TheChek News Flow

H1 COI came in at €80.4m (vs. UBSe €146, Bloomberg cons €142m) and includes a

€55m FX tailwind. Guidance for the full year remains unchanged at "COI close to the

level of FY 14/15" implying a challenging target for 2H COI of ~€230m vs. €136m

achieved in H2 FY15/16. Zodic expects the improvement to be driven by a positive

volume effect and a decrease in cost overruns. Zodiac expects to meet Net Debt/EBITDA

<3x covenant without taking into account the hybrid financing set in place. We

estimate that this implies a significant improvement in cash generation in H2 to ~

€360m vs. ~€120m generated in H2 2014/2015. The press release does not offer any

indication about FY 17 targets.

Zodiac has already reported its H1 16 sales. Zodiac reported H1 16 group EBITA of

€80.4m (3.2% margin, UBSe €146m), of which Aerosafety EBITA of €50m (UBSe

€53m), Aircraft Systems EBITA of €103m (UBSe €109.4m) and Aircraft Interiors EBITA

loss of €-66m (UBSe -€10m).

We expect investor focus to be on: 1) cash and profit generation potential in 2H FY16

and beyond, 2) the learning curve progress on the A350 and C Series, 3) book to bill.

Our €17.5 price target is based on 9% WACC, 5 year profit growth of 18% CAGR

from FY15/16E and cash conversion of 82%, which implies a fair value multiple of

18.8x FY15/16E EV/EBITA.

HEINEKEN: 1Q volumes strong, org beer volume +7% vs 2.4% cons.............+3%

WTB: Accor's UK revpar should help Whitbread today........................+2%

GENMAB: U/G guidance, projecting US revs of $400m-$450m vs 250-300 prev...+1%

TLSN: Revs 1.8% miss, but EBITDA 3% beat and '16 guidance raised..........+1%

ABB: Orders and profits beat consensus, Revenues in line..................+1%

VOD: We U/G to Buy, growth acceleration ahead, 3% upside to EBITDA........+1%

MONY: Revs +9%,insurance momentum improved,strong growth in credit cards..+1%

SYNGENTA: Q1 sales flat in local currency, down 7% in USD................unch

ARM: 1Q16 revenues 2% ahead, EPS 1% ahead of consensus...................unch

GKN: Group revs £2,179mn, +1% organic, in-line with cons £2,168mn........unch

BLT: inline w our forecasts, 4% cut to iron ore guidance expected.........-1%

ACCOR:1Q16 Group RevPAR +0.4% in line driven by France -2.5% v BofA -4%...-1%

HOCHSCHILD: Q1 production in line, Net Debt slightly better...............-1%

ASML: Q1 revs €1.3bn, EBIT €231m in-line, Q2 guide +1% ahead of cons......-2%

BUNZL: Q1 IMS inline, though lack of new bolt-on M&A might disappointment.-2%

HANDELSBANKEN: Net Income miss (4.04bn vs 4.18bn). Fee Income fell 6%.....-3%

ZODIAC: 1H results, big miss on op profit & further risks from FAA recall.-5%

ABB +1% Op profit 5% beat, orders better, USD50m one off

Accor +2-3% 1Q revs slightly light, Jin Jiang's stake risen to 14.98%

Arm +1-2% Q1 Rev 276.4 mln est 272.6mln

ASML -1-2% 2Q rev outlook beats ests, gross margin light

Autos -1% Mitsubishi motors -18%, improper fuel economy tests

Banco Sab M/P CS reinstate with NEUTRAL (Valuation)

BHP Billiton -2% FY16 prod inline, expectations met in all key businesses

Brown Group -1% FY revs 1.5% beat, challenging mkt conditions

Bunzl M/P H1 underlying revs flat YoY

Gam -3-4% AuM Chf67.3b (CSe 70.8b), cautious on outlook

Genmab M/P Updates financial guidance inline with market

GKN M/P Statement inline with market expectations

Heineken +2-3% Beer volumes strong +7% est +2.4%

Hochschild M/P On track to achieve its full year production target

Miners -1% Copper -0.25%, Brent -2.45%, Iron Ore +0.65%, China -4.01%

Moneysuper M/P Trading inline, confident of meeting its FY outlook

Novozymes -1% Co keeps guidance for the FY, cuts EBIT growth

Oil -2% Oil lower o/n, Brent -2.45% to $42.95, WTI -2.9% to $39.9

Paddy Power -2% CS reinstate with UNDERPERFORM (Cost synergies poor)

Punch Tav +2% LFL Net income growth of 1.6%, disposals ahead of target

Repsol -2-3% CaixaBank may sell stake for BPI deal

Rentokil +1-2% Org growth in Q1 was 2.8% (vs 1.8% last year)

SAP M/P No's inline with pre-announce, re-iterates 2016 forecast

SHB -2% Adj Net 4% miss, NII 1% light, fees 4% below

TeliaSonera +2-3% Numbers better and raises profit outlook

Telefonica -1-2% CaixaBank may sell stake for BPI dea

Temenos +2% Sales up 24% yoy, management confirmed its 2015 outlook

Trav Perk +2% Q1 LFL 4.2% mkt around 3.5-4%

Virgin Money M/P Short trading statement inline with expectations

Zodiac -3% H1 revs inline, op income looks light

ABB-Ebita 943m(865),Sales 7.903b(7.98),co sights slow China...........+1.3%

*SYNGENTA-Sales 3.74b(3.72),EMEA 1.75B(1.77),NA 986m(996),FCF '16 1b+..-0.5%

*ASML-Rev 1.33b(1.32),Net 198m(184),GM 42.6%(42.6),Q2 GM 42%(46%)......-2%

*ZODIAC-Rev 2.489b,Net 48.9m,Sees +ve vol effect in H2.................-5%

*SARTORIUS-Rev 301.9m(299),Ebitda 72.3m(71.13),NP 29.3m,FY ok..........+1%

*GAM-AUM CHF114.7b(117.8),H1 performance fees lower vs last yr.........-1.5%

*GENMAB-Raises 2016 f/casts as Darzalex drives sales...................+1%

*TEMENOS-Rev 129.4m(124.2),Lic Rev 26.9m(24),Ebit 22.2m(19.8)..........+1%

*SAP-Finals Op CF 2.48b,confirms FY guidance Rev 2.95-3.05b............+1%

*VONTOBEL-Q1 update client assets CHF142.3b,Q1 weaker lower activity...-1%

*FIELMANN-PT 54.1m,External Sales 372.1m,Cons Sales 316.4m.............-4%

*NOVOZYMES-Rev 3.61b(3.61),Ebit 950m(976),Net 745m(729),PT 955m(938)...+1%

*HEINEKEN-Cons Beer Vol 43.5(41.5),Org Beer Vol +7%(2.4),$ & € +ve.....+2%

*ACCOR-Rev 1.16b(1.19),LFL Sales +1.9%(0.3),Revpar Grth 0.4%...........+2%

*TELIA-Sales 20.4b(20.8),Ebitda 6.22b(6.01),Raises FY guidance.........+1%

*SVENSKA H/BK-Net Inc 4.04b(4.18),NII 6.8B(6.85b),FCI 2.17b(2.27)......-2%

Investec

* ABB-Q1 ebitda $943m Vs est $865m, cautious o'look re fx & oil..............+2%

* ACCOR-Q1 lfl sales +1.9%(est +0.3%),overall good start.....................+1%

* ASML-Q2 sales ahead at €1.7bn Vs €1.65bn, Q2 margin guidance light.........-1%

* CARLSBERG- +ve read from HEIA results, we traded 250k y’day, ongoing flow..+1%

* GAM-Q1 AUM falls 4%, sees lower H1 performance fees........................-1%

* GENMAB-raises FY guidance on Darzalex royalties............................+5%

* HEINEKEN-Q1 org beer vols +7%(est +2.4%),looks blowout but keeps guidance..+3%

* NOVOZYMES-Q1 rev in line,net btr. FY sales lwrd on FX,unch on org basis....-1%

* SAP-Q1 confirms pre announced data, confirms guidance......................+1%

* SARTORIUS-Q1 sales and ebitda look small beat, confirms guidance...........+1%

* SHB-Q1 net misses by 3.5%, fees & comms 4% light, CETR1 ratio ok...........-2%

* SYNGENTA-Q1 in line,ChemChina deal complete by yr end(in line)............unch

* TELIA-Q1 sales in line, ebitda 3% ahead, raises FY ebitda guidance.........+2%

* TEMENOS-Q1 looks solid, confirms guidance, hear -ve broker comment away....+1%

* VOPAK-AGM today, confirms outlook, shares volatile last few days...........U/C

* ZODIAC AERO-H1 miss, keeps guidance(mkt won't believe), hit 3% into close..-5%

* ARM HDGS-Q1.Sales ahead, PTP a miss.See FY rev in line.Weak into stmtn...+2%

* BHP Billiton - Q3 In line.Cuts Iron Ore g'nce. Sector Strong ..................+2%

* BUNZL-Q1.Rev +13%,Trends similar to H2 '15. In line with exp's.

.........unch

* ENTEQ-Update. In line with exp's. Chairman stepping down in Sept........unch

* GB GROUP.PreClose.Inc's FY adj. op. pft g'nce to £13.4m.CEO to retire....+2%

* GKN-Q1.Rev +12%, margins lowers. O/look mixed............................-1%

* MONEYS'MKT-Q1.Rev +9%.Confident in meeting FY exp's......................+1%

* N BROWN-FY.FY in-line,trading since year-end subdued.....................-2%

* PUNCH TAVERNS-H1,in-line with management exp's,disposals prog' ahead.....+1%

* RENTOKIL-Q1.Integration of Steritech going well.Conf FY will be i/l.....unch

* TRAVIS PERKINS-Q1, in-line, LFL sales growth of 4.2%.....................+1%

* VIRGIN MONEY-Q1.In-line with est's.Investor meeting today(credit cards).unch

are about to reach cyclical troughs. We expect the overall order inflow to be

down by 20%, or more, even after taking into account the favourable tailwind

from exchange rates. Given the current uncertain outlook for the oil & gas and

mining industries in terms of capex spending and aftermarket demand together

with the subsequent risk to earnings expectations for Weir, we believe the

shares should trade at a discount to the sector in the near-term. With ~30%

downside to our price target we are maintaining our Underweight

recommendation.

 Weak start to the year. The trading update is due to be released on 28

April. We expect this to show a 45% decline in order inflow for the Oil &

Gas division, which we expect to limit the near-term recovery potential for

this division. We expect the combination of weak demand and increase

price pressure to translate into a 10% decline in order for the Minerals

division, with both the OE and aftermarket falling.

 Share price bounce reflects commodity price rise, not fundamentals.

We do not believe the bounce in commodity prices (WTI or metals) since

the publication of Weir's full-year results has been sufficient to translate

into improved demand. For example, the rig count has continued to fall and

is down 30% over the period, despite a >50% increase in the WTI price. We

believe that the financial challenges of many operators in the fracking and

mining industries limits the scope for a recovery in demand in equipment

the absence of a significant increase in commodity prices and/or

consumption.

 Downside to forecasts remains. The operating profit delivered for 2015

was 40% below Bloomberg consensus at the start of 2015. Given the

prospect of ongoing weakness in demand, both OE and aftermarket, and the

prospect of increased downward pressure on aftermarket prices, particularly

in the Mining division, we believe there remain above-average downside

risks to consensus expectations.

 Valuation. Based on our revised forecasts, the group is trading 2016E

EV/EBITDA, EV/EBITA and PE multiples of 12.4x, 16.1x and 19.6x,

respectively. This leaves Weir trading at a significant premium to our

industrial universe, with an above-average risk to forecasts, in our view.

Saudi Arabia is raising $10bn from a consortium of global banks as the kingdom embarks on its first international debt issuance in 25 years to counter dwindling oil revenues and reserves.

The landmark five-year loan, a signal of Riyadh’s newfound dependence on foreign capital, opens the way for Saudi to launch its first international bond issue. It comes as the sustained slump in crude encourages other Gulf governments, such as Abu Dhabi, Qatar and Oman, to tap international bond markets.

The oil-rich kingdom, which last weekend blocked a potential deal among oil producers to freeze output and bolster prices, has burnt through $150bn in financial reserves since late 2014 as its fiscal deficit is set to widen to 19 per cent of gross domestic product this year.

Strong interest in the loan, especially from Asian banks, came despite rating agency downgrades on Saudi creditworthiness since the oil price collapsed. The government raised the amount it wanted to borrow from $6bn-$8bn to $10bn after the deal was oversubscribed.

“The deal is very successful, with very competitive pricing,” said Elyas Algaseer, deputy regional general manager at Bank of Tokyo-Mitsubishi. “There was immense market appetite.”

Saudi Arabia may now raise its first global bond in the wake of the loan deal, bankers said. Institutions that loaned the most would be set to benefit from a mandate to help Riyadh raise the bond.

“The loan is a way for Saudi Arabia to test the waters and set up an international borrowing profile,” said Ewen Cameron Watt, chief investment strategist at BlackRock, the world’s largest asset manager. “This is paving the way for the kingdom to transform from a creditor nation into a debtor nation. It's a significant moment of change in debt markets.”

The strategy of raising debt overseas aims to slow the drawdown of foreign reserves and reduce pressure on local banks, which have been supporting state related companies and buying Saudi domestic bonds for almost a year.

The lead lenders, each pledging around $1.3bn, include Bank of Tokyo-Mitsubishi, HSBC and JPMorgan, bankers say. Lenders were required to lend at least $500m to participate.

Mr Algaseer declined to comment on the pricing, but other bankers close to the deal said it had priced at around 120 basis points over US dollar Libor.

The loan is Saudi Arabia's first international debt issuance since 1991, when it raised around $1bn in the aftermath of the Iraqi invasion of Kuwait.

Bankers are now confident that Saudi state-related companies will also seek to raise funds, using the sovereign loan, and later bond, as a benchmark.

Prince Mohammed bin Salman, the king’s powerful son who overseas economic reform, is set to publicise his “vision for Saudi Arabia”, a template for shifting the kingdom into a post-oil era, in Riyadh on April 25.

The “vision” is expected to give more details about the privatisation of state oil company Saudi Aramco, the creation of a sovereign wealth fund and other reforms to boost jobs and investment.

JPMorgan, which has decades of experience banking for Saudi Aramco, has been working with the state oil company since late last year on a plan for an initial public offering, people aware of the matter said.

Saudi Aramco is still evaluating how to organise any flotation, which could either list a portion of the holding company, or a collection of downstream assets, on the Saudi stock exchange. But Prince Mohammed has said he intends to float less than 5 per cent of the holding company by 2018.

The Saudi fundraising comes amid broader debt issuance as neighbouring oil economies also tap international markets.

Abu Dhabi has mandated Bank of America Merrill Lynch, JPMorgan and Citigroup to hold investor meetings this week ahead of the UAE capital’s third international bond.

“Abu Dhabi’s strong fundamentals should support strong demand for any issuance and provide a benchmark for corporates looking to raise debt,” said Ms Malik.

Qatar, which last year raised a loan of more than $5bn, has sent out a proposal request to lenders to manage an international bond issue, bankers said, and Lebanon has announced a sale of two bonds worth $1bn.

HSBC and JPMorgan declined to comment.

French utility faces questions about whether it has set aside enough to decommission power plants

In 1997 French utility EDF started to dismantle its first nuclear power plant, a 30-year-old heavy water reactor in Brennilis, north-western France. It was expected to cost €250m.

The bill is now set to be at least half as much again, and the decommissioning is still not done. In fact, there has never been a full dismantling of a reactor in France, the only European country to get three-quarters of its electricity from nuclear power.

EDF, the operator of all 58 of France’s reactors, is preparing to build a new £18bn plant at Hinkley Point in the UK that some at the Paris-based company have warned is too dangerous given its stretched balance sheet. EDF’s other big reactor project, at Flamanville in France, is already six years behind schedule and €7.2bn over budget.

John Paulson’s losing bets on Allergan and Valeant have contributed to a near $2bn fall in his funds’ assets in the space of five months, taking the total amount managed by his hedge fund business to its lowest level in almost 10 years.

Paulson & Co, one of the titans of the US hedge fund industry, made billions of dollars betting against subprime mortgages ahead of the financial crisis. Its Advantage Plus fund returned 17 per cent in 2010, following gains of 21.5 per cent in 2009, 37.6 per cent in 2008 and 158.5 per cent in 2007.

But fund documents show that the company’s assets under management had fallen to $14.3bn as of March 1, down from $16.1bn in November, and from a high of $36bn back in 2011.

These numbers are unlikely to have improved since March, given sharp falls in the price of Mr Paulson’s pharmaceuticals holdings.

His funds were down about $250m after a 17 per cent plunge in Allergan shares, his largest holding, on April 5 following news that tough tax rules from the Obama administration had scuppered a takeover bid from Pfizer.

At the same time, Valeant, once favoured by Wall Street, has suffered a series of share price falls following fears over is business model and ability to repay debt. Its shares are trading at about $32.60, having stood at $262.50 in August. Paulson was the sixth-biggest shareholder as of the end of December, according to regulatory filings.

Paulson & Co’s Advantage Plus fund is down 15 per cent this year and Mr Paulson is tapping his own fortune as additional collateral for his firm’s funds as a guarantee for its credit line, according to a person familiar with the returns.

He is faring worse than most event-driven and activist funds this year as well. Hedge Fund Research’s event-driven index advanced 2.7 per cent in the first quarter, while its activist index gained 3.1 per cent.

A spokesman for Paulson & Co declined to comment.

But Mr Paulson is not alone in his woes — 2016 has been a rocky year for hedge funds, with sharp losses incurred by marquee names. Many managers trimmed their bullish bets and added short positions as markets fell in the first six weeks, only to have those short positions hurt them when the market reversed course.

“Bad things happen when you’re the least prepared for them,” Alexandra Coupe, head of asset allocation research at Pacific Alternative Asset Management Company, said of this year’s turmoil.

Part of Mr Paulson’s current strategy is focusing on specialty pharmaceutical companies that may be takeover targets.

According to a presentation that Mr Paulson was giving on April 5, the day Allergan’s share price collapsed, he was telling an audience at his prime broker JPMorgan that the stock was the one “we are most excited about”.