>>> EU Mid-Market Update

EU Mid-Market Update: Easter Monday holiday in Europe keeps participation to a minimum


**Notes/Observations**
- Four events that will shape market psychology in the week ahead. Fed chair Yellen's speech to the NY Economic Club, US jobs data on Friday, Euro Zone March CPI and PMI data, and Japan's quarterly Tankan Survey**Notes/Observations*

Overnight news
Asia:
- yen currency weakens on Japanese govt hop to unveil fiscal stimulus and delay a planned increase in sales tax; PM Abe said to plan to unveil package of new spending measures on Tuesday, Mar 29th
- China Feb YTD Industrial Profits registers its first rise after 7 straight declines (Y/Y: +4.8% v-4.7% Dec reading)
- China Beige Book, released over the weekend, also pointed to improving profits in Q1

-Europe:
- Easter Monday holiday keeps European markets closed

Americas:
- Fed's Bullard (Voter): April and June are "live meetings" for Fed to raise rates again

**Economic data**
- None seen

**Fixed Income Issuance:

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM ***

**Equities**
Indices [Stoxx50 closed for holiday; FTSE closed for holiday;, DAX closed for holiday;, CAC-40 closed for holiday;, IBEX-35 closed for holiday;, FTSE MIB closed for holiday; SMI closed for holiday; S&P 500 Futures +0.5%

Market Focal Points/Key Themes: Easter Monday holiday keeps European markets closed

***Equities***
- Energy: Abengoa [ABG.ES] Company confirms standstill request with 75% creditor support. To file chapter 11 for US affiliates

**Speakers**
- Spanish banks to stop counting DTA as capital in 2019 with ECB said to approve rules on DTAs last week
- Japan PM Abe reiterated view that 2md phase of planned sale tax increase to occur unless there is a Lehman-like event (refuted press reports that govt would announce a delay for 2nd round of consumption tax increase in May)
- Japan Fin Min Aso stated that it had no plans to use low rate environment to refinance older JGB bonds
- BOJ Gov Kuroda reiterated that currency intervention is up to the Finance Ministry
- Bank of Korea (BOK) names four new candidates as potential Board members. Koh Seung Beom recommended by Financial Services Commission, Cho Dong-chul recommended by the finance ministry, Shin In-seok recommended by Korea Chamber of Commerce and Lee Il-houng recommended by BOK (**Note: four members expected to leave when their terms end in April)

**Currencies**
- FX markets were listless with European out for Easter Monday holiday.
- JPY currency was weaker for the 7th straight session and above thw 113.50 area (longest streak since Oct). USD/JPY pair was rising on short-covering stemming from increased expectations that PM Abe would unveil fiscal stimulus and delay a planned increase in sales tax

**Fixed Income:
- None seen

**Looking Ahead***
- 06:00 (IL) Israel Feb Unemployment Rate: No est v 5.1% prior
- 06:00 (RO) Romania to sell 3.25% 2021 Bonds
- 07:00 (IN) India announces details of upcoming bond sale (held on Fridays)
- 07:00 (BR) Brazil Mar FGV Construction Costs M/M: 0.6%e v 0.5% prior
- 07:25 (BR) Brazil Central Bank Weekly Economists Survey
- 08:30 (US) Feb Advance Goods Trade Balance: -$62.3Be v -$62.2B prior
- 08:30 (US) Feb Personal Income: 0.1%e v 0.5% prior; Personal Spending: 0.1%e v 0.5% prior; Real Personal Spending: 0.1%e v 0.4% prior
- 08:30 (US) Feb PCE Deflator M/M: -0.1%e v +0.1% prior; Y/Y: 1.0%e v 1.3% prior
- 08:30 (US) Feb PCE Core M/M: 0.2%e v 0.3% prior; Y/Y: 1.8%e v 1.7% prior
- 08:30 (BR) Brazil Feb Total Federal Debt (BRL): No est v 2.750T prior
- 09:00 (IL) Israel Central Bank (BOI) Interest Rate Decision: Expected to leave Base Rate unchanged at 0.10%
- 10:00 (US) Feb Pending Home Sales M/M: +1.1%e v -2.5% prior; Y/Y: -0.4%e v -0.9% prior
- 10:00 (MX) Mexico Feb Trade Balance: +$0.4Be v -$3.4B prior
- 10:30 (US) Mar Dallas Fed Manufacturing Activity: -26.0e v -31.8 prior
- 11:30 (US) Treasury to sell 3-Month and 6-Month Bills
- 13:00 (US) Treasury to sell 2-Year Notes
- 17:00 (KR) South Korea Mar Consumer Confidence: No est v 98 prior
- 18:00 (HU) Hungary Mar Business Confidence: No est v 4.6 prior; Consumer Confidence Index: No est v -20.2 prior
- 19:30 (JP) Japan Feb Jobless Rate: 3.2%e v 3.2% prior; Job-To-Applicant Ratio: 1.29e 1.28 prior
- 19:30 (JP) Japan Feb Overall Household Spending Y/Y: -1.7%e v -3.1% prior
- 19:50 (JP) Japan Feb Retail Sales M/M: -0.9%e v -1.1% prior; Retail Trade Y/Y: +1.5%e v -0.1% prior; Large Retailers' Sales: No est v 0.9% prior
- 19:50 (JP) Japan Feb Department Store Sales: 1.6%e v 1.0% prior
- 23:00 (TH) Thailand to sell combined THB80B in 3-month and 6-month bills
- 23:30 (HK) Hong Kong to sell 3-month, 6-month bills
- 23:30 (TH) Thailand Feb ISIC Manufacturing Production Index Y/Y: -4.0%e v -3.3% prior; Capacity Utilization: No est v 63.9 prior
- (CO) Colombia Feb Retail Confidence: No est v 19.5 prior; Industrial Confidence: No est v 5.3 prior
- (CL) Chile Central Bank (BCCH) Quarterly Report

(TechCrunch) Why every household is about to get a brand-new fridge

Today’s retail economy is focused on acquisition and retention costs. Getting into people’s homes and turning them into long-term brand buyers is the goal, and appliance makers control an untapped resource — the Internet of Things (IoT) — that can effectively extend a brand or retailer’s supply chain visibility into the home.

How will the IoT manifest itself in the home? For many consumer brands and retailers, there’s always been one door that holds the key to the $65 billion a month American households spend on food: the refrigerator door. For example, at this year’s CES, Samsung introduced a refrigerator touted as truly “smart,” with connected cameras inside the fridge, an ability to run Pandora with built-in speakers and even grocery shopping through Amazon’s Alexa or a new, dedicated app called Groceries by MasterCard.

By building smart fridges that can track consumption, deliver offers and manage purchasing and replenishment, manufacturers can extract subsidies from companies in order to tap into data and the revenue stream of each consumer, then provide them with a free refrigerator.

Subsidies have long been a tool for both customer lock-in (think of InkJet printers sold at a loss to open the revenue stream for ink) as well as recurring revenue models (such as Verizon trading a $650 iPhone for the chance at triple the revenue in yearly billings). The smart fridge brings both of these models into play.

With a connected fridge, advertisers will pay to promote products to the consumer on the refrigerator’s screen, who will then use a related subscription-based service to buy the products. What makes promotion like this appealing to advertisers is that it’s data-driven, personalized and proactive.

It’s the same reason Google acquired Nest and Apple built HomeKit: It puts them inside the consumer’s house and gives them the ability to be “first to market” when a need arises. Like Valleywag’s Sam Biddle tweeted after the Nest acquisition, “If your house is burning down you’ll now get Gmail ads for fire extinguishers.”

In the same way, imagine receiving a $0.50 coupon for Heinz ketchup just as you toss your empty bottle. Or better yet, what if you got a coupon for a free bottle of Del Monte ketchup? Would you not try it? And what if this happened in hundreds of thousands of homes? Del Monte, by way of example, stands little chance in the battle over supermarket shelf space, but may find a way to challenge Heinz’s near 60 percent market dominance by going directly to a consumer’s fridge.

Food is a recurring purchase, with most Americans buying the same brands over and over again. While a bottle of ketchup does not have the lock-in protection of InkJet cartridges, the smart fridge provides a way to keep the purchase cycle going through replenishment reminders and promotions. It will play a central role in ensuring the consumption of the same food brands — or help drive consumers to a competitor.

Nothing in this life is free, so how will advertisers and retailers make back the cost of subsidizing these “free” fridges? By tapping in to years of food purchases via the fridge. There will have to be some manner of contract (just like with cell phone carriers) to ensure users behave as intended and buy what the fridge recommends or buy goods from a certain store. Users will see workflows and behaviors that have been made most famous through Amazon, such as:

Recommendations — If the smart fridge knows what it contains, it can make recipe recommendations, which may or may not encourage the purchase of an additional item (e.g. you have lettuce, tomatoes and bread, why not buy some delicious Oscar Mayer bacon and have a BLT tomorrow?).
Subscriptions — By incorporating features similar to Amazon’s Subscribe and Save program, the fridge can ensure rapid, automated replenishment that eliminates the window to change brands and keeps products on hand for continued consumption.
Auto purchase — Despite the ridicule of Amazon’s Dash Button, automatic purchases are the wave of the future. Fridges will log consumption and enable users to auto-purchase depleted goods. It’s this sort of mindless, one-click (or no click) transaction that is the ultimate in retention methodology.
While the smart fridge brings convenience and new features to consumers, it is also interesting to consider what consumers could provide to brands, retailers and each other through machine learning and artificial intelligence.

Look at the success of an app like Waze. Its power comes from the volume of people using the software and making recommendations. You could see the same collective intelligence arise within the smart fridge. What if Del Monte actually does make better ketchup than Heinz, but we just don’t know about it? A connected fridge could provide new insights into tastes and preferences, helping bring better product awareness to the public. It can also provide superior consumer intelligence that food and beverage companies could only dream about when trying to understand buying and consumption habits.

The idea of a free refrigerator may seem radical today, but it’s a concept that has proven successful in other industries — and the technology exists to make it work. Ultimately, the consumers are the ones holding the key to the smart fridge’s future. Are we ready to share the details of every late-night snack, or will the fridge be the line that we draw when it comes to sharing our private information with commercial organizations?

(ZH) Something Just Snapped In The VIX ETF Complex

Something Just Snapped In The VIX ETF Complex

As TVIX, the double-levered long VIX ETF unleashed in Nov 2010, decays to record low prices...

 

An unusual (and almost unprecedented) event has occurred. Just as we saw in Gold ETFs, and Oil ETFs, TVIX Shares Outstanding have exploded by a stunning 225% in the last 4 weeks... [the last 3 times TVIX has undeergone such an epic surge in demand marked a major turning point and led a violent surge in VIX]

 

with the largest inflows (bearish bets) on record in the last week...

 

The entire VIX complex is perturbed as the huge bearish TVIX flows contrast with the complacency of the steepest term structure since Nov 2014 (post Bullard-Bounce)...

 

And net speculative positioning at its shortest VIX (most bullish) in 2016...

 

We saw this kind of manic ETF creation recently in Blackrock's Gold ETF, which forced them to halt creation - for lack of supply...

 

 

In the case of the current scramble for TVIX units, forced buying of VIX futures (which explains the steepness of the futures curve) suggests VIX buying pressure is building...

As Barron's adds, volatility is back, but too few investors even know it.

Most are too focused on the CBOE Volatility Index's extraordinary collapse in recent weeks to 15 from about 28. When the VIX is low, as it is now, it tends to be interpreted as a green light to buy stocks. . .or a sign of investor complacency.

 

Not enough people realize that the VIX is just a 30-day snapshot of expected returns for the Standard & Poor's 500 index. A more meaningful, if esoteric, indicator is the VIX futures curve, which offers a long-term view of the stock market's perceived risk.

 

The curve has lately been flat, indicating little risk to owning stocks between now and more distant months. But the futures curve is now "upward sloping," as if sophisticated investors have suddenly regained visibility into what was an opaque stock market.

 

Nothing bores people more than nerdy derivatives measures, including VIX futures curves. But you should add this volatility gauge to your arsenal of indicators if you trade options or want to be a smarter stock investor.

Once again it appears the ETF tail is wagging the underlying market 'dog' as hedging with the 'cheapest' instrument - no matter how bad the basis - is the new normal. Remember, options markets are already medium term complacent and longer-term terrified.

 

As detailed previously, the VXV has been around only since 2007. Over that time, the VIX/VXV ratio has dropped to 78% on 4 prior distinct occasions:

  • March 12-20, 2012 - The S&P 500 chopped sideways for a few weeks before falling some 9% over the next 2 months
  • August 13-22, 2012 - The S&P 500 chopped sideways for a few weeks before rallying by as much as some 4% over the next few weeks. 2 months later, the index had lost that entire gain, and another 4%.
  • December 5, 2014 - The S&P 500 immediately dropped 5% over the next 2 weeks before chopping sideways for several months.
  • March 20, 2015 - The S&P 500 dropped 2.5% over the next week before moving sideways for several months.

Now there is no guarantee that stocks are about to hit an air pocket. However, given the (albeit limited) precedents, the track record in the short to intermediate-term following such readings has not been a positive one. In fact, following the prior 15 days with VIX/VXV readings below 79%, the S&P 500 was lower 3 months later 14 of the days by a median of -3.7%. The only positive return was the 1 point gain following the March 2015 occurrence.

All in all, this may not be a Defcon 5 level red flag for the market. However, for a rally that has seen scant evidence of exuberance, this is at least one of the first indications of complacency.

>>> EDF could be liable for 80% of EUR 5bn overrun costs at Hinkley Point - The

EDF could be liable for 80% of EUR 5bn overrun costs at Hinkley Point - The Times (London), Journal du Dimanche (France)

EDF (EPA:EDF) may be on the hook for a greater portion of liabilities relating to its Hinkley Point C nuclear project in the UK than was previously thought, The Times reported, citing Le Journal du Dimanche. EDF owns a 66.5% stake, but would reportedly take on 80% of a potential EUR 5bn overrun in costs, with state-owned Chinese partner CGN taking a lesser proportional hit.

If Hinkley Point is delayed for six months, CGN would be in line for a refund of several hundred million euros from EDF, the item reported. It added that the French company’s ability to finance the GBP 18bn project is increasingly being called into question.

The government of Austria has alleged Hinkley Point is receiving illegal state aid; should its challenge to the European Commission succeed, CGN will be in line for a further EUR 1.6bn payment, the report said. The information came from a note written by former EDF Chief Financial Officer Thomas Piquemal to the group’s audit committee, the report said. It noted that Piquemal, who handed in his resignation earlier this month, believes the Hinkley Point project may jeopardise EDF’s financial situation as a whole.

The report from Le Journal du Dimanche cited a person in the know as saying that the effective rate of return on the projects, estimated at 9% by the French Finance and Economy Minister Emmanuel Macron, now amounts to 8% and is expected to be equal to 6% by the end of the project.

The report also noted that EDF has given CGN several veto rights regarding the management and governance of the project, and in particular concerning the accounting, the budgeting, the payment of dividends and the payment of the board members. The report claimed that CGM would also be able to vote measures even if EDF is against it if it manages to convince the independent board members.

According to the report, several members of the board of EDF are not in favour of voting for the project in its current form and are asking to delay it by two to three years. The delay would give the group time to view how the EPR nuclear project in China is running and how the construction of the similar EPR project in Flamanville, France, progresses. The newspaper claimed that a majority of nine EDF board members, out of the total 17, could be in favour of the delay. However, the government and the management of EDF are pressuring to sign the deal

The Times (London), Journal du Dimanche (France)

>>> Terex/Konecranes deal looks unlikely, analysts say - Kauppalehti Online, Tal

Terex/Konecranes deal looks unlikely, analysts say - Kauppalehti Online, Taloussanomat

The Finnish Konecranes’ ability to acquire the Connecticut–based Terex is greatly reduced after Zoomlion raised its offer, according to Kauppalehti Online. The Finnish-language piece cited an analyst from Inderes, Juha Kinnunen, who said that the merger is looking even less likely now after Terex announced Zoomlion had raised its non-binding offer to USD 31 per share.

The fusion with Terex would be beneficial for Konecranes, he said, but it is likely that shareholders will take Zoomlion’s cash offer. He said that the Zoomlion deal may still fall because of American competition officials despite the fact that Terex shareholders may approve of the deal.

He said that Terex may not have a genuine interest to merge with Konecranes, but its board officially supports Konecranes’ offer due to the contract’s legal reasons.

Meanwhile, Taloussanomat also reported, citing various analysts that the merger seems very unlikely now.

Kauppalehti Online, Taloussanomat

NY Times : Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin

Ethereum, a Virtual Currency, Enables Transactions That Rival Bitcoin’s

A new virtual gold rush is underway.

Even as Bitcoin, riven by internal divisions, has struggled, a rival virtual currency — known as Ethereum — has soared in value, climbing 1,000 percent over the last three months.

Beyond the price spike, Ethereum is also attracting attention from giants in finance and technology, like JPMorgan Chase, Microsoft and IBM, which have described it as a sort of Bitcoin 2.0.

The rise of the relatively new virtual currency has been helped by a battle within the Bitcoin community over how the basic Bitcoin software should develop.
The fights have slowed down Bitcoin transactions and led some people to look for alternative virtual currencies to power their businesses. Enter Ethereum.

Like Bitcoin, the Ethereum system is built on a blockchain in which every transaction is recorded publicly. The promise of such a system is that it allows the exchange of money and assets more quickly and more cheaply than relying on a long chain of middlemen.

But Ethereum has also won fans with its promise to do much more than Bitcoin. In addition to the virtual currency, the software provides a way to create online markets and programmable transactions known as smart contracts.

The system is complicated enough that even people who know it well have trouble describing it in plain English. But one application in development would let farmers put their produce up for sale directly to consumers and take payment directly from consumers. There are already dozens of functioning applications built on Ethereum, enabling new ways to manage and pay for electricity, sports bets and even Ponzi schemes.

All of this work is still very early. The first full public version of the Ethereum software was recently released, and the system could face some of the same technical and legal problems that have tarnished Bitcoin.

Many Bitcoin advocates say Ethereum will face more security problems than Bitcoin because of the greater complexity of the software. Thus far, Ethereum has faced much less testing, and many fewer attacks, than Bitcoin. The novel design of Ethereum may also invite intense scrutiny by authorities given that potentially fraudulent contracts, like the Ponzi schemes, can be written directly into the Ethereum system.

But the sophisticated capabilities of the system have made it fascinating to some executives in corporate America. IBM said last year that it was experimenting with Ethereum as a way to control real world objects in the so-called Internet of things.

Microsoft has been working on several projects that make it easier to use Ethereum on its computing cloud, Azure.

“Ethereum is a general platform where you can solve problems in many industries using a fairly elegant solution — the most elegant solution we have seen to date,” said Marley Gray, a director of business development and strategy at Microsoft.

Mr. Gray is responsible for Microsoft’s work with blockchains, the database concept that Bitcoin introduced. Blockchains are designed to store transactions and data without requiring any central authority or repository.

Blockchain ledgers are generally maintained and updated by networks of computers working together — somewhat similar to the way that Wikipedia is updated and maintained by all its users.

Many corporations, though, have created their own Ethereum networks with private blockchains, independent of the public system, and that could ultimately detract from the value of the individual unit in the Ethereum system — known as an Ether — that people have recently been buying.

The interest in Ethereum is one sign of the corporate fascination with blockchains. Most major banks have expressed an interest in using them to make trading and money transfer faster and more efficient. On Tuesday, executives from the largest banks will gather for a conference, “Blockchain: Tapping Into the Real Potential, Cutting Through the Hype.”

Many of these banks have recently been looking at how some version of Ethereum might be put to use. JPMorgan, for instance, has created a specific tool, Masala, that allows some of its internal databases to interact with an Ethereum blockchain.

Michael Novogratz, a former top executive at the private equity firm Fortress Investing Group, who helped lead Fortress’s investment in Bitcoin, has been looking at Ethereum since he left Fortress last fall. Mr. Novogratz said that he made a “significant” purchase of Ether in January. He has also heard how the financial industry’s chatter about the virtual currency has evolved.

“A lot of the more established players were thinking, ‘It’s still an experiment,’ ” he said. “It feels like in the last two to three months that experiment is at least getting a lot more validation.”

Since the beginning of the year, the value of an individual unit of Ether has soared as high as $12 from around $1. That has brought the value of all existing Ether to over $1 billion at times, significantly more than any virtual currency other than Bitcoin, which had over $6 billion in value outstanding last week.

Since Bitcoin was invented, there have been many so-called alt-coins that have tried to improve on Bitcoin, but none have won the following of Ethereum.

Unlike Bitcoin, which was released in 2009 by a mysterious creator known as Satoshi Nakamoto, Ethereum was created in a more transparent fashion by a 21-year-old Russian-Canadian, Vitalik Buterin, after he dropped out of Waterloo University in Ontario.

The most basic aim of Ethereum was to make it possible to program binding agreements into the blockchain — the smart contract concept. Two people, for instance, could program a bet on a sports game directly into the Ethereum blockchain. Once the final score came in from a mutually agreed upon source — say, The Associated Press — the money would be automatically transferred to the winning party. Ether can be used as a currency in this system, but Ether are also necessary to pay for the network power needed to process the bet.

The Ethereum system has sometimes been described as a single shared computer that is run by the network of users and on which resources are parceled out and paid for by Ether.

A team of seven co-founders helped Mr. Buterin write up the software after he released the initial description of the system. Mr. Buterin’s team raised $18 million in 2014 through a presale of Ether, which helped fund the Ethereum Foundation, which supports the software’s development.

Like Bitcoin, Ethereum has succeeded by attracting a dedicated network of followers who have helped support the software, partly in the hope that their Ether will increase in value if the system succeeds. Last week, there were 5,800 computers — or nodes — helping support the network around the world. The Bitcoin network had about 7,400 nodes.

One of Mr. Buterin’s co-founders, Joseph Lubin, has set up ConsenSys, a company based in Brooklyn that has hired over 50 developers to build applications on the Ethereum system, including one that enables music distribution and another that allows for a new kind of financial auditing.

The ConsenSys offices are in an old industrial building in the Bushwick section of Brooklyn. The office is essentially one large room, with all the messy trademarks of a start-up operation, including white boards on the walls and computer parts lying around.

Mr. Lubin said he had thrown himself into Ethereum after starting to think that it delivered on some of the failed promise of Bitcoin, especially when it came to allowing new kinds of online contracts and markets.

“Bitcoin presented the broad strokes vision, and Ethereum presented the crystallization of how to deliver that vision,” he said.

Joseph Bonneau, a computer science researcher at Stanford who studies so-called crypto-currencies, said Ethereum was the first system that had really caught his interest since Bitcoin.

It is far from a sure thing, he cautioned.

“Bitcoin is still probably the safest bet, but Ethereum is certainly No. 2, and some folks will say it is more likely to be around in 10 years,” Mr. Bonneau said. “It will depend if any real markets develop around it. If there is some actual application.”

FT : Italian lenders’ tie-up paves way for consolidation

Italian lenders’ tie-up paves way for consolidation

Italy’s banking sector is braced for further consolidation following its first merger in a decade, agreed last week between mutual banks Banca Popolare di Milano and Banco Popolare.
The deal to combine BPM and Banco Popolare, creating the country’s third-largest banking group by market capitalisation holding €170bn in assets, comes as the Italian banking sector is coming under strain. Investors’ concerns over banks’ exposure to €360bn in gross non-performing loans have sent shares plunging roughly 25 per cent since the start of year.

Nonetheless, demands by the ECB for additional capital and governance, in its role as chief supervisor of the single supervisory mechanism, have left market participants concerned about the difficulties ahead for potential merger candidates, says bankers and analysts.
The ECB demanded that Banco Popolare, which has €21.7bn of gross deteriorated loans compared with €5bn at BPM, acquire a further €1bn via a capital raising — even though both banks passed most recent stress tests. The announcement of the merger and the conditions being imposed led to shares in both banks falling 6 per cent.
Johan De Mulder, analyst at Bernstein, said the weeks of wrangling over the merger terms between BPM and Banco Popolare showed that “the ECB is getting serious about wanting to offload bad debt from bank balance sheets”.
“A successful merger will be used as a template for further consolidation in the sector and shows the ECB’s game in pushing for more aggressive disposals and potential capital raises,” he said.
A law passed by the government of Matteo Renzi in January last year fired the starting gun on the consolidation process. It decreed that Italy’s 10 largest mutual banks, with combined assets of about €500bn, must become joint stock companies by the end of 2016. The Italian government wants consolidation to boost profitability and lending in the fragmented sector of more than 600 banks.
Adding to the momentum, the government this year passed an additional reform to speed up the consolidation of Italy’s smaller co-operative banks.
Davide Serra, founder and chief executive Algebris, a financial-only fund, said the Italian banking system needs “more consolidation as it has more banks than pizzerias”. “But ECB supervisory actions have destabilised market confidence,” he said.
Bankers said the focus now shifts to UBI Banca, with €120bn in assets. Both BPM and Banco Popolare held aborted merger talks with the lender — Italy’s next largest mutual bank in the wake of the merger.
Banca Monte dei Paschi di Siena, Italy’s third-largest banking group by assets, and Genoan Carige, the worst performers in the European stress tests of 2014 are also seeking buyers. Giuseppe Castagna, chief executive designate of the merged BPM-Banco Popolare, has also described the new group as a “consolidator” that could consider more deals.
“We look forward to further consolidation,” said one senior Italian government official.
Still, bankers consider the next potential “flash points” of the Italian banking sector — and test of investor confidence — are capital increases worth about a combined €2.5bn due next month at Popolare di Vicenza and Veneto Banca. These were again demanded by the single supervisor in Frankfurt and underwritten by Italy’s largest banks UniCredit and Intesa Sanpaolo, respectively.
“The key test will be the capital raisings at Veneto and Vicenza,” said Mr Serra

FT : Loeb presses Japan’s Seven & i on succession plans

Loeb presses Japan’s Seven & i on succession plans

Daniel Loeb, the US activist investor, has urged the board of Seven & i Holdings to select its new chief executive based on competency rather than nepotism, citing rumours that the incumbent is looking to name his son as eventual successor.
The latest attack on the Japanese retailer comes as Third Point — the hedge fund run by Mr Loeb — has taken aim at several companies including Suzuki Motor and robotmaker Fanuc, buoyed by Prime Minister Shinzo Abe’s corporate governance reforms.

In his third letter to Seven & i dated Sunday, Third Point said the retailer faces a succession issue with Toshifumi Suzuki, the 83-year-old CEO, suffering from chronic health issues.
The fund said it was concerned by rumours that Ryuichi Isaka, president of Seven-Eleven Japan, could be removed from his position and replaced with another executive in a manoevre to enable Mr Suzuki’s son to eventually head the main convenience store business and then become group chief executive.
“We think the process of selecting the new chief executive rests with the board, not with Mr Suzuki,” Mr Loeb said in a media phone interview on Sunday, adding the choice should not be “Mr Suzuki’s handpicked successor who will in turn appoint his son.”
“This is not a dynasty but a corporation, and corporations are based on meritocracy not on dynasty,” Mr Loeb added.
Seven & i declined to comment on Third Point’s letter. But the company said it did not have imminent plans for management changes and added Mr Suzuki has fully recovered after being briefly hospitalised at the end of the year.
Third Point has not disclosed the size of its stake in Seven & i but Mr Loeb said the fund was a significant stockholder and its equity stake was worth “hundreds of millions of dollars.” Seven & i has a market capitalisation of $38bn.
He sent his first letter in late August and a subsequent one in January, where he called on the retailer to revamp its lacklustre supermarket business and pull out of acquisitions including Barney’s Japan and department store group Sogo & Seibu.
Seven & i has already announced plans to close 40 unprofitable Ito-Yokado supermarket stores over the next five years and shut down two department stores, but Mr Loeb wants it to go further.
On Sunday he said he has yet to decide whether to submit a shareholder proposal on the succession issue for the annual shareholder’s meeting in May. But in his letter, he said: “We have no wish to create a public dispute at a future Annual General Meeting but of course are willing to do so in order to protect our investment.”
Mr Loeb, known for his aggressive activist campaign, has been an active investor in Japan and a supporter of Abenomics, the equities-friendly economic policies of Mr Abe.
Last year, Mr Loeb took aim at Fanuc, successfully urging the robotmaker to make better use of its ample cash pile. It has also invested in Sony, SoftBank and heavy machinery maker IHI Corp.

Recode.net : Dell could announce the sale of its IT services unit to Japan’s NTT

Dell could announce the sale of its IT services unit to Japan’s NTT for $3.5 billion as soon as Monday

Capping a process that began late last year, Dell could announce as early as Monday the sale of the company’s IT services unit to Japan’s telecom conglomerate NTT for $3.5 billion, sources briefed on the process tell Re/code.

Dell has been shopping the division — previously known as Perot Services — since last fall as part of a wider effort to raise as much as $10 billion selling assets that aren’t a core part of its business.

The company wants to use those funds to help pay down part of the $50 billion in debt it will incur when it closes on its $67 billion acquisition of data storage company EMC, which would stand as the largest technology deal of all time if it goes through. The sale to NTT is seen as an important signal to the debt markets that Dell will be able to rapidly pay down that debt.

A Dell spokesman had no comment as did a spokesman for Silver Lake, the private equity firm that co-owns Dell. A spokesperson for NTT did not reply to messages left over the weekend.

As recently as December, Dell had hoped to get about $5 billion for the business unit, but sources say NTT is likely to pay slightly north of the $3.5 billion it offered earlier this month. That’s about $400 million lower than the $3.9 billion Dell paid when it acquired Perot Systems in 2009.

During the on-again off-again sale process, Dell approached several international IT consultancy companies including India’s Tata Consultancy Services, Genpact, a U.S.-based firm and CGI, a Canadian IT company. Talks with the French IT services firm Atos reached an advanced stage in January. Sources said the talks ended when the two sides couldn’t agree on a price, and also because Atos’ share price fell.

>>> What to look today - 28th of March 2016 - Easter Monday (Europe Closed)

Asian equity markets sprung right back into rally mode with steady gains, even though participation was still limited by the Easter holiday that kept Australia and Hong Kong traders away. Nikkei225 led the rally with nearly a 1% rise as USD/JPY rose over 60pips to 113.60 on the heels of more bullish comments from Fed's Bullard calling April and June meetings as "live" events for potentially more tightening. Shanghai Composite benefited from improving industrial profits data and more upbeat China Beige Book. China Industrial Profits for Jan-Feb - spread out due to the seasonality around Lunar New Year - showed their first rise after 7 straight months of decline. China Beige Book, released over the weekend, also pointed to improving profits in Q1, but also noted declining staffing, as quarterly Capex hit a 5-year low and 33% of companies reduced their investments. Beige Book report further noted payrolls growth by private companies was at a 4-year low. Helping sentiment was a report in Chinese press that the state pension fund will begin to invest in A-share market this year with estimated flows of about CNY600B. The timing outline for the announcement follows recent State Council decision to allow up to 30% of Pension Fund assets to be invested in equities. Also of note, China lockup shares expected to be released into the market this week was down to just over CNY25B from over CNY100B last week.

Nikkei +0.77% Hang Seng Closed Shanghai -0.73%

Eur$ 1.1167 CNH 6.5247 CNY 6.5155 JPY 113.58 GBP 1.4152 CHF 0,9771 RUB $67.80 WTI$ 39.96

S&P+0.35% EuroStoxx Closed Dax Closed SMI Closed

Macro :
Dijsselbloem Says ECB Actions Unusual Because of Unusual Times
Bond Rally Seen on Collision Course With Inflation as Fed Punts
Behind U.S. GDP Data Is Reason for Recession Worry: Weak Profits

Keep an eye on :
- ABG SM : Abengoa Presents Standstill Request, Has 75% Creditor Support
- AZN LN : Astrazeneca Says Japan Approves Tagrisso for Patient Treatment
- BMPS IM : Paschi Denies Press Report on ECB Request for Capital Increase
- BMPS IM : Monte Paschi Said to Seek Buyers for EU200m of Secured Bad Loans
- CABK SM : Santoro’s Silva Says Co. Willing to Restart Talks with CaixaBank
- CRG IM : Apollo Bids for Carige Bad Loans, May Add Capital: Messaggero
- CRG IM : Banca Carige may sell 52%-59% stake to Apollo if non-binding offer accepted - Messaggero
- CNHI IM : CNH Industrial Sees ~$500m Charge Related to Probe of Unit
- DB1 GY : Deutsche Boerse, LSE Mull Using Dutch Legal Entity: Telegraph
- EDF FP : EDF Confirms Goal to Start Flamanville Reactor in 4Q 2018
- EDF FP : EDF Would Shoulder CGN Share of Hinkley Point Cost Overruns: JDD
- ENI IM : Eni Declines Comment on WSJ Report of Exxon Mozambique Interest - http://on.wsj.com/1RAWKTa
- FER SM : Ferrovial Said in Lead to Win Laing O’Rourke Unit Auction: AFR
- FCC SM : FCC Seeks Help From Creditors on Debt, Expansion Reports
- GBB FP : Bourbon Says Two Crew Members Abducted in Nigeria Freed
- OMG LN : Old Mutual’s wealth management unit could see joint bid from Bain and Carlyle, Advent also interested - Sunday Times
- PST IM : Italy Weighing Sale of Second Stake in Poste This Year: Ansa
- PFD LN : John Paulson urges Premier Foods to engage - FT - http://on.ft.com/1UpqQQA
- PFD LN : Premier Foods CEO open to talks with McCormick at right price; pension contribution could be too much for McCormick
- PFD LN : Premier Foods shareholders would settle for sale at 65p per share - Daily Telegraph
- RNO FP : Nissan to Use Japan Battery for Japan Leaf Cars: Nikkan Kogyo
- RENFE IPO : Renfe Exec Says Train Operator Should Be Publicly Listed: FT
- CFR VX : Chopard Co-President Sees Consumer Caution in Some Regions: SZ
- RDSA NA : Neptune Oil confirms interest in Shell’s North Sea assets - Daily Telegraph
- RWE GY : RWE Plans to Cut 2,000 Jobs by 2018, Says HR Officer Tigges: WAZ
- SAF FP : Safran Said to Evaluate Security Division Sale: Les Echos
- SAP GY : SAP Extends Contracts of CEO, CFO, Sales Chief to 2021: Reuters
- SRG IM : Thyssengas may receive bid from Snam - Il Sole 24 Ore
- SN/ LN : Zimmer Biomet Says Deferred Prosecution Agreement Ongoing
- SOF BB : Sofina Net Asset Value Climbs 12% in 2015; Dividend Tops Est.
- SPIE FP : Spie Gets EU30m Investment From La Caisse
- SYNN VX : Syngenta Says ChemChina Deal Poses No Food Safety Risks: WSJ
- URKA LI : Acron Said to Have Sold Uralkali Stake, Interfax Reports
- VIE FP : Veolia Sold EU700m of Convertibles by Private Placement: Gide
- VIV FP : Canal+ to Pay beIN Sports More Than EU1.5B, BFM Business Says
- VOW3 GY : Volkswagen, Porsche Recall More Than 800,000 SUVs on Pedal Issue
- VOW3 GY : VW Superv’y Board Considers New Strategy Committee, dpa-AFX Says
- VOW3 GY : VW CEO Loses Fight to Restore Hatz to Post After Scandal: BamS
- YHOO US : Microsoft Said to Mull Backing Potential Yahoo Buyers: Re/Code - http://on.recode.net/1Sl6pjT