>>> Casino - Muddy Waters Update - see attached

Neither Casino nor its more vocal defending analysts have given us reason to adjust our estimate of Casino’s equity value of approximately €7 per share. On the contrary, since we announced our short thesis on December 17th, five of Casino’s six listed subsidiaries have dropped in value by 8% to 27%. With Rallye’s NAV less than zero at Casino’s current share price, we similarly have not seen a reason to change our estimate of its value.
Casino’s response to our short thesis reminds us of the reaction from Noble Group (NOBL SP) to our April 2015 short thesis. When we shorted Noble it was rated BBB- (like Casino). We criticized Noble for its leverage and aggressive accounting (similar to our criticism of Casino). Noble has since been downgraded by both ratings agencies and its stock has declined by 64%.
To encourage transparency and accuracy we’re publishing a list of 10 questions for the company to answer on the January 14th call. Many of the questions get to the heart of whether there is truly a recovery in Casino’s France retail business. Addressing our questions will go a long way toward allowing investors to determine whether our opinion, that Casino is a highly-levered, poorly performing business being hollowed-out and managed primarily to buy time for the massive debt its controlling shareholder has amassed, is reasonable.

>>> Casino mulling to acquire stake in SMU before IPO - report (translated)

Casino mulling to acquire stake in SMU before IPO - report (translated)
Story
Casino Group, the mass-market French retailer, is interested to acquire a stake in SMU, the Chilean retailer, before SMU carries out its long awaited IPO, Diario Financiero reported.

The Spanish-language article, without citing any source, said that Casino expressed its interest on this potential deal with SMU to one of the banks that is looking to participate in the IPO.

SMU’s IPO is likely to be carried out in 2016, the item noted. The company has still not selected the banks that will act as underwriters and agents for the IPO.

SMU is not looking to sell a stake in the company, the item pointed out, citing unnamed sources.

A previous report said that SMU’s IPO may be carried out in the first half of 2016.

SMU is controlled by Corp-Group which holds a 78.59% stake. Southern Cross has 12.4%, the Bravo family holds 3.35% and ILC and the Repetto family hold 3.2% and 2.45% respectively, as reported.

Diario Financiero, previously reported intelligence

WSJ : Why Banks Should Stop Stars Dodging Bonus Rules

Why Banks Should Stop Stars Dodging Bonus Rules

U.K. regulators want to stop bonus buy-outs from undermining post-crisis rules on pay.

There is something suspect about people who change jobs too frequently—but some senior bankers have become more worried about this in the past year or two.

The fear is that staff can dodge responsibility for negligence or outright wrongdoing by jumping ship to a rival and having their unpaid bonuses bought out by a new employer, a regular practice in the battle for star bankers and traders.

The Bank of England wants to close this loophole in the U.K. by making new employers enforce punishments demanded by old employers. This could be a minefield for both sides, but shareholders should lend their support: it could help ensure banks don’t pay big signing-on fees for bad apples.

Postcrisis rules on pay were designed to change the balance of risks between individuals and banks. In most countries, bonuses are going to be paid over longer periods to give more time for bad behavior or poor risk management to come to light. And once awarded, bonuses can be stopped from vesting, or even demanded back.

When supposed stars are poached by rivals, their unvested bonuses will often be paid-out by the new employer. U.K. regulators want firms to honor the same terms on bonuses and potential clawback, rather than paying out upfront.

This will require cooperation between firms and demands that former employers don’t act vindictively against the disloyal. The regulator says banks will have to demonstrate fairness in seeking to punish former employees. And rightly those former employees would be able to challenge attempts to restrict their pay.

There is a danger that for both sides the process could involve too much cost and hassle to ever be effectively used. But shareholders should back the idea in the U.K. and elsewhere. Attempts to hold bankers to account through pay are undermined if serial job-hoppers can skirt the rules, leaving employers past and present bearing the risk.

Poachers should be gamekeepers, too.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: MFLX -16.8%, F -2.8%, (Ford Motor sees record 2015 adj. pre-tax profit at the high end of guidance, with 2016 adj. profit equal to or higher; announces $0.25 special dividend), TSCO -2.7%,CSX -1.9%, FANG -1.3%, STJ -0.4%


Other news: FXCM -14.5% (FXCM reports December and Q4 metrics; Says ongoing sales process may not be completed in Q1 as previously indicated), HQCL -2.4% (sells a portfolio of three operating PV power plants in the UK for ~$90 mln plus working capital to the NextEnergy Solar Fund), EQY -1.7% (commences a public offering where it will sell ~11.3 mln shares of co common stock ), FANG -0.9% (guides Q4 2015 production and FY16 production; announces 2.25 mln common stock offering)

Analyst comments: LYG -2.7% (downgraded to Underperform at Exane BNP Paribas), AXP -1.4% (downgraded to Neutral from Buy at Goldman), CONN -1% (downgraded to Hold from Buy at Stifel)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: HLTH +32.1%, ARO +17.7%, (Aeropostale announces new cost reduction program; reiterates Q4 guidance for EPS of ($0.17)-(0.04) vs. ($0.12) Capital IQ Consensus Estimate), TREE +4.5%,ACST +4.5%, GM +4.4%, YUM +2.6%, ( discloses China December comps +1%), IRG +2%, (Ignite Restaurant announces Q4 prelim sales at $93.3 mln vs. $91.0 Capital IQ Consensus Est; Comparable Sales -2.9%), SYK +1.5%,PRGS +1.1%, SVU +1%, NEPT +0.8%

M&A news: CYBR +11.1% (Check Point Software (CHKP) in early-stage talks to acquire Cyber Ark, according to Haaretz), ORAN +0.9% (to acquire Airtel's subsidiaries in Burkina Faso and Sierra Leone)

Select metals/mining stocks trading higher: HMY +5.2%, X +4.9%, VALE +3.8%, RIO +3.6%, FCX +2.9%, MT+2.3%, BHP +1.8%, AA +1.5%

Select oil/gas related names showing strength: ETE +3.8%, WLL +3.5%, BP +2.1%, OAS +2%, RDS.A +0.9%,XOM +0.7%, PBR +0.6%

Other news: TTNP +33.3% (Titan Pharma and Braeburn Pharmaceuticals receive FDA recommendation for Probuphine),BIOL +10.9% (enters into a development and distribution agreement with IPG Photonics Corporation's (IPGP) medical laser division), MET +8.4% (MetLife plans to pursue the separation such as public offering, spin-off, or sale of a substantial portion of its U.S. Retail segment ), QUNR +7.5% (Ctrip.com announced it has agreed to make certain investments; investment entities will acquire a significant minority stake of Qunar Cayman Islands), ARNA +5.7% (Arena Pharm and Boehringer Ingelheim to conduct joint research to identify drug candidates targeting an undisclosed G protein-coupled receptor), NAT +5.1% (increases quarterly dividend to $0.43/share from $0.38/share), EURN +4.5% (modestly rebounding after recent decline), FEYE +4.2% (in symp with CYBR), SALT +4% (reports Scorpio Services Holding has purchased 338,436 common shares at an average price of $4.64 per share previous announcement on Oct 1, 2015), ARTX+3.6% (announced that its Training and Simulation Division has received $7.4 mln in new awards and contract modifications), AIG +3.1% (in symp with MET), SHPG +2.1% (cont strength), DKS +1.9% (The UK's Sports Direct discloses stakes in Dick's and Iconix Brand Group (ICON)), ERII +1.7% (announces $6 mln share repurchase program)

Analyst comments: LNG +3.8% (upgraded to Buy from Neutral at Citigroup), PHM +2.2% (upgraded to Overweight from Neutral at JP Morgan), MSFT +1.8% (upgraded to Overweight from Equal-Weight at Morgan Stanley), QCOM +1.5% (upgraded to Positive from Neutral at Susquehanna)

>>> Fed's Rosengren: (moderate, FOMC alternate): Only limited data support Fed's

Fed's Rosengren: (moderate, FOMC alternate): Only limited data support Fed's projected inflation path, FOMC's forecasted rate path has downside risks 
- Data raise the real possibility that US growth may be slowing. December US jobs report was pretty strong, but economy could still be slowing.
- A big dip in unemployment might call for quicker rate hikes, however inflation remains low.
- Would like to see more economic improvement so the Fed can keep raising rates- Growth needs to be at or above potential for the Fed to raise rates
- To remain highly attentive to developments in the global economy

>>> General Motors raises FY16 EPS guidance; FY15 on track; raises quarterly div

General Motors raises FY16 EPS guidance; FY15 on track; raises quarterly dividend 6% to $0.38; adds $4 bln to buyback
  • Co raises FY16 EPS to $5.25-5.75 vs $5.32 Capital IQ Consensus; sees improved EBIT, margin, adj. auto FCF. The company's 2016 outlook is based on a strong product launch cadence, growth in adjacent businesses, continued emphasis on driving core efficiencies across the enterprise, and expected modest global industry growth.
  • On-track to deliver double-digit growth in EBIT-adjusted and EPS-adjusted in calendar year 2015. Achieved its targeted 10-percent EBIT-adjusted margin in North America -- one year ahead of plan. Since announcing the initial share repurchase program in March 2015, the company repurchased 70 percent of the authorized program through the end of 2015, or $3.5 billion.
  • Co raises quarterly dividend 6% to $0.38/share.
  • Co increases buyback $4bln to $9 bln.
  • Co said continued execution of its plan should keep GM on track to achieve 9- to 10-percent EBIT-adjusted margin by early next decade.
  • GM also outlined several actions designed to improve the company's capital efficiency, resulting in a significant reduction in longer-term capital expenditures. GM continues to expect capital expenditures of 5- to 5.5-percent of revenues in the near-term.