(JPM) UK Small and Mid Caps : Best of British: The Year Ahead 2017

Preferred stocks for 2017: Our preferred stocks drawn from the universe of 33 stocks covered by the UK Small and Mid Caps team are:
o Best for growth: BCA Marketplace
o Best for quality: BBA Aviation, DS Smith, Inchcape
o Best defensive plays: Biffa, Cineworld, Go-Ahead
o Best for value: FirstGroup

Least preferred stocks. Within our sectoral orders of preference, our least preferred stocks are Stagecoach (Bus and Cail), Carillion (Construction), The Restaurant Group and Mitchells & Butlers (Pubs and Cestaurants). We are also Underweight on HSS Hire.

(JPM) European Autos and Suppliers

Turning defensive in Q1: Upgrade to OW Michelin, Nokian & Stabilus, downgrade Conti (N), Schaeffler (UW) and Hella (N)

We are turning defensive in our European Autos coverage forecasting limited global growth, challenging pricing environments, rising raw material headwinds and technological shift as reflected by our JPMC “EV Tax”.

Downgrade Schaeffler to UW, upgrade Michelin and Nokian to OW and downgrade Conti and Hella to Neutral. 
As a result of implementing our EV tax we cannot recommend simply going OW suppliers vs OEMs. It becomes a stock by stock strategy where on the OEM front we would favor restructuring stories like VW or best in class execution such us Daimler and PSA. On the supplier front we have turned defensive owning tire stocks even with rising raw materials as well as growth and margin re-rating stocks like Valeo and Faurecia. We are downgrading Continental to Neutral (mainly on valuation grounds), Hella to Neutral (as we wait for clarity on reducing R&D expenditure), Schaeffler to UW and upgrading Michelin, Nokian and Stabilus to OW. We remain OW on Faurecia, Valeo (AFL), Volkswagen (AFL), PSA and Daimler. Neutral on FCA, Leoni, BMW and Renault. Remain Underweight on Volvo and ElringKlinger.

Reuters - UK factory bosses see worse economy but better sales in 2017 - EEF

UK factory bosses see worse economy but better sales in 2017 - EEF

British factory bosses are downbeat about the outlook for the economy after last year's Brexit vote even though they expect their sales both at home and abroad to improve in 2017, an industry survey showed on Monday.

An annual survey by manufacturing association EEF showed 47 percent of executives in the sector predicted a decline in Britain's economic fortunes this year, up from 28 percent in the same survey in 2016.

Only 25 percent said they expected to see an improvement.

Still, manufacturers were confident they would perform well in the face of uncertainty around Brexit, with half expecting to increase their sales at home and more than 40 percent anticipating improved export sales.

British manufacturing had a mixed performance in 2016, with economic growth driven mostly by the much larger services sector and consumer spending.

A separate survey from credit card company Visa Europe showed consumer spending expanded at an annual rate of 2.8 percent in the fourth quarter - more than double the pace of the previous two quarters.

However, consumer spending power looks likely to wilt in the face of rising inflation following the pound's post-Brexit vote drop - something that two-thirds of manufacturers in the EEF survey cited as a big risk.

Last week a record number of manufacturers in a British Chambers of Commerce survey - the largest of its kind - said they expected to hike selling prices in the coming months.

"Global political upheaval means that 2017 looks set to be another bumpy ride, with manufacturers forced to navigate uncertainty, unpredictable economic conditions and a number of risks that have been amplified by Brexit," said Terry Scuoler, chief executive of EEF.

Britain's economy looks on track to have expanded by more than 2 percent in 2016 - faster than almost all other big advanced economies except perhaps the United States.

REuters - UK house price growth picks up speed again - Halifax

UK house price growth picks up speed again - Halifax

Growth in British house prices picked up speed for the second month in a row in December and a shortage of homes on the market is expected to support prices in 2017, mortgage lender Halifax said on Monday.

In the three months to December, house prices were 6.5 percent higher compared with the same period a year earlier, up from growth of 6.0 percent in the three months to November, Halifax said.

A Reuters poll of economists had expected an increase of 5.8 percent.

In monthly terms, house prices jumped by 1.7 percent in December, the strongest increase since March.

Martin Ellis, an economist with Halifax, said yearly price growth was expected to slow to between 1 and 4 percent by the end of 2017.

"The relatively wide range for the forecast reflects the higher than normal degree of uncertainty regarding the prospects for the UK economy this year," he said in a statement.

>>> Nordnet board recommends raised offer by Nordic Capital at SEK 38 per share

Nordnet board recommends raised offer by Nordic Capital at SEK 38 per share
Link to Statement : https://newsclient.omxgroup.com/cdsPublic/viewDisclosure.action?disclosureId=753226&lang=en
The board of Nordnet has today issued a statement in relation to the public offer by NNB Intressenter, according to stock exchange announcement.
The Board of Nordnet unanimously recommends that the shareholders of Nordnet accept NNB Intressenter’s cash offer at SEK 38 (EUR 4). This statement is made by the Board of Nordnet AB (publ) (“Nordnet”) pursuant to Rule II.19 of Nasdaq Stockholm’s Takeover Rules (the “Takeover Rules”).
Background
On 25 October 2016, Nordic Capital Fund VIII (“Nordic Capital”) and Ohmangruppen, through NNB Intressenter AB (“NNB Intressenter”), announced a public offer to the shareholders of Nordnet to transfer all shares in Nordnet to NNB Intressenter (the “Offer”). NNB Intressenter initially offered SEK 37 (EUR 3.87) in cash for each share in Nordnet, but has today, 9 January 2017, announced that the Offer is increased to SEK 38 per share. The acceptance period for the Offer ends on 23 January 2017.
Together, Ohmangruppen and Nordic Capital owned and controlled, at the announcement of the Offer, in aggregate 67.5 per cent of all shares in Nordnet. On 26 October 2016, NNB Intressenter announced that Nordic Capital had acquired additional shares in Nordnet, corresponding to 4.7% of the shares. Together, Ohmangruppen and Nordic Capital own and control, as of 9 January 2017, in aggregate 72.3% of all shares in Nordnet. Öhmangruppen and Nordic Capital will, subject to completion of the Offer, contribute all of their Nordnet shares to NNB Intressenter.
The Offer values all shares in Nordnet at SEK 6.651bn (EUR 696m), based on 175,027,886 outstanding shares of which 614,079 shares are held in treasury by Nordnet.
The Offer represents a premium of approximately:
  • 29% compared with the closing price for the Nordnet share on 24 October 2016, the last trading day prior to the announcement of the Offer, of SEK 29.5 (EUR 3.08);
  • 32% compared with the volume weighted average price paid for the Nordnet share during the last 30 calendar days prior to the announcement of the Offer of SEK 28.8 (EUR 3); and
  • 41% compared with the volume weighted average price paid for the Nordnet share during the last six months prior to the announcement of the Offer of SEK 27 (EUR 2.82)
Completion of the Offer was initially conditional upon, inter alia, that the Offer is accepted to the extent that NNB Intressenter will become the owner of more than 90% of the total number of shares in Nordnet, after full dilution. NNB Intressenter has now waived this condition so that completion of the Offer is no longer conditional upon that shareholders accept the Offer to a certain extent. All other conditions for the Offer, as set out in the offer document published on 2 December 2016, remain unchanged.
Shareholders who have tendered their shares in Nordnet at SEK 37 in cash per share will automatically benefit from the increased consideration in the Offer of SEK 38 in cash for each share in Nordnet without further action.
In addition, NNB Intressenter has announced that no further increases will be made and that the consideration in the Offer at SEK 38 for each share in Nordnet thus is final.

REuters - Oil prices fall as Iran's exports surge, U.S. adds more rigs

Oil prices fall as Iran's exports surge, U.S. adds more rigs

Oil prices fell on Monday as increased exports from Iran undermined efforts by other oil producers to curb a global fuel supply overhang and as U.S. drillers increased activity for a 10th straight week.

Brent crude futures LCOc1 were trading at $56.70 per barrel at 0745 GMT, down 40 cents, or 0.7 percent, from their previous close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were trading at $53.59 per barrel, down 40 cents, or 0.74 percent.

The lower prices were a result of rising exports from Iran that come just as other members of the Organization of the Petroleum Exporting Countries (OPEC) cut supplies in an effort to end a global glut.

Iran has sold more than 13 million barrels of oil held on tankers at sea, capitalising on an OPEC output cut deal from which it is exempted to regain market share and court new buyers, according to industry sources and data, reducing the quantity of oil it stores on tankers from 29.6 million barrels last October to just 16.4 million barrels now.

Iran's surging tanker exports were not the only indicator of plentiful supplies.

Last week, U.S. energy companies added oil rigs for a tenth week in a row, extending a recovery in activity into an eighth month as crude prices remained at levels at which many drillers can operate profitably.

"The next leg up in prices probably won't occur until the traders see evidence that production levels are falling. In the meantime, rising U.S. drilling activity and output is likely to keep prices in check," ANZ bank said on Monday.

Drillers added four oil rigs in the week to Jan. 6, bringing the total count to 529, the most since December 2015, energy services firm Baker Hughes Inc (BHI.N) said on Friday.

As a result of the increased drilling, U.S. oil output C-OUT-T-EIA has risen by over 4 percent from its 2016 low to almost 8.8 million barrels per day, although production remains 8.74 percent below its 2015 peak.

In Iraq, OPEC's second-biggest producer, a record volume of 3.51 million bpd were exported from its port in Basra in December, officials said on Monday, although they added that the country would comply with its commitment to lower output by an average of 210,000 bpd from January.

Iraq raised its February official selling price (OSP) for Basra Light crude to Asia by $0.50 to minus $0.90 a barrel against the average of Oman/Dubai quotes from the previous month, the State Oil Marketing Organization (SOMO) said on Monday.

In Russia, oil and gas condensate output were cut by 1.2 percent to 11.3 million bpd as of Jan. 6 from Dec. 29.

Reuters - Automakers, suppliers team up to share costs of self-driving cars

let's talk of Tom Tom again...clearly a target for me in this logic...stock is trading highs levels with volume...
{TOM2 NA Equity GPC D <GO>}



Automotive suppliers and automakers are expanding alliances to develop self-driving car technology that can serve multiple automakers, as the race to put such vehicles on the road separates companies that can go it alone from those that need help sharing the financial and technical burdens.

While some companies, such as Tesla Motors, General Motors and Ford Motor, are trying to develop proprietary driverless systems, a larger group of automakers appears to have decided it makes more sense to develop self-driving technology in collaboration with suppliers – as many other features such as anti-lock brakes or radar-enabled cruise control already are.

"What's going on in the industry right now is like a hyper version of musical chairs - and the music is still playing," said Gill Pratt, chief executive officer of Toyota Research Institute. "Everyone is changing partners."

Several suppliers - notably Mobileye, Nvidia and Delphi Automotive - are among the more popular technology partners in the self-driving race, with multiple alliances around the globe.

"If you want to build a truly autonomous car, this is a task for more than one player," said Amnon Shashua, chief executive of Mobileye, an Israeli-based supplier of mapping and vision-based sensing systems.

"The technological challenges are immense," Shashua told Reuters. "I would compare it to sending a man to the moon."

Mobileye supplies cameras, chips and software for driver assist systems - the building blocks for self-driving cars - to more than two dozen manufacturers around the globe. The company was an early supplier of vision systems to Tesla, but the two companies had an acrimonious and public breakup last summer after the driver of a Tesla Model S was killed while operating his vehicle using Tesla's Autopilot system.

Since the break with Tesla, Mobileye has secured two critical partnerships to develop self-driving systems: With German automaker BMW and U.S. chipmaker Intel, and with longtime supplier Delphi.

The Delphi-Mobileye alliance involves a turn-key system that the partners plan to offer to smaller automakers that lack the resources to develop such systems on their own. It will be ready for production by 2019, said Jeff Owens, Delphi's chief technology officer, with a projected wholesale cost of about $5,000.

The alliance with BMW and Intel is expected to draw additional vehicle manufacturers and suppliers, according to Elmar Frickenstein, BMW's senior vice president for automated driving.

"We would like to create a standard system for everybody to use by 2021," Frickenstein said. "That would share the costs and speed up the process of development and adoption."

Eventually, BMW and its partners could offer self-driving hardware and software sets or an entire driverless system on a non-exclusive basis to companies ranging from Uber [UBER.UL] to Google, Frickenstein said.

A blueprint for collaboration is BMW's joint ownership with Daimler AG and Volkswagen AG's (VOWG_p.DE) Audi of Here, the mapping company acquired in late 2015 from Nokia. Since then, both Intel and Mobileye have teamed with Here to pool and share data.

Chipmaker Nvidia also is ramping up its partnerships in self-driving technology and systems, this week announcing deals with Audi and Here, as well as German suppliers ZF [ZFF.UL] and Bosch [ROBG.UL].

"We're not looking to develop a proprietary system," said Dirk Hoheisel, the member of Bosch's board of management who oversees autonomous driving. "We want to work with others to develop a standard platform and open standards for self-driving systems, especially around data and mapping."

While pursuing similar partnerships with suppliers, Audi sees its role as a vehicle manufacturer evolving to that of systems integrator.

"There's not one supplier out there who can provide the whole solution - no one who knows everything, every part of what's needed to make an autonomous car," said Alejandro Vukotich, Audi's head of development for driver assistance systems.

Some key components of self-driving systems - cybersecurity, for instance - should remain the responsibility of vehicle manufacturers, said Guillaume Devauchelle, head of innovation and scientific development at French supplier Valeo.

But carmakers also will continue to rely on suppliers to provide specific self-driving technologies, he said.

"There will be a mix because it's quite a complex system (with) sensing, data fusion, artificial intelligence, connectivity, man-machine interface and so on," Devauchelle said. "Those are big blocks."

>>> Pre-Market Indications

CS
Air France +1% Traffic stats - increase in traffic, loadfactor (+2.5 pt)
Bookmakers -1-2% Negative read from William Hill results
Centamin +2-3% FY production 551k ounces vs guidance 520-540k
Dialog Semi +1% Pre-announced Q4 revs of $365m - guidance was $345-375m
DNB +1% CS UPGRADE to NEUTRAL (Offshore downturn risk)
Ericsson -1-2% CS DOWNDGRADE to UNDERPERFORM (Slower recovery)
Fre Med -0.5% Regulation threatens to put an end to premium assistance
Lufthansa -0.5-1% Reported on Friday, earnings growth remains a challenge
Meyer Burger +3-5% Reveives orders for CHF 20m, upgraded by a peer
Miners +1-2% Copper +0.30%, Brent -0.15%, Iron Ore +6.00%, China +0.30%
Petrofac +3% Oman gas contract win close to $600m
Richemont +1% Tag Heuer CEO sees return to growth for Swiss watchmaking
SHB -1% CS DOWNGRADE to UNDERPERFORM (Earnings headwinds)
Swatch +1% Tag Heuer CEO sees return to growth for Swiss watchmaking
TGS +1-2% Q4 revs $165m vs cons $110m
Tui +1-2% Mulls sale of Travelopia + Mordashov buys TUI shares
Volkswagen -0.5% FBI said to have arrested VW managers [NYT]
Wirecard +2% CS UPGRADE to NEUTRAL (Metrics not deteriorating)

MainFirst Pre Mkt Indications
*FIAT-To invest $1b in Midwest Plants, Add 2,000 Jobs................U/C
*FRES MEDICAL-Says New U.S. Regulation will impact business..........-4%
*TUI-Considers sale of Travelopia to Kuoni,as well as KKR-Press......+0.5%
*LHA-Confirms 2016 view, Sees ‘Clearly Negative’ Pricing.............-0.5%
*SANOFI-Has capacity to make acquisitions - CEO Tells Figaro.........-0.5%
*VW-Near resolving Criminal Investigation,FBI arrest manager.........+0.5%
*DIALOG-Q4 Rev $365m(371),FY Rev $1.198b(1.2b),Finals due 23/2.......-0.5%
*WIRECARD-Concardis is likely be sold to Bain and Advent €700m.......+1%
*LVMH-Jean-Claude Biver (TAG) is +ve on Swiss Watch Inds for '17.....+0.5%
*DAIMLER-Mercedes has reached more than 2mln unit sales in 2016......+0.5%
*CS-Saw external asset management outflows in Q4(out Friday)-F&W.....U/C
*ROCHE-FDA grant priority review for Tecentriq (atezolizumab)........+1%
*AIR FRANCE-Dec 7.6%,Passengers 7.2m,Travsavia +37.4% to 0.8m........+1%
*ADIDAS-Pou Sheng -21% as fire CFO over sales records(90% ADS/Nike)..+0.35%
*RICHEMONT/SWATCH-Read across from LVMH comments(always bullish).....+0.5%
*AHOLD-Starts $1bln buyback program..................................+0.5%


Investec

Euro  
* AHOLD DELHAIZE-starts $1bn buyback ............................+0.5%
* AIR FRANCE-Dec Traffic +7.6%, load factor +2.7% YoY.....................+1.5%
* CS-saw asset management outflows in Q4 (FUW)..............................U/C
* DIALOG SEMI-FY prelim numbers are in line with ests.....................+0.5%
* FIAT-to spend $1bn on US plant, expand Jeep range.........................+1%
* FRESENIUS MED-says US regulation will have impaact, joins lawsuit.........-3%
* GECINA-replaces CEO,accelerate strategy,become a leading real estate grp..+1%
* IPSEN-pays $1bn for cancer assets from Merrimack..........................U/C
* LHA-sees -ive yld trend,reit ebit f/c,speaking at conf today(-3% Fri).....U/C
* LVMH-head of Tag Heuer sees return to growth in 2016......................+1%
* SWEDISH ORPHAN-CEO to leave, board wants more presence in Stockholm.......+1%
* TUI-considers sale of Travelopia to Kuoni(CityAM). Was rmrd previously....+1%
* VW- FBI arrest fmr VW manager on conspiracy charges(NYT)................-0.5%
Other
* BRUNELLO CUCINELLI-Q4 due after close
* CONTI-Q4 due this morning
* DANONE-WhiteWave extends long stop date, still sees Q1 close on deal.
* GALENICA-Sprint 'no longer holds stake'(had 9%).
* IAG-Traffic Stats due this afternoon
* US Co's reporting: Global Payments
UK
* AMINEX-In line update from Ntorya-2 well.................................unch
* BOOHOO-Confirms US Bankruptcy Court approved sales of Nasty Girl assets..unch
* CENTAMIN-Update.Strong Q4. Raises FY guidance. Raising div................+5%
* GENEL-Peshkabir 2 discovery(Broker d/g away)............................+2-3%
* ITV-"Keep watching ITV - the takeover talk may come true" (S.Telegraph)..+1/2%
* LADRBOKES CORAL-Read across from WMH miss.................................-2%
* LLOYDS-Another 1% reduction in Gvt stake (now 5.95%).....................unch
* PETROFAC-Awarded $600m Oman gas project...................................+2%
* SAFESTORE-FY.Rev & EBITDA ahead. Div +21%. Positive outlook stmnt.........+2%
* SPIRENT-New customer win in China for V2X test system.....................+1%
* SPORTSDIRECT-Considering further brand sales(D.Mail/S.Telegraph).........+1/2%
* VODAFONE-Seeks partner for struggling Indian Business(S.Telegraph).......unch
* WILLIAM HILL-Update.OpProf £260m(bottom end).GWM weaker.Sees better '17...-5%
* ZOTEFOAMS-Update.Solid finish to yr.FY to be in line.No chg to #'s........+1%