>>> Europe : Brokers Upgrades & Downgrades - 9th of february 201

>>> Up
*Autoliv Raised to Overweight at Keybanc, PT $120
*KCB GROUP RAISED TO BUY VS HOLD AT HSBC
*Lenzing Raised to Buy at Berenberg

>>> Down
*BBVA Cut to Underperform at Exane
*Sampo Cut to Hold at ABG Sundal, PT EU47
*Storebrand Cut to Hold at Pareto Securities, PT NOK55

>>> PT Change

>>> Initiation
*Sika Rated New Buy at Mirabaud Securities, PT CHF5550

>>> Call

>>> Asian Update

Asia Mid-Session Market Update: NZD falls as RBNZ signals neutral stance, calls out market expectations of hikes premature

***US Session Highlights***
- (US) DOE Crude: +13.8M v +2.5Me; Gasoline: -0.9M v +1Me; Distillate: +0.03M v +0.5Me
- (US) MBA MORTGAGE APPLICATIONS W/E FEB 3RD: +2.3% V -3.2% PRIOR
- (US) President Trump order to get rid of 2 regulatory initiatives for each new initiative is challenged in court by environmental group NRDC and others - press
- (EU) ECB's Draghi: ECB will remain accommodative until at least the end of his term, Oct 2019 - France press report of earlier Draghi remarks

***US markets on close: Dow -0.2%, S&P500 +0.1%, Nasdaq +0.2%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Financials
- Biggest gainers: MCHP +6.0%, CTSH +5.0%, KSS +4.3%, XRX +4.1%, JWN +4.1%
- Biggest losers: AKAM -10.6%, GILD -8.6%, AIZ -6.8%, ICE -4.8%, JEC -3.7%
- At the close: VIX 11.5 (0.2pts); Treasuries: 2-yr 1.15% (-2bps), 10-yr 2.35% (-4bps), 30-yr 2.96% (-6bps)

***US movers afterhours***
- PAYC: Reports Q4 $0.18 ex-items v $0.12e, R$87.8M v $86.2Me; extends existing stock repurchase plan; Guides Q1 Rev $114.5-116.5M v $114Me; +10.5% afterhours
- IMPV: Reports Q4 $0.32 v $0.03e, R$78.4M v $70.2Me; Guides Q1 -$0.06 to -$0.02 v -$0.10e, R$67-69M v $68Me; +9.7% afterhours
- PCMI: Reports Q4 $0.51 v $0.36e, R$586.6M v $578Me; +9.1% afterhours
- SCSS: Reports Q4 $0.25 v $0.32e, R$313.4M v $314Me; +6.2% afterhours
- WFM: Reports Q1 $0.39 adj v $0.39e, R$4.92B v $4.99Be; Q2 SSS to date tracking -3.2%; -1.5% afterhours
- FISV: Reports Q4 $1.16 v $1.16e, R$1.43B v $1.48Be; -2.6% afterhours
- QLYS: Reports Q4 $0.23 v $0.18e, R$52.2M v $52.8Me; Guides Q1 $0.17-0.19 v $0.20e, R$52-53M v $54.8Me; -7.1% afterhours
- IRBT: Reports Q4 $0.49 v $0.39e, R$212.5M v $206Me; Guides initial FY17 $1.35-1.65 v $1.69e, R$770-785M v $763Me; -9.1% afterhours

***Politics***
- (US) Ninth Circuit Court of Appeals will not be issuing ruling on Trump travel ban today - press
- (US) Senate confirms Jeff Sessions as the next US Attorney General by 52-47 margin

***Asia Key economic data:***
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 1.75%; AS EXPECTED
- (NZ) NEW ZEALAND DEC BUILDING PERMITS M/M: -7.2% V -9.6%PRIOR (2nd straight decline)
- (AU) AUSTRALIA Q4 NAB BUSINESS CONFIDENCE: 5 V 6 PRIOR
- (AU) AUSTRALIA DEC HIA NEW HOME SALES M/M: +0.2% V +6.1% PRIOR; 2nd straight increase
- (JP) JAPAN Q4 HOUSING LOANS Y/Y: 3.1% V 2.7% PRIOR
- (JP) JAPAN JAN M2 MONEY STOCK Y/Y: 4.1% V 4.0%E; M3 MONEY STOCK Y/Y: 3.5% V 3.5%E
- (JP) JAPAN DEC CORE MACHINE ORDERS M/M: 6.7% V 3.0%E; Y/Y: 6.7% V 4.5%E

***Asia Session Notable Observations, Speakers and Press***
- Markets stateside as well as in Asia appear to have reached an equilibrium, with sessions of modest losses alternating with those of modest gains; Few macro catalysts are observed, even as bond markets rally continues to put in question the confidence of 3 FOMC rate hikes this year. Investors are now looking forward to Fed Chair Yellen's Congressional testimony next week as key determinant of near term policy bias.
- Fixed income markets had begun to price in the possibility of RBNZ preparing for a rates liftoff after the latest quarterly inflation data returned to target range for the first time in over 2 year. However today's RBNZ statement, economic projections, and subsequent commentary delivered a squarely neutral assessment. While acknowledging progress on inflation, RBNZ is not convinced the upward pressure can be sustained and also noted elevated uncertainty from external factors. NZD/USD was most volatile among the majors, selling off by 100pips below $0.72.
- PBoC has once again skipped its reverse repo operations, calling liquidity conditions ample; Separately, a local press report speculated the central bank will continue to tighten policy, even though economists have suggested that last week's 10bp hike in reverse repo yields were an adjustment to fundamentals rather then a start of a trend.
- Ahead of the high profile Abe-Trump summit tomorrow, Japan PM signaled he is prepared to discuss the currency issues at G20, with local press also calling for more formal framework for cooperation between US and Japan. BOJ Dep Gov Nakaso also noted that while the central bank is prepared to consider raising long-term rates target in the future, momentum behind inflation does not yet justify the shift.

China:
- (CN) China Ministry of Commerce (MOFCOM) Spokesperson Sun Jiwen: Urges other countries to drop protectionism
- (CN) White House press secretary: Pres Trump sent letter to China Pres Xi; Looking forward to constructive relationship - press
- (CN) PBOC may continue tightening of monetary conditions in 2017 - Chinese press

Japan:
- (JP) Japan PM Abe: To suggest to Trump to talk about currency issues at G20 and G7
- (JP) Japan PM Abe to propose new cabinet level framework for US-Japan talks on trade, security, and macroeconomic issues - press
- (JP) Japan Chief Cabinet Sec Suga: nothing has been decided on US/Japan economic framework
- (JP) BOJ Dep Gov Nakaso: Momentum towards price target not yet sufficiently firm; BOJ should consider raising long term rate increase in near future, though momentum toward hitting price goal not yet sufficient

Australia/New Zealand:
- (NZ) RBNZ Gov Wheeler: We adopted a very neutral bias; Removed our neutral bias; Market a bit ahead of itself in pricing in 2017 rate hike.

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

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0675-1.0700; JPY 111.70-112.30; AUD 0.7610-0.7645; NZD 0.7190-0.7280
- Apr Gold +0.3% at $1,243/oz; Mar Crude Oil +0.6% at $52.60/brl; Mar Copper +0.3% at $2.67/lb
- (CN) PBOC SETS YUAN MID POINT AT 6.8710 V 6.8849 PRIOR
- (CN) PBOC skips reverse repo operations (5th consecutive halt)
- SPDR Gold Trust ETF daily holdings rise 5.7 tonnes to 832.7 tonnes; 6th consecutive increase; Highest since Dec 16th
- (JP) Japan MoF sells ¥723B in 0.6% (0.6% prior) 30-yr bonds; Avg yield: 0.907% v 0.745% prior; Bid to cover: 3.23x v 3.33x prior

***Asia equities / Notables / movers by sector***
- Consumer discretionary: 751.HK Skyworth Digital +1.8% (Jan result); 2432.JP DeNA Co +1.9% (9-month result); 034230.KR Paradise Co -0.8% (Q4 result)
- Consumer staples: 2607.JP Fuji Oil Holdings +5.5% (9-month result); 168.HK Tsingtao Brewery Co +5.3% (Carlsberg to bid stake); RHL.AU Ruralco Holdings +4.1% (ACCC not oppose acquisition)
- Financials: 6881.HK China Galaxy Securities Co +1.1% (Jan result); PMV.AU Premier Investments -2.2%; AMP.AU AMP Capital +3.8% (FY16 result)
- Industrials: 2238.HK Guangzhou Automobile Group +3.1%, 1958.HK +2.7% BAIC Motor Corp (Jan result); 6448.JP Brother Industries -7.9% (9-month result); 4118.JP Kaneka Corp -11.5% (9-month result); 052690.KR Kepco Engineering & Construction +7.0% (offer to join UK project); 1919.HK COSCO Shipping Co +10.4% (Maersk to be profitable this year); 7202.JP Isuzu Motors -0.2% (9-month result)
- Technology: 3436.JP Sumco Corp +6.6% (Q4 result)
- Materials: RIO.AU Rio Tinto -0.9% (FY16 result); 3863.JP Nippon Paper Industries -1.5% (9-month result)
- Energy: AGL.AU AGL Energy +4.5% (H1 result); 1662.JP Petroleum Exploration +3.6% (9-month result)
- Telecom: 035720.KR Kakao Corp +5.6% (Q4 result)

>>> After Hours Summary: PAYC +10% and FLT +9% higher following ear


After Hours Summary: PAYC +10% and FLT +9% higher following earnings, JAGX +66% on merger news... BGC -8%, IRBT -8%, OII -7% following earnings/guidance, CREE -5% Infineon deal CFIUS hurdle

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SKYS +25.6% (thinly traded), OSUR +12.2%, PAYC +10%, IMPV +9.6% (also agrees to sell its Skyfence technology and service to Forcepoint, acquires the assets of Camouflage Software), PCMI +9.1%, FLT +8.8%, WSTL +8.4%, ZEN +7%, SCSS +6.2%, LLNW +5.4%, RLGT +4.2%, CXW +4.2%, CMP +2.9%, EFX +2.5%, AOSL +2.5%, FTK +2.4%, GPRE +2.2%, FORM +1.6%, PSEC +0.8%

Companies trading higher in after hours in reaction to news: JAGX +66.1% (Jaguar Animal Health to merge with Napo Pharmaceuticals), RELV +14.7% (thinly traded; announced that CardioSentials heart health supplement has earned a U.S. patent), STB +3.2% ( awarded new record $187 million contract ), REGN +2.3% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent during appeals process), FSLR +1.1% (awarded module supply contract for the 140 megawatt DC Sun Metals Solar Farm in North Queensland)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: MTRX -10.6%, SNCR -9.6%, MB -9.5%, BGC -8%, IRBT -7.9%, OII -7.4%, GLUU -7.2%, TBI -6.7%, QLYS -6.5%, STRL -5.6% (sees Q4 net loss of $5.5-6.5 mln and revs of $165-170 mln vs. $157.25 mln two analyst estimate; says results are 'very disappointing'), ECHO -5.3%, CDE -5.2%, TYL -4.8%, MXL -4.1%, KS -3.4%, ENTA -3.3%, UHAL -3%, PPC -2.1%, WFM -1.9%, GLAD -1.7%, CTL -1.6%, JE -1%

Companies trading lower in after hours in reaction to news: SRRA -11.2% (to offer shares of its common stock in an underwritten public offering; size not disclosed), CREE -5.4% (CFIUS informed Infineon and Cree that the Wolfspeed transaction poses a risk to the national security), AMGN -2% (Regeneron Pharma confirms appeals court grants stay of permanent injunction for Praluent during appeals process), BANC -1.9% (appoints Richard Lashley, co-founder of 6.9% holder PL Capital Advisors, to the Board and approves certain enhancements to corporate governance policies), PYPL -1.6% (discloses that it has received subpoenas from the DOJ seeking the production of certain information related to the company's historical anti-money laundering program), KR -1.3% (WFM sympathy), MCHP -1.2% (to offer $1.5 bln of convertible senior subordinated notes due 2027 and $500 mln of convertible junior subordinated notes due 2037 in private placement)

>>> Michael Kors watching for targets; 'we probably won't do anything small'

Michael Kors watching for targets; 'we probably won't do anything small'
STRATEGIC SNAPSHOT08 FEB 2017
Michael Kors Holdings Ltd. [NYSE:KORS], the London-based designer and retailer of branded apparel and accessories, is actively looking at potential acquisitions, CEO John Idol said.
On the 3Q17 earnings call held 7 February, Evercore ISI analyst Omar Saad asked about the company's M&A strategy. Regarding capital allocation, CEO Idol said the top priority was to continue to reduce shares outstanding and the company would be aggressive on its buyback program.
"Secondly, we've said that we will look at potential acquisitions," Idol continued. "We are actively looking at a number of different things, and if it's right for our company and our management's ability to execute and create value for our shareholders, then we will take advantage of it."
Idol added that the company had the capacity to do "sizeable transactions" or smaller ones.
"But what we said to you in the past is that we probably won't do anything small," he said. "We think that would be a distraction for us and really not create the kind of value we think the shareholder's looking for from us. So again, actively looking and we'll see what transpires."
During the quarter, the company repurchased 2,069,706 shares for USD 100m in open market transactions. Remaining availability under the repurchase program was USD 250m at 31 December. The company ended the quarter with cash and equivalents of USD 368.8m.
A published report on 20 January said Michael Kors and Coach [NYSE:COH] were possible buyers of Kate Spade [NYSE:KATE] and were discussing potential bids with their respective boards.
In December 2016, Michael Kors was reported to have tapped Goldman Sachs to advise on a number of strategic options.
Michael Kors has three operating segments, retail, wholesale and licensing. For FY16, these segments accounted for the following percentages of total revenue, respectively, 50.8, 45.5 and 3.7.
In May 2016, it acquired Michael Kors (HK) Limited, the exclusive licensee of the company in China and certain other jurisdictions in Asia, for USD 500m in cash.
For the China deal, advisors were JPMorgan and law firms Wachtell and Paul Weiss, the last of which lists Michael Kors on its website as a representative client of the firm's Corporate Department.
Michael Kors Holdings has a market capitalization of USD 6.2bn.

>>> Tesaro studying its options after takeover approaches

Tesaro studying its options after takeover approaches - report
08 FEB 2017
Tesaro (NASDAQ:TSRO), an oncology-focused, commercial-stage biopharmaceutical company headquartered in Waltham, Massachusetts, is in talks with banks after receiving approaches from several drug companies, according to a newswire report.
Reuters, citing unidentified individuals, said Tesaro is discussing its options with the banks, including Citi. They added Tesaro has not decided on a sale and noted there was a significant difference in valuation expectation between the company and potential buyers.
Tesaro shares late on Wednesday morning were up almost 13% at USD 183.70 apiece, corresponding to a market cap of USD 9.46bn.
StreetInsider reported last month, citing a source, that French group Sanofi (NYSE: SNY) was considering making an offer for Tesaro. Morgan Stanley was advising on the potential bid, it said.

Link to original source (Reuters)
Link to original source (StreetInsider)

>>> Bristol-Myers, Incyte and BioMarin could be acquisition targets for Gilead

Bristol-Myers, Incyte and BioMarin could be acquisition targets for Gilead
08 FEB 2017
Bristol-Myers Squibb (NYSE: BMY) as well as the smaller pharms Incyte (Nasdaq:INCY) and BioMarin Pharmaceutical (Nasdaq:BMRN) could be the target for acquisition by Gilead Sciences (Nasdaq:GILD), Barron's reported, citing an analyst at asset manager Gabelli for the opinion. California-based Gilead is turning its attention now to what it could do to reverse its outlook, including a possible big purchase of another company, Barron’s wrote in an online story Wednesday.
Jing He, an analyst at Rye, New York-based Gabelli said the asset manager couldn’t rule out the acquisition by Gilead of Bristol-Myers Squibb due to the recent setback of New York-based BMS in lung cancer. Jing He also said she believes Incyte could be a good fit as a result of Gilead’s interest in a growth oncology asset, Barron’s reported. BioMarin is another possibility as it provides growth and has the size Gilead likes, according to the report.
Gilead, which reported its earnings Tuesday, 7 January 2017, reconfirmed its willingness to acquire assets with pipeline value, the analyst said in the report cited by Barron’s.
The report may be seen at the link below.

>>> Softbank Group CEO hoping to revisit takeover of T-Mobile US under relaxed r

Softbank Group CEO hoping to revisit takeover of T-Mobile US under relaxed regulations (translated)
08 FEB 2017
Softbank Group Corp [TYO:9984] is hoping relaxed regulations under the new US administration allow it to take another stab at acquiring T-Mobile US [NYSE:PCS], the Fuji Sankei Business i reported.
The Japanese-language report cited Softbank CEO Masayoshi Son, who said on 8 February, in regard to expected changes to regulations in the US under President Trump and the possibility of making another attempt at acquiring T-Mobile US, that he will think flexibly about any structural changes. Son emphasized that having SprintCorp [NYSE:S] bounce back and operating on its own power is one admirable option. However, he noted, through an alliance new business value can be generated. He added that he will keep his mind open to consider various possibilities.
In 2013, Softbank acquired US-based wireless telecommunications company Sprint Corp. Plans to also acquire T-Mobile US and merge the two companies were thwarted by the Federal Communications Commission, which would not approve the deal, the report said. Tom Wheeler, who headed the FCC under President Obama, was replaced under President Trump by Ajit Pai, who believes that deregulation fosters market competition, the report said.
T-Mobile US has a market capitalization of USD 9.5bn.
The original article appeared in print ; pg. 1.