(BofA-ML) Flow Show

>>> Asset Class Flows
* Equities: $4.3bn inflows (first inflows in 3 weeks) (note $6.8bn ETF inflows vs $2.5bn mutual fund outflows)
* Bonds: strong $8.0bn inflows (largest in 12 months) (inflows in 5 of past 6 weeks)
* Precious metals: modest $0.3bn inflows (13 straight weeks)

>>> Equity Flows
* Europe: $0.7bn outflows (9 straight weeks = longest streak since May’13)
* Japan: $1.0bn outflows (4 straight weeks) (longest outflow streak since Sep’12)
* EM: $0.6bn outflows (2 straight weeks)
* US: $5.4bn inflows (inflows in 4 of past 5 weeks)
* By sector, largest inflows to REITs since May’13 ($1.7bn); 4 straight weeks of outflows from financials ($0.3bn)

>>> Fixed Income Flows
* $1.8bn outflows from Govt/Tsy funds (7 straight weeks)
* Big $1.1bn inflows to TIPS (largest since Apr’15) (8 straight weeks)
* Largest EM debt fund inflows since Jun’14 ($2.0bn) (7 straight weeks)
* $4.0bn inflows to IG bond funds (5 straight weeks)
* $1.2bn inflows to HY bond funds (inflows in 6 of past 7 weeks)
* 29 straight weeks of inflows to Munis ($0.8bn)

(Nomura) Mobistar, Proximus & Telenet...

European Telecom Services: A fresh look for a new era

Our in-depth look at Belgian telecoms flags material upside at Mobistar 
We have taken a new in-depth look at the Belgian telecoms market as it enters a new era following Mobistar’s convergence launch and Telenet’s completed purchase of BASE. We have become positively biased towards the Belgian market following the recent mobile consolidation, and among Belgium’s three listed mid-cap stocks we see material upside potential for Mobistar (Buy, EUR 26.5 TP) and prefer it to Proximus (Neutral, EUR 31 TP) and Telenet (Neutral, EUR 52 TP). 

Convergence: Each can take market share on its own merits 
We believe Proximus' well-invested fixed & mobile networks, and Telenet's quality proposition should enable them to add subscribers. Our in-depth assessment of Mobistar’s new cable-based convergent product leads us to believe that it can build market share to 4-5% and that this will expand its addressable market for adding more lucrative post-paid mobile subscribers. 

Mobile: Fundamentals can drive top-line growth, despite headwinds 
We think the seeds have been sown for an acceleration of Belgian mobile data usage and believe that the relatively benign market structure should enable the operators to successfully monetise this increased demand. We believe Mobistar is most geared to this trend given its mobile revenue exposure. 

Quality: Regulation raises standards in Belgium but Telenet still on top 
We expand our sector-wide ‘quality’ analysis and find that it plays an especially interesting competitive role in Belgium compared with elsewhere. Our assessment of a number of factors suggests that the operators have sensible strategies, with none having yet tipped towards diminishing returns. 

Investment & returns: Well-invested networks and appropriate plans 
Our detailed analysis gives us confidence that Belgium’s fixed and mobile networks compare well against their European peers. We think that Mobistar (and Proximus) should be able to maintain a degree of mobile network leadership while Telenet makes catch-up investments into BASE. 

M&A: Controlling owners seem steady; VOO could shake things up 
M&A does not play a core role within our investment theses, but we have made qualitative assessment of several potential scenarios and the potential impact on market dynamics. Separately, we do not foresee any near-term shift in the controlling shareholders’ (Orange in Mobistar, Liberty Global in Telenet or the Belgian state in Proximus) positions. 

Our analysis suggests that Mobistar is best positioned across most themes, and we upgrade it to Buy (from Neutral) with a EUR 26.5 TP (34% upside potential). We also upgrade Proximus to Neutral (from Reduce) with a EUR 31 TP (vs EUR 32 previously) and retain our Neutral rating on Telenet while reducing our TP to EUR 52 (vs EUR 60 previously).

(BarCap) Telecom Italia : CEO for a day

With a new CEO recruited externally, Vivendi’s objective seems to be to make important changes vs the previous plan. In this report we review what new management could act on and conclude that whilst there are cost cutting
opportunities beyond the current plan, we see limited opportunity to accelerate them in the short term and preserve top line improvements at the same time. Also we see no early exit from Brazil. Meanwhile competition on fixed line is rising and we wonder if Vivendi is still that welcomed in Italy. We cut our PTs to EUR0.82/0.66. TI trades at a premium to peers which we believe is unwarranted on fundamentals.
We reiterate our UW and prefer BT, ORA and DTE.

What can change? The press reports that Vivendi was behind the recent change in CEO as it wants more cost cutting in Italy and sees Brazil as non-core. On costs, when we benchmark TI to peers on employees, this seems an area with savings of potentially EUR0.5bn above TI’s plan. However TI has been working on this already for many years and given protective labour laws, it is a long-term process. Cutting costs in other items such as marketing could create revenue downside risk. On Brazil, as we wrote recently in Brazil: Opportunities for TEF B and TIMP, we believe that consolidation is unlikely to happen in 16e and see no scenario to exit Brazil quickly.

More competition on wireline. Meanwhile pressure is increasing in wireline with a new entrant, Enel, the Italian utility company that has announced a EUR2.5bn investment. So whilst there is a growth opportunity in the fixed market (spending per pop is c. 35% less than EU peers due to low Broadband penetration) that could be largely offset by losses on the wholesale side of the business (30% of fixed revenues).

Is Vivendi still welcome? According to the press, Mr Bolloré (Chairman and main shareholder of Vivendi) has been seen as an Italian insider. With new competition on fixed line and the regulator opposing a TI price increase, it is fair to wonder if he is still welcome. History is not encouraging as it seems TI crystallises the attention of many
national stakeholders that have their own views about the best strategy for TI.

Changing estimates and cutting PT. We cut our mid-term estimates for revenues, partly offset by higher cost cutting post 2018. Recently we also increased our estimates for TIMP (in local currency and due to stronger BRL). With a worse mix this leads us to cut our TI PTs (-8% to EUR0.82 for ords, EUR0.66 for prefs).

Risks. Orange has expressed potential interest in TI but a bid could just be on the 25% that enables to control TI. Approval of the consolidation between 3 and WIND, which is being reviewed by the Competition authorities, would be a positive catalyst but is largely reflected in our estimates.

>>> Street Pre-Market Indications

L&S
RWE +1.7% CBK upgrade
HEI GR +0.4% AlphaValue upgrade
CS:
Autos M/P Carmax (KMX US) down 7% on INLINE numbers
Ems Chemie M/P Sales inline, EBIT above previous year, maintains outlook
Miners +1% Copper UNCH, Brent +3.00%, Iron Ore UNCH, China -0.59%
Oils +1-2% Oil +3% vs Euro close
Partners Grp -1-2% CS downgrade to NEUTRAL (Valuation)
Renault +0.5% Nissan +3%, Renault own 43.65% of Nissan
United Utils M/P Bid spec in the daily mail, been strong recently
Unicredit +2% CEO confident Vicenza IPO will go ahead positively
Weir +1% Oil +3% vs Europe close and peer positive on them today

RBC:
AIR FRANCE -1% Weak March traffic, ASK +0.6%, cargo demand weak
ASML +1% Positive read from TSMC (+1.2%) overnight
KALI & SALZ -1% Read through from COMPASS MINERALS warning overnight.
M.PAGE -1% UK job report shows slowest Perm growth since last September
MITTAL +2% 3rd hike in HRC prices in Europe, small positive for sector.
SABADELL -2% Confirmation that mortgage floors are deemed illegal
SAN/BBVA -1% Mortgage floors illegal and probe into derivatives by regulator
TGS NOPEC +1% Inline Q1 numbers with guidance reiterated, oil price better

Mainfirst:
*VIVENDI-Deal with Mediaset announced Friday ? 3.5% stake swap?....+0.5%
*BASF-Interested in onshore oil assets in Iran(4th largest o/res)..+1%
*AIR FRANCE-March passengers +4.6%,Transavia +21%,Total 7.2m.......+0.5%
*SANOFI-Venezuela sales 200m,Auviq sales 17m,b/back €1.4b..........-0.5%
*GRIFOLS-Buys the Interstate Companies for €184m - Confidencial...+1%
*GAMESA-Receives two orders in China to supply turbines............+1%
*EMS CHEMIE-Sales 503m(511),sees 2016 slightly above 2015..........+0.5%
*ABB-Group grows business to over $1bln in India & targets more....+1%

Commerz:
AM3D +2.0% HSBC starts with Buy – PT €30
AR4 –0.3% Removed from Baader-Helvea Top Picks List
FRA +0.1% Resumed Neutral at Nomura – PT €53 (56)
HEI –0.4% Raised to Reduce (Sell) at Alphavalue
MRK +0.2% DBK cuts from ‘German Stock Ideas’ List
PNE3 –2.0% Appoints Markus Lesser as CEO
SDF +0.4% CEO may have known about brine leakage problems in 2007
SPR +2.5% JPM raises to Overweight (Neutral) – PT €60 (53)
TKA +0.2% Shortlisted for future submarine orders from Norway

ML
* DFS - Advent selling 30m shrs ($135m) at GBP 3; UBS/Jefferies..............
* DELTA LLOYD - Rights issue take up at 96.15%, RUMP being placed at GS......
BO DC - Says Sparkle Roll bought block from DL NA, now owns 13.1% stake.+5-7%
VECTURA - Gets payment of $10m that can rise in future if gets approvals..+3%
AIRFRANCE - Load factor remains strong (+1.6pc) in short/med haul.......+2-3%
ASTRAZENECA - Early stage alzheimers product to progress into PIII trial+1.5%
VESTAS - Borsen reporting Egyptian Ministry to sign $2.2bn wind farm deal.+1%
AB FOODS - To buy 48.65% interest in Illovo that it doesn't already own.+0.5%
VIVENDI - Spec agrees to acquire Mediaset's pay-TV unit in 3.5% swap deal.u/c
IBERDROLA - Press spec that AGM today to approve a 4% increase in pay out.u/c
SAN/BBVA/CABK/SAB - Probe over poss collusion on setting Ps for IR derivs.u/c
UK ASSET MNGRS - FCA article in FT on misselling of 'active' funds......-1-2%
TULLOW - Negative op update, FPSO will be offline for another 2 weeks.....-2%
TGS - Preannounce 1Q rev US$64m v cons US$96m. Maintains FY16 guidance....-5%

WSJ : FCC Plan Would Revamp Oversight of Bulk Data Service Provided to Businesse

FCC Plan Would Revamp Oversight of Bulk Data Service Provided to Businesses

Telecom groups battle over how far overhaul should go, which sectors to sweep up under proposal

Federal regulators said Thursday that they would seek to revamp their oversight of an obscure but important part of the telecommunications market, the bulk data service that telecom companies provide to businesses, including each other.

Details of the new plan being advanced by Federal Communications Commission Chairman Tom Wheeler hadn’t yet been made public as of Thursday evening. The agency said it would vote on the plan at its April 28 meeting.

But even before the proposal emerged, industry groups began battling each other over how far it should go and which sectors should be swept up.

Smaller telecom companies reached an understanding with giant Verizon Communications Inc. to recommend replacing the current patchwork of regulation with “a permanent policy framework for all dedicated services,” one that would be “technology-neutral,” according to a joint statement. The current regulatory system has been criticized for focusing on older market players and technologies, leaving them feeling disproportionately targeted.

That announcement prompted a swift response from the cable industry, which said Thursday evening that such a move would target their firms. Some cable companies fear they might now face more regulation than in the past, since they represent a newer technology.

“The FCC should reject any call to impose new, onerous regulations on an industry that is stepping up to offer meaningful choices to business customers,” the National Cable & Telecommunications Association said in its own statement. “The FCC will not achieve competition if it burdens new…entrants with regulation.”

The so-called special-access market has proved to be a particularly difficult regulatory puzzle for the FCC to solve, at a time of rapid transformation in the telecom industry generally.

Some critics believe the FCC went too far in deregulating the market in 1999, the last time the agency made a major policy pronouncement.

For years, telecom companies such as Sprint Corp. and Level 3 Communications Inc. have griped that the big phone companies like AT&T Inc. and Verizon Communications Inc. have taken unfair advantage of their power in the market. AT&T and Verizon, along with CenturyLink Inc. and Frontier Communications Corp., dominate the special access market because they effectively control the wires that were built by the legacy AT&T monopoly, which was broken up by the government in 1984.

Some smaller companies, for example, accuse the carriers of requiring them to make large volume commitments or face big fees. Sprint, which uses the special access to connect its cell towers, says it has had to pay huge termination fees to the larger carriers when it switched several thousand cell towers to alternative providers.

AT&T and the other large carriers have denied the allegations and said the market is generally competitive.

In addition, companies of all sizes have complained that the FCC deregulatory scheme adopted in 1999 was both overly complicated and ineffective at determining areas where the market still needed stronger oversight. As a result, the FCC already has taken some steps toward a new system of stronger oversight.

Adding to the problems, the 1996 Telecommunications Act gives the FCC authority to police competitive behavior in the telecom market, but the agency’s jurisdiction over these types of contracts primarily covers older technologies. AT&T, Verizon and other carriers have invested in newer network technologies that aren’t subject to FCC oversight in this way.

>>> What to look at today - 8th of April 2016

Dow-0.98% S&P -1.20%Nasdaq-1.45% Russell-1.47%
US MArket closed lower as uncertainty about economy grows. Gain in JPY & volatility in Oil continue to be in focus. All ten sectors ended their day beneath their flat lines with financials (-1.9%), telecom services (-1.4%). technology (-1.4%), and materials (-1.3%) leading the downside. Conversely, utilities (UNCH), energy (-0.6%), and industrials (-0.7%) ended with the slimmest losses. A downturn in European banks led to a tumble in the heavyweight financial sector (-1.9%). WTI crude ended its day down 2.4% ($36.84/bbl). Volume were in line with average @ 913mil shares. DEPO +7% after Starboard discloses active stake; GPS -9% following weak March sales, State-side. Fed chair Yellen joined her predecessors Bernanke, Greenspan, and Volcker at a panel hosted by CNN's Zakaria in New York. Her comments largely retained the mixed-dovish policy stance, cheering the progress made on employment and also acknowledging the challenge of reaching 2% inflation target. She again referred to the headwinds from global economy in justifying a gradual trend of rate increases, though she also refuted her critics who called December rate hike a mistake. On inflation, Yellen noted the 2% is not a ceiling, implying that the FOMC could tolerate some overshooting with extended timing of accommodation. Yellen's predecessor Bernanke most notably stated that a recession in 2016 is not any more probable than in the prior years, and that the risk of slowing economy is fairly constant. He once again defended the Fed policies during his term, suggesting that all the risks his critics listed never came to pass. Looking forward, Bernanke said the way out of the Fed's balance sheet build-up is to stop reinvesting interest and allow assets to roll off. Later in the session, the FOMC's solo dissenter George, who voted for a 25bp hike last month, again stated that fundamentals and labor markets are relatively strong, urging the Fed not to delay rate hikes. Note that earlier in the day, a survey put the odds of the next move on rates in June at around 75%. Asian equity markets are generally softer in the final trading session of the week, tracking the selling on Wall St that erased overnight gains. Australia's base metals were particularly weak as copper prices fell sharply in US hours. Cabinet officials in Tokyo continued to dial up the growing uneasiness over rising Yen. Fin Min Aso remarks produced the most direct response of weaker Yen as he stated that rapid FX moves are most undesirable and could result in govt action.

Nikkei +1.34% Hang Seng-0.50% Shanghai -0.94%

Eur$1.1365 CNH 6.4884 CNY 6.4794 JPY 108.70 GBP 1.4067 CHF 0.9569 RUB$67.8768 WTI$38.04(+2.09%)

S&P+0.33% EuroStoxx +0.32% Dax +0.42% SMI+0.38%

Macro :
U.S. Feb. Consumer Credit Rose $17.2b, Est. Up $14.9b
- White House Says Congress Has to End Tax Avoidance:Rtrs
- Greek Bailout Talks to Be Completed Soon, Govt Official Says
- FCC Seeks to Revamp Business Bulk Data Service Oversight: WSJ
- Blackstone to Shut Alternative Mutual Fund After Fidelity Pulls

Keep an eye on :
- ABBN VX : ABB Group Grows Business to Over $1b in India; Targets More: ET
- AAPL IM : FBI’s IPhone Hack Doesn’t Work on Newer Models: Verge
- AF FP : Air France-KLM March Passengers Rise 4.6% to 7.2m
- BA/ LN : BAE Systems to Produce Assault Amphibious Vehicles for Japan
- BO DC : Bang & Olufsen Says Sparkle Roll Buys Shares; Has 13.1% Stake
- BMW GY : BMW CEO Says Taking Part in Formula E Racing Possible
- DL NA : Delta Lloyd Received Subscriptions For ~96.15% Shares Offered
- EDF FP : EDF Engineers Say Hinkley Point Can Be Built on Time: Reuters
- EDF FP : EDF Stake Held by French State at 84.9%, Voting Rights at 90.7%
- GAM SM : Gamesa Receives Two Orders in China to Supply Turbines
- GRF SM : Grifols Buys Interstate Companies Stake: Confidencial
- SDF GY : K+S CEO Steiner May Have Known About Waste Irregularities: Wiwo
- MDVN US : Medivation Takeover Appeal Boosted by Latest CHMP Opinion: JMP
- PFC LN : Petrofac Confirms Internal Probe Into Alleged Breach of Conduct
- RLYP US : Merck, Sanofi, Galenica May Be Among Relypsa Bidders: BTIG
- SAN FP : Sanofi Bought Back 18.8M Shares Totaling EU1.4 Billion in 1Q
- GLE FP : SocGen Filed Defamation Proceedings Against Melenchon, Kerviel
- UCG IM : UniCredit CEO: Institutions Working on Banks Capital Solution
- VRX US : Valeant Actively Discussing Sale of Bausch and Lomb Unit: FBN
- VIV FP : Vivendi Said to Acquire Berlusconi’s Pay-TV Unit in Swap Deal
- YHOO US : Verizon Said to Proceed With Yahoo Bid as Google Weighs Offer

>>> Europe : Brokers Upgrades & Downgrades - 8th of April 2016

>>> Up
*AXEL SPRINGER RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*CGG RAISED TO BUY VS HOLD AT SOCIETE GENERALE
*DSV RAISED TO OUTPERFORM FROM NEUTRAL AT DAVY; PT DK350
*KUEHNE+NAGEL RAISED TO OUTPERFORM AT DAVY; PT CHF160
*MAXIM INTEGRATED RAISED TO OUTPERFORM AT RBC CAPITAL
*MOBISTAR RAISED TO BUY VS NEUTRAL AT NOMURA
*PALFINGER RAISED TO HOLD VS REDUCE AT HSBC
*PETROLEUM GEO-SERVICES RAISED TO BUY AT GOLDMAN
*PEUGEOT RAISED TO HOLD VS SELL AT BERENBERG
*PROXIMUS RAISED TO NEUTRAL VS REDUCE AT NOMURA
*TGS NOPEC RAISED TO NEUTRAL AT GOLDMAN
*UMICORE RAISED TO REDUCE VS SELL AT ALPHAVALUE

>>> Down
*CGG CUT TO SELL AT GOLDMAN
*ELEMENTIS CUT TO HOLD VS BUY AT BERENBERG
*EXPERIAN CUT TO REDUCE VS BUY AT HSBC
*LAFARGEHOLCIM CUT TO SELL VS HOLD AT BERENBERG
*ORKLA CUT TO HOLD FROM BUY AT SEB; PT NOK76
*PROSAFE CUT TO SELL AT NORDEA
*TOMRA CUT TO SELL FROM HOLD AT SEB, PT NOK80


>>> PT Change


>>> Initiation
*ADP RESUMED NEUTRAL AT NOMURA
*AENA RATED NEW BUY AT NOMURA
*AROUNDTOWN PROPERTY RATED NEW BUY AT BANKHAUS LAMPE, PT EU5.20
*EUROTUNNEL RESUMED BUY AT NOMURA, PT EU12
*FERRARI NV RATED NEW REDUCE AT KEPLER CHEUVREUX
*FRAPORT RESUMED NEUTRAL AT NOMURA
*JACK IN THE BOX RATED NEW HOLD AT EVERCORE ISI
*POPULAR RATED NEW OVERWEIGHT AT PIPER JAFFRAY
*SLM SOLUTIONS RATED NEW BUY AT HSBC, PT EU30
*TELENET RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT EU50.3

>>> Cal
>> Stock
*AURELIUS, DAETWYLER, EMMI REMOVED FROM BAADER-HELVEA TOP PICKS
*VONTOBEL ADDED TO BAADER-HELVEA TOP PICKSl