>>> US Early pre-market gappers

Early pre-market gappers

Gapping up:SYUT +24.4%, DRYS +26.2%, DCIX +21.0%, RCON +17.6%, OGXI +16.9%, SHIP +11.5%, SINO +11.5%, URRE+10.8%, MRVL +9.6%, ESEA +8.7%, PIP +8.6%, FCEL +8.3%, ALBO +7.8%, CRM +7.6%, GLBS +7.1%, RLOG +6.7%, SPLS+5.0%, SCYX +4.2%, ROST +3.0%, VSAT +2.5%, TWLO +2.2%, GFI +2.1%, DB +1.5%, SCTY +1.5%, HTZ +1.4%, BGNE+1.4%, SKX +1.3%, ARRY +1.2%.
Gapping down:KTOS -11.1%, ANF -11.1% GPS -6.7%, MTL -6.7%, EMES -4.4%, VEDL -4.3%, RGC -4.3%, GOLD -2.9%, AG-2.9%, AEM -2.5%, CDE -2.4%, HMY -2.4%, FSLR -2.2%, HL -2.2%, RIO -2.1%, VALE -2.1%, TEF -2.0%, BT -2.0%, PAAS-1.9%, FL -1.9%, BBL -1.9%, NVS -1.5%, CAFD -1.5%, TS -1.4%, ABX -1.3%, GDX -1.2%, AZN -1.2%, BUD -1.2%, NEM-1.2%, NGG -1.2%, FCX -1.2%, UL -1.1%, AMAT -1.1%.

>>> US Gapping Up

In reaction to strong earnings/guidance:MRVL +9.6%, CRM +7.6%, ROST +3.0%

M&A news:
  • SYUT +24.4% (agrees to be taken private for $6.05/share in cash)
  • SCTY +1.5% and TSLA +1.4% (Tesla Motors shareholders approve proposed merger with SolarCity)
Shippers seeing continued swings: DRYS +26.2%, DCIX +21.0%, SHIP +11.5%, SINO +11.5%, ESEA +8.7%, GLBS +7.1% (will report Q3 results after the close on Monday, Nov 21), RLOG +6.7%
Other news:
  • OGXI +16.9% (ticking higher on light volume; commits to further reduction in its workforce)
  • URRE +10.8% (still checking for anything specific)
  • HRG +11.5% (HRG Group confirms evaluating potential strategic alternatives to maximize shareholder value; Pres/CEO plans 2017 departure)
  • PIP +8.6% (announces a $2.91 special cash dividend)
  • FCEL +8.3% (announces a contract with Alberta Innovates for an engineering study on a fuel cell carbon capture application at a Husky Energy-owned heavy oil thermal facility)
  • VSAT +2.5% (prices public offering of 6.5 mln shares of its common stock at $69.74/share, before underwriting discounts)
  • MNK +1% (modestly rebounding, presented study that addresses possible impact of H.P. Acthar Gel on use of corticosteroids among patients with rheumatoid arthritis, lupus, and dermatomyositis/polymyositis)
Analyst comments:
  • SPLS +5.0% (target raised to $9 at Telsey Advisory Group after Q3 results)

(Handelsblatt) Going Easy on the Banks


Germany’s finance ministry is likely to give a pass to banks that helped foreign investors circumvent capital gains taxes. The news could set off a political firestorm with German states that want tax-avoidance practices curbed.

German banks received some surprisingly positive news last week. Germany’s Finance Ministry in a letter obtained by Handelsblatt said it won’t punish banks or claim back taxes from those that exploited a controversial tax loophole on behalf of international investment clients.

It’s a controversial move that is drawing the ire of some German states, many of which have aggressively gone after tax avoidance and evasion schemes over the past few years.

The loophole in question has to do with capital gains taxes. Last year it was revealed that German banks have been creating domestic vehicles for foreign investors to claim benefits normally reserved only for German investors.

Both domestic and foreign investors have to pay a tax on dividends, but only local investors are entitled to a tax rebate for the lower value of a stock following a dividend payment. By temporarily lending stocks to a domestic entity, foreign investors were able to enjoy the same tax rebate.

The letter might undermine efforts to fight the tax reducing scheme and prosecute banks and investors to pay damages for past deals.
The finance ministry’s letter, posted November 11, said that when banks make a profit on such deals with foreign investors, the tax authorities will approve of them, according to the letter obtained in a joint investigation from Handelsblatt and the Bavarian broadcasting programs BR Recherche and Report München show.

The letter might undermine efforts to fight the tax reducing scheme and prosecute banks and investors to pay damages for past deals. Germany’s Federal Supreme Financial Court in August last year ruled that the so-called “cum-cum deals” aiding foreign investors were unlawful.

Together with another form of dividend stripping known in Germany as “cum-ex,” which involves short selling around the ex-dividend date, the schemes are thought to have cost German taxpayers upward of €10 billion (around $11.3 billion) over the course of a decade. German law explicitly made cum-ex deals illegal in 2012.

Citigroup’s German unit has reached a settlement with German authorities to pay less than €10 million, or $10.9 million, a fraction of the originally estimated sum, in a dispute over alleged tax evasion by clients in dividend-stripping deals, Handelsblatt learned last week.

Norbert Walter-Borjans, finance minister of the state of North Rhine-Westphalia, is especially irritated by the Finance Ministry letter. He has been at the forefront in Germany to crack down on tax evasion.

“The banks have operated in compliance with existing law.”
Florian Lechner, Tax partner, law firm Linklaters
“We are outvoted, much against our clearly voiced opposition,” Mr. Walter-Borjans told Handelsblatt, adding that he had tried to stop the letter from being sent out but failed to convince his counterparts at the federal level.

“I expect that some states, such as the bank location of the state of Hesse, have warmly welcomed the letter,” he added, referring to the state that includes Frankfurt, Germany’s financial capital, and is home to Deutsche Bank, Commerzbank and many other domestic and international financial institutes.

Commerzbank, Germany’s second-largest bank and partially government-owned, played an active role in helping foreign investors exploit a tax loophole that artificially lowered German tax payments by around €1 billion, or $1.1 billion, a year, research by Handelsblatt and a group of global media publications showed in May.

The financial sector and their advisors applauded the Finance Ministry’s letter. “The banks have operated in compliance with existing law,” said Florian Lechner, a tax partner at law firm Linklaters. “I assume that with the Finance Ministry’s letter, the sound structures of cum-cum businesses by banks will no longer be picked at.”

Gerhard Schick, policial spokesman of the opposition party Greens in the Lower House, said the letter may have been motivated by different concerns: “I’m afraid that those involved in this matter were worried about [the health] of some institutions. We cannot, however, let the tax payer bleed to stabilize banks.”

Mr. Walter-Borjans for his part suggested he’s not going to give up the fight just yet, arguing the ministry had gone over the states’ heads.

The Finance Ministry “has ignored the reservations of the Finance Ministers’ Conference. [They] sent out the letter and created new facts,” Mr. Walter-Borjans said. “Of course, we will not just accept this.”

THALES SA-Thales enters into exclusive negotiations to sell its revenue collect

Thales (Euronext Paris: HO) has entered into exclusive negotiations with the private equity firm Latour Capital with a view to divesting its business that provides ticketing and revenue collection for transport operators as well as road tolling and car park management systems. Presented on November 16th to the Thales Group's European Works Council, the project aims to accelerate the development of this business while creating value for its customers and employees.
Key points

* In 2015, this business generated sales of 155 million euros. It employs
close to 850 people, mainly in France, the Netherlands, Mexico, Hong Kong,
Denmark and Italy.
* The objective is to put in place a business plan to grow this activity
by building on its existing teams, know-how and capabilities, and by
developing innovative technological solutions.
* The divestment project is in line with the Thales strategy of permanent
business portfolio optimisation.

(Flow Show) Violent Rotation

Violent rotation: record inflows to equity ETFs, record inflows to financial sector funds, biggest bond redemptions in 3½ years, record redemptions from EM debt.
“Great Rotation” flows: largest equity inflows in 2 years ($28bn), biggest bond outflows in 3½ years ($18bn); widest weekly disparity between stock & bond flows ever.


>>> Asset Class Flows
- Equities: largest inflows in 2 years ($27.5bn) ($34bn inflows to
- ETFs offset by $7bn outflows from mutual funds)
- Bonds: largest outflows since Jun’13 ($18.1bn)
- Precious metals: largest outflows since Jun’13($2.7bn)

>>> Equity Flows
- EM: largest weekly outflows in 14 months ($5.4bn)
- US: largest weekly inflows in 2 years ($30.7bn)
- Europe: rare $0.8bn inflows (largest in 9 months)
- Japan: $1.0bn outflows (outflows in 3 of past 4 weeks)
By sector: monster inflows to financials ($7.2bn) & healthcare ($3.1bn); largest materials inflows in 3 years ($1.4bn); 7 straight weeks of consumer outflows ($0.8bn)

>>> Fixed Income Flows
- Record outflows from EM debt funds ($6.6bn)
- Largest outflows from muni bond funds since Jun’13 ($3.0bn)
- Largest outflows from Govt/Tsy funds in 12 months ($3.4bn)
- Chunky $3.8bn outflows from HY bond funds (3 straight weeks)
- $2.4bn outflows from IG bond funds
- 23 straight weeks of TIPS inflows ($0.8bn)
- Inflows to bank loan funds in 18 of past 20 weeks ($0.6bn)

>>> US Pre-market indicqtions

ML
VOLVO - CEO says focusing on boosting profitability in Dagens Industri(99)+2-3%
ST JAMES - We UPGRADE to Buy, PO 1090p. Think advice you can rely on (965)..+2%
JIMMY CHOO - Solid. Back on tract to deliver highest earnings growth (131.5)+2%
VOW - 'Future Pact' agreed, margin target could disappoint today (131)....+1-2%
SAGE - US peer Intuit reported small beat on rev/earnings. U/G away (685).+1-2%
LAFARGEHOLCIM - CMD. Lower 2018 targets but raise cash returns (CHF55.45)...+1%
SAP - Positive read across from salesforce.com beat o/n, +5% aft hrs (78).+0.5%
HANNOVER RE - We DOWNGRADE to Neutral, PO 105 on rise in bond yields (103)-0.5%
MUNICH RE - DOWNGRADE to Underperform, PO 170 on rise in bond yields (174)-0.5%
MAERSK - Spec potentially bidding for Dong Oil unit valued at >$2b (8880)...-1%
MINERS - Copper -0.9%, Iron Ore -2.9% with BHP OZ +0.17% & RIO OZ -0.4%...-1-2%

MainFirst
*VW-Planning to cut €3.7b a year through 2020,30k jobs to go.......+1%
*AIRBUS-Wins $1.3b order for 13 planes from Japan's Peach..........+0.5%
*VOLVO-CEO focusing on boosting profitability - DI.................+0.5%
*LAFARGE-Cuts '18 Ebitda tgt 7b(+8b),b/back over 2yr 1b,Div CHF2...+2%
*UNICREDIT-No firm decision yet on Capital Optimization............-0.5%
*MAERSK-And EIG among potential bidders for Dong's oil.............U/C
*BPOST-Invites PostNL 2 discuss merger terms,S/hldrs push 4 deal...U/C
*AIR FRANCE-Plans management changes, Head of Long-Haul to leave....U/C
*SAP-Positive read across from SalesForce last night,stk +5.5%.....+0.5%

>>> What to look at today - 18th of November 2016

Dow +0.17% S&P+0.49% Nasdaq. +0.74% Russell +0.56%
US Market closed higher, increased inflation concerns had investors rotating out of the bond market in favor of more growth-oriented positions. Federal Reserve Chair Janet Yellen highlighted recent economic growth when she stated that economic data since the November Fed meeting has been consistent with expectations. Chair Yellen also indicated that a policy rate increase may be appropriate relatively soon. According to the CME's FedWatch Tool, the implied probability of a December interest rate hike registers at 90.6%, unchanged from yesterday. BBY +13.7% after topping consensus estimates for the quarter and issuing upbeat guidance for the fourth quarter. CSCO-4.8% on cautious guidance. Energy sector (-0.7%) ended on a lower note as crude oil surrendered an intraday gain, sliding into negative territory. WTI crude settled down 1.1% ($45.38/bbl; -$0.19). US After Hours MRVL +7%, CRM +5%, NUAN +2% following earnings/guidance, SCTY +2% and TSLA +1% on shareholders' merger approval... GPS -4.9%, WSM -4%, AMAT -1% following earnings/guidance. Strong US economic data and hawkish comments from Fed chair Yellen preserve the 2-week-long USD bull trend; USD/JPY hit a 5-month high above ¥110 and EUR/USD falls to 11-month low below $1.06; Treasury yields also continue to rise, particularly on the long-end, steepening the curve to multi-months highs. Gold prices fall to multi-month lows below $1,210. China property prices are stabilizing, with first tier appreciation slowing notably. NBS said "property prices have stabilized in the second half of October." Separately in China, Financial Stability Bureau official remarked China is prepared for economic uncertainties. BOJ Gov Kuroda says the recent rise in 2-yr and 5-yr JGB yields has been quite fast, pledging to continue to use fixed rate operations as needed with unlimited capacity for purchases; Prepared to conduct operations even at below market yields. Comments follow overnight BOJ's first use of fixed-rate facility to buy 2-yr and 5-yr JGBs to curb the recent yield rise.

Nikkei +0.59% Hang Seng +0.10% CSI -0.29% Shanghai -0.27%

EUR 1.0594 CNH 6.9103 CNY 6.8909 JPY 110.71 GBP 1.2391 CHF 1.0088 RUB 65.0715

S&P -0.07% EuroStoxx +0.39% Dax +0.47% SMI +0.19% FTSE +0.17%

Macro :
- Sweden Fin. Minister Wants ‘As Soft a Brexit as Possible’: Rtrs
- ECB’s Angeloni Hopes EU To Harmonize States Leeway on Bank Rules
- Deloitte May Move Roles If U.K. Crimps Immigration, Sky Says
- Brevan Howard Hedge Fund Suffers $1.1 Billion in Outflows
- York Capital Assets Said to Slump by $2 Billion From Withdrawals
- Antofagasta Says Copper Market May Swing to Shortage in ’18/’19

Keep an eye on :
- ABI BB : AB InBev Board Member Descheemaeker Buys Net EU2.81m of Stock
- ACS SM : ACS Sells Sintax Stake; Transaction Generates EU5.6M Gain
- AF FP : Air France Head of Long-Haul Bruno Dellile to Leave: Tribune
- ANTO LN : Antofagasta Says Copper Market May Swing to Shortage in ’18/’19
- BAMNB NA : *BAM TO SELL 47 PROPERTY POSITIONS IN NORTH EAST OF NETHERLANDS
- BAYN GY : Monsanto/Bayer Said in Talks With Remedy Buyers: DealReporter
- BT/A LN : BT and Deutsche Telekom Plan Network Sharing, Joint Development
- CARLB DC : Carlsberg CEO Says His Job Hinges on Reaching 2018 Goals: Borsen
- CHOO LN : Jimmy Choo Says 2H LFL Sales to Dare Have Turned Positive
- DBK GY : Deutsche Bank eyes bonus clawback for former bosses - FT
- LEY FP : Faiveley Transport 1H Rev. Falls Y/y; Wabtec Purchase Seen 4Q
- FER SM : Ferrovial Says 56% of Rights Holders Received New Shares
- GKN LN : GKN to shut UK helicopter plant with loss of 230 jobs - FT
- ILD FP : Iliad’s Niel Sees ‘Huge Increase’ in Cash Flow in 2019
- DEC FP : JCDecaux Expects ‘Slightly Negative’ Impact From 2017 Elections
- KPN NA : KPN Not Interested in Merger, Sees Consolidation Happening: CEO
- LHN VX : LafargeHolcim Cuts 2018 Ebitda Target, Sees Up to CHF1b Buybacks
- MAERSKB DC : Maersk, EIG Said Among Potential Bidders for Dong’s Oil Unit
- MAIL LI : Mail.ru Not in Merger Talks With MegaFon, CFO Hammond Says
- NFLX US : Amazon Said to Expand Video Streaming Into 200 Countries: DJ
- NOVN VX : Novartis Sandoz Etanercept Has Equivalent Efficacy to Originator
- PNL NA : PostNL, Bpost Should Start Talks, FD Cites Shareholder Capfi
- RIO LN : Rio Tinto Offered Bribe for Iron Mine, Ex-Guinea Official Says
- SKY LN : Sky Will Let Some Rights Go as It Reduces Dependence on Sports
- UCG IM : UniCredit to Announce Possible Share Sale, Cost Cuts on Dec. 13
- VWS DC : Vestas Is Interested in Buying China’s United Power: Finans
- VOLVB SS : Volvo CEO Says Focusing On Boosting Profitability: DI
- VOW3 GY : VW Said Planning EU3.7b/Yr Cost Savings, Job Cuts: Handelsblatt
- VOW" GY : VW Said to Cut 23,000 Jobs, Save EU3.7 Billion With Labor Pact
- VOW3 GY : Volkswagen Says It Reached Labor Deal With German Workers

>>> Europe : Brokers Upgrades & Downgrades - 18th of Novembre 2016

>>> Up
*Genel Energy Raised to Hold at Jefferies
*Ophir Energy Raised to Buy at Stifel, PT 90p
*Premier Oil Raised to Buy at Jefferies
*TERNA RAISED TO NEUTRAL AT CREDIT SUISSE

>>> Down
*ABN Amro Cut to Neutral at Macquarie, PT EU21
*Ahold Cut to Hold at Deutsche Bank, PT EU22.50
*Mediobanca Cut to Hold at Kepler Cheuvreux, PT EU7.20
*Swedbank Cut to Hold at Deutsche Bank
*Topdanmark Cut to Neutral at Goldman, PT DKK185

>>> PT Change


>>> Initiation
*Enel Resumed Equal-Weight at Morgan Stanley, PT EU4.30
*Italgas Rated New Outperform at Credit Suisse, PT EU3.80

>>> Call
>> Stock
*BNP, CREDIT SUISSE ADDED TO CITI FOCUS LIST EUROPE
*MOTOR OIL ADDED TO CEEMEA FOCUS LIST AT GOLDMAN
*SAGE GROUP ADDED TO CONVICTION BUY LIST AT GOLDMAN