(HSBC) Italian Referendun : All you need to know

Italian referendum

All you need to know ahead of the vote

* On 4 December, Italy will hold its constitutional referendum
* Renzi's premiership could be on the line, particularly if the "no" vote wins by a wide margin…
* …but the immediate implications for domestic politics and reforms are not as great as the markets seem to believe


On 4 December, Italy will hold a constitutional referendum on whether to reduce the
role of the upper house of parliament. Voting will take place between 6am and 10pm
(GMT). The result should be known by the early hours on Monday (Table 1). The final
polls (polls are not allowed in the two weeks running up to the vote) have implied a 5-
7ppt lead for "no", but 20-25% of the population still appears to be undecided (Chart 2).
The referendum might not have been so important from a political and market
perspective had Prime Minister Matteo Renzi not decided to put his political future at
stake at the beginning of the year, pledging to resign if "no" won. His move shifted
the focus of the referendum from the reform on to his government, pushing all
opposition parties to campaign for a "no" vote. Mr Renzi has attempted to backtrack
on this pledge, but has not managed to separate himself from the referendum. His
premiership could still be on the line, particularly if "no" wins by a wide margin. But
our central scenario is that Mr Renzi will remain Prime Minister.
In this note, we dispel three main market misconceptions. We argue:
 A "yes" vote would not mark the beginning of a new era of reforms and political
stability, at least not in 2017, with elections taking place in early 2018 anyway
 A "no" vote is unlikely to lead to immediate elections, as the President would be
reluctant to call elections without a new electoral law for the upper house
 A "no" vote would not necessarily increase the chances of populist party, Five
Star Movement (5SM), coming to power. If anything, a "yes" vote might
This does not mean the referendum doesn't matter. We still think that passing the
reform could yield benefits in the medium term, ie after the 2018 election.
The markets seem to be pricing in a "no" vote (betting odds are 75%). However,
markets could fall further if "no" wins, particularly if Mr Renzi resigns (which might not
necessarily happen overnight), and the banking sector could take the biggest hit.

>>> What to look at today - 25th of November 2016

US MArket Closed for Thanksgiving.
Oil retreats slightly despite reports that Saudi Arabia is pushing for OPEC production cuts, USD/JPY approaching fresh 8-month highs of ¥114. China Vice Premier: Plan to strengthen economic cooperation with EU; Hopeful EU will fulfill WTO rules. Gold prices tracking firmer greenback with a fall below $1,180 as gold mining stocks suffer.

Nikkei +0.26% Hang Seng +0.52% CSI +0.64% Shanghai +0.37%

Eur$ 1.0580 CNH 6.9404 CNY 6.9153 GBP 1.2456 CHF 1.0153 RUB 64.7724 WTI$ 47.37 -1.23%

S&P +0.16% EuroStoxx +0.23% FTSE -0.01% Dax +0.13% SMI +0.27%

Macro :
- Japan GPIF Names Toyota, Apple, Microsoft as Top Stock Holdings
- Uber’s Rival Ola Said to Be Seeking Funds at 40% Lower Valuation
- Brexit May Take Decade So Give the Pound a Rest, Investors Say

Keep an eye on :
- ATLN VX : J&J Said to Make Takeover Approach for Swiss Drugmaker Actelion
- Alain Afflelou Delays IPO Until 2017, Les Echos Says
- BLT LN : BHP Says to Provide $115m Facility to Samarco Joint Venture
- BMPS IM : Monte Paschi Shareholders Approve EU5b Capital Increase Plan
- BMPS IM : Morelli Aims to Close Paschi Capital Increase Before Christmas, Paschi Sets Maximum Conversion Price at EU24.9 as Part of Recap
- BPOST BB : Bpost Hires 290 Extra Full-Time Equivalents for Delivery: Belga
- CDA FP : Permira May Take 15% Stake in Compagnie Des Alpes, Figaro Says
- EDF FP : EDF Files Legal Case in Response to Claims Made By Greenpeace
- LPE FP : Laurent-Perrier Says Outlook Calls for Caution as Net Falls
- LHA GY : Lufthansa Pilots May Extend Strikes Beyond Saturday, Focus Says
- NOVOB DC : Novo CEO Says Easier to Surprise Positively, Berlingske Reports
- RIO LN : Rio Tinto Has Room for $2b Buyback Next Year, Deutsche Bank Says
- LOCAL FP : Solocal Delays 2018 Plan, Cites Financial Restructuring
- FP FP : Total CEO Says OPEC Will Probably Reach Accord in Vienna Meeting

>>> Europe : Brokers Upgrades & Downgrades - 25th of November 20

>>> Up
*ArcelorMittal Raised to Outperform at RBC, PT EU8.20
*Flughafen Wien Raised to Buy at Citi
*Generali Raised to Overweight at JPMorgan, PT EU14
*Mediclinic Raised to Overweight at Morgan Stanley, PT 825p
*Remy Cointreau Raised to Hold at Berenberg
*Royal Unibrew Raised to Buy at ABG Sundal, PT DKK320
*Sulzer Raised to Buy at Baader-Helvea, PT CHF120
*Telenor Raised to Sector Perform at RBC, PT NOK138

>>> Down
*Daily Mail Cut to Underweight at Barclays, PT 705p
*SSAB Cut to Sell at Nordea Securities, PT SEK29
*TUI Cut to Equal-Weight at Morgan Stanley, PT EU12.70
*Voestalpine Cut to Sector Perform at RBC, PT EU38

>>> PT Change


>>> Initiation
*Repsol Resumed Market Perform at Raymond James

>>> Call

>>> Asian Update

Asia Mid-Session Market Update: New Zealand trade deficit narrows on dairy exports; Japan headline CPI rises for the first time in 8 months

***Asia Session Notable Observations, Speakers and Press***
- Oil retreats slightly despite reports that Saudi Arabia is pushing for OPEC production cuts.
- USD/JPY approaching fresh 8-month highs of ¥114
- Gold prices tracking firmer greenback with a fall below $1,180 as gold mining stocks suffer
- New Zealand posts a narrower trade deficit as Exports top consensus and Imports come in as expected; Exports of dairy up a robust 13% for the first time in months amid recovery in prices.
- Recovery in energy prices helping Japan headline CPI's bounce.

China:
- Vice Premier: Plan to strengthen economic cooperation with EU; Hopeful EU will fulfill WTO rules - press
- State Council: China to ensure stable coal supply; China has completed target of overcapacity cut in steel and coal this year - press

South Korea:
- Bank of Korea (BOK) said to be considering lowering their economic growth forecast - financial press
- Bank of Korea (BOK) Senior Deputy Gov Jang: Will not sit idle if the bond market is disrupted - Korean press

***Asia Key economic data:***
- (JP) JAPAN OCT NATIONAL CPI Y/Y: 0.1% (first positive print in 8 months) V 0.0%E; CPI EX FRESH FOOD (CORE) Y/Y: -0.4% V -0.4%E
- (JP) JAPAN NOV TOKYO CPI Y/Y: 0.5% (19-month high) V 0.2%E; CPI EX-FRESH FOOD Y/Y: -0.4% V -0.4%E
- (JP) Japan Oct BOJ National CPI Ex Fresh Food, Energy (core-core) Y/Y: 0.3% v 0.3%e
- (JP) JAPAN OCT PPI SERVICES Y/Y: 0.5% V 0.3%E
- (NZ) NEW ZEALAND OCT TRADE BALANCE (NZ$): -0.85B (4th straight deficit) V -0.97BE; 12-MONTH TRADE BALANCE: -3.29B V -3.39Be
- (SG) SINGAPORE OCT INDUSTRIAL PRODUCTION M/M: -0.1% V -2.0%E; Y/Y: 1.2% V 1.0%E
- (KR) SOUTH KOREA NOV CONSUMER CONFIDENCE: 95.8 V 101.9 PRIOR; 8-year low

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.1%, Hang Seng +0.4%, Shanghai Composite -0.2%, ASX200 +0.4%, Kospi flat
- Equity Futures: S&P e-mini +0.2%, Dax flat, FTSE100 flat

***FX ranges/Commodities/Fixed Income (00:00ET):***
- EUR 1.0540-1.0580; JPY 113.20-113.90; AUD 0.7400-0.7440; NZD 0.6980-0.7020
- Dec Gold -1.0% at 1,177/oz; Jan Crude Oil -0.7% at $47.62/brl; Dec Copper -0.2% at $2.65/lb
- JGB: (JP) Japan MoF sells ¥500B in 0.4% 40-year bonds, bid to cover: 2.98x v 2.73x prior
- (CN) China MoF sells 3-month bills at avg yield 2.11% v 2.01% prior
- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.9168 V 6.9085 PRIOR; weakest Yuan setting since June 2008
- (CN) PBOC to inject CNY120B in 7-day reverse repos, CNY70B in 14-day reverse repos, and CNY25B in 28-day reverse repos; injects net CNY40B for the week v CNY425B last week
- (AU) Australia sells A$900M in 5.5% 2023 bonds;avg yield 2.4328%; bid-to-cover 2.16x

Notable movers by sector:
- Consumer discretionary: Luk Fook 590.HK +3.7% (H1 result); Tatts Group TTS.AU +6.6%, Tabcorp TAH.AU +0.9% (enter into equity swap); Select Harvests SHV.AU +2.5% (guidance); HIS Co 9603.JP -4.6% (cuts guidance)
- Financials: KB Financial Group 105560.KR +0.7% (considers delaying Hyundai Savings sales); CYBG CYB.AU -2.6% (Numis cuts to sell); Ardent Leisure Group AAD.AU +4.4% (Dreamworld safety update); PICC Group 1339.HK +2.9%, China Life Insurance 2628.HK +2.8%
- Industrials: Codan CDA.AU +10.0% (guidance); Nissan Motor Co 7201.JP +3.1%, Mitsubishi Motors 7211.JP +5.6% (Oct result); Takata Corp.7312.JP +14.6% (acquisition speculation)
- Technology: Samsung Electronics 005930.KR -0.6% (speculation to sell PC business); MYOB Group MYO.AU +0.9% (guidance); Trend Micro 4704.JP -0.2% (Daiwa cuts to outperform)
- Materials: Resolute Mining RSG.AU -2.9%, Saracen Mineral Holdings SAR.AU -3.3% (gold declines)

>>> Disney 10k - subscribers data


Walt Disney publishes 10-K, issues estimated subscriber figures for its various networks (98.26)

The Company's significant cable networks and the number of subscribers as estimated by Nielsen Media Research are as follows: Estimated Subscribers -

* ESPN - Domestic
ESPN 90 mln (vs. 92 mln a year ago)
ESPN2 89 mln (vs. 92 mln a year ago)
ESPNU 71 mln (vs. 72 mln a year ago)
ESPNEWS 70 mln (unch y/y)
* SEC Network 62 mln (unch y/y)
Disney Channels - Domestic
Disney Channel 93 mln (vs. 95 mln a year ago)
Disney Junior 74 mln (unch y/y)
Disney XD 78 mln (unch y/y)
Freeform 91 mln (vs. 93 mln a year ago)
* International Channels
ESPN channels 141 mln (vs. 127 mln a year ago)
Disney Channel 205 mln (vs. 195 mln a year ago)
Disney Junior 140 mln (vs. 130 mln a year ago)
Disney XD 127 mln (vs. 123 mln a year ago)

(Handelsblatt) Germany’s Energy Fix for France


France is at risk of blackouts this winter because a dozen nuclear reactors are off the grid. It’s going to need imports from countries including Germany, which has abundant supplies thanks to its heavy investment in green energy.
It was a cold November evening but on France’s electricity market, things were heating up. On November 14 between 6 and 7 p.m, within just a few minutes the wholesale price of electricity jumped to €829.79, or $874.31, per megawatt hour.

At the same time across the border in Germany, the same amount of electricity was changing hands for just under €47 — and even that was a lot. So power in France was 17 times more expensive than in Germany.

That Monday evening had started pretty normally. Like on every working day, millions of people came back from the office and turned on their heating, and around a third of French homes are heated by electricity.

It was a cold evening, and power consumption surged by several gigawatts in just one hour. This high demand coincided with a supply shortage because a dozen nuclear power plants have been taken off the grid for several months for safety checks. And then, to make matters worse, wind power output that day was less than power companies had expected.

Suddenly they found themselves barely able to meet demand and had to fire up their most expensive reserves, including old and inefficient oil-fired power plants.

Luckily, the grid remained stable and the shortage had little impact beyond the price surge. But it may well happen again this winter. French grid operator RTE is preparing for a huge supply shortfall in December, January and February when the weather will likely be constantly cold, and power demand constantly high.

But Germany could help France get through the winter. Germany of all countries, criticized so often by the French because its green energy revolution has triggered a huge expansion in renewable power generation in recent years, regularly putting strains on the French grid.

“We’ve often been criticized in recent years for exporting wind and solar power abroad ... Now Europe can be happy that we can do that.”
Gero Lücking,, Lichtblick power provider
However, thanks to its abundance of wind and solar plants, Germany has what France would dearly like right now — ample electricity.

“We’ve often been criticized in recent years for exporting wind and solar power abroad,” said Gero Lücking, managing director of renewable power provider Lichtblick in Hamburg. “The Poles and the French regularly complained. Now Europe can be happy that we can do that.”

French nuclear safety regulator ASN ordered state-controlled utility EDF to carry out urgent safety checks on 18 of its 58 reactors. At present, 12 reactors are still off the grid and will remain shut in December — and even in January and February, nine reactors will still be out of action. ASN is checking for suspected flaws in pressurized water reactors supplied by state-owned reactor builder Areva after the discovery of weak spots in the steel of a reactor that EDF is building in Flamanville in northwest France.

EDF will be able to make up some of the shortfall by firing up modern gas-fired power plants. But that won’t cover the whole supply gap.

Franck Chevet, the head of regulator ASN, said the situation of the French nuclear sector — which usually covers three quarters of French power needs — was “very worrying.” France must be prepared to be able to do without five to 10 reactors at any time, he told newspaper Le Figaro.

Market prices reflect how serious the problem is. The forward price of a megawatt hour of power to be delivered in January currently costs €117 — up from €35 in January 2016.

In January, the interconnectors linking the French grid to Germany, Spain, Switzerland, Belgium and Britain will be will be running hot. The French can import a total of 12.2 gigawatts from six countries — equivalent to the output of 10 large nuclear power plants.

Germany can mobilize enough capacity to help out. Since 2000, when the renewable energy law was launched to subsidize green power, so many wind turbines and solar plants have been installed that coal and gas-fired plants are often sitting idle.

When weather conditions are favorable — meaning windy and sunny — Germany produces far more power than it consumes and exports it to other countries. Its neighbors regularly complain that they have to compensate for these German output peaks and struggle to keep their grids stable.

Mr. Lücking, the head of German supplier Lichtblick, said France’s current shortfall shows the disadvantages of being so dependent on one energy source. “It was far-sighted of us to diversify our power production and invest in renewable energy early on,” he said. “Despite all the problems we’re having with the energy revolution, there’s no danger that we’ll run short of power.”

German solar plants won’t provide much electricity over the winter, but strong winds during the season will ensure that renewable energy will remain a big part of the energy mix in the coming months, said analysts.

Last week renewables had a 40 percent share of German power output thanks to wind power. Nevertheless, German exports won’t be enough to avert blackouts in France. The country will have to import power from all its neighbors. In the last really cold French winter in 2012, Brittany in northwest France and the Provence-Alpes-Côtes d’Azur region in the south suffered power cuts.

To make sure that doesn’t happen this winter, the grid operator is considering three measures that France has never resorted to before.

The first is to issue an alert to consumers to rapidly cut their consumption by turning down the heating, using their computers less and switching off washing machines and even the lights.

>>> FT AlphaVille : Actelion - have a look



BE
To Switzerland, specifically.
12:15 pm
BE
Because .....
12:15 pm
BE
Switzerland-based Actelion has attracted takeover interest, according to a person claiming to have knowledge of the matter. The source hinted that the mystery buyer is likely a major U.S.-based pharmaceutical company, but he wouldn't reveal the bidder’s name or the offer price. The ADR's of Actelion trade thinly in the U.S. under the ticker symbol (OTC: ALIOY).
12:16 pm
BE
New Jersey-based Johnson & Johnson (NYSE: JNJ) and Paris-based Sanofi (NYSE: SNY) were previously mentioned as potential suitors for the Swiss drug company, but Actelion management has in the past been quick to downplay the idea that it’s a takeover target.
12:16 pm
BE
,,,,,,,, So ................
12:16 pm
BE
We, along with every other M&A hack in the Western world, have been chasing this story for about a month.
12:16 pm
BE
There's a big wall of speculative money sitting behind Actelion right now ....
12:17 pm
BE
.... so this RAW disclaimer is particularly important.
12:17 pm
RAW is market chatter - information that has not been formally tested through traditional journalistic channels (PRs etc). The story might be complete rubbish, but if we believe there is some substance to it we will say so. Either way, Reader Beware.
12:17 pm
BE
But since Streetinsider is wearing some of the risk for us, here's the general gist of the rumour.
12:17 pm
BE
We've been hearing that Actelion has had a firm approach reasonably recently, and that it brought in BOA Merrill Lynch to do the defence.
12:18 pm
BE
We also hear that there's a firm deadline on that offer, as in this week. After that, the predator has threatened to go hostile.
12:19 pm
PM
This is all v v interesting
12:20 pm
BE
The price we've heard is .... actually, I'll not be specific here. But there's a price around.
12:20 pm
PM
But it's yet to show through vividly in the stock price
12:21 pm
PM
Actually just getting going now
12:21 pm
BE
In terms of the potential buyers, J&J seems a credible one. Though J&J traditionally says it doesn't do hostile.
12:21 pm
BE
There's also the theory that Actelion might just be looking at partnerships, so is talking to lots of companies, but has BOAML at its back in case anyone gets the wrong idea.
12:22 pm
BE
And as StreetInsider says, Actelion has in the past played down the idea that it's for sale.
12:22 pm
BE
..... So anyway. There's lots more on my notepad about this one, but there's no point in gifting stuff to the competition.