>>> Groupe Flo shares suspended ahead of update on Groupe Bertrand offer

Groupe Flo shares suspended ahead of update on Groupe Bertrand offer

Groupe Flo [EPA:FLO] announced it has requested Euronext Paris to suspend trading of its shares from Monday, 10 April, until further notice, in anticipation of an update from the company and its shareholder Financière Flo on the review of Groupe Bertrand's takeover offer.
The terms and conditions for the resumption of trading of the Groupe Flo shares will be set out in a forthcoming press release.

FT : Stada backs $5.6bn takeover offer from Bain Capital and Cinven

The drawn-out chase for Stada looks set to come to an end, with the German generic drug maker deciding to support a takeover bid from Bain Capital and Cinven valuing the company at €5.32bn ($5.6bn).

German generic drug maker Stada it had agreed to the offer from Bain and Cinven of €65.28 a share and a dividend of €0.72 per share, or a 48.9 per cent premium to Stada’s share price on December 9. The offer estimates Stada’s equity value at €4.11bn.

Ferdinand Oetker, chairman of the supervisory board of Stada said:

The offer of Bain Capital and Cinven contains the most attractive overall combination. In addition to the highest price we were able to reach comprehensive protection provisions especially for our employees and to initiate a future-oriented growth strategy.
Stada opened its books to a private equity firms in February after receiving offers from Bain Capital and Cinven as well as a bid from Advent International.

FT : Activist fund Elliott urges BHP Billiton to spin off US petroleum assets

BHP Billiton has come under fire from activist investor Elliott Management, which is calling for the resources giant to unlock shareholder value by spinning off its US petroleum assets.
The miner’s shares spiked in late Australian trade after Elliot said it had sent a letter to the Anglo-Australian miner’s directors outlining a plan to “unlock value and improve capital returns to shareholders” by around 50 per cent.

Elliott said that BHP had a “first-class portfolio of assets which are failing to deliver optimal value for shareholders” and added that even since the spin off in May 2015 of South32 – which mostly contained BHP’s base metals and coking coal assets – and said the parent company “still cannot deliver” shareholder value without ironing out the inefficiencies associated with its dual-listed shares, US petroleum business and enhancing its capital management plans.

Elliott also revealed it had a 4.1 per cent stake in the company’s London-listed shares. BHP’s Sydney-listed stock made a late charge, rising as much as 4.9 per cent to A$25.79 on Monday, the highest level since mid-February.

The hedge fund outlined three main steps that could boost shareholder value including:

Unifying BHP’s dual-listed company structure into a single Australia-headquartered and Australian tax resident company
Spinning off and separately listing the company’s US petroleum business on the New York Stock Exchange
Adopting a consistent capital return policy that would allow it to take advantage of its substantial franking credit balance through off-market buybacks, rather than using its excess cash “to make value destructive acquisitions”, Elliott said.
Elliott estimated its plan could lift the value of Australia-based investors by 48.6 per cent and by 51 per cent for UK-based investors.

In February, BHP swung back to profit in the six months ended December 31, with a $3.2bn net profit, compared to a loss of $5.7bn a year earlier. The company, which last year slashed its interim payout and scrapped its progressive dividend policy, this year paid out a first-half dividend of 40 US cents per share, which was higher than analysts estimated

(CS) European Luxury : Consensus beating numbers will be needed in 1Q

The luxury goods sector has outperformed the European equity market in the last 12 months driven by the broader market appetite for cyclicals and improving sales growth in 2H. For the upcoming reporting season, and the respective stock price movements, we believe 1Q could be a similar scenario to 4Q whereby strong beats will be needed, particularly in soft luxury, to drive share prices higher. Positive surprises could come from greater sales growth acceleration than currently expected. We believe this is largely possible given the greater weight of the faster-growing Chinese clientele in 1Q than in 4Q and relatively easy comps

>>> What to look at today - 10th of April 2017

Asian equity markets are mixed and US futures are higher on expectation of renewed risk appetite to start the new week. Investors are shrugging the miss in non-farm payrolls as a one-off due to weather impact and buying the recent dip. Nikkei225 is the best performer as USD/JPY hit a 1-week high above 111.50, while Australia miners have helped that index hit a 2-year high after positive broker commentary. In other FX majors, AUD/USD slid to January lows below 0.7480 and NZD/USD was at a 3-week low around 0.6920. Broad USD strength is derived from momentum on Friday as comments from Fed's typically more dovish voter Dudley are perceived to be increasingly more hawkish. Fed's Bullard also spoke in Australia, noting the underwhelming jobs report is in line with the view of 2% inflation and modest growth, urging a wait and see for Trump's fiscal policy combined with just one more rate hike by the Fed this year. Florida meeting between China Pres Xi and US Pres Trump is viewed as a success. China has reportedly offered improved market access for US financial sector investments and beef exports in a move to avert a trade war, while Xi has extended Trump an invitation to visit Beijing in the near future. China State Media also said the meeting marks the start of a relationship based on cooperation and respect instead of conflict.

Nikkei +0.65% Hang Seng +0.02% CSI -0.09% Shnaghai -0.22%

EuR$ 1.0589 CNH 6.9081 CNY 6.9081 JPY 111.36 GBP 1.2391 CHF 1.0090 RUB 57.4560 WTI$ 52.39 +0.33%

S&P +0.16% EuroStoxx +0.12% FTSE +0.14% CAC +0.06% Dax +0.18% SMI +0.36%

Macro :
- Italy Official: Too Early to Discuss CDP Role in Privatizations
- Morgan Stanley Targets 2017 Return on Equity 9%-11% Range
- EU Mulls Excluding U.K. From Updates on Trade Talks: FT

Keep an eye on :
- ABF LN : AB Foods Said to Seek Successor to Chairman Sinclair, Sky Says
- ABE SM : Abertis to Propose EU4B of French Highway Work, Echos Says
- AIR FP : Airbus Shows New A380 Seat Configuration in Hamburg: Figaro
- AIR FP : Boeing to Deliver 2 Passenger Jets to Iran Air in Month: IRNA
- AF FP : Air France-Klm March Passenger Traffic Rises 5% to 7.6M
- AKS US : AK Steel Declines to Comment on M&A Rumors That Pushed Up Stock
- ASML NA : Dutch Cos. Need Govt Support From Foreign Takeovers: ASML CEO
- BLT LN : BHP Urged by Elliott to Unify Structure, Separate US Petroleum
- BOI FP : Boiron Finalized Acquisition of Ferrier: Statement
- BPOST BB : Francois Cornelis to Be Proposed as Bpost Chairman, L’Echo Says
- BOSN SW : Bossard 1Q Sales CHF197.9m; Targets FY2017 Sales CHF750m-760m
- EDF FP : Macron Would Retain Decision to Close Fessenheim Nuclear Plant
- DL NA : NN Group Declares Offer for Delta Lloyd Unconditional
- DRX LN : Drax May Face Investor Revolt Over Executive Pay, Sky Says
- GAM SW : GAM Restructuring Needs Time, CEO Tells Finanz und Wirtschaft
- BAER VX : Julius Baer CEO Collardi doesn’t rule out further acquisitions
- FME GY : weighing bid for generic drugmaker Akorn: Bbg reut.rs/2nmWULa
- ILVA Spa : Italy Sees Offers for Steelmaker Ilva as Inadequate: Repubblica
- LDO IM : Leonardo May Be Part of Treasury-CDP Stake-Transfer Plan: Sole
- LIFE SW : BioTelemetry to Buy LifeWatch AG for CHF260m in Cash, Stock
- MDLZ US : Mondelez Said to Prepare Search for CEO Successor, WSJ Says
- RB/ LN : McCormick Said Considering Bid for Reckitt Brands: Telegraph
- SAND SS : Sandvik Sees Strong Demand Increase in South Africa, DI Reports
- SGO FP : Burkard Family Express Doubts on Sika-Saint Gobain Deal: SZ
- SIKA VX : Burkard Family Express Doubts on Sika-Saint Gobain Deal: SZ
- GLE FP : Kerviel Bank Accounts Seized by Bailiffs, 20minutes Reports
- SAZ GY : Stada Supports Offer by Bain Capital, Cinven Worth EU66/Share
- TEVA IT : Teva Said to Explore Sale of Women’s Health for Up to $2B
- TKA G : Thyssenkrupp to Cut Steel Unit Costs by EU500m, Affecting Jobs
- VIV FP : Vivendi CEO Said to Lead List of Telecom Italia Board Nominees

>>> Europe : Brokers Upgrades & Downgrades - 10th of April 2017

>>> Up
*Rio Tinto Raised to Buy at CLSA
*SLM Solutions Raised to Hold at HSBC, PT EU43

>>> Down
*AstraZeneca Cut to Hold at Jefferies, PT 5,050p
*DNB Cut to Sell at Citi, PT NOK130
*Henkel Cut to Sell at Goldman, PT EU104
*L'Oreal Cut to Neutral at Goldman, PT EU179
*Nordea Cut to Neutral at Citi, PT SEK105
*Subsea 7 Cut to Sell at SpareBank, PT NOK130
*Yandex Cut to Hold at Standpoint

>>> Initiation
*Deutsche Bank Resumed Equal-weight at Morgan Stanley, PT EU17.50
*Snam New Hold at SocGen, PT EU4.27

>>> Call

>>> Asian Update

Asia Mid-Session Market Update: US increases naval presence near Korean peninsula; USD rallies as Trump-Xi talks viewed as successful

***Friday US Session Highlights***
- (US) MAR CHANGE IN NONFARM PAYROLLS: +98K V +180KE (lowest since May 2016)
- (US) MAR UNEMPLOYMENT RATE: 4.5% V 4.7%E (lowest since April 2007); Underemployment Rate: 8.9% v 9.2% prior
- (US) MAR AVERAGE HOURLY EARNINGS M/M: 0.2% V 0.2%E; Y/Y: 2.7% V 2.7%E; AVERAGE WEEKLY HOURS: 34.3 V 34.4E
- (US) Feb Wholesale Inventories (Final) M/M: 0.4% V 0.4%E; wholesale Trade Sales M/M: +0.6% v -0.1% prior

***Friday US markets on close: Dow flat, S&P500 -0.1%, Nasdaq flat***
- Best Sector in S&P500: Consumer Staples
- Worst Sector in S&P500: Utilities
- Biggest gainers: VMC +3.9%; INCY +3.4%; FMC +3.1%
- Biggest losers: UA -3.2%; KMX -2.6%; CBT -2.3%
- At the close: VIX 12.9 (+0.5pts); Treasuries: 2-yr 1.29% (+4bps), 10-yr 2.37% (+3bps), 30-yr 3.00% (+1bps)

***Politics***
- (HU) About 60K marchers in Budapest protested PM Orban's targeting of Central European University - press
- (US) KT McFarland has been asked to step down at deputy National Security Advisor to Pres Trump; Expected to be nominated as ambassador to Singapore - press
- (US) Trump Chief Economic Advisor Gary Cohn: Not sure that Mnuchin’s Aug forecast will be reachable for tax reform - financial press
- (US) Reminder: US Congress is on break for the next two weeks (starting April 10th), which leaves little time to pass spending bill and avoid a govt shutdown

***Weekend US/EU Corporate Headlines***
- TSLA Said to be planning a factory in Guangdong, China - Southern Metropolis Daily

***Key economic data:***
- (JP) JAPAN FEB BOP CURRENT ACCOUNT TOTAL: ¥2.81B V ¥2.51TE; ADJ CURRENT ACCOUNT TOTAL: ¥2.21T (multi-year high) V ¥1.79TE; TRADE BALANCE BOP BASIS: ¥1.08T V + ¥982BE
- (AU) AUSTRALIA FEB HOME LOANS M/M: -0.5% V 0.0%E (biggest decline in 4 months)

***Asia Session Notable Observations, Speakers and Press***
- Asian equity markets are mixed and US futures are higher on expectation of renewed risk appetite to start the new week. Investors are shrugging the miss in non-farm payrolls as a one-off due to weather impact and buying the recent dip. Nikkei225 is the best performer as USD/JPY hit a 1-week high above 111.50, while Australia miners have helped that index hit a 2-year high after positive broker commentary. In other FX majors, AUD/USD slid to January lows below 0.7480 and NZD/USD was at a 3-week low around 0.6920. Broad USD strength is derived from momentum on Friday as comments from Fed's typically more dovish voter Dudley are perceived to be increasingly more hawkish. Fed's Bullard also spoke in Australia, noting the underwhelming jobs report is in line with the view of 2% inflation and modest growth, urging a wait and see for Trump's fiscal policy combined with just one more rate hike by the Fed this year.
- Geopolitical risk remains a hot topic in the wake of Syria strikes last week. Russian press has reported that communications in Syria have been disrupted after the US actions, while other reports noted new bombing on the rebel town that suffered the chemical attack. ISIS also waged an attack on a joint coalition forces base in the south of the country. Separately, US reports noted that a strike force led by US destroyer is approaching the Korean peninsula. State Sec Tillerson however said that a regime change is not the objective for North Korea
- Florida meeting between China Pres Xi and US Pres Trump is viewed as a success. China has reportedly offered improved market access for US financial sector investments and beef exports in a move to avert a trade war, while Xi has extended Trump an invitation to visit Beijing in the near future. China State Media also said the meeting marks the start of a relationship based on cooperation and respect instead of conflict.
- In notable economic data, Australia home loans saw their biggest m/m decline in 4 months, though most analysts are focusing on this week's employment data as a key driver for RBA bias going forward. Morgan Stanley however has already revised its prior view of a rate cut this year to expect neutral stance through 2017 on housing inflation concerns.

China
- (CN) China's 21 listed property developers saw combined Q1 sales of CNY621.6B, +69% y/y - Chinese press
- (CN) China NDRC: Will gradually reduce planned power output of existing coal fire power plants
- (CN) China Premier Li Keqiang calling on cabinet to remain vigilant for risks related to bad assets, bond defaults, shadow banking and online finance - press
- (CN) China State Information Center researcher Zhu Baoliang: Economic growth may stabilize at slower place in Q2 as the world economy remains sluggish and domestic auto, home sales cool - Chinese press
- (CN) Goldman Sachs sees China Q1 GDP at 6.8% v 6.8% in Q4; 2017 GDP seen at 6.6% v "around 6.5%" official target - Chinese press
- (CN) Chairman of China Securities Regulatory Commission (CSRC) urging listed companies in China to pay out more dividends - Chinese press
- (CN) China State Media calls Trump/Xi meeting the start of a relationship based on cooperation and respect instead of conflict

Japan
- (JP) Bank of Japan (BOJ) Amamiya: BOJ unrealized losses could be ¥24T if yield rises to 1%
- (JP) Bank of Japan (BOJ) Gov Kuroda: Japan CPI to rise toward 2% target
- (JP) IMF may raise Japan's 2017 GDP target above 1% from 0.8% in its upcoming World Economic Outlook report amid continued growth in exports - Japan press

Australia / New Zealand
- (AU) Morgan Stanley: No longer expect RBA to cut rates this year; Expect rates to remain unchanged - Australian press
- (AU) Moody's: Australia home prices forecast to rise 5.6% in 2017 before falling 0.6% in 2018 - press
- (AU) CBA economist: RBA seems comfortable with inflation below target, but they would be sensitive to deterioration in the labor market - SMH
- (AU) UBS: Rise in commodity prices may strengthen Australia's AAA rating - press
- (NZ) Westpac: Recent rise in New Zealand inflation may not be sustainable - press

Korea
- (US) Sen Markey (D-MA): Pres Trump should engage in direct negotiations with North Korea's Kim Jong Un as part of combined efforts with China - US press
- (KR) US has ordered an aircraft carrier group to move closer to the Korean Peninsula in response to recent provocations from North Korea - US press

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.7%, Hang Seng flat, Shanghai Composite -0.3%, ASX200 +0.5%, Kospi -0.8%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.1%, Dax +0.3%, FTSE100 flat

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0570-1.0590; JPY 111.00-111.60; AUD 0.7480-0.7510; NZD 0.6920-0.6945; GBP 1.2365-1.2385
- June Gold -0.2% at 1,255/oz; May Crude Oil +0.3% at $52.40/brl; May Copper -0.9% at $2.62/lb
- (US) Weekly Baker Hughes US Rig Count: 839 v 824 w/w (+1.8%) (12th straight weekly rise)
- ANZ: Oil market looks finely balanced; While US production is up, demand is also relatively strong - press
- SPDR Gold Trust ETF daily holdings fall 0.3 tonnes to 836.5 tonnes
- iShares Silver Trust ETF daily holdings fall to 9,862 tonnes from 10,208 tonnes prior; 6th straight decline, lowest since Mar 2016
- (CN) PBOC SETS YUAN MID POINT AT 6.9042 V 6.8949 PRIOR; weakest Yuan setting since Mar 21st; 3rd straight weaker setting
- (CN) PBoC skips open market operations for 11th straight session; drains net CNY10B
- (AU) Australia MoF sells A$400M v A$400M indicated in 4.5% 2033 bonds; avg yield 3.008%; bid-to-cover 3.81x
- (KR) South Korea MoF sells 5-yr Govt bonds at 1.915%

***Asia equities / Notables / movers***
Australia
- Tabcorp (TAH) +0.9%; NSW wagering partnership
- South32 (S22) +1.9%; Raised at CLSA
- BHP (BHP) +1.0%; Raises at CLSA
- Oz Minerals (OZL) +0.9%; exploration agreement
- Worley Parsons (WOR) +4.0%; Block trade
- Cimic (CIM) +1.1%; Leighton contract in India
- Mesoblast (MSB) +8.2%; endpoint in phase 3 trial

Japan
- Toshiba (6502) +6.3%; May sell TV business; Additional reports of Hon Hai intereest
- Dentsu (4324) +2.8%; March sales
- Hisamitsu Pharmaceutical (4530) -9.5%; FY16 results

Hong Kong
- Skyworth Digital Holdings (751) -7.5%; Q1 guidance
- Gemdale Properties (535) +1.8%; Mar sales
- China Overseas Grand Oceans (81) +2.2%; Mar sales
- Agile Group Holdings (3383) -2.7%; Mar sales
- Greenland Hong Kong (337) -3.6%; Mar sales

FT : France’s Sapin warns of post Brexit trading loss for UK

France’s Sapin warns of post Brexit trading loss for UK
City of London risks losing euro-denominated operations, minister warns


France’s finance minister has warned that the City of London will lose lucrative euro-denominated trading operations after Brexit, saying that allowing them to continue there would threaten the currency bloc’s “sovereignty”.

Speaking to the Financial Times, Michel Sapin said that other euro area countries share Paris’s conviction that key processes such as the clearing of euro-denominated derivatives must be relocated so that they come under the full oversight of EU supervisors.

France’s president François Hollande has repeatedly warned that the vote for Brexit will have consequences for the City. He said back in June that the decision meant the repatriation of clearing to the continent. Since then, some regulators and Brussels lawmakers have suggested that the concerns could instead be addressed by making sure that EU financial supervisors play a role in overseeing the City after Brexit.

But Mr Sapin, whose time as economy and finance minister will end with the upcoming French elections, said that this solution is unlikely to work given the depth of concern within the eurozone and the difficulty for London of accepting the conditions that would come with it.

“Everyone sees that . . . this goes to the heart of the resilience of our [financial market] arrangements and of our sovereignty over our money,” he said, noting also that the problem is not necessarily confined to clearing.

“The strategic vision is that we must be masters, as Great Britain is the master when it comes to the rules that apply for the pound sterling, of the authorities that oversee the resilience of our arrangements,” he said. “And we are going to have this sovereignty.”

London is the European hub for trading in swaps — handling a notional $900bn a day in euro-denominated deals on these derivatives contracts. It is a position that has long been a source of contention in Europe.


The UK in 2015 won a court battle against the European Central Bank over the Frankfurt-based institution’s attempt to apply a so-called “location policy” that clearing — a key part of trade processing — should take place within the currency bloc’s territory when the swaps transactions are in euros.

Mr Sapin, however, said that the kind of oversight that would be required to ease euro area concerns would most likely be unacceptable to Britain, as it would run counter to the spirit of Brexit. “I understood that one of the most effective stimuli and motivations behind Brexit was that Great Britain should take back its sovereignty,” he said.

“If Great Britain accepts today that the rules in force in London should be of the same nature, level, with the same effects [as those in Europe] and with the same judges to settles questions about how to apply them, I would say why not. But this doesn’t seem to correspond to the prevailing mood [in the UK].”

The European Commission is also wrestling with the question of what to do about clearing after Brexit.

Valdis Dombrovskis, vice-president of the European Commission in charge of financial services policy, noted in a speech on Thursday that the City’s role in handling a “very significant proportion” of clearing activities in some market segments will “surely be a matter of important reflection in the coming months and years,” notably because the UK will no longer be covered by key EU legislation, known as EMIR.

The commission moved in March to delay plans for updating EMIR, fuelling speculation that it is weighing options for how to tackle the problem. “Brexit has consequences,” Mr Sapin said. “And one of those consequences is that, obviously, everything must be re-examined when it comes to financial-market access.”