WSJ : Eurozone Suspends Short-Term Debt Relief for Greece Amid Growing Friction

Eurozone Suspends Short-Term Debt Relief for Greece Amid Growing Friction
Move comes in response to Tsipras’s surprise fiscal gifts for pensioners and other Greeks, which creditors say run afoul of Athens’s bailout commitments

BRUSSELS—Greece’s European creditors suspended proposed debt-relief measures for the country after the Greek government surprised them by announcing it would boost welfare benefits for low-income pensioners, a sign of escalating tensions over the country’s bailout.

The moves come as Athens and its international creditors—which include the eurozone and the International Monetary Fund—are struggling to conclude their latest review of the country’s rescue plan of as much as €86 billion ($92 billion) in loans.

“The institutions have concluded that the actions of the Greek government appear to not be in line with our agreements,” a spokesman for Jeroen Dijsselbloem, the Dutch finance minister who presides over the group of his eurozone counterparts, said in a statement on Twitter.

“No unanimity now for implementing short-term debt measures,” he added.

The step puts further pressure on Greece’s government, which is considering calling snap elections in 2017 as it grapples with slumping popularity and is losing hope of winning concessions on deeper debt relief or austerity from the eurozone and the IMF.

Greece’s embattled Prime Minister Alexis Tsipras surprised Greeks and the country’s creditors last week with handouts that his government hadn’t previously discussed with bailout supervisors, which represent eurozone governments and the IMF.

Mr. Tsipras promised 1.6 million pensioners a Christmas bonus of between €300 and €800. He also suspended a planned increase in sales tax for Aegean islands that have received large numbers of refugees from the Middle East and elsewhere.

Eurozone officials expressed frustration that the country’s creditors were not told in advance by Greece of its plans—widely seen as a lure to voters ahead of elections—and said the new measures would have to be assessed to determine whether they were in line with the country’s bailout commitments.

“We will adhere to the [bailout] program to the letter, but whatever outperformance in revenue arises by following to the program, we will not ask anyone in order to give this money to those most in need,” Mr. Tsipras said Tuesday from the small island of Nisyros.

He stressed that the Greek government wouldn’t ask for permission to support those in need and spoke of “fool technocrats…who can’t even get their numbers right.”

Greece registered a primary budget surplus of €7.4 billion in the year to November, data from the finance ministry showed Wednesday, beating its target by nearly €4 billion because of lower spending and higher revenues.


Greek officials resumed talks with officials representing the country’s creditors earlier this week. The two sides remain apart on key overhauls, including a revamping of the labor market, as well as on further austerity aimed at reaching the country’s primary surplus target—its budget balance excluding interest payments—from 2018 onward.

But eurozone officials cautioned that the recent escalation would likely lead to further delays in the negotiations, which are already expected to go into the new year.

The situation has been further complicated by disagreements among Greece’s creditors over the level of the surplus that Greece must sustain and the economic overhauls it should be required to undertake.

The IMF has pressed Europe to reduce Greece’s budget target to a primary surplus of 1.5% of gross domestic product, instead of the current goal of 3.5%. But European governments, led by Germany, are unwilling to agree, partly because Greece would then need even more debt relief.

This month, eurozone finance ministers agreed on a package of debt-relief measures to be implemented in the short term that could ease the country’s debt load by around a fifth by 2060.

Germany’s finance ministry criticized Greece for the unexpected new spending earlier on Wednesday, indicating that it supported putting the agreed-upon debt relief on hold.

“In order to turn the bailout program into a success, it is imperative that measures should not be unilaterally decided or reversed without notice,” the ministry said.

Reuters - Mondelez unaware of any Kraft Heinz approach: sources

Mondelez unaware of any Kraft Heinz approach: sources

Mondelez International Inc (MDLZ.O) has not heard from Kraft Heinz Co (KHC.O) about any potential acquisition, people familiar with the matter said on Wednesday, after Swiss magazine Bilanz reported that the latter was planning a bid.

Mondelez has no reason to believe there is truth to the Bilanz report, the sources said, asking for anonymity to discuss the matter. Kraft-Heinz and Mondelez, two of the world's largest packaged food producers, offered no comment.

>>> Mediaset in the Press

MEDIASET After mkt hours Bloomberg reported that Vivendi stated that it had reached 20% of Mediaset capital.
Bloomberg reports comments from Mr Silvio Berluscconi that Vivendi's action is a hostile and that the Berlsuconi family will continue to raise its stake within legal limits.
Reuters reports comments from the Industry minister that the Government is monitoring the situation vis a vis Vivendi and that the way Vivendi is proceeding does not seem to be the most appropriate.
Reuters reported that Milan prosecutors opened a preliminary investigation into alleged market manipulation after Fininvest complained about Vivendi's stake building.
MF reports that Fininvest could make a countermove by intervening in Telecom Italia (controlled by Vivendi with 24.7%) as its capitalisation is less than Vivendi.

Mediaset could carry out a EUR 500m-EUR 800m capital increase to fend off moves by Vivendi [EPA:VIV], Italian language daily Il Messaggero reported.
The unsourced article said the proposal was put forward by Intesa Sanpaolo and Unicredit, which are supporting Mediaset. The proceeds from the capital increase would be used to relaunch Mediaset Premium, the pay-TV arm of Mediaset and the centre of dispute between Vivendi and Mediaset.
The report noted Vivendi has built up a 20% stake in Mediaset in the last few days. Fininvest, the holding company of the Berlusconi family that is the controlling shareholder of Mediaset, has increased its stake from 34.7% to just under 40% in response to Vivendi's moves.

(HSBC) European Equities in 2017 : Volatility fatigue? Five themes to outperform

Volatility fatigue? Five themes to outperform

How to play the yield 
Timing the peak in bond yields is likely to be the major decision facing investors in terms of their sector allocations in 2017. Our bond strategists see the scene setting US 10Y bond yield peaking at the end of Q1. We focus on the rise before the fall and stay overweight the European Financials. 
Still value in value 
Our Fixed Income team’s base case is for bond yields to peak at the end of Q1. Even though the expected rise is modest from here, it points to a continued preference for Value over Growth. Our two new monitoring tools – V-meter and G-meter – attempt to quantify whether the latest period of Value outperformance and Growth underperformance has further to run. Analysis of our Value screen indicates that market optimism remains relatively low on this theme even though momentum is at multi-year highs. The opposite is true for our Growth screen. 
Run with the Banks 
We maintain our non-consensus overweight recommendation on European Banks. Even after the strong run we do not think it is too late to buy the sector. This sector is offering more visibility than many currently in our view, given both the steeper yield curve and a fading regulatory headwind. 
The great thaw of China 
Our updated Chinometer tells us that market optimism on the China theme continues to edge higher from the record low it reached in January. Meanwhile, short-term momentum indicator has risen to a six year high. Given that momentum tends to lead market optimism and supports the view that sentiment on the sectors and stocks exposed to China have further upside. 
Value Income Perspective screen (VIPs) 
The rise in bond yields has triggered a de-rating in dividend proxy stocks. We feel the best way to play higher yield in the current environment is through stocks that also offer Value and/or a degree of sensitivity to the global business cycle. Our Value Income Perspective screen (VIPs ) screen lists 22 stocks that HSBC analysts have Buy ratings on.

>>> What to look at today - 15th of December 2016

Dow -0.60% S&P -0.81% NAsdaq -0.50% Russell -1.28%
US Market closed lower after long expected FOMC Meeting and announced 25bps rate hike. The central bank lived up to that expectation, but the accompanying "dot plot" indicated that policymakers expect to raise rates three times in 2017. This is at odds with the fed funds futures market, which expects just two hikes in 2017. All eleven sectors ended the day in negative territory with rate-sensitive groups leading the retreat. Real estate (-1.9%) and utilities (-2.0%) settled near the bottom of the leaderboard while consumer staples (-1.0%) and telecom services (-1.0%) posted slimmer losses. The health care sector (-0.4%) ended a bit ahead of the market thanks to the outperformance among biotech names. volume were above average with 1.2bil shares. US After Hours MDLZ+15% and then +6% on article in Swiss press of potential Kraft Heinz bid. ATHN +21%, PIR +19%, APOG +2% following earnings/guidance, ORIG -20% following earnings/guidance, several names lower following offering news. Asian mkt are digesting FOMC Decision, USD spiked by over 200pips against JPY and about 150pips against EUR to 1.05, while Gold fell over $20/oz below $1,450. US treasury yields rose most notably on the short end - 2-year added 11bps and the 5-year was saw a 10bp increase. USD added to gains in Asia, with EUR/USD coming within 10pips of its 14-year low below 1.0460 and USD/JPY approaching 118 handle. Aussie gold miners are bearing the brunt of the precious metal decline. Hong Kong was also hard hit - Insurers, financials, property developers, and gaming stocks were the biggest decliners. Japan's Dec prelim manufacturing PMI printed an 11-month high with its 4th straight month of expansion. Markit economist noted new work inflows rising at the quickest pace since January, helping the rate of job creation picking up to a 32-month high. BOJ's Q4 Tankan survey of inflation raised its 1-year target and 5-year target by a decimal to 0.7% and 1.1% - still well below the 2% goal.

Nikkei +0.10% Hang Seng -1.93% CSI -1.29% Shanghai -1%

Eur$ 1.0491 CNH 6.9372 CNY 6.9349 JPY 117.55 GBP 1.2551 CHF 1.0239 RUB 61.7433 WTI$ 50.96 -0.15%

S&P +0.06% EuroStoxx -0.06% Dax -0.06% SMI +0.21% FTSE -0.30%

Macro :
- Yellen: It Will Take Several Years to Let Balance Sheet Run Off,
- Yellen: FOMC Discussed Strength of Post-Election Markets
- Yellen: Fiscal Boost ‘Not Obviously Needed’ for Full Employment
- EU Leaders to Call for Additional Defense Spending: Draft
- Juncker: Don’t See New Euro Crisis Emerging From Italy

Keep an eye on :
- ABG SM : Abengoa Wins Approval for U.S. Units to End Bankruptcy
- ADS GY : Adidas to Focus on U.S. Expansion, Digitization: Handelsblatt
- CS FP : Axa Vice-Chairman of Board Resigns; Co. Appoints Poncet
- CS FP : Cap Gemini Acquires Axa Tech’s Indian Unit: Les Echos
- BMW GY : BMW I Ventures Invests in Virtual-Reality Co. Strivr, No Terms
- BPOST BB : Belgian Regulator Approves Bpost Plan to Meet Delivery Criteria
- CAP FP : Cap Gemini Acquires Axa Tech’s Indian Unit: Les Echos
- DB1 GY : Merger Watchdogs Disclose Objections to LSE-Deutsche Boerse Deal
- EDF FP : EDF Sees Ebitda Falling to EU13.7 Billion-14.3 Billion in 2017
- FUR NA : Boskalis not ruling out future Fugro move - report
- GAM SM : Gamesa Improves Terms of EU750 Million Syndicated Loan Facility
- GTO NA : Oddo Meriten Reports Smaller Gemalto Stake of 2.98%: AFM Filing
- GBB FP : Bourbon Names Henri de Chateauvieux’s Daughter De Breon as CFO
- HAR US : Harman shareholder Atlantic Investment says no to proposed acquisition by Samsung - WSJ
- LIN GY : Linde to Become U.S. Company After Praxair Deal: WiWo
- LLOY LN : Lloyd’s of London May Propose EU Base Location by February: FT
- LONN VX : Lonza to Buy Capsugel for $5.5b
- MEO GY : Metro Group to Demerge, Split Into Two Separate Companies
- MDLZ US : Kraft Heinz Said Planning to Acquire Mondelez, Bilanz Reports - http://bit.ly/2hGq8Bx
- MDLZ UA : Mondelez Said to Be Unaware of Any Kraft Heinz Approach: Reuters - http://reut.rs/2hwa84h
- MS IM : Vivendi Increases Stake in Italy’s Mediaset to 20%
- MS IM : Mediaset may carry out EUR 500m-EUR 800m capital increase to ward off Vivendi attack - Il ~Messaggero
- NOVOB DC : Drugmaker Novo Says Stem Cell Trials May Begin Within 5 Yrs
- SAN FP : Sanofi Cited by FDA Over Misleading TV Ad for Diabetes Drug
- SIKA VX : Sika Acquires U.S.-Based Rmax Operating, Doesn’t Disclose Price
- SKY LN : 21st Century Fox to make formal offer for Sky today - The Times
- SOP FP : Sopra Chosen by Bank of France for Payment Systems: L’Agefi
- TOM2 NA : TomTom, Microsoft to Partner on Location-Based Services
- UCB BB : UCB Says Evelyn du Monceau to Succeed Gerhard Mayr as Chairman
- VIV FP : Italy’s Calenda Says Vivendi’s Action Doesn’t Seem Appropriate
- VIV FP : Canal to Pay EU8/New Subscriber for French Soccer Rights: Echos
- VOW3 GY : *VW POSTS FIRST EUROPEAN MARKET-SHARE GAIN SINCE DIESEL CRISIS
- VOLVB SS : Volvo Cars could be worth EUR 4.6bn-EUR 5.7bn in the event of a listing - Dagens Industri
- YHOO US : Yahoo Says 1 Billion Other Accounts May Have Been Hacked --> Verizon Says Will Evaluate Yahoo Hacking Situation: CNBC

>>> Europe : Brokers Upgrades & Downgrades - 15th of December 20

>>> Up
*Aggreko Raised to Buy at Deutsche Bank, PT 1000p
*Air Liquide Raised to Overweight at Morgan Stanley, PT EU115
*AMD Raised to Equal-Weight at Morgan Stanley
*Amsterdam Commodities Raised to Buy at ING, PT EU25.68
*Hilton Raised to Buy at Spin-Off Research, PT $30.25
*MTU Aero Raised to Overweight at JPMorgan, PT EU125
*SocGen Raised to Buy at Natixis, PT EU54
*Telefonica Raised to Hold at Deutsche Bank
*WH Smith Raised to Buy at Deutsche Bank

>>> Down
*Arkema Cut to Equal-Weight at Morgan Stanley, PT EU95
*BAE Cut to Hold at Jefferies, PT 600p
*BP Cut to Sector Outperform at Scotia HW, PT $42
*Covestro Cut to Equal-Weight at Morgan Stanley, PT EU63
*Elisa Cut to Sell at Deutsche Bank, PT EU26
*Heroux-Devtek Cut to Market Perform at Raymond James
*Mediaset Cut to Neutral at MedioBanca, PT EU4.09
*Shell Cut to Sector Perform at Scotia HW, PT $56

>>> PT Change


>>> Initiation
*Coca-Cola HBC Rated New Outperform at Exane, PT GBP19.30
*Dassault Aviation Rated New Sell at Berenberg, PT EU920
*Hurricane Energy Rated New Buy at Stifel, PT 60p
*Solvay Resumed Equal-Weight at Morgan Stanley, PT EU100
*Victoria Rated New Buy at Berenberg, PT 450p
*Voltalia Rated New Buy at Natixis, PT EU14.60

>>> Call

>>> Volvo Cars could be worth EUR 4.6bn-EUR 5.7bn in the event of a listing

Volvo Cars could be worth EUR 4.6bn-EUR 5.7bn in the event of a listing 

Volvo Cars, the Swedish auto company owned by Geely, the Chinese car manufacturer, could be worth SEK 45bn-SEK 55bn (EUR 4.6bn-EUR 5.7bn) in the event of a listing, according to an analyst at Handelsbanken, a Swedish bank, cited in a report by Dagens Industri.

This is after the Swedish media reported yesterday that Volvo could make a decision regarding a 2017 IPO before the end of the year after which Volvo later contacted the Swedish newswire, TT, and denied that the company is planning to list in the short term.

However, despite this, the paper reported that a decision to soon look at listing is still a very real possibility.

The item cited the Handelsbanken analyst who commented that listing Volvo Cars would give the Swedish auto industry a boost and would stimulate new companies entering the sector. He also estimated that Volvo Cars could reach an enterprise value of SEK 45bn-SEK 55bn if listed.

WSJ : Harman Shareholder Plans to Vote Against Sale to Samsung

Harman Shareholder Plans to Vote Against Sale to Samsung
Alexander Roepers said his Atlantic Investment Management, which had a 2.3% stake in Harman as of the end of September, plans to vote against the deal

A large shareholder is balking at Harman International Industries Inc.’s planned $8 billion sale to Samsung Electronics Co., arguing the automotive technology company is worth far more.

Alexander Roepers said his Atlantic Investment Management, which had a 2.3% stake in Harman as of the end of September, plans to vote against the deal, criticizing its timing after the company issued optimistic guidance and the decision not to seek out other potential bidders.

The deal, Samsung’s largest ever, would help the South Korean electronics giant branch out beyond smartphones by giving it a foothold in the growing business of developing technology for so-called connected cars. The $112-per-share price was a 28% premium to where Harman’s stock was trading at the time.


The stock has traded around $110 ever since, a relatively narrow spread that signals investors are confident the deal will close or betting that Harman could attract a higher bid. That could make it tough for Mr. Roepers or anyone else to stop it.

“The transaction with Samsung was carefully considered and unanimously approved by Harman’s board of directors as the best way to maximize value for all of our shareholders,” the company said in a statement, citing increasing competition.

Mr. Roepers founded Atlantic 28 years ago and, unlike other activist investors, typically prods companies in private.

He said Harman’s highs above $145 in April 2015 are proof that the company’s growth plan announced in August could get the stock to nearly $200.

After investing in the company occasionally in the past, he purchased Harman shares earlier this year when they dropped to the $70-range on the theory that concerns about a slowdown in car sales and in China’s economy were unjustifiably weighing on the company. He sold some stock heading into the third quarter, according to a regulatory filing.

When announcing the deal last month, Harman Chief Executive Dinesh Paliwal said the price would deliver “significant and immediate” value for Harman shareholders and allow the company to grow inside Samsung.

“We cannot stand still,” Mr. Paliwal said at the time. “Based on the pace of change in the industry, we need to continue moving quickly to remain the industry leader.”

At least one other bidder has expressed interest in buying Harman. In a regulatory filing this week, Harman disclosed it had received an all-stock offer from an unnamed company in December 2015 that, at the time, was worth $115 a share. The stock prices of both companies fell afterward, according to the filing, and they mutually agreed to end the discussions.

Harman’s bankers were in touch with the undisclosed bidder when Samsung surfaced in September, but Harman ultimately decided the all-stock offer wasn’t likely to top Samsung’s bid, the filing said. Harman’s board agreed not to seek other bidders, a condition Samsung sought.


Mr. Roepers said he was “dismayed” that Harman didn’t attempt to find another bidder after Samsung arrived.

While some analysts have speculated another bidder could surface, others have said Harman’s outlook is comparable to that of its peers.

“We think it would be difficult for shareholders to argue for a substantial premium to the peer group,” Piper Jaffray wrote last month. “We think the offer is fair.”

>>> Boskalis not ruling out future Fugro move - report (translated)

Boskalis not ruling out future Fugro move - report (translated)
15 DEC 2016
Boskalis chairman Peter Berdowski is not ruling out a new move for Fugro sometime in the future, according to an interview with Dutch daily Het Financieele Dagblad. The acquisition of Fugro by Boskalis recently fell through. According to Berdowski, Fugro was too expensive.
When Boskalis first bought a stake in Fugro, analysts estimated an EBITDA of EUR 350m for Fugro, Berdowski says in the interview.
However, now the EBITDA is EUR 100m and the company's share price has not adjusted, Berdowski said.

>>> Mediaset may carry out EUR 500m-EUR 800m capital increase to ward off Vivend

Mediaset may carry out EUR 500m-EUR 800m capital increase to ward off Vivendi attack

Mediaset [BIT:MS] could carry out a EUR 500m-EUR 800m capital increase to fend off moves by Vivendi [EPA:VIV], Italian language daily Il Messaggero reported.
The unsourced article said the proposal was put forward by Intesa Sanpaolo and Unicredit, which are supporting Mediaset. The proceeds from the capital increase would be used to relaunch Mediaset Premium, the pay-TV arm of Mediaset and the centre of dispute between Vivendi and Mediaset.
The report noted Vivendi has built up a 20% stake in Mediaset in the last few days. Fininvest, the holding company of the Berlusconi family that is the controlling shareholder of Mediaset, has increased its stake from 34.7% to just under 40% in response to Vivendi's moves.