(HSBC) Italian referendum

Italian referendum
Too many no's, Renzi goes After a strong rejection of constitutional reform in the Italian referendum, Prime Minister Matteo Renzi resigned. We still believe that there won’t be a snap election, as we do not think that the president will send the country to new elections before parliament has approved a new electoral law for the upper house of parliament. However, the strong rejection could open a new period of political instability in Italy, and the eurozone, causing a negative market reaction and possible concerns about the future of the single currency.

>>> Street PRe-Market Indications

BAML
ACTELION - +9% on US close; spec JNJ bid raised to >$250. No update (214.2).+5%
BURBERRY - Reportedly rejected multiple takeover offers from Coach (1470p)..+4%
AIXTRON - Obama blocked the acquisition of the US biz by Grand Chip (3.95)..+3%
HANSTEEN - Good letting progress post Brexit, cont to reduce vacancy (107)..+1%
NORWEGIAN AIR - Wins approval to expand flights to U.S Using Irish sub (262)+1%
BASF - We DOUBLE UPGRADE to Buy, taking our PO to €97 from €60 (€81.4)....+0.5%
MINERS - Copper +1.4%, Iron ore +4.6% with BHP OZ +0.6% and RIO OZ +1%......u/c
LANXESS - We UPGRADE to Buy, PO €70 from €49. Bullish on diversified (€57.8)u/c
RYANAIR - Nov traffic stats: +15% on volume and +2% on load factor (€13.82).u/c
INMARSAT - We roll back onto our Europe 1 list (best ideas) as BUY (703p)...u/c
ARKEMA - We reinstate coverage with a BUY rating and PO of €105 (€90.05)....u/c
COVESTRO - We UPGRADE to Buy, PO €70 from €44. Bullish diversified (€59.55).u/c
ST MODWEN - Nine Elms interest on site sale. Commercial still robust (280.9)u/c
ITV - Sunday Telegraph talking down ITV bid spec over the weekend (165.2)...-1%
RBS - FT; shareholder settlement uncertainty on '08 rights issue (190.5)..-1-2%
EVONIK - We DOWNGRADE to Neutral; PO €28 from €31. Outlook weak for N&C (25)-2%
GIVAUDAN - We DOWNGRADE to Neutral; turning more cautious cons chems (1754).-2%
EDF - Spec may cut div payout to 50% to conserve cash v BAML at 60% (€9.6)..-2%
AKZO - We DOWNGRADE to Underperform, reducing our PO to €56 from €60 (56.4).-2%
SYMRISE - We DOWNGRADE to Underperform. More cautious on cons chems (€55.2)-2%
UNICREDIT - Amundi said to be in the lead to buy co's Pioneer biz (1.98)....-5%
ITALIAN BANKS - No vote wins, 59-41. Renzi set to resign this afternoon.....-5%

RBC
ACTELION +7% Speculation after hours of J&J bid increase north of $250/shr
AIXTRON +2% Obama confirms he is blocking Chinese takeover of US unit.
BURBERRY +1% FT report company rebuffed takeover approach from COACH in summer
BMPS -20% Poor take-up of Debt/Equity swap, €1bln v €1.5-2bln expectation
BTG +3% Inclusion of treatment w/ pneumrx coils for management Copd.
DT BANK -2% To pay $60m to settle gold price lawsuit
FERRARI +2% Chinese dealers sold 3-months of cars in a day to beat sales tax
IAG -1% US D.O.T. grants foreign air carrier permit to Norwegian air.
RENAULT +1% NISSAN Nov car sales +10.7% and weaker Euro should help.
UNA/D.TEL +1% Both included in Barrons top 10 stocks picks globally for 2017

Macquarie
* Genel GENL- Receives full Tawke payment for September. +1%

*IAG- Norwegian Air Shuttle to increase Trans-Atlantic flights by 50% in 2017. -1%

* Purple Bricks PURP-Revenues grew 159% to £18.7m, confident outlook for future. Unch

* RBS- Reached settlement with 3 of 5 shareholder groups regarding the Shareholder Rights Litigation group (77% by value) Provisioned £800m -1%

* St Modwen SMP-Portfolio continued to trade well, expects H2 performance to be broadly inline. Unch

* Bookies: Stewart Kenny, Co-founder of Paddy Power writes an article to Irish Govt lobbying against FOBT’s (The Times). PPB, LCL, WMH all -2%

MainFirst
*AIXTRON-Obama blocks Chinese takeover of Aixtron (Confirmed).......+2%
*ENGIE-US says Engie Unit violated Power Mkt Manipulation rules.....-0.5%
*NOVARTIS-CEO rules out counterbid for Actelion- SonntagsBlick.......+0.5%
*BURBERRY-Rejects multiple takeover offers from Coach(Comb $20b)....+1%
*BPOST-Intends to submit PostNL offer memo to AFM by 30th Jan.......U/C
*ACTELION-J&J's increased offer for Actelion to be north of $250....+7%
*HELLA-Read across from Panasonic buying ZKW for €834m..............+1%
*RYANAIR-Nov Passengers 8.8m,Load Factor 95%,Trafic +15%............+1%
*CS-To cut as many as 1,300 Swiss jobs - SamS reports...............-0.5%

Investec
UK

* ANGLO-PIC to drop platinum spin off calls (S.Telegraph)...................+1%
* BOOHOO-Press reports is looking to acquire Nasty Gal Inc(US).............unch
* BURBERRY-Has said to have rejected approaches from Coach(FT)............+2-3%
* CAMBIAN-Sells adult service business for £377m cash.....................+5-7%
* ITV-Liberty Global "enough to do" without bidding for ITV(S.Telegraph)...-1/2%
* PURPLEBRICKS-H1. Rev ahead on increasing mkt spend. Confident outlook.....unch
* ROYAL MAIL-Seeks Private Company to run Public Pension(S.Telegraph)......unch
* RYANAIR-Stats. LF 95%(vs 93%) Traffic +15% vs '15.........................+1%
* ST.MODWEN-Q4.Expects performance in 2H to be broadly in line with 1H....unch
* TARSUS-Acq's of Connect($44m)Raising £24m at 235p(closed 248p)............-2%
* WANDISCO-Appoints new NED and SVP of Finance to be new CFO...............unch
* WIZZAIR-Stats.LF +1.1%, passengers +19.1% YoY. Launches Wizz Go...........+1%

Euro

* ACTELION-J&Jtlks said progress, offer seen >$250...........................+7%
* AIXTRON-Obama backs CFIUS to block US sale, Spec Sits comment follows.
* CSGN-to cut up to 1300 jobs (SaS).........................................-1%
* DBK-to pay $60m gold price fix fine.......................................-2%
* ENGIE- US says Engie unit violated mkt manipulation rules.................-1%
* INTERTRUST-Parvus raises stake above 5%...................................+1%
* NOKIA-pushed in Barron’s article today..................................+0.5%
* REPSOL-sells Indonesian LNG plant for $313m...............................U/C
* TOMTOM-plans major reorganisation of consumer unit........................+1%
* UNICREDIT-starts talks w/AMUNDI on Pioneer sale. Sector weak on referendum.-??
* ZALANDO-plans entry into cosmetics and personal care(EaS)...............+0.5%
* IAG-Traffic Stats due later

CS
Actelion +3% J&J’s Raised Offer for Actelion said north of $250/Shr, BB
Banks -2-3% Negative readfrom Renzi losing referendum
Burberry UNCH Rejected multiple takeover approaches from Coach, FT
Italy Banks -5-6% Renzi the lost the referendum as 59% voted 'NO'
Miners +0.5-1% Copper +1.50%, Brent -0.10%, Iron Ore +5.55%, China -1.85%
Oils UNCH US rig count +4, Brent -10bps to $54.1, WTI -40bps to $51.1
Prudential +0.5% Has begun a review of its £45bn pension liabilities biz
RBS M/P Settles 77% of 2008 shareholder rights issue litigation
Ryanair M/P Solid traffic stats Load factor +2% at 95% and Traffic 15%


TradeGate
DBK -2%
ISP -7.7%
GLE -1.3%
BMPS -11%
RWE -1.4%
ENEL -1.5%
CBK -1.4%
DB1 -1.2%
PSM +0.5%
TLX -2.4%
ZAL -1.6%
SZG -1.6%
COV1 +3.1%
AIXT +2.5%

Julius Baer
ATLN +7.2%
CSGN -1.7%
UBSG -1.8%

FT : Burberry spurned takeover approaches from bigger US rival Coach

Burberry spurned takeover approaches from bigger US rival Coach
A deal would have created a global fashion group with a market value above $20bn

Burberry, the UK’s biggest luxury goods retailer, rejected multiple takeover overtures from US fashion accessories group Coach in recent months, according to people briefed on the matter.

A deal would have created a group with a market value above $20bn, bringing together the US company’s leather goods, handbags and shoemaker Stuart Weitzman with Burberry’s trademark luxury outerwear and global retail footprint.

Talks are no longer active between the companies and that is not expected to change anytime soon after Burberry saw off the interest from its larger rival, these people added. Burberry and Coach declined to comment.


The Coach proposals, which peaked sometime after the summer, were informal and envisaged a cash-and-stock takeover of Burberry. It was unclear at what premium they were made or if Burberry ever engaged in serious talks with the US company.

One of the people following the process closely said Coach might have been more successful if had it acted on its interest in the British company earlier this year.

Burberry shares struggled in the first half of 2016, under pressure from a slowdown in luxury demand from Asia and questions over its leadership. The weakness in sterling after the UK’s vote to exit the EU has also hurt the value of its share price, though it has benefited from an exchange rate boost to its sales in dollars and euros.

Shares in the British fashion group have climbed a third since hitting their lowest level in mid-June to reach £14.11. The company has a market value of £6.2bn and has no debt.

Related article
How Coach Inc got its roar back
The US brand’s chief executive Victor Luis and designer Stuart Vevers discuss the house’s transformation
In July, Burberry said Marco Gobbetti, head of French luxury brand Céline, would become chief executive at the start of next year, replacing Christopher Bailey from the role he held since May 2014. Mr Bailey will remain the company’s chief designer and will add a new role of president when Mr Gobbetti begins.

Its finance director Carol Fairweather was also replaced by Julie Brown, who joined from Smith & Nephew, the UK medical device company. In September, Burberry unveiled a “see now, buy now” at London Fashion Week that allows consumers to buy products immediately after they are shown on the runway.

In an interview with the Financial Times last week, Victor Luis, chief executive of Coach, and designer Stuart Vevers declined to comment on rumours of its interest in Burberry.

However, the duo have been looking to expand Coach’s focus on outerwear, its European and developing market footprint and diversify its brands.

Mr Luis took over as chief executive of Coach in 2014 and helped bring the company back to sales growth after streamlining the business and promoting the brand’s status. Last year, Coach beat competition from rival retailers to acquire women’s luxury shoemaker Stuart Weitzman for $574m to bolster its footwear offering.

Shares in Coach have climbed 11 per cent since the start of the year, taking its market capitalisation to $10.1bn.

Coach was working with three investment banks including independent advisory group Evercore Partners on the situation. Burberry’s advisers included the London-based advisory firm Robey Warshaw.

(SG) Christian Dior : Holding company discount update: back below its medium-ter

Holding company discount update: back below its medium-term average
Our Hold rating on Dior is based on: 1) disappointing trends at Dior Couture (c.8-9% of EV), the only operating asset apart from the LVMH stake, on both revenues and profitability; 2) the unattractive current holding company discount (near the average at c.15%); and 3) a lack of catalysts for a major change in the holding company discount, i.e. no changes to the shareholding structure

FT : Monte dei Paschi rescue thrown into doubt



From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 12/05/16 02:43:14
Subject: FT : Monte dei Paschi rescue thrown into doubt

Monte dei Paschi rescue thrown into doubt
Bank’s €5bn recapitalisation could fall victim to referendum result

A last-gasp rescue for Monte dei Paschi di Siena, the world’s oldest surviving bank, has been thrown into doubt after reformist prime minister Matteo Renzi decisively lost a referendum on constitutional reform on Sunday.

MPS and advisers JPMorgan and Mediobanca will meet as early as Monday morning to decide whether to pull a plan to go ahead with a €5bn recapitalisation, according to people informed of the plan.

Senior bankers will decide whether to pursue their underwriting commitments or exercise their right to drop the transaction due to adverse market conditions, these people said. In the event the banks drop the capital plan, the Italian state is expected to nationalise the bank, say senior bankers.


Mr Renzi, who came to power in February 2014 pledging to reform Italy’s sclerotic economy, lost the referendum with 60 per cent of votes for “no”, according to polls from SkyTG24 at midnight Central European Time. The 41-year-old former mayor of Florence who had spurred investment in Italy with his reformist agenda told a live TV address he would resign on Monday.

Analysts had argued the market had already priced in a “no” vote but warned that if Mr Renzi lost by a bigger margin than anticipated — as seemed to be the case with a fifth of the votes counted — market volatility could follow the outcome.
If MPS’s private recapitalisation plan fails, Italy is expected to undertake a precautionary recapitalisation of the bank to avoid it being wound down under new EU rules, say people informed of the plan.

One big MPS investor said the extent of Mr Renzi’s loss was “a really bad result”. This person said they expected the private recapitalisation would be pulled and the Italian state would pump funds into the bank.

A precautionary recapitalisation would involve burden sharing by junior bondholders but with indemnification for investors up to a maximum of €100,000, said three people.


Officials and bankers want to head off the risk of a deposit flight from Monte Paschi which has seen its deposits falls by 10 per cent so far this year as concerns about its viability have mounted.

Officials also want to prevent contagion from Monte dei Paschi hitting Italy’s wider banking sector which is already weighed down by €360n of soured loans, low profitability and more bank branches than pizzerias.

High on the list of concerns is an expected €13bn capital hike at UniCredit which Italy’s biggest bank is due to announce on December 13 as part of a new business plan.

Bankers say UniCredit is likely to find investors but they are more doubtful about the chances of several other midsized banks attracting more capital if investors are spooked in the aftermath of the vote.

Italian banks including Genoa’s Carige, Popolare di Vicenza and Veneto Banca require at least €3bn in new capital, say bankers.

>>> What to look at today - 5th of December 2016

Friday Close : Dow -0.11% S&P+0.04% Nasdaq +0.09% Russell +0.03% Best Sectors : Utilities Worst Sector : Financials
In a high-turnout referendum, PM Renzi lost his bid for Senate reform with nearly 60% of the voters casting their ballots as NO; Renzi to tender his resignation to Italian president on Monday who will then announce plans for forming a new govt; Euro-skeptic party leader Grillo says his supporters are ready to take the reins. Euro falls as much as 1.5% in early Asian trade on the referendum results before paring declines to $1.0560's. Focus falls on Italian yields and banking sector. China Caixin Services PMI hits a 16-month high, beating consensus. Hong Kong PMI in contraction for 21st straight month, but the figure is the highest since early 2015. Nigeria Oil Min: Expect to maintain 1.9M bpd output

Nikkei -0.82% Hang Seng -0.70% CSI -1.67% Shanghai -1.24%

Eur$ 1,0554 CNY 6,8886 GBP 1.2688 JPY 113.48 RUB 63.98 CHF 1.0155 WTI 51.11% -1%

S&P -0.30% EuroStoxx-1.12% Dax -0.85% SMI -0.72%

Macro :
- Caixin China Nov. Services PMI 53.1 vs 52.4 in Oct.
- Nikkei Japan Nov. Composite PMI 52 vs 51.3 in Oct.
- US banks face clash over EU regulations - FT
- Italy Court Freezes Part of Reform Law for Cooperative Banks
- Peru May Pay Up to $1.4b If Odebrecht Contract Scrapped: Reuters
- Swiss Minister Sees Companies Leaving If Tax Plan Rejected: T-A
- Italian Regulator Requires New Tender Offer for Alerion: Sole
- Japanese Govt Set to Impose Home-Sharing Limit: Nikkei
- Trump: 35% Tax to Be Levied on Imports From Cos. Leaving U.S.
- Mergermarket Said to Have Received Takeover Approach: S. Times

Keep an eye on :
- AIR FP : U.S. Navy Aims to Buy More Boeing F/A-18E/F Super Hornets: Rtrs
- AAL LN : Anglo Convinces Shareholder to Drop Spinoff Call: S.Telegraph
- AMUN FP : UniCredit Said to Agree to Sell Pioneer to Amundi for EU3b: FT
- AZN LN : AstraZeneca to Move U.K. Jobs to Poland, Costa Rica: Guardian
- BMPS IM : Qatar Set to Meet With Paschi on Dec. 5 After Referendum: Sole
- BMPS IM : Monte Paschi, Advisers to Meet Soon as Monday on Rescue Plan: FT
- BRBY LN : Burberry Said to Have Rejected Approaches From Coach: FT (Yday)
- CABK SM : Caixa Geral Conversion of CoCos to Take Place in 2016: Expresso
- CBK GY : Commerzbank’s Zielke Tells FAS Banks Will Disappear From Germany
- CSGN VX : Credit Suisse to Cut as Many as 1,300 Swiss Jobs, SamS Reports
- DBK GY : Deutsche Bank ETF Business Down EU4.5b in Jan-Oct: Handelsblatt
- DBK GY : Deutsche Bank to Pay $60m Fine for Gold-Price Manipulation: FAZ
- DB1 GY : Deutsche Boerse Sees Hesse Oversight Role After Merger: Reuters
- EDF FP : EDF Agreed Deal Terms With EPH, IFM in Polish Assets Sale: Rp.pl
- ENI IM : Eni Congo Oil Platform Fire Kills 1, Injures Five: Reuters
- EMG LN : Man GLG Asia Hedge Fund Managers Walsh and Vidale Said to Leave
- NG/ LN : National Grid to Select Gas Pipeline Bidder: S.Telegraph
- NOVN VX : Novartis Says SEG101 Met Primary Endpoint in Phase 2 Study
- NOVN VX : Novartis CEO Rules out Counter Bid for Actelion: SonntagsBlick http://bit.ly/2h2leKz
- RMG LN : Royal Mail Seeks Private Co. to Run Public Pension: S.Telegraph
- RDSA NA : Royal Dutch Shell receives bid approach from Macquarie for 45% stake in Corrib gas field - The Times
- SAN FP : Sanofi to Invest $80m in JHL Shares at NT$90/Shr in Alliance
- SAP GY : SAP’s Mucic Says Would Prioritize Small-Scale Acquisitions: BZ
- STL NO : *AKZO NOBEL CUT TO UNDERPERFORM VS NEUTRAL AT BOFAML
- SCMN VX : Swisscom Mobile Mkt Share ‘Not Ideal,’ Swiss Regulator: SoZ
- VMED LN : Virgin Media CEO downplays prospects of parent company Liberty Global bidding for ITV - Telegraph
- VOW3 GY : Volkswagen Financial Services Profit to Pass EU2 Billion: BZ

>>> Europe : Brokers Upgrades & Downgrades - 5th of December 201

>>> Up
*BASF Raised to Buy at BofAML, PT EU97
*BHP BILLITON RAISED TO NEUTRAL VS SELL AT CITI
*Covestro Raised to Buy at BofAML, PT EU70
*Eni Raised to Equal-Weight at Morgan Stanley, PT EU13.40
*Finmeccanica Raised to Buy at Deutsche Bank, PT EU14
*Halma Raised to Buy at HSBC, PT GBP11
*Lanxess Raised to Buy at BofAML, PT EU70
*Polypipe Group Raised to Buy at Jefferies, PT 350p
*RIO TINTO RAISED TO NEUTRAL VS SELL AT CITI
*Rotork Raised to Hold at HSBC, PT GBP2.25

>>> Down
*AKZO NOBEL CUT TO UNDERPERFORM VS NEUTRAL AT BOFAML
*Evonik Cut to Neutral at BofAML, PT EU28
*Evraz Cut to Sell at Goldman, PT 200p
*Grafton Cut to Hold at Jefferies, PT 590p
*Tullett Prebon Cut to Hold at HSBC, PT GBP4.80
*Vossloh Cut to Hold at HSBC, PT EU58

>>> PT Change


>>> Initiation
*Natixis Rated New Neutral at UBS, PT EU4.40

>>> Call
>> Sector
*METALS & MINING SECTOR VIEW RAISED TO BULLISH AT CITI