>>> What to look at this Week End - 12th & 13th of March 2016

Weekly Performance
Dow+1.21% S&P+1.11% Nasdaq+0.67% Russell+0.52% IBovespa+1.13% Nikkei-0.45% Hang Seng+0.11% Shanghai -2.22% EuroStoxx+1.20% CAC+0.81% Dax+0.07% Ibex+3.17% MIB+3.88% FTSE-0.96%
China and the ECB set the tone for global markets this week. Last weekend, the Chinese leadership disclosed their economic projections for 2016 at the National People's Congress (NPC), unveiling a GDP target range of 6.5-7.0%, as well as a higher fiscal deficit level. China left its CPI target at +3%, and cut its fixed asset investment growth to 10.5% from 15% prior. The changes were largely in line with expectations, although enthusiasm was tempered by the very weak February China trade report out later in the week. On Thursday, the ECB launched another round of monetary policy stimulus, cutting all three of its key policy rates and adding to its monthly QE bond buying scheme. Mario Draghi warned markets that there would not be much more easing on tap from the ECB, while simultaneously claiming that the ECB was not out of ammo. Thursday was the seventh anniversary of the current bull market, as measured from the Monday following the S&P500's ominous bottom at 666 on Friday, March 6th 2009. US markets were flattish and devoid of much major news (beyond the continuing political circus of the presidential nominating contest) until Friday, when stocks surged higher. For the week, the DJIA added 1.2%, the S&P500 gained 1.1%, and the Nasdaq rose 0.7%.

Macro :
ECB Giving ‘Final Shove’ to End Crisis: ABI Head to Messaggero
EU Says China Gave Some Clarity on Steel Cuts, Must Do More
U.K. to Cut Welfare by GBP1.2b by 2020: Telegraph
ECB Measures to Spur More Lending, UniCredit CEO Says: Stampa

Keep an eye on :
- ALV GY : Allianz 2015 Board Compensation Almost Doubles to EU57 Mln: BZ
- AZN LN : AstraZeneca CEO Said to Face Shareholder Revolt Over Pay: Times
- EN FP : Bouygues, Orange Close to Deal, Les Echos Reports - http://bit.ly/1QQVfEr
- CBK GY : Martin Zielke Named as New CEO of Commerzbank - WSJ
- DRTY LN : Fnac Planning to Improve Offer for Darty: Journal du Dimanche
- DB1 GY : LSE, Deutsche Boerse Deal Could Be Announced Monday, Times Says
- EDF FP : EDF Seeks French Govt Financial Support on U.K. Plant: FT
- EDF FP : EDF’s Hinkley Deal ‘Outrageously Expensive’, Ineos Tells Times
- ENEL IM : Enel to Decouple Its Gas-Supply Contracts From Oil Price: Welt
- ENI IM : Eni’s Goliat Starts Producing, Stavanger Aftenblad Reports
- EOAN GY : Germany Worried About Hacker Attacks on Utilities: Tagesspiegel
- FERR IM : Ferrero’s Reorganization to Start in May, Sole Reports
- TFM US : Apollo Global Said to Near Deal to Buy Fresh Market: Reuters
- INW IM : Inwit 2015 Adj. Net EU83.9m vs Pro-Forma EU82.2m Y/y
- UG FP : FFP CEO Says Peugeot Stake to Remain Stable, Les Echos Reports
- RBS LN : RBS Cut 550 Jobs, Replace People With ‘Robo-Advisers’: FT
- RWE GY : Germany Worried About Hacker Attacks on Utilities: Tagesspiegel
- SBRY LN : Sainsbury Set to Raise Bid for Argos Parent to GBP1.5b: Mail
- SIKA VX : Saint-Gobain, Burkard Family Extend Validity of Agreement
- SKAB SS : Skanska Said to Sell Stake in London M25 Contract: Sunday Times
- WWP LN : WPP’s Sorrell May Be Awarded GBP60m in Bonus, Sunday Times Says
- ZEG LN : Zegona Said to Offer More Than EU500m for Yoigo, Expansion Says

(Les Echos) Orange-Bouygues : de vraies avancées

Orange-Bouygues : de vraies avancées

Un accord est « quasi bouclé » avec Patrick Drahi et Xavier Niel sur la rétrocession d’actifs.
C’est la dernière ligne droite avant la conclusion, ou pas, d’un mariage entre Orange et Bouygues Telecom. Stéphane Richard, le PDG d’Orange, et Martin Bouygues ont en effet indiqué qu’ils étaient prêts à négocier jusqu’au 31 mars, mais pas après. Pour l’heure, les discussions seraient en bonne voie et les protagonistes auraient de bonnes chances de conclure un accord.
Pour obtenir le feu vert de l’autorité de la concurrence sur cette fusion, Orange et Bouy­gues Telecom vont devoir céder des actifs (fréquences, réseaux, clients, boutiques...) à leurs concurrents.
Partage des fréquences et des réseaux
Sur ces points, les discussions ont bien avancé et un accord est « quasi bouclé » avec le SFR de Patrick Drahi et le Free de Xavier Niel, selon une source proche du dossier. Tous deux vont se partager les fréquences, les réseaux et les clients mobiles. Free reprendrait moins d’actifs par rapport à ce qui avait été envisagé dans un premier temps, et en particulier a priori pas de clients mobiles.
C’est Stéphane Richard, le PDG d’Orange, qui pilote les discussions pour le compte des quatre opérateurs télécoms. Les autres patrons, Patrick Drahi, Xavier Niel et Martin Bouygues, eux, ne s’adressent pas la parole. Les négociations se sont intensifiées en fin de semaine dernière, jeudi et vendredi, Stéphane Richard ayant même décidé d’annuler un road show organisé par BAML aux Etats-Unis, où il devait intervenir, afin de pouvoir les accélérer.
Restera ensuite à franchir les derniers obstacles en réglant en particulier la question de la participation de Bouygues dans Orange et celle de l’Etat, qui contrôle 23 % du capital d’Orange, dont 9,6 % via la BPI. Chacun a ses exigences, l’Etat veut rester l’actionnaire de référence d’Orange et garder ses sièges au conseil d’administration pour s’assurer une minorité de blocage. Martin Bouygues, lui, veut céder Bouygues Telecom pour 10 milliards d’euros. Il a fait savoir publiquement qu’une participation comprise « entre 10 % et 15 % » serait « très correcte », avant que son entourage rectifie le tir en précisant que l’objectif était bien « d’obtenir 15 % ».
Dimanche soir, Stéphane Richard devait participer à une réunion avec l’Etat pour tenter d’harmoniser les positions. Il ne reste qu’une quinzaine de jours aux protagonistes pour se mettre d’accord.


http://www.lesechos.fr/tech-medias/hightech/021763376671-orange-bouygues-de-vraies-avancees-1206578.php


FT : Uber competitor to offer drivers shares

Uber competitor to offer drivers shares

Competitors of Uber think they have found a chink in the armour of the ride-hailing juggernaut: disgruntled drivers who can be lured away with better rates and equity.
That is the strategy of one of Uber’s newest and most high-profile challengers, Juno, a start-up that plans to launch a competing ride-hailing service in New York this spring.

Juno’s founder Talmon Marco, an entrepreneur who co-founded Viber, says the company is specifically targeting Uber drivers and offering them a better deal with lower commission rates and equity in the company.
“What Uber left out in the process of building their company is that they completely and totally forgot about the people who do the work, the drivers,” he says. “Imagine a company where all the employees hate management; that is not a good place to be.”
Groups of drivers in some of Uber’s largest US markets, including New York and San Francisco, have been protesting over fare cuts that were introduced in January, saying that the cuts affect their take-home wages.
While ride-hailing companies’ efforts to attract consumers with low prices and promotions usually receive the most attention, behind the scenes a battle is under way to attract the best drivers.
Lyft, Uber’s main competitor in the US, has been wooing drivers with its tip system as well as lower commissions for full-time drivers. Uber changed its commission structure this week to mirror Lyft’s in rewarding full-time drivers.
Drivers have also become the focus of increasing efforts to unionise. A bill was introduced in the California legislature this week which, if passed, would allow drivers for Uber and Lyft to form unions. Seattle passed a similar measure last year, although it is being challenged by a lawsuit.
Mr Marco says that Juno would classify drivers as employees, not as independent contractors, if they drove exclusively for Juno.
In an unusual twist, he proposes to distribute shares in Juno to drivers each quarter, so that over time the drivers can build as much equity as the founders.
However, the transportation market in New York is highly competitive, and has already seen at least one ride-hailing company, Hailo, give up entirely.
Mr Marco said that Juno would try to avoid the price wars that have defined the New York ride-hailing market so far. “Every time that either Uber or Lyft reduce their prices, it is a war that is fought on the back of drivers,” he said.
Juno is recruiting Uber drivers specifically, and requires that drivers have a high Uber rating to join. The company is already paying some drivers for permission to gather data on their Uber journeys.
Mr Marco would not disclose how much Juno has raised so far, saying only that it was in the tens of millions.
Uber declined to comment. The company has previously said that gross fares per hour have gone up in New York, rising from $26 per hour in 2012 to $39 per hour in 2015. However, Uber has also increased its commissions over the period by adding fees, such as the booking fee; the company does not disclose how drivers’ net pay has changed.
Uber has raised more than $10bn from investors and is the world’s most highly valued start-up, with a total valuation of $62.5bn.

WSJ : Blackstone Group Nears Deal to Sell Hotel Portfolio to Anbang Insurance Gr

Blackstone Group Nears Deal to Sell Hotel Portfolio to Anbang Insurance Group

China’s Anbang already owns New York’s iconic Waldorf Astoria

HONG KONG—Blackstone Group LP is flipping a portfolio of U.S. luxury hotels just months after buying it for $4 billion to the Chinese owner of New York’s Waldorf Astoria.

China’s Anbang Insurance Group Co. is near a deal to buy Strategic Hotels & Resorts Inc. from a Blackstone-managed real-estate fund, according to a person familiar with the situation. The deal comes after Blackstone took the company private in December for around $4 billion.

Anbang is among the most ambitious Chinese overseas acquirers, snatching up insurance companies and property assets across the U.S. and Europe. Chinese companies have done more than $84 billion in deals so far this year, according to Dealogic, setting them up to exceed the record $108 billion of Chinese outbound acquisitions reached last year.

China National Chemical Corp.—known as ChemChina—announced China’s biggest overseas purchase earlier this year with a $43 billion deal to buy Swiss pesticide and seed company Syngenta AG. Other big deals include Haier Group’s $5.4 billion agreement to buy General Electric’s appliance unit and a $3.3 billion bid by Chinese equipment maker Zoomlion Heavy Industry Science & Technology Co. for U.S. crane maker Terex Corp.

Anbang’s agreement to acquire Chicago-based Strategic Hotels will give it a substantial presence in luxury hotels across the U.S. Strategic Hotels’ prime assets include luxury properties such as the Essex House overlooking Manhattan’s Central Park and the Hotel del Coronado near San Diego. It owns a number of Four Seasons properties, including hotels in Washington, D.C., and Austin, Texas, and a resort in Jackson Hole, Wyo.

Blackstone is expected to turn a profit on the Strategic Hotels deal. Blackstone has built itself into the world’s largest real-estate private-equity fund manager by assets, and typically holds such assets for years.

Once a sleepy provincial car insurer, Beijing-headquartered Anbang Insurance has leapt onto the global stage with several high-profile deals, including its purchase of the Waldorf Astoria New York hotel for $1.95 billion in February 2015 from Hilton Worldwide Holdings Inc., which counts Blackstone as its largest shareholder.

The Waldorf Astoria New York sale carried the steepest price tag ever for a U.S. hotel at the time, brokers said, although it wasn’t the highest on a per-room basis.

Anbang has also cut a number of deals in the insurance world. It agreed to buy U.S. insurer Fidelity & Guaranty Life for $1.57 billion last year. It paid around $1 billion for a majority stake in a South Korean insurer and has purchased insurance companies in Belgium and the Netherlands.

Bloomberg News first reported that Anbang had agreed to purchase Strategic Hotels from Blackstone Group.

WSJ : Ryanair’s New Strategy: Being Nice

Ryanair’s New Strategy: Being Nice

Europe’s biggest budget carrier cuts fees, relaxes restrictions as it aims to win back customers

DUBLIN— Ryanair Holdings PLC, Europe’s biggest, no-frills budget carrier, has pulled out of what was starting to look like a tailspin.

Chief Executive Michael O’Leary’s unorthodox strategy for the recovery? Being nice to passengers.

Mr. O’Leary and Ryanair helped pioneer the rock-bottom budget airline, taking a page from Southwest Airlines in the U.S., but going much further. It offers some of the lowest airfares in Europe—sometimes as low as $15 one-way across Europe.

It does that by keeping operating costs low—spending minimally on cabin décor, for example—and charging for almost everything on top of the price of a ticket. Mr. O’Leary has been the airline’s best-known spokesman for years, with his no-apologies marketing.

He once defended Ryanair’s €70 (about $75) penalty fee for passengers who show up at the airport without a boarding pass, saying they were “being so stupid.” The fee is now €45 for airport check-in. He has in the past proposed a standing-room only cabin and a charge of one British pound (about $1.41) for using the in-flight toilet.

The no-frills model, once novel but now widely mimicked, has turned the 32-year-old Ryanair into Europe’s second-biggest airline by passengers flown, behind Deutsche Lufthansa AG. Ryanair’s long-haul competitors still outdistance it in terms of passenger-miles, a closely followed metric that also takes into consideration journey distances.

In 2013, a price war with full-service carriers and upstart budget airlines alike threatened that success. A pair of rapid-fire profit warnings spooked investors, who worried Ryanair might struggle to keep costs low amid all the new competition. The headwinds were similar to those now hitting U.S.-based carrier Spirit Airlines Inc. Spirit’s new CEO has said the carrier is working to address customer complaints and make its operations more reliable.

To win back customers, Mr. O’Leary relaxed onerous hand-luggage restrictions and redesigned Ryanair’s cumbersome website. It cut fees and told staff to be less confrontational. The airline also made headlines by dropping its trademark bugle call, which it blasted through cabins each time a flight arrived on time. The practice, amusing at first, had started to annoy passengers.

“Standing room only and charging for toilets was a great PR wheeze when we were young, dumb and growing rapidly,” Mr. O’Leary said in an interview. But after rivals started painting the moves as cheap and nasty, “the laddish noise was displacing the great fares, brilliant punctuality and new aircraft,” he said.

Passengers responded. In 2013, passenger growth was stuck at 1% to 3% some months, with as much as 20% of seats unsold. This year, monthly growth is climbing by 10% or more. Full-year results are due in May, and Ryanair expects passengers hit 106 million, about 6% more than forecast. Ryanair’s load factor, a measure of seats sold, should average at least 92% this year, up from 83% in March 2014.

Ryanair has “regained its crown as Europe’s best-performing airline on virtually every measure of margin, return on capital and cash generation,” Barclays analyst Oliver Sleath said.

Investors worried costs would rise as Ryanair tried to win back disgruntled passengers. Low global oil prices helped, but the airline also kept nonfuel costs in check.

“If I had only known that being nicer to our customers was good for business I would have done it years ago,” Mr. O’Leary says.

Ryanair has also avoided the sort of labor trouble that has hung over other European carriers. Employees last year ripped the shirt off a senior Air France manager amid talks over job cuts.

But Ryanair has drawn fire from unions and some governments about its own labor practices—which rely heavily on using pilots and crew as contract workers. The mayor of Copenhagen last year accused the carrier of using pilots with foreign contracts to circumvent local labor laws, calling it “social dumping.”

“The contracts pilots are required to sign to work for Ryanair could be described as legally unconscionable,” said Evert van Zwol, chairman of the Ryanair Pilot Group, which says it speaks for pilots working for the airline.

Ryanair closed a Danish base in response to the Copenhagen mayor’s accusations, though it still operates flights to the country. It says the use of contract workers is compliant with European Union labor rules and typical for other industries like health care. Mr. O’Leary said his pilots don’t want to be unionized, and those flying under contract have work guarantees.

Emboldened by its recent turnaround, Ryanair is now pushing out of its traditional network of mostly second-tier European airports, like Beauvais-Tille, a tiny airport about 50 miles outside Paris.

Major hubs in Brussels, Amsterdam and Milan have courted budget airlines as legacy carriers retrench. With those new destinations, Ryanair is hoping to lure more business travelers.

Ryanair is targeting Germany, in particular. It has started flights between Cologne and Berlin and added 50% more seats in the German market this winter. Ryanair wants to reach 15% to 20% market share in Europe’s largest economy in around five years, up from 5% today.

Lufthansa, meanwhile, is seeking to build its own low-cost business and “won’t be squeezed out of its home market,” Chief Executive Carsten Spohr said in an interview last year.

>>> China chief securities regulator Lui: too early to discuss pulling state fun

China chief securities regulator Lui: too early to discuss pulling state funds out of stock market; will act decisively against abnormal market volatility - press 

The recently appointed China Securities Regulatory Commission Chairman Liu Shiyu said the govt intervention in the stock market last summer helped ward off systemic risks. He said the govt had an obligation act last summer in the face of tightening liquidity. Also stated that a stock market circuit breaker system is not appropriate for China's markets.

>>> Barron's Summary : positive on ASH, IR, KORS

Barron's weekend: positive on ASH, IR, KORS 

Cover story: Growth stocks, especially the so-called FANG group (FB, AMZN, NFLX, GOOGL) have led the broad market, but in recent months they've grown too rich for many investors, while value stocks are becoming too cheap to ignore; Story looks at 16 ways to play value's resurgence (C, GS, TWX, DISCA, MU, INTC, BA, CMI, AMGN, PFE, F, GM, IWD, IWN, AWSHX, TRVLX). 

Features: 1) Positive on IR: Company "remains undervalued relative to the broad stock market and other industrials, especially considering how well its profits have held up amid a recent weak patch for the group"; 2) Positive on KORS: Company is expanding its product lines and closely monitoring inventory; it also plans to expand in footwear and menswear and boost its presence in Asia and Europe; shares could rally 30% in the next year; 3) Positive on ASH: Shares of motor oil and specialty chemical maker have fallen from last May's 52-week high and now look cheap, especially because of the upcoming Valvoline spinoff, which should benefit investors. 

Tech Trader: Many people on Wall Street have realized that it will be increasingly difficult for the PC sector to grow, while others remain in denial that it's a dying category; Only challengers such as AAPL and other companies that bring novel approaches to the business are likely to thrive. 

Trader: Some investors wonder if the ECB's stimulus will work amid fears that chief Mario Draghi has "thrown in the kitchen sink" and that there are few options left for boosting Europe's economy; Cautious on Z: The market is ignoring a number of factors that could send shares down, such as growing losses and the fact that the company can't make a net profit with 70% market share; Positive on ADT, ALR, ARG, CVC, RAD, TUMI: The shares prices of these acquisition targets are significantly lower their deal prices, offering investors an attractive annualized yield. 

ETF Special Report: Experts discuss the latest trends in exchange-traded funds and explain what investors need to know about "smart beta"; Picks: Larry Whistler of Nottingham Advisors (USMV, EEMV, PXF), Michael Yoshikami of Destination Wealth Management (SDY, VUG, VTV). 

Profile: Phil Davidson, portfolio manager, American Century Equity Income (top 10 holdings: Bank of American conv, Wells Fargo conv, XOM, PG, SYY, SLB, JNJ, PFE, WMT, Microchip Technology conv). 

Small Caps: Positive on HYH: Shares of surgical and infection products appear poised to double in three years as the company expands its product line through acquisitions. 

Follow-Up: Cautious on BABA: Chief Jack Ma's transfer of Alipay ownership to Ant under flimsy pretexts continues to raise issues for investors, and the company's shares could eventually become toxic; Positive on Samsonite: Luggage giant's acquisition of TUMI "offers a lot of opportunities to boost margins, revenue, and profit in the next few years." 

European Trader: The stimulus efforts announced by European Central Bank head Mario Draghi could be good news for bank stocks, and the decision to purchase corporate bonds could lead to a rally; Companies such as ISS, SAP, and Linde are potential beneficiaries. 

Asian Trader: Iron-ore prices, now nearly $58 per dry ton, could fall to the low $30s or high $20s by the end of the year and remain there until 2017 (Cautious on RIO, BHP, Vale, Fortescue). 

Emerging Markets: "Colombia is suffering from stagflation, but you wouldn't know it from the performance of the local stock market." 

Commodities; Gold isn't likely to keep going up at its current pace, says Julian Jessop of Capital Economics, and those who believe industrial metals will improve should buy silver. 

Streetwise: Mutual funds aren't happy with the SEC's proposal to force them to keep more cash on hand to meet redemptions, which is difficult because many funds are having a tough enough time beating their benchmarks.

(ZH) The Next Fukushima? Active Fault Line Discovered Directly Below Japanes

Hokkaido Electric Power Co (9509) is the company managing the central {9509 jp Equity DES <GO>}


The Next Fukushima? Active Fault Line Discovered Directly Below Japanese Nuclear Power Plant

 

Five years after the Fukushima disaster, things are getting worse.

As we reported last week, "the fuel rods melted through their containment vessels in the reactors,and no one knows exactly where they are now. Tepco has been developing robots, which can swim under water and negotiate obstacles in damaged tunnels and piping to search for the melted fuel rods.  But as soon as they get close to the reactors, the radiation destroys their wiring and renders them useless, causing long delays, Masuda said."

More troubling was our assessment that the "2011 disaster will be repeated. After the Fukushima nuclear meltdown, Japan was flooded with massive anti-nuclear protests which led to a four-year nationwide moratorium on nuclear plants. The moratorium was lifted, despite sweeping opposition, last August and nuclear plants are being restarted."

And now we have the candidate for the "next Fukushima" - as Japan's Yomiuri Shimbun reports, one of the faults that run under the premises of Hokuriku Electric Power Co.’s Shika nuclear power plant in Ishikawa Prefecture can be reasonably concluded to be active, according to an evaluation compiled last Thursday by an expert panel at the Nuclear Regulation Authority.

According to the Shimbun, the No. 1 reactor at the Shika plant may have to be decommissioned under the new nuclear regulatory standards, which ban the construction of important facilities above an active fault. The fault in question lies directly under the No. 1 reactor building.

 

Eight faults run under the premises of the Shika power station. Of these, three faults called S-1, S-2 and S-6 have been subject to close scrutiny. The S-1 fault lies directly under the No. 1 reactor building, a facility designated as an important facility under the new regulatory criteria.

Although stratum slippage at the S-2 and S-6 faults does not reach the surface, these faults run immediately under the Nos. 1 and 2 reactor turbine buildings. This means the No. 2 reactor cannot be reactivated unless measures are taken to reinforce its safety, such as increasing the reactor’s earthquake-resistance level and changing the layout of its piping.

This being Japan, however, where Tepco was hiding for years the full severity of the Fukushima explosion and putting millions of people in danger in the process, denial is rife and the power company has already submitted an application for a safety inspection of the No. 2 reactor, asserting that the fault is not active, based on its own investigation. No difference in levels has been
discovered in other locations along the S-1 fault, according to the
company.  The utility also intends to file a similar application regarding the No. 1 reactor in the near future.

Because if you can't trust a Japanese nuclear utility company who can you trust.

After taking the panel’s conclusion into account, the Nuclear Regulation Authority will make a decision during safety reviews as to whether the fault in question is active. We expect its opinion will be well greased by a modest monetary exchange under the table. What is most disturbing however, is that as the Amari bribe scandal showed, in Japan even when bribes are involved the amount of money is so modest that it hardly merits putting people's lives in danger, and yet that's precisely what will happen.

On the other hand, since global central bankers have made hope into a strategy, in fact the only strategy, why should the threat of another Japanese catastrophe be exempt?