>>> RTRS - IPSOS MORI POLL SHOWS AMONG THOSE WHO ARE LIKELY TO VOTE NEXT WEEK,
RTRS - IPSOS MORI POLL SHOWS AMONG THOSE WHO ARE LIKELY TO VOTE NEXT WEEK, 58% WOULD VOTE FOR UK TO STAY IN EU WHILE 33% SUPPORT BREXIT AND 8% ARE UNDECIDED
RTRS - IPSOS MORI POLL SHOWS AMONG THOSE WHO ARE LIKELY TO VOTE NEXT WEEK, 58% WOULD VOTE FOR UK TO STAY IN EU WHILE 33% SUPPORT BREXIT AND 8% ARE UNDECIDED
*ARGENTINA IN TALKS TO BUY 12 DASSAULT MIRAGE F1: LA NACION
Announces Launch of Tangible Equity Units Offering and Credit Facility Financing Dynegy Inc. is commencing a public offering of 4,000,000 tangible equity units, with each tangible equity unit having a stated amount of $100.00 and comprised of a prepaid stock purchase contract and a senior amortizing note due July 1, 2019, each issued by Dynegy. In addition to the $400 million offering of tangible equity units, Dynegy is commencing the syndication of an incremental $2 billion term loan B facility and a revolving credit facility of $75 million. Dynegy intends to enter into a $50 million letter of credit facility in connection with the transactions described below. Dynegy will use the net proceeds from the tangible equity units offering, together with the borrowings under the companys term loan B and revolving credit facilities, the proceeds of ECPs purchase of $150 million of the companys common stock to occur concurrently with the closing of the acquisition and cash-on-hand, to fund the consideration for the previously announced acquisition of ownership interests in certain North American power generation assets from International Power, S.A., an indirect subsidiary of ENGIE S.A. and to pay related fees and expenses. The underwriters of the tangible equity units offering will have a 13-day over-allotment option to purchase an additional $60 million of tangible equity units.
EDF refuse d’enclencher la fermeture de Fessenheim
La plus vieille centrale nucléaire de France, celle de Fessenheim (Haut-Rhin), sera-t-elle fermée, conformément à la promesse de campagne de François Hollande ? EDF y renâcle. Malgré les fortes pressions de l’Etat, l’entreprise publique refuse d’enclencher la procédure juridique qui doit conduire à l’arrêt anticipé des deux réacteurs.
Depuis de long mois, la ministre de l’écologie et de l’énergie Ségolène Royal presse l’électricien de lancer ce processus, en déposant avant la fin du mois de juin une demande d’abrogation de l’autorisation d’exploiter le site. La direction a décidé de ne pas le faire dans l’immédiat, indiquent au Monde des sources concordantes. Les représentants du personnel devraient être informés de la situation lors d’un comité central d’entreprise, prévu jeudi 16 juin.
Pour les dirigeants d’EDF, impossible d’entamer juridiquement la fermeture de Fessenheim sans s’être entendus au préalable avec l’Etat sur l’indemnité que recevra l’entreprise. Or, sur ce terrain, aucun accord n’est en vue. Là où EDF espérait recevoir au moins 2 à 3 milliards d’euros, Mme Royal a proposé, début mai, de verser 80 à 100 millions d’euros seulement. Un montant jugé dérisoire, voire insultant, au siège de l’électricien. Faute de compromis sur le sujet, EDF fait donc de la résistance. Le dépôt formel de la demande de fermeture n’est plus envisagé avant décembre.
Siemens, Gamesa Near Wind-Power Deal
Deal would end months of the uncertainty around the transaction
FRANKFURT—Siemens AG and Gamesa Corporacion Tecnologica SA are close to announcing an anticipated deal to combine their wind-power activities and create the world’s largest wind turbine maker, according to people familiar with the matter.
A deal, which could be announced as early as this week according to the people, would end months of the uncertainty around the transaction. As always in these deals, an announcement could be delayed.
Siemens and Gamesa in February agreed in principle to combine their wind activities, but the tie-up hit a snag because Gamesa needed to renegotiate elements of an offshore wind joint venture, dubbed Adwen, with French nuclear engineering firm Areva SA.
Those issues have been resolved in principle, the people said.
The deal structure that is to be revealed as early as Wednesday foresees Siemens transferring its offshore wind activities into the Spanish company in exchange for a roughly 60% stake in the enlarged business, people familiar with the matter said, adding the combination could help realize annual synergies of around €200 million ($224.13 million).
The expanded entity would likely have a market capitalization of roughly €10 billion, remain listed on the Madrid Stock Exchange and be led by Gamesa’s Chairman Ignacio Martin, the people said.
The transaction still needs to be approved by Gamesa’s shareholders, who will get to vote on the transaction.
Both Siemens and Gamesa declined to comment.
June 15, 2016
MAKOR - Dividend Weekly
Good morning,
Please find our MAKOR dividend weekly report of 15 June 2016.
Weekly ahead :
- SX5E Dividend futures outperformed the SX5E Index
- Long terms underperformed short term with -3.07% for 2017 to -7.56% for 2020
- 2019 / 2017 discount up to 17.97% close to the annual high reached in February (18.46%)
- Unicredit, still decreased with -6.67% for 2017, -30.00% for 2018 and 2019 because of financial issues and rumor of capital increase and catch up effect (Unicredit future dividends 2018 and 2019 hadn’t gone down in line with the 2017 over past few weeks)
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Two large May orders push YTD book to bill at Airbus and Boeing towards 1x
Combining the stats for Airbus (200 orders to 234 deliveries = 0.85x) and
Boeing (296 orders to 301 deliveries = 0.98x), aircraft book to bill or gross
orders to deliveries reached 0.93x for the first five months of the year, as
shown in Exhibit 1.
Prior to the 208 combined orders booked in May (125 Boeing, 83 Airbus),
aircraft book to bill had had its weakest start to a year since 2010 (0.7x book to
bill over Jan - April). More than three-quarters of May's order intake is
attributable to two large orders: (i) at Boeing, an order from VietJet Air for 100
737 MAX aircraft, signed during President Obama's visit to Vietnam; and, (ii) at
Airbus an order for 60 A320neo family aircraft (45 A320s, 15 A321s) for an
undisclosed customer, although we note that this matches an order placed by
China's Spring Airlines in December 2015 which itself also formed part of the
130 aircraft deal agreed between Airbus and China last October
While there are some orders still yet to enter the backlog, from China where
it’s hard to be precise on exactly how many, and from Iran where an Airbus
order for 118 aircraft is still awaiting certain approvals which are expected to
be gained by year end, we think book to bill looks set to slow further this year
after 1.48x last (1.87x at Airbus; 1.15x at Boeing) as shown in Exhibit 2.
As detailed in our note from 13 April entitled Cycle Update – A Fine Balance,
while we see a deceleration in book-to-bill as natural at this point in the cycle,
after a period of sustained strength, and while we don’t expect it to have
negative implications for Airbus’ medium-term production plans, we find it
hard to ignore the fact that the multiple on which Airbus shares trade has
remained somewhat correlated with book-to-bill trends despite the record
backlog of aircraft orders (9.1 years cover vs 2015 deliveries). By way of a
reminder, order cover in narrowbody (10.1 years) remains well ahead of
widebody (6.3 years) supporting our preference for Safran over Rolls-Royce
in engine propulsion.
Better than expected organic growth, but still behind schedule on the A350 deliveries
Q: What were the most noteworthy areas in the results?
Zodiac reported Q3 organic revenue growth rate of 4.4% y/y (UBSe 2% y/y) supported
by strong growth in Cabin and aftermarket, that more than offset the headwinds in
bizjets and helicopters. Guidance for the full year was confirmed and management
reiterated expectations to get back to operational performance in 15 months, with
normalization of financial performance following thereafter. We perceive as positive the
progress made in Seats: a) certification of dynamic shells, b) supply chain
improvements. However, we remain concerned by the A350 lavatory delivery rates
remaining behind schedule.
Q: How did the results compare vs. expectations?
Zodiac reported Q3 sales of €1,353m (up 3.7% y/y, UBSe €1,298m, cons €1,290m),
with Aerosafety sales of €149m (down 7.7% y/y organically, UBSe €168m), Aircraft
Systems sales of €366m (up 4.9% y/y organically, UBSe €338m), Seats sales of
€385.7m (up 3.2% y/y organically, UBSe €378m), and Cabins of €451.9m (up 10% y/y
organically, UBSe €414m).
Q: How would we expect investors to react?
On the positive side: a) Q3 organic growth is encouraging showing sequential
improvement after the -1.7% y/y organic decline in H1 and; b) confirmed guidance;
could be supportive for the stock after the recent underperformance. Nevertheless we
believe uncertainty remains on the back of: a) persistence of delivery delays with A350
lavatories caused by quality issues, b) shape of the financial recovery in FY 16/17 and
thereafter.
Valuation: trading on18.7x calendar 16E EV/EBITA, 24.1x calendar 16E P/E
Our €18.5 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.
Fiscal QE: when, where, and how to play it
Markets are underestimating the probability of 'fiscal QE': In our opinion, the likelihood of some form of fiscal QE by one of the G4 central banks over the next 3-5 years is high, for the following reasons: i) given the age of the US cycle, history suggests there is a 60% chance of a US recession within the next three years; this would require real rates to fall by 5%, which is very hard to achieve; ii) conventional QE is having increasingly unwelcome side-effects (e.g. banks' NIMs falling, ‘zombie’ capitalism, and potential housing bubbles); iii) fiscal QE is effective (the multiplier on government spending is 1.8x, and there is a shortage of infrastructure investment in many developed markets); iv) it's more acceptable politically, as it can target the median household via construction jobs and tax cuts/incentives; and v) we believe that strong structural disinflationary forces (technology, China) will continue to make it hard for central banks to hit their inflation targets. Ultimately, central banks' holdings of domestic government debt could be swapped into very long-dated zero coupon bonds, meaning increased government spending has little financing impact
We rank the likelihood of fiscal QE by region: Based on shortage of existing infrastructure, need for stimulus, how constrained monetary tools are and policy flexibility, we think Japan is most likely to conduct some form of fiscal QE, followed by the UK, the US and lastly the euro area.
We identify five types of fiscal QE: The most likely of these is implicit (governments spend while central banks print) or funding of profitable infrastructure projects. We think Japan is most likely to move first but will probably resort to tax cuts/spending (given its high-quality infrastructure). Within the UK, we believe infrastructure QE is most likely to occur within 3-5 years. While political hurdles to undertaking infrastructure QE are greater in the Eurozone, we describe a form of revamped Juncker Plan which might work legally, practically and logically but would need a crisis and time to organise.
Equity and sector implications: We focus on stocks that would benefit from infrastructure QE and look attractive regardless. We introduce an overweight on European construction (previously no weighting), as the construction share of GDP is at a 20-year low (Travis Perkins and Assa Abloy look cheap on Credit Suisse HOLT® with eCAP awards), and stay overweight cement (LafargeHolcim). The outlook for US non-residential construction looks attractive, with a compelling need to upgrade infrastructure (Halma, Wolseley). We like defence companies with strong local content benefit (Thales). We include a sensitivity analysis based on a 5% increase in construction/defence spending for the respective companies. Into fiscal QE, real rates should fall, which would re-rate equities (US P/E multiples could rise to c18x on our fair value model). The fall in real rates would also support the gold price (where, anyway, central bank diversification could lead to a sixfold increase in gold demand). US names that would benefit from the themes above (with an eCAP and cheap on HOLT) are: Johnson Controls, Raytheon, General Dynamics.