Min Tsakalotos went well, progress was made, auditors to return to Athens by next week - press

***Asia Key economic data:***
- (JP) JAPAN FEB PRELIMINARY PMI MANUFACTURING: 53.5 V 52.7 PRIOR; multi-year high, 6th month of expansion
- (JP) Japan Dec All Industry Activity Index M/M: -0.3% v -0.2%e
- (KR) South Korea Q4 Household Debt (KRW) q/q: 1.34T v 1.29T prior (record high)
- (KR) South Korea Feb First 20-days Exports y/y: 26.2% v +25.0% prior; Imports y/y: 26.0% v +25.9% prior
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 113.7 v 116.4 prior

***Politics***
- (US) President Trump names General H.R. McMaster as his new National Security Adviser - US press
- (FR) French police said to have raided the office of National Front's Le Pen on suspicion of EU funds misuse - press

***Asia Session Notable Observations, Speakers and Press***
- Asia equity markets are slightly higher, though trading conditions remain muted after Monday's US holiday. Nikkei225 is one of the better performing indices on weakness in JPY, while tepid earnings season in Australia continues to weigh on S&P/ASX 200.
- USD traded firmer following hawkish set of comments from Fed voter Harker, particularly gaining vs JPY, NZD, and EUR. Harker reiterated that March meeting should be on the table for next rate hike, adding the Fed is not behind the curve, the economy is healthy, and job growth is steady. USD/JPY was up some 40pips in the wake of comments, EUR/USD fell about 30pips, and NZD/USD was off by 30pips.
- Japan flash manufacturing PMI offered a glimpse of February economic data, and the signs were positive. 53.5 was a multi-year high, as New Export Orders and Employment components increased at a faster rate while Backlog of work rose for the first time in over a year and Inventories fell.
- RBA meeting minutes expanded on neutral-hawkish rate decision earlier this month, noting higher terms of trade impact on growth and rising prices of commodities renewing mining investment; On inflation, RBA tone was more measured, stating the headwinds could be more persistent than assumed, but also noting wage inflation could rise more quickly if labor conditions improve.
- Late in the day, HSBC (and the Hang Seng) slumped after the banking giant released underwhelming FY16 results. Net profit of $19.3B missed expected $20.3Be, and Adj Rev slowed to $50.2B v $51.4B y/y; CET1 ratio came in 30bps to 13.6% and ROE slowed drastically to 0.8% v 7.2% y/y. HSBC also underscored some of the risks going forward, namely the "threat of populism impacting policy choices in upcoming European elections, possible protectionist measures from the new US administration impacting global trade, uncertainties facing the UK and the EU as they enter Brexit negotiations, and the impact of a stronger dollar on emerging economies with high debt levels."

China:
- (CN) PBOC says it is conducting an evaluation of a targeted RRR cut this month; Changes to take effect on Feb 27th; Adjustments to targeted rates will be made both upward and downward - financial press
- (CN) China Commerce Ministry (MOFCOM): Expect 2017 consumption growth to remain robust; China to assess and react if US rolls out tariffs - press
- (CN) China researcher: trade war unlikely to weaken China - China Daily
- (CN) China's 3rd batch of free trade zones may start this month - Chinese press

Japan:
- (JP) Bank of Japan (BOJ) Gov Kuroda: BOJ still far from inflation target; appropriate to continue powerful easing
- (JP) Japan Fin Min Aso: Cannot comment on border tax being considered by the US

Australia/New Zealand:
- (AU) Westpac's Evans: See nothing in RBA minutes to change our view that RBA will be on hold throughout 2017 and 2018 - SMH
- (AU) AUD/USD : Deutsche Bank chief economist: AUD may rise to $0.80 and beyond on strength in exports - SMH
- (AU) ANZ: New "Fed-Style" inflation indicator suggests inflation in Australia won't fall any further - press
- (NZ) According to Seek.com, January National new online job ads rose 5.0% y/y; Auckland rates rose 7.2% y/y - NZ Herald

***Asian Equity Indices/Futures (23:30ET)***
- Nikkei +0.7%, Hang Seng +0.1%, Shanghai Composite +0.3%, ASX200 -0.2%, Kospi +1.1%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.3%; Dax flat; FTSE100 flat

***FX ranges/Commodities/Fixed Income (23:30ET)***
- EUR 1.0575-1.0615; JPY 113.05-113.70; AUD 0.7665-0.7690; NZD 0.7150-0.7185
- Apr Gold -0.4% at $1,234/oz; Apr Crude Oil +0.5% at $54.05/brl; Mar Copper -0.4% at $2.74/lb
- (CN) PBOC to inject combined CNY100B v CNY170B prior in 7-day, 14-day and 28-day reverse repos
- (CN) PBOC SETS YUAN MID POINT AT 6.8790 V 6.8743 PRIOR; 2nd straight weaker setting

***Asia equities / Notables / movers by sector***
- Consumer discretionary: SEK.AU SEEK -1.9% (H1 result)
- Financials: 5.HK HSBC -3.8% (FY16 result); WBC.AU Westpac Banking Corp flat (Q1 metrics); SCG.AU Scentre Group -1.2% (FY16 result); FXL.AU FlexiGroup -2.1% (H1 result)
- Industrials: WOR.AU WorleyParsons -5.9% (Credit Suisse cuts rating); BKN.AU Bradken +0.2% (H1 result); MND.AU Monadelphous Group +11.8% (H1 result); 6472.JP NTN Corp +5.5% (Nomura raises rating)
- Technology: ALU.AU Altium -5.7% (guidance); BXB.AU Brambles Limited -2.4% (Deutsche Bank cuts rating)
- Materials: IGO.AU Independence Group -5.0% (H1 result); SAR.AU Saracen Mineral Holdings -3.9% (H1 result)
- Energy: OSH.AU Oil Search -2.1% (FY16 result); CTX.AU Caltex Australia +1.3% (FY16 result)
- Healthcare: GXL.AU Greencross Limited +6.0% (H1 result)
- Telecom: 762.HK China Unicom +0.5%, 728.HK China Telecom Corp. +0.5% (Jan result)
- Utilities: 9507.JP Shikoku Electric Power Co. Inc +5.7% (raises guidance)

>>> GM Opel/PSA Group: rival bid would see hurdles, bankers say

GM Opel/PSA Group: rival bid would see hurdles, bankers say

  • Public negotiation tough given job issues
  • Past bidder Fiat Chrysler not ruled out

Potential rival bidders in PSA Group’s [EPA:UG] offer to acquire General Motors' [NYSE:GM] Opel would face difficulties publicly navigating a politically sensitive deal exposed to potential job losses, said two sector bankers.
Strategic shifts for potential rivals like Magna International [TSE:MG] have also made an acquisition less compelling than in the past, they and a third banker said, though some suitors could still have a rationale in a deal.
Earlier this week, the carmakers confirmed reports that they were exploring a strategic review that includes a potential disposition of Opel to Paris-based PSA Group. Analyst reports have valued Opel near EUR 2.6bn, though this news service previously reported the deal price could be influenced by the value of potential R&D, scale, and licensing benefits.
The proposed deal has already drawn political attention as the German and UK government showed concerns on whether the acquisition could lead to the closing of factories and job cuts. PSA has pledged to maintain Opel's independence and continue to invest in all its German sites until at least 2020, according to press reports. PSA CEO Carlos Tavares is also to meet British Prime Minister Theresa May to discuss his company’s acquisitions, which would include two factories ran in the UK by GM under the brand Vauxhall.
Rival bidders might be hesitant to make a bid given the political uncertainty around employees and factories in the UK and Germany, the first banker argued.
Opel has previously attracted takeover interest. In 2009, Italy-based Fiat—years before it became Fiat Chrysler [NYSE:FCAU]—took a look at Opel, as did Canada-based Magna , according to news reports. The first banker also noted that Chinese strategics and sponsors have pursued Opel in the past.
The bankers were split on the chances that either Magna or Fiat Chrysler would enter the bidding fray for Opel at this stage.
Magna initially expressed interest in Opel when it was attempting to develop into a carmaker, the first and third bankers said, but the company has since transitioned into a supplier. A second Magna approach could also be less likely without a partner, the first banker added. Sberbank partnered with Magna in its 2009 bid.
Still, the second and third bankers said they couldn’t rule out Magna as a rival given its previous expression of interest.
Magna did not return requests for comment.
Fiat Chrysler drew similarly mixed speculation. GM wouldn’t likely sell Opel to Fiat Chrysler as it would make the acquiring company, which is already a big competitor in the US, stronger in Europe, the third banker said. In May 2015, Opel chief Karl-Thomas Neumann publicly discounted another proposition from Fiat to combine with Opel, declining to elaborate.
Fiat did not return phone calls seeking comment, while GM declined to comment.
A fourth, US-based banker said that a rival bid is unlikely as the process is a negotiated sale, not an auction.
A PSA-Opel matchup would give PSA scale and also leave Opel with a more logical owner, as GM has always been much more US-oriented, said the first banker. PSA needs a stronger platform to develop further into the electric and autonomous car trends, as well to compete with Korean and Japanese automakers, this news service previously reported.