(DB) Weekly Fund Flows : Developed flow woes

Last week’s (Wed-Wed) review of funds’ in/outflows as % of funds’ AuM.

The global fund flow picture kept its recent shape to close out April, with investors continuing to rebuild positions in fund groups they fled last year and early this year (DM credit, EM debt) while pulling back from fund groups tied
to NIRP markets (Japan, Europe equity) and normalizing flows out of overallocated assets (DM sovereigns).

The latest redemptions from Japanese equity funds now pulled their year-todate flows into negative territory, while European peers – which posted record setting inflows last year – saw the strongest outflows since Oct’14, pulling the
3-month flow momentum for ETFs to the most negative since Aug’08 (see centre right chart). In a week where the ECB and the BoJ kept their policies unchanged, fund investors continued to lose faith in the impact of monetary stimulus, whilst uncertainties regarding the UK referendum persist (Europe), and competitive FX advantages and inflation expectations wane (Japan).

In terms of new money investments, last week’s flows showed a more cautious risk appetite as investors waited to see what signals emerged from the three DM central banks’ statements. HY bond funds attracting only a quarter of the inflows they averaged over the previous nine weeks, and new commitments to EM equity funds barely broke through the zero mark, slowing the pace of pain relief brought by the rise in oil prices

Across asset classes – bonds (+) vs. equities (-) &. MM (-): 
Total equity funds (-0.1%, MFs: -0.2%, ETFs: +0.1%) declined for a third straight week as Japanese (-0.8) and European funds (-0.4%) continued to be a drag. Total bond funds (+0.1%) once again saw inflows with credit (+0.2%) still enjoying the oil rally and dollar weakness, and only partially offset by sovereign fund redemptions (-0.3%). Global money market funds (+0.0%) witnessed marginal inflows as investors showed some caution before the central bank notes.

DM equity funds (-) with Japan (--), W. Europe (-), with US (~): 
DM equity funds (-0.1%, MFs: -0.2%, ETFs: +0.1%) saw redemptions for a third consecutive week driven by significant losses across Japan (-0.8%, MFs: -0.7%, ETFs: -0.8%) and Western Europe (-0.4%, MFs: -0.3%, ETFs: +0.9%). US equity funds gained marginal inflows (+0.0%, MFs: -0.2%, ETFs: +0.4%), but the outflow streak for US mutual funds extended into the 42nd week.

EM equity funds (-) with EMEA (+) vs. Asia ex-Japan (-) &. LatAm (-): 
EM equity fund flows (+0.0%, MFs: +0.0%, ETFs: +0.1%) were positive for another week as MF flows turned positive for the first time in 12 months. Regionally, EMEA inflows (+0.2%, MFs: +0.2%, ETFs: +0.3%) outweighed losses across Asia ex-J (-0.1%, MFs: -0.1%, ETFs: -0.3%) and LatAm (-0.1%, MFs: -0.2%, ETFs: -0.3%). China equity funds (-0.4%) witnessed outflows for the second week in a row.

Bond funds (+) with credit (+) and EM debt (+) but sovereigns (-): 
Total bond funds (+0.1%) experienced significant inflows, again driven by credit (+0.2%) and EM debt (+0.1%). Europe HY funds continued to witness inflows for the 10th consecutive week whereas their US counterparts (-0.1%) turned negative. Sovereign redemptions continued for the 10th consecutive week with outflows across US & Europe. Meanwhile EM debt funds continued their positive run for yet another week.

>>> Lagardere yet to receive 'interesting' offers for weekly magazine publishing

Lagardere yet to receive 'interesting' offers for weekly magazine publishing activities 

Lagardere [EPA:MMB], the listed French media and retail group, has not received offers that were “interesting enough” for some of weekly magazine publishing activities to this day, French daily Le Figaro reported.

The report said that the comments were made during the company’s general meeting held yesterday (May 3). The activities include titles such as Tele 7 Jours, France Dimanche and Ici Paris.
Le Figaro

>>> Street Pre-Market Indications

ML
** Half day in Sweden today, market closes at 12pm (13pm CET)................
* ST GOBAIN - Wendel sold 5.4% stake & issue €500mn bond covertible; BNP/GS..
* SWEDISH ORPHAN - Sobi Chairman sells 8m shrs @ SEK 108.5; Danske...........
GN STORE - Mixed. Revs +1.6% vs con but EBITA -11.8% and EPS -8% v cons......
AIRFRANCE - Q1 EBIT was -EUR99mn (vs. consensus of -EUR226mn)...........+3-4%
HEIDELBERGCEMENT - OIBD better than cons & raises FY16 earnings guidance..+2%
WIZZ - Solid Q1 update with a slight YoY increase in load factor the key..+2%
EVONIK - Q116 better in operating manners, confirmed FY16 outlook.......+1-2%
SIEMENS - Beat throughout the P&L, driven by Power & Gas. Orders 3% beat+1-2%
BAE - Solid trading update with positive order momentum. Reits FY guid..+1-2%
UMICORE - We UPGRADE to Neutral post 1Q results. Take PO to EUR 46........+1%
EDPR - 1Q16 EBIT touch higher v cons, inline at net income. CMD tomorrow..+1%
SPONDA - Q1 meets ests with EPS 0.08, NAV EU4.95 v EU4.5 year earlier....+1%
THALES - Q1 sales beat, solid execution continues. Revs 1% ahead of cons..+1%
ADIDAS - Strong acceleration in North Am. market up 22% v +8% in Q4.......+1%
IMPERIAL BRANDS - Solid. EBIT 3% beat, group EBIT by 2%, EPS 2% beat too..+1%
LEGRAND - Solid org growth (+1.9% v 0.7%) & margins, guidance confirmed...+1%
SOC GEN - Messy on P&L with 4% net profit miss to cons. Strong bal sheet..+1%
ERSTE - 25% headline beat is flattered a little by a lower tax rate.......+1%
RDS - 1Q16 beat thanks to Downstream; Upstream weaker than expected.......+1%
JD WETHERSPOON - 3Q LFL sales +3.8%, consistent with +3.7% reported prev..+1%
SYNGENTA - Appoints J. Erik Fyrwald as new CEO as of June 1 2016..........u/c
INTU - +1% on occupancy YOY but down 50bps from Dec. Reits LfL guidance...u/c
PADDY BETFAIR - Q1 revenue growth (16%) ahead of FY consensus.............u/c
AXA - Inline in life & asset, non-life better. Q1 capital ratio ahead.....u/c
RYANAIR - Traffic stats look ok. Loads up +2pc and volumes +10pc..........u/c
DEUTSCHE TEL - Headlines beat, Germany 1% light, FY guidance reit......u/c-1%
VALLOUREC - Mixed results. Hurt by low demand, mainly in oil and gas......-1%
VEOLIA - 1Q16 inline at EBITDA/EBIT, a bit below at revenues/net income...-1%
INTNL PERSONAL FIN - Customer numbers +3%, mentions strong competition..-1-2%
NOKIAN - 1Q16 EBIT inline, but outlook for 2Q16 inventories looks weak..-1-2%
DIRECT LINE - GWP growth of 4.2% YoY, a touch light v our est (c.0.5%)..-1-2%
PROXIMUS - Domestic underlying rev 1.7% below cons while EBITDA inline....-2%
GLENCORE - Explores sale of its Kazakh gold mine. Copper 10% ahead v BAML.-2%
RANDGOLD - Q1 EBITDA of $123mn is a touch light (23%) v consensus.......-2-3%
UK MINERS - Miners in OZ overnight : BHP OZ -9.7%, RIO OZ -8%, FMG -5%..-3-4%
NEXT - Sales -0.9% v cons flat. New sales range equates to c.2.5% d/g...-3-4%
BHP - Samarco faces $43bn suit for dam disaster, shrs -8.5% in AUS o/n....-5%
DIALOG - 1Q rev inline. Cuts FY16 rev guidance. Announces 50mn buyback..-6-8%

JPM:
ADIDAS No suprises following pre-a. Talks to sell parts of golf unit unch
AVIVA JPM key call. Reiterate Overweight +2%
AXA Solvency strong at 200%. Topline growth a touch disappointing unch
BEIERSDORF Beat driven by better than expected consumer +2%
BHP Brazilian prosecutors file $43bn claim against BHP and Vale -5%
CS Selling distressed debt assets for $1.27bn +2%
D TEL Beat driven by TMUS and System Solution, Germany weak -1%
DIALOG Warning overnight - 8% decline in FY sales vs cons +1% -10%
ERSTE Beat driven by lower provisions, core income is slightly light +2%
EVONIK Touch ahead, outlook reiterated. Consensus unlikely to move +1%
GN STORE Mixed. Better Resound org sales growth, but weaker Netcom -2%
HEIDELBERG Strong. EBITDA 5% beat driven by US & Europe offsetting EM +3%
IMP BRANDS Inline, guidance reiterated unch
LEGRAND Adj EBIT inline, FY guidance left unch unch
NEXT New guidance mid-point = 2.6% reduction -3%
ONTEX 6% EBITDA beat BUT guidance unch & outlook on mature mkts soft +3%
PROXIMUS 4% rev miss, EBITDA in line. Reit FY guidance -2%
SAINSBURY FY numbers, 4% beat at the PBT level but no comment on guidance +2%
SIEMENS Solid. Has been weak into figs +2%
SOC GEN Earnings inline, but capital beat & cost guidance revised lower +1%
THALES Q1 org sales growth tracking ahead vs guidance. Reits FY guid +1%


CS:
Adidas +1-2% Opts to enter talks to sell part of golf unit
Air France +2-3% Numbers better, OP loss 99m vs cons -226m, cautious outlook
Andritz -1-2% EBIT 74.2mln vs cons 72.5mln, outlook slightly light
Axa +1% Q1 new business indicators inline, solvency solid
Beiersdorf -2% Q1 Sales EU 1.67b est EU 1.72b, confirms forecast
BHP Billiton -3% Brazil Seeks $44B in Suit Over Spill at BHP-Vale Mine
Cramo M/P Q1 ebit €11.7 vs cons 9.9m, keep FY guidance
Compugroup -1% Q1 revs 2% miss, EBITDA inline, Confirms FY forecast
Daimler -1-2% US light truck data soft, new orders -40%
Deut Tele -1-2% Net income 1.05b vs 1.04b, confirms 2014 - 2018 outlook
Dialog Semi -8-10% Revises down its revenue and gross margin outlook for FY
Direct Line -1% GWP's inline but cost base is a little higher
Elringklinger UNCH Sales 2% light, 2016 guidance reiterated.
Erste Bank +2% Revs smll miss but lower NPL provisions
Evonik -0.5% Q1 EBITDA €565m cons 550m, reiterate FY16 guidance
Fonciere des +1-2% Q1 rental rev +5.5%, ahead of schedule to meet FY targets
Flow Traders -1-2% Revs €64.6m vs CS ests 67m and net €23.2m vs CS ests 24.7m
Fraport -1% Revs €572m vs cons 577m, reiterate outlook
Freenet M/P Q1 sales and EBITDA inline
GN Store -2% Q1 Revs Dk2.09b cons 2.06b, Margins/Netcom/Resound weaker
HeidelCement +3-5% Q1 revs 1% miss, OIBD 5% beat, op income 21% beat
Imp Brand +1% H1 net rev GBP 3.4b est GBP 3.32b
Intu +1-2% Company remain on target, deliver growth
Inwit M/P Revs inline with consensus, Net income 2% ahead
ISS M/P Sales DK19.2bn vs cons 19.1, keeps FY guidance
JD Weather UNCH LFL +3.8% in line
Kloeckner +1-2% Q1 a marginal beat, Q2 ebitda forecast €50-60m cons at €47m
Kuka -1% Revs light 629.1m vs cons 669.75m, confirms 2016 forecasts
Legrand M/P Q1 sales inline, Net Income 2% miss, reiterates FY outlook
Maersk +1-2% Net Profit $211m cons 54m, reiterated guidance
Miners -2% Copper -0.20%, Brent +0.30%, Iron Ore -2.30%, China -0.30%
Next -1-2% FY sales guidance has been reduced
Nokian Tyres -2% Q1 op profit 3% beat, net sales 1% miss
Norma +1% Revs 226.6mln vs cons 229.4mln, confirms forecasts
Ontex +3-5% LFL rev growth 1% vs cons 0.7%, revs 452.4m vs cons 445m
Orpea +1% Q1 Sales small ahead, reiterates 2016 sales target
Paddy Power -1% EBITDA of 59m vs CS ests 64m
Proximus -2% 1Q adj rev 3% miss, adj Ebitda inline, keeps FY guidance
Randgold -3% EBITDA 10% light, Production issues should be short-term
Royal Dutch +1% Operating level ok and beat at bottom line
Ryanair +1% April traffic stats. Traffic +10%, Load factor up 2%
Sainsbury +1% Pre tax GBP 587m mln est GBP 571.2m, Final div 8.1p conc 7p
Soc Gen +2-3% Decent numbers, capital up
Swed Match +2% Operating profit 1.71b vs cons 1.35b, sales ahead
Swed Orphan -3-5% Chairman sells 8m shares at SEK108.5 via ABB
Thales M/P Organic growth 7% vs our 6%. no change to guidance
Vallourec +1% Q1 EBITDA inline, outlook tough in abscence of a recovery
Verbund -2% 12% beat on numbers but reviewing dividend policy
Veolia -2% Q1 Revenues 1-2% light, confirmed forecasts
Volvo -1-2% US light truck data soft, new orders -40%
Wienerberger +2% Revs 611mln vs cons 618mln, confirms outlook


Investec EU:
* AB INBEV-MISS but outlook maintained, Q1 ebitda 4.6% below consensus.......-3%
* ADIDAS-in talks to sell golf unit,good news but shares strong recently.....U/C
* AIR FRANCE-Q1 rev miss, net better, keeps 2016 targets. Been weak..........+2%
* AXA-Q1 revs +1% to €31.8bn, AUM inflows €10.1bn, broadly in line.........+0.5%
* BEIERSDORF-Q1 sales €1.67bn Vs est €1.71bn, confirms FY f'csts.............-1%
* CSGN-sells debt assets to TPG unit for $1.27bn...........................-0.5%
* DIALOG SEMI-lowers FY rev,margin ests. 2Q rev. $240m-$260m(est. $257.3m)...-8%
* DNO-Q1 look fine,production levels ok. Weak on broker d/g y’day............U/C
* D TEL-Q1 adj ebitda beats at $5.16bn, low quality beat, maintains outlook..U/C
* EVONIK-Q1 sales in line, ebitda 3% ahead, confirms outlook.................+1%
* ERSTE BANK-Q1 NII bang in line, net inc 25% ahead on lower provisions......+2%
* FLOW TRADERS-Q1 value traded +14%, trading inc flat, cancels non-core sale.-2%
* FRAPORT-Q1 ebit 12% below ests, saw weak April, outlook reiterated.........-2%
* GBL-Q1 hit by large LafargeHolcim w/down (€1.44bn), div guidance in line...-1%
* H’BERG CEMENT-Q1 rev in line, op inc 20% beat, raises FY f/casts...........+3%
* KUKA-Q1 rev 6% light, confirms FY rev and margin forecasts.................-2%
* LEGRAND-Q1 sales in line, net 2% miss, confirms FY targets.................U/C
* MAERSK-Q1 sales miss,profits well ahead(lwr costs),lowers oil b/even lvl...+2%
* SIEMENS-Q2 rev small miss,profits beat,confirms o/look,raised cost savings.+1%
* SOC GEN-Q1 net 20% ahead,fine w/back and btr own debt valn.Sees more cuts..+2%
* TDC-Q1 rev 2% light, ebitda in line, keeps guidance........................U/C
* THALES-Q1 sales in line, org rev +7.3%, FY ebit guidance in line...........+2%
* TIT-Republica reports that TIT has put sale of Inwit stake on hold..........1%
* VALLOUREC-Q1 rev low end,€134m in charges,confirms guidance, been weak.....+2%
* VEOLIA-Q1 miss,revs 2%,net 9%. Blames energy prices, confirms outlook......-1%
* WIENERBERGER-Q1 rev and ebitda in line, confirms FY outlook................+2%
Other news
* ALTICE-gets approval from FCC to buy Cablevision.
* ST GOBAIN-Wendel selling 5.3% stake, priced at €38.50
* SYNGENTA-new CEO appointed, seen as neutral ahead of Chemchina deal


Investec UK:
* ARROW GLOBAL-Completes acq's of InVesting & financing using FRNs.........unch
* AVON RUBBER-H1.#'s in line, no chg to FY exp's...........................unch
* BAE SYS-Update. Trading in line with exp's. Outlook unch.................unch
* BILLITON/RIO-Brazilian prosecutors file $43b civil law suit...BLT -5% RIO -2%
* DIRECT LINE-Q1.Gross premiums £777.8m.Reit FY outlook....................unch
* GEMFIELDS-Update.In line,coloured gemstone market remains robust........+1-2%
* GLENCORE-Q1.In line.Sale Kazakh gold mine,worth $2bn(FT)Shs -8% yday.....unch
* IMP.BRANDS-H1.Adj Op Profit sml beat. FY remains on track................+1/2%
* INTU PROP.-Update.Footfall +1.4%,occupancy(95.3%).On track to meet exp's..+1%
* INT'L PERS-Q1.Good update,driven by growth in Mexico & digital products...+2%
* JD W'SPOON-Q3.In line, still expects 'resonable outcome' for the FY......unch
* NEXT-Q1.Full price sales a miss, widens FY guidance.Shs -3.3% yday........-2%
* PPOWER BETFAIR Q1 Rev +16%,good perf' across all divi's,online +17%.......+1%
* RANDGOLD RES-Q1 prof +19%, output -11%(Kibali issues), net cash $254m.....-1%
* ROYAL DUTCH Q1 clean net $1.6bn v $1.2bn est,beat all downstream..........+1%
* SAINSBURY-FY pretax beat,mkt to remain tough, margins narrow..............-1%
* SPIRENT-Q1 'broadly' in-line, N.Amer', EMEA slower than est's.............-1%
* STANDARD LIFE-Acquires Axa's Elevate unit for undisclosed price..........unch
* ULTRA ELEC-Appoints new FD, Ami Sharma...................................unch
* VIRGIN MONEY-Q1 record mortgage lending/credit card balances..............+1%
* WIZZAIR-Stats.Passenger +16%, capacity +15.4%............................+1/2%


ShoreCap:
IMPERIAL BRANDS-H1 pbt 452m.Revs 12.8bln.Strong H1 and on track for fy......+2%
GLENCORE-Cuts fy E&P oil output guidance.Fy prod guidance unchanged.........-1%
JD WETHERSPOON-Q3 lfl slales +3.8%.Op margin 6.4%.Total sales +5.5%.........+1%
RYANAIR-Load factor 93% V 91%.April passengers 9.9m v 9m....................+1%
SAINSBURY-Fy eps 24.2p.Final divi 8.1p.Pricing pressures impact sales/margin+1%
NEXT-Q1 directory sales +4.2%(Est+2.5%).Retail sales -4.7%(Est -1.6%).......-2%
SPIRENT-Q1 rev grows.Orders broadly in line with expectations..............UNCH
SHELL-Q1 adj net $1.55b.Beats estimates.Div 47c/share.......................+1%
BAE SYSTEMS-Says trading consistent with forecasts.........................UNCH
IPF-Sees further strong growth in IPF digital..............................UNCH
PADDY POWER-Says 1Q Good Performance in All Divisions ......................+1%
DIRECT LINE -Q1 gross premiums rise combined ratio 93-95% reit guidance ....+1%
INTU-rental income 2-3% footfall +1.4% occupancy 95.3% v 94.3% ............UNCH


Mainfirst:
*SIEMENS-Inds Pft 2.12b(1.92),Sales 19b(19.3),NI 1.48b(1.08)...........+2%
*SOC GEN-Net 924m(765),CET1 11.1%,Targets addit cost cuts..............+3%
*EVONIK-Sales 3.11b(3.13),Ebit 389m(359.8),Ebitda 565m(546.8)..........+1%
*DTE-Adj Ebitda 5.16b(5.1),Sales 17.6b(17.5),confirms guidance.........+0.5%
*INBEV-Ebitda 3.46b(3.74),OV -1.7%(-0.3),OG 2.5%(5.7),Rev 9.4b.........-4%
*FRAPORT-Sales 572.5m(577.8),Ebitda 145.6m(155.4),Ebit 64.3m(73).......-1.5%
*AIR FRANCE-Rev 5.61b(5.56),Net -155m,o/l remains uncertain............U/C
*KUKA-Rev 629.1m(669.8),Ebit 31.4m(34.6),Orders 746.5m(733)............-2%
*H/CEMENT-Rev 2.83b(2.86),Op Inc 138m(114),OIBD 321m(306.2)............+3%
*DIALOG-Q1 Rev 241.4m(240.9),OP 29.9m(32.3),FY outlook weak............-6%
*LEGRAND-Sales 1.19b(1.18),Net 127.4m(130.4),Confirms 2016 tgt.........-1%
*ERSTE-NII 1.092b(1.094),Op 620.5m(656),F&C Inc 443m(460)..............-2%
*ADIDAS-Confirms it is looking to divest T-M,Adams & Ashworth..........+0.5%
*SYNGENTA-Appoints J.Erik Fyrwald as CEO as of the 1st June............+0.5%
*SONOVA-Acquires AudioNova for €830m in cash(Sales 360m)...............U/C
*ANDRITZ-Ebit 74.2m(72.5),Net Inc 52.5m(52.5).Rev 1.29b(1.36),o/lk ok..U/C
*GN STORE-Rev 2.09b(2.06),Net 208m(227),Keeps FY outlook...............-2%
*NOKIAN-OP 50m(48.4),Net Sales 276m(279),Q2 weaker vs Q2 2015..........-0.5%
*ICA GRUPPEN-Sales 24.76b(24.59),OP Ex 959m(866),Comp still tough......+1%
*THALES-Sales 2.73b(2.704),Order intake 2.31b,FY Ebit 1.3b-1.33b(1.33).+0.5%
*MAERSK-Sales 8.54b(8.81),Ebit 490m(230),NP 211m(38),Short Int 4.7%....+5%
*BEIERSDORF-Sales 1.67b(1.72),Tesa 277m,Consumer 1.4b,FY confirmed.....-1%
*ELRINGKLINGER-Sales 385m(391),Adj Ebit 32m(33.2),NI 17.2m(17.5).......-1%
*ISS-Sales 19.2b(19.1),Adj Ebitda 1.03b(1.03),Keeps FY outlook.........+1%
*FREENET-Rev 749.2m(751),NI 51m(57),FCF 64.9m(65.5),Ebitda 89.1m(90)...-0.5%
*KLOECKNER-Sales 1.4b(1.52),Ebitda 16m(16.2),NI -14m(-14.2),Q2 ok......-0.5%
*NORMA-Sales 226.6m(229),Ebita 40.1m(39.6),Margin 17.7%(17.3)..........U/C
*RATIONAL-Rev 135.7m(136),Ebit 32.2m(30.4),EPS 2.15(2.25)..............-1%
*TDC-Rev 5.83b(5.99),Ebitda 2.23b(2.25),Keeps outlook unch.............U/C
*SWEDISH MATCH-OP 1.71b(1.35),Sales 3.56b(3.47),Net Inc 1.4b(1.25).....+3%

(BarCap) VW: Talking the right talk. Delivery needs to follow

Press and analyst day an opportunity for management to present the “new VW” 
– atthe moment VW’s management presentation with their FY results last week was just an opportunity for talk about change. And this talk went much deeper than anything we have heard before from VW management. It is exactly what the business needed, even before the diesel issues emerged. But now we believe the market needs to see delivery both in terms of cultural change but also on structural efficiencies. However, even throwing a 30% conglomerate discount, to account for the risk of change not occurring, weak multiples on weak VW brand earnings (we forecast 2-3% EBIT margin for next 5 years) and assuming €20bn in total liabilities for diesel at current cost, we still see upside in the shares to €158 (prefs). We reiterate our OW.

What do we now know on emissions? 
There are still so many unknowns at VW that reaching a conclusive valuation for the business is tricky. We still don't know what is included in the €16.2bn diesel provision - the company has agreed not to disclose the full details of their provisional agreement with the DoJ. However, we can conclude that VW have tried to post as much bad news into 2015 numbers as possible. We continue to leave an incremental €3.8bn in our forecasts to factor in any further criminal suits by investors or dealers and any global costs not covered by the DoJ agreement. We believe this figure is at the upper end of any likely outcome.

What about change ahead?
Management were keen to emphasise the opportunities ahead for VW with last week’s results. Clearly a focus on sustainability via future powertrain and future mobility concepts is necessary to rebuild the brand's engineering
credentials. But there was also a focus on cultural change and efficiency. Productivity has not been a watchword of VW historically, engineering prowess was more highly valued internally – but with management comp now more aligned with the share price, could a tougher stance with the unions (and less vertical integration of the supply
chain) be possible?

What does this mean for valuation?
We continue to discount VW Brand and assume depressed volumes, pricing and margins remain. We apply a 30% conglomerate discount to account for execution risk and continued lack of visibility. We don't argue that there is a magic fix and all will be well in Wolfsburg but we do believe a lot of the bad news is now known and that a worst case scenario on liabilities seems unlikely. It will be a long, hard road to win back investors' trust and to persuade us to unlock our 30% conglomerate discount but we believe the company have made the first steps by focusing management variable compensation on share performance and any evidence of a tougher stance on costs would be a positive catalyst.

>>> Philips Lighting could still be sold to private bidder

Philips Lighting could still be sold to private bidder

Despite its plans to take Philips Lighting to the Euronext in an IPO, there is still a chance the Philips [AMS:PHA]division could be sold to a private bidder, Philips CEO Frans van Houten indicated in a press conference about the listing plans yesterday (3 May).

The news was reported by Dutch-language publications NRC Handelsblad and De Telegraaf.

Both papers reported Van Houten would not specifically rule out an ultimate bid by a private party, which would then put a halt to the IPO process.

Philips plans to float Philips Lighting in about four weeks, NRC Handelsblad reported.

NRC Handelsblad, de Telegraaf

>>> What to look at today - 4th of April 2016

Dow -0.78% S&P-0.87% NAsdaq-1.13% Russell-1.68%
US Market Closed Lower, on down tick on oil & concerns over global growth disappointing manufacturing PMI readings from China (49.4 in April from 49.7 in March) and the U.K. (49.2 in April from 50.7 in March) both showed larger than expected contractions in April. RBA Cut & Fed speak that continues to treat the June FOMC meeting as "live" for further rate hikes has added to the bearish sentiment via stronger USD. WTI crude ended its day lower by 2.5% ($43.64/bbl) as investors ruminated over supply increases from OPEC states and looked forward to the API's latest inventory report. In the Tech Sector AAPL Outperformed after few days of Underperformance. Volume were in line with average at 975mil shares. US After Hours : ETSY +16%, ZG +14%, CRAY -19% following earnings; MDVN +4% on reports of interest from PFE, INTN+3.3% on CEO Purchases. Asian equity markets are tracking the selling on Wall St, where the overnight rally has been fully reversed. China state planner NDRC warned the economy is faced with downward pressure in investment, even as the financial sector remains burdened by the increase in bad loans. According to a Chinese press report, 11 out of 16 banks reporting Q1 results thus far saw higher levels of NPLs. Japan markets remain closed until Friday, though markets remain on edge given the recent one-way trade in Yen pairs. Ted Cruz announced he was pulling out of the race.

Nikkei Closed Hang Seng -0.92% Shanghai +0.06%

Eur$1.1486 CNH 6.5081 CNY 6.4984 JPY 107.11 GBP 1.4542 CHF 0.9567 RUB$ 66.4294 WTI$ 43.80(+0.34%)

SPX-0.10% EuroStoxx-0.07% Dax +0.02% SMI -0.03%

Macro :
- ECB Tells Veneto Banca Weak Governance Hurt Lender in the Past
- NPL Flows, NII Key for Future Italy Banks Profitability: Citi
- Trump Becomes Presumptive Republican Nominee as Cruz Exits Race

Keep an eye on :
- ABI BB : AB InBev 1Q Adj. Ebitda, Organic Revenue Misses Ests., Says Organic Beer Vol. Decline Driven by Brazil
- ADS GY : Adidas Says Actively Seeking a Buyer for Part of Golf Business, Adidas 1Q FX Neutral Sales Up 22%, Adidas Brand Up 26%
- AF FP : Air France to Put First Boeing Dreamliners into Service in 2017
- AF FP : Air France-KLM 1Q Loss Narrows; Fuel, Unit Rev Outlook Uncertain
- AF FP : Air France to Impose Legacy ‘Transform’ Plan on Pilots: Echos
- ATC NA : FCC ‘In Favor’ of Approving Altice-Cablevision Deal
- AAPL US : Joel Greenblatt Says He Bought Apple Recently: CNBC
- CS FP : Axa 1Q Rev. Rises 1% to EU31.8b, Life & Savings Little Changed
- BEI GY : 1Q SALES EU1.67B; EST. EU1.72B, 1Q CONSUMER UNIT REV EU1.40B, CONFIRMS FY FORECAST
- BLT LN : Brazil Seeks $44 Billion in Suit Over Spill at BHP-Vale Mine Dam -10% in Australia
- GBB FP : Bourbon Says 2016 to See Low Point in Cycle; 1Q Sales Miss
- CSGN VX : Credit Suisse to Sell Distressed Debt Assets for ~$1.27b: WSJ
- DTE GY : Deutsche Telekom 1Q Adj. Ebitda Beats Ests.; Keeps Outlook
- DLG GY : Dialog Semiconductor Lowers 2016 Rev., Gross Margin View, Dialog Semi 1Q Rev. Matches, Underlying Op. Profit Misses Ests.
- EBS AV : Erste Bank 1Q Net Income Rises, Beats Ests; Risk Provisions Drop
- EDPR PL : EDP Renovaveis 1Q Net EU75m vs EU57m Y/y on Added Capacity
- EUCAR FP : Avis Sees 2016 Rev. Up 3%-5%, Higher Than Est.; Shares Rebound
- EVK GY : Evonik 1Q Adj. Ebitda Beats Estimates; Confirms 2016 Outlook
- FCC SM : FCC Aims to Refinance EU3B of Debt, Cinco Dias Reports
- FINGB SS : Fingerprint Cards Seeks Compound Rev. Growth of 60% in 2016-2018
- FIS1V FH : Fiskars 1Q Net Sales Increase 29% Y/y; Keeps 2016 Outlook
- FDR FP : Fonciere des Regions 1Q Rental Rev. Rises 5.5% to EU140m
- FNTN GY : Freenet Sticks to 2016 Guidance After ’Very Robust’ 1Q Earnings
- GL FP : Galeries Lafayette Unions Refuse Sunday Opening: Echos
- GBLB BB : GBL Spends EU418m Raising Holdings in Adidas, Umicore, Ontex
- HEI GY : HeidelbergCement 1Q a Strong Set of Results, Goodbody Says
- INW IM : Telecom Italia’s Inwit 1Q Net Income EU23.5m, Rev EU81.7m
- KER FP : Kering: Emmanuel Gintzburger Appointed CEO of Alexander Mcqueen
- KCO GY : Kloeckner Says Well On Track to Achieve FY Targets
- KU2 GY : Kuka 1Q Rev. Below Estimate, Confirms 2016 Forecast
- LR FP : Legrand 1Q Sales In Line, Confirms 2016 Targets
- NDA SS : LHV Isn’t Interested in Buying Nordea’s Baltic Units, BNS Says
- ORP FP : Orpea 1Q Sales of EU680.5m Beat Average Estimate of EU666m
- PARG SW : Pargesa 1Q Loss Per Shr CHF4.39 Vs EPS CHF1.02 Y/y
- UG FP : Citroen to Produce Cars With Iran’s Saipa, IRNA Reports
- SGO FP : Wendel Says BNP, Goldman Bookrunners in Saint-Gobain Sale
- SAN FP : Pfizer Said to Approach Medivation on Potential Buy: Reuters - http://reut.rs/1QRQBkD - MDVN @ 60.10
- SIE GY : Siemens 2Q Net Profit Halves, Beats Est.; 2016 Outlook Confirmed
- GLE FP : SocGen 1Q Net Beats Estimate, Targets Additional Cost Cuts, CEO Says Can’t Guarantee to Reach 10% ROE in 2016
- SDA1V FH : Sponda 1Q EPS Meets Estimates; NAV per Share Rises
- SYNN VX : Syngenta Appoints J. Erik Fyrwald as CEO as of June 1
- HO FP : Thales Q1 Sales EU2.73b; New Orders at EU2.31b
- VK FP : Vallourec Says 1Q Loss Widens to EU284m, Confirms FY Guidance
- VIE FP : *VEOLIA 1Q REV. EU6.089B; EST. EU6.217B, 1Q CURRENT NET EU173M; EST. EU190M, CONFIRMS 2016, 2018 TARGETS
- VOLVB BB : Volvo Cars Posts 1Q Op. Profit Margin of 7.5% on XC90 SUV Sales
- VIG AV : Wienerberger 1Q Ebitda EU40m; Outlook Confirmed

>>> Europe : Brokers Upgrades & Downgrades - 4th of April 2016

>>> Up
*ALPHA BANK RAISED FROM EQUAL WEIGHT AT MORGAN STANLEY
*EUROBANK ERGASIAS RAISED TO OVERWEIGHT AT MORGAN STANLEY
*LUXOTTICA RAISED TO OUTPERFORM AT RAYMOND JAMES
*PIRAEUS BANK RAISED TO OVERWEIGHT AT MORGAN STANLEY
*SOPRA STERIA GROUP RAISED TO BUY AT HSBC
*STRAUMANN RAISED TO BUY AT KEPLER CHEUVREUX
*UMICORE RAISED TO NEUTRAL VS UNDERPERFORM AT BOFAML

>>> Down
*ELIOR GROUP CUT TO HOLD AT HSBC
*JSE CUT TO HOLD VS BUY AT DEUTSCHE BANK
*LPKF CUT TO HOLD VS BUY AT HSBC
*LUFTHANSA CUT TO SELL VS REDUCE AT ALPHAVALUE
*MORRISON CUT TO UNDERPERFORM VS MARKETPERFORM AT BERNSTEIN
*PROSIEBENSAT.1 MEDIA SE CUT TO HOLD AT KEPLER CHEUVREUX

>>> PT Change


>>> Initiation


>>> Call

>>> Asian Update

Asian Market Update: New Zealand jobless rate rises on spike in labor force; Sellers return to stocks as USD rises and Oil retreats; Ted Cruz suspends campaign

***Economic Data***
- (AU) AUSTRALIA APR AIG PERF OF SERVICES INDEX: 49.7 V 49.5 PRIOR; 2nd month of contraction
- (NZ) NEW ZEALAND Q1 UNEMPLOYMENT RATE: 5.7% V 5.5%E; EMPLOYMENT CHANGE Q/Q: 1.2% (1-year high) V 0.6%E; Y/Y: 2.0% V 1.3%E
- (NZ) NEW ZEALAND APR ANZ COMMODITY PRICE M/M: -0.8% V -1.3% PRIOR; 2nd straight decline
- (NZ) NEW ZEALAND APR QV HOUSE PRICES Y/Y: 12.0% V 11.4% PRIOR; 1st rise since Nov
- (UK) APR BRC SHOP PRICE INDEX Y/Y: -1.7% V -1.7% PRIOR (36th month of decline)
- (KR) South Korea Apr Foreign Reserves: $372.5B v $369.8B prior

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 closed, S&P/ASX -1.0%, Kospi -0.6%, Shanghai Composite -0.2%, Hang Seng -1.0%, Jun S&P500 -0.1% at 2,054

***Commodities/Fixed Income***
- June gold -0.8% at $1,282/oz, June crude oil flat at $43.65/brl, Jul copper -0.1% at $2.21/lb
- (US) Weekly API Oil Inventories: Crude: +1.3M v -1.1M prior
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.4943 V 6.4565 PRIOR; weakest Yuan setting since Apr 28th; biggest margin of weakening in 9 months
- (CN) PBOC to inject CNY100B in 7-day reverse repos
- (AU) Australia MoF (AOFM) sells A$700M in 4.25% 2026 Bonds; avg yield: 2.4144%; bid-to-cover: 2.89x

***Market Focal Points/FX***
- Asian equity markets are tracking the selling on Wall St, where the overnight rally has been fully reversed. In the absence of meaningful new data, soft China Caixin PMI and surprise rate cut by the RBA have been widely cited as evidence of a slowdown in global growth. Out of the US, Fed speak that continues to treat the June FOMC meeting as "live" for further rate hikes has added to the bearish sentiment via stronger USD which, in turn, weighed on oil prices for the 2nd straight day. In USD majors, USD/JPY spiked toward 107.50 in the first hour of Asia trade before consolidating in 107.00-40 range for the balance of the session. Post-RBA AUD/USD selling ebbed below $0.7470 and the pair retraced to around $0.75 level. NZD/USD came under initial pressure after Q1 jobless rate rose higher than expected, then recovered to $0.6940 before sliding to 0.6880s - a 1-week low. USD strength was also on display in the latest Yuan fix, as PBoC weakened CNY by the biggest amount in 9 months.

- Down under, after yesterday's RBA surprise rate cut decision and subsequent Budget release, Australia PM Turnbull reiterated that Australia can avert a recession as the govt has a long term plan to reduce the deficit and China growth story would remain intact. Recall Australia maintained its projections for achieving return to budget surplus by FY20/21 despite announcing reductions of corporate tax rates. S&P has also subsequently affirmed Australia AAA rating. In New Zealand, Q1 unemployment rose to 5.7% even with q/q employment change rising by the biggest margin in over a year. The strong job growth / higher unemployment dynamic was the result of a 12-year high increase in the Kiwi labor force, sending participation rate up to 69.0% v 68.6% expected - the biggest increase in 11 years.

- China state planner NDRC warned the economy is faced with downward pressure in investment, even as the financial sector remains burdened by the increase in bad loans. According to a Chinese press report, 11 out of 16 banks reporting Q1 results thus far saw higher levels of NPLs. There was some better news in the materials / industrials space - according to Steel Logistics Committee, Apr PMI for the steel sector saw its first expansion in 2 years.

- Japan markets remain closed until Friday, though markets remain on edge given the recent one-way trade in Yen pairs. Long positioning among speculators has been around multi-year highs and stops are tight, raising the probability of spikes such as the one markets experienced in early Asia trade today. Comments from BOJ's Kuroda and Fin Min Aso earlier were boilerplate - former reiterating commitment to take additional easing measures if deemed necessary and latter stating the govt maintains its focus on FX moves. Separately, Japan's monthly GDP, according to JCER, was down 0.5% m/m as decline in consumption overshadowed slight increase in exports and capital investment.

- Stateside, just when the tone of Republican primaries took a turn for the worse, a decisive victory by Donald Trump in Indiana virtually cemented his path to the threshold number of delegates to secure the nomination. Ted Cruz announced he was pulling out of the race as the probability of a contested convention shrunk, and RNC's Priebus called for the GOP to unite behind the presumptive nominee Trump. Sanders defeated Clinton in Indiana but did not make a significant dent in her delegate lead. Still, the Democratic primary race is likely to continue until the California poll in early June.

***Equities***
US equities / ADRs:
- ETSY: Reports Q1 +$0.01 v -$0.02e, R$81.8M v $76.0Me; Affirms 3-year outlook; +12.9%
- Z: Reports Q1 -$0.13 v -$0.10e, R$186M v $127M y/y; +11.9% afterhours
- MDVN: Pfizer said to have approached Medivation to express interest in a takeover bid - press; +4.6% afterhours
- TSE: Reports Q1 $1.62 v $1.33e, R$894M v $949Me; +4.3% afterhours
- CAR: Reports Q1 -$0.28 v -$0.11e, R$1.88B v $1.88Be; +2.6% afterhours
- DVN: Reports Q1 -$0.53 v -$0.60e, R$2.13B v $2.59Be; +2.3% afterhours
- CBS: Reports Q1 $1.02 v $0.94e, R$3.85B v $3.82Be; +2.2% afterhours
- AGU: Reports Q1 $0.05 v -$0.07e, R$2.73B v $2.75Be; -0.5% afterhours
- WU: Reports Q1 $0.37 v $0.38e, R$1.30B v $1.31Be; -1.7% afterhours

Notable movers by sector:
- Consumer discretionary: SJM Holdings 880.HK -1.2% (Q1 result); Sydney Airport SYD.AU +0.4% (guidance); Peak Sports Products Co 1968.HK -7.1% (Q1 result)
- Financials: Evergrande Real Estate Group 3333.HK -1.6% (Apr result); QBE Insurance Group QBE.AU +1.9% (targets additional expenses cuts)
- Industrials: Hyundai Motor Co 005380.KR -1.4% (Apr China sales)
- Energy: Santos STO.AU -6.5% (to purchase solar power)

(BN) NYC Makes Progress in Altice-Cablevision Deal Approval: NYP

New York City officials are moving closer to approving Altice’s $17 billion takeover of Cablevision, The Post has learned.
The mayor’s office on Wednesday plans to announce that the committee tasked with reviewing the merger has been making progress in its negotiations with Altice, two sources said.
On Monday, the committee concluded that the European telecom giant was becoming more transparent and helpful in the review process, one source said.


As recently as two weeks ago, city officials were raising concerns about the deal, in particular, whether the heavy debt load would lead to job cuts and poor customer service at Bethpage, LI-based Cablevision, which has more than 3 million customers in the metro area.
While Altice has questioned whether the city even has the legal authority to stop the merger, it has been meeting with city officials all the same.
New York City officials plan to vote on the merger on May 11, while state regulators will follow later that month.
Cablevision shares rose 18 cents, or less than 1 percent, to $33.83, on Tuesday