>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • LPTH +14.1%, SANW +8.5%
M&A news:
  • DEPO +15.3% (higher on light volume on potential sale exploration, according to Reuters exclusive)
Other news:
  • NAVB +8.7% (confirms Lymphoseek received positive opinion in Europe for a new reduced Mass Vial )
  • SCOR +6.4% (determines that various prior financial statements should no longer be relied upon)
  • CAR +4.7% (to join the S&P MidCap 400)
  • AINV +3% (Apollo Investment expanded the stock repurchase program by $50 mln to $150 mln)
  • TWTR +3% (contintued strength)
  • OHGI +2.6% ( enters into securities purchase agreement, agrees to sell an aggregate of 198,413 shares of common stock at $0.63/share )
  • P +2.2% (Pandora Media and Warner Music Group announce direct licensing agreement)
Analyst comments:
  • GPRO +3% (initiated with a Buy at BofA/Merrill

>>> US Early premarket gappers

Early premarket gappers

Gapping up: DEPO +13%, LPTH +12.2%, SANW +9.1%, SCOR +6.4%, HNRG +5.4%, CAR +4.8%, CLF +4.4%, AINV +3%,OHGI +2.6%, GPRO +2.4%, P +2.2%, AZN +0.9%, NVO +0.6%

Gapping down: NVAX -82.4%, CAPR -15.1%, DB -8.5%, MGT -7.3%, RBS -5.6%, CS -5.2%, ORCL -3.5%, BCS -3.3%, SAN-3.1%, SNE -2.8%, VIP -2.8%, STM -2.6%, ING -2.4%, NOK -2.3%, TOT -2.2%, CHK -2.2%, PBR -2.2%, SITO -2%, PUK -2%,SAP -1.9%, ASML -1.7%, BHP -1.7%, C -1.7%, BBL -1.6%, MKC -1.5%, FOXA -1.4%, XOM -1.4%, SLB -1.4%, BP -1.2%, SNY-1.1%, BABA -1.1%, RDS.A -1%, RIO -0.9%, GOLD -0.8%

(BofA-ML) The Flow Show : Equities $1.1b Outflows, But Stronj Japan Inflows



>>> Asset Class Flows
- Equities: $1.1bn outflows (first outflows in 3 weeks) ($4.8bnmutual fund outflows vs $3.7bn ETF inflows)
- Bonds: $0.6bn outflows (first outflows in 11 weeks)
- Commodities: $0.8bn outflows (largest outflows YTD) (outflowsin 4 of past 5 weeks)

>>> Equity Flows
- Japan: strong $2.5bn inflows (largest since Jan’16)
- EM: 11 straight weeks of inflows (modest $0.7bn)…no sell-signal for EM equities forthcoming
- Europe: $2.5bn outflows (record 32 straight weeks of outflows)
- US: $1.7bn outflows
- By sector: largest utilities outflows in 10 months ($0.5bn); largest tech outflows in 7 months ($1.0bn); largest healthcare outflows in 6 months ($0.9bn); big $2.9bn inflows to REITs.

>>> Fixed Income Flows
- Largest HY bond outflows since Jan’16 ($3.5bn) (first outflows in 6 weeks)
- 10 straight weeks of outflows from Govt/Tsy funds ($0.8bn)
- 11 straight weeks of inflows to EM debt funds (albeit tiny $0.1bn)
- $2.6bn inflows to IG bond funds (inflows in 27 of past 28 weeks)
- 52 straight weeks of inflows to Munis ($0.3bn)
- 14 straight weeks of inflows to TIPS ($0.2bn)

(CS) French Banks : Initiating on Natixis and CASA with Outperform; BNP and SocG

Initiating on Natixis and CASA with Outperform; BNP and SocGen with Neutral

Earnings diversification supports better-than-average earnings momentum among French banks. Natixis and CASA (after selling the regional banks stake) get 65% and 55% respectively from the high ROTE and less rate-sensitive businesses of asset gathering and financial services. Our 2017/18 EPS forecasts are 5-7% ahead of consensus at Natixis and 3% ahead at CASA. This also gives upside on DPS forecasts, especially CASA. Our DuPont analysis of sector ROTEs highlights why lower capital requirements are key to French profitability and why we are sceptical of cost plans. We think mutually owned Natixis and CASA should sustain the highest yield expectations (top 3 in the sector) and this along with lower interest rate sensitivity places them alongside our other top picks in the sector. 
■ Credit Agricole SA: Initiating with an Outperform and €11 TP: After the regional banks sale in Q3 we see multiple expansion to match the higher ROTE business mix and ability to raise the payout from 50% to 60%. 
■ Natixis: Initiating with an Outperform and €5.0 TP: We see upside in Investment Solutions earnings. An asset-light mix and mutual ownership give Natixis the highest ROTE and payout potential among the four banks. 
■ BNP Paribas: Initiating with a Neutral rating and €50 TP: Although EPS forecasts have benefited from a solid corporate centre, a larger ECB SREP capital gap should limit increases in dividend payout, in our view. 
■ Societe Generale: Initiating with a Neutral rating and €35 TP: The low P/TBV multiple is underpinned by the lowest ROTE forecast in the group due to the drag from CIB, French retail (30% of earnings) and some International businesses.

>>> RSA Insurance shares gain on takeover speculation

RSA Insurance shares gain on takeover speculation

RSA Insurance [LON:RSA], a UK-based insurer, was the subject of takeover speculation on Thursday, 15 September, The Times reported. The newspaper’s market report section did not cite a source for the rumour and gave no further details of the speculation.

The Financial Times’ market report did not mention any takeover talk in connection with RSA but noted that the insurer’s share price reached its highest level in close to two years, closing 21.5p up on the day at 530.5p yesterday. The volume of RSA shares traded yesterday was double the average number, the item added.

Both reports noted that Zurich Insurance [VTX ZURN] walked away from a planned takeover bid for RSA in September last year.

RSA Insurance Group’s market capitalisation stood at GBP 5.40bn (EUR 6.35bn) at the close of trading in London on Thursday

>>> Street Pre-Market Indications

MERRILL
* GALP - Amorim selling 5% stake @ EU 11.69/shr; SocGen sole bookrunner........
SVG - Offer update from Harbourvest. Has received other approaches (670p)..+3%
STATOIL - We UPGRADE to Buy, FV NOK 170 from 160. 30% upside potench (125.3)+1%
CAMPARI - We reinstate coverage with a BUY rating, PO of EUR 11.3 (9.7).....+1%
JOHN MENZIES - Buying ASIG from BBA for $202m. Plans a rights issue (598p)..+1%
DIAGEO - We reinstate coverage with a BUY rating, PO of 2450p (2129p).....+0.5%
PERNOD - We reinstate coverage with a BUY rating, PO of EUR 121 (103.7)...+0.5%
UNILEVER - Said to be in talks to buy Honest Co for over $1b; WSJ (3546.5p).u/c
LUFTHANSA - S&P moves to -ve outlook on weaker op performance '16 (10.675)..u/c
BBA - Sells ASIG biz to John Menzies for $202m. AISGs 15 EBITDA $31.9m (236)u/c
MINERS - Copper +0.1%, Iron Ore -0.5% with BHP OZ +0.55%, RIO OZ -0.8%....-0.5%
SAP - Read from Oracle, -3% AH on 4% EPS miss & lowering FY guide (78.4)..-0.5%
BASF - Named alongside Dow & others in $90b false claims act suit (€70.9)...-1%
GAS NAT - We DOWNGRADE to Underperform, taking PO to €16.5 from €20.7 (18.1)-1%
C.SUISSE - -ive read on D.Bank story around DOJ proposed settlement (13.1)..-2%
UBS - Negative read on D.Bank story around DOJ proposed settlement (13.5)...-2%
BARC - Negative read on D.Bank story around DOJ proposed settlement (165).-2-3%
RBS - Negative read on D.Bank story around DOJ proposed settlement (186.4)..-4%
ACACIA - Update outlines issue with Bulyanhulu. No change in FY16 guide(475)-5%
DEUTSCHE BANK - Doesn't see settlement near DOJ $14b proposed offer (12.4)..-5%
CS
Acacia mining -1% Operations update. Difficulties at Bulyanhulu
Deutsche Bank-5-7% DoJ seeks $14bn fine on mortgage backed securities sales
Dechra Phar unch Announced small acquisition of Apex Laboratories in Aus
Fiat Chry -1% Recalls 1.4m vehicles in US on airbag ans seatbelt issues
Grand City -1% CS D/G to N - M&A opportunities becoming more scarce
Miners M/P lagging in Oz, but a good bounce in the US, and EEM +1.7%
Post Italiane +1% Buying 14.8% of electronic payments co.
Renault -1% Russian govt discusses cutting state aid to autos