Europe : AKZA NA, ARM LN, ASML NA, CSGN VX, DGE LN, ING NA, IHG LN, NESN VX, NOVOB DC, PRU LN, RIO LN, RYA LN, FP FP, VOD LN
ECB chief Draghi: QE will run beyond Sept 2016 if needed to achieve the 2% inflation target - EU Parliament testimony
- Reaffirms to closely monitor the risk to price stability;
- Reiterates view to re-examine the degree of monetary policy accommodation at December meeting
- Reiterates view that recovery in the Euro area is progressing moderately but downside economic risks are clearly visible
- QE will run beyond Sept 2016 if needed to achieve the 2% inflation target
- For monetary policy to be effective, it is important to meet market participants to hear views
- QE is particularly powerful and flexible tool; can use other tools to strengthen available within its mandate
CS:
Aegon -0.5% EBITDA 5% beat, 5% miss on bottom line confirms FY
Aldermore M/P Growth trends solid, outlook on track
BAE Systems +1-2% Spec in advanced talks to sell US manpower and services biz
Burberry +2-3% Headline PBT better, confirms LFL guidance
Card Factory UNCH Trading inline with expectations, FY forecasts unchanged
Derwent +1% Lettings have been 10.8% ahead of December 2014 ERV
FirstGroup +3% Revs slightly light, op prof and net loss ahead
Gategroup -1% No's inline, working on further cost reductions
Hermes -1-2% Q3 sales inline, org growth inline, confirms FY outlook
Hochtief +1% Q3 EBIT 2% beat, Confirms FY guidance, +1% after hours
IMI -3-4% Profit warning, sees adj EPS at lower end of market est
LEG Immo +2-3% Reports Q3 FFO +35%; raises 2016 forecast
Merck +2-3% Q3 EBITDA pre items beats estimates, lifts 2015 guidance
Miners M/P Copper -0.05%, Brent -0.35%, Iron Ore +0.15%, China -0.43%
Oriflame UNCH 3Q Operating Profit, Sales Beat Estimates
Pearson -0.5% Sees Declining U.S. College Enrollment Weighing on Sales
Punch Tav M/P FY EBITDA small ahead, net slightly light
Raiffeisen +2% Surprise drop in NPL's, weaker NII
Refresco Ger M/P Volumes slightly better, price mix slightly worse
Repsol -2% Net income light, downstrean robust, upstream missed
Rolls Royce -5-7% Sees 2015 profit at lower end of previous guidanc
RWE -1% Operating better due to one off but net slightly worse
Salzgitter M/P Numbers inline with pre-release last week, cash better
Schmolz -0.5% Q3 revs slightly light, EBIT loss slightly bigger
Siemens +1-2% Orders 9% beat vs cons, sales 1.5% miss
SMA Solar +10% Raises forecasts again, Shares traded +10% after-hrs
Spectris -2% Negative read from IMI warning
Stada M/P Sales and EBITDA slightly better, outlook confirmed
Swiss life +1% Q3 IMS solid, Switzerland +6%, France +6%
Technip +1-2% Won a "significant" tech contract ($50-$100m)
Telenor -2-3% Suspends CFO, Chief Council as Uzbek Graft Is Probed
Tods +2-3% Q3 sales 1% miss, EBITDA 1% beat, confirms 2015 guidance
WS Atkins +1-2% Sales and pretax ahead, oulook unchanged
Zalando M/P Released prelim figs on 15 Oct, Q3 revenues 5% beat
UBS PRE:-
SIEMENS +2% 4Q orders 7% beat, revs 4% miss, €3bn buyback over 3y
AEGON +2% U'lying earning €436m v 415m, underlying €243 v 233m, relief
SWISS LIFE +1% Generally inline
RWE Unch 9m net €545m v 608m, EBITDA €4.4bn v 4.7bn, FY confirmed
MERCK +2% Sales inline @ €3.12bn, guidance raised, was expected
VODAFONE +1% CEO doesn’t rule out Liberty asset swap talks in Future
TELENOR -3-4% Suspends CFO/General Counsel on Uzbek bribes, Thai biz -7%
FIRSTGROUP +1-2% Inline, FY numbers re-it with confidence
HALFORDS -2% Interims light, Retail LFL +1.4% v UBSe +2.5%, cycling weak
BEAZLEY +1% IMS encouraging
JPM:
AEGON Messy. Underlying Profit a 4% miss, but Capital better -1%
ALDERMORE Q3 IMS in-line with expectations unch
ILIAD Revs inline, Mobile and broadband adds ahead +2%
RAIFFEISEN Strong. Headline profit 90mn vs cons loss -73mn, CET 1 ahead +5%
REFRESCO Figs inline. Volumes at lower end&margin impacted by input costs-2%
ROLLS ROYCE Massive warning. Implies a 30% cut to consensus EPS -10%
RWE Clean figs 7% miss.Conf generation,supply germany & UK all weak -2%
SIEMENS Better Q4 margin,cash & orders.Guidance & buyback may disappoint+2%
TALANX 2% miss on 3Q net income. CoR inline -1%
TELENOR Suspends CFO, general counsel over VimpelCom probe -2%
TELIASONERA Expansion: Zegona considering offer to buy Yoigo (owned by TEL) +2%
TODS Broadly inline, comments on Oct & handbags momentum more bullish+2%
UK SUPERS Negative. Lidl planning to invest > £1.5bn in price in next 3 yrs
VIVENDI E6.9m share buyback carried out yday.Executing on buyback <E20 unch
YNAP Q3 figs inline, but synergy update well ahead of prev guid +2%
ZALANDO No surprise given the very recent Q3 trading update unch
ECB proposal implies Danish Compromise could stay
* What has been announced. The European bank regulator (the ECB
SSM*) yesterday put out a draft regulation, 'Draft regulation of the ECB
on the exercise of options and discretions available in Union law'. The
aim is to reduce national discretions in order to create a more homogenous
set of bank rules across Europe. Although the draft is not entirely clear,
our first read is that the proposal implies that EU Banks could avoid a
capital deduction of insurance holdings. If we are right, EU Banks could
continue** to use the so called 'Danish compromise', which allow insurance
holdings to be risk weighted (at 100 - 370%). The compromise was, initially,
set to be phased out, starting 2019. The consultative period runs to 16
December 2015, and we expect banks to welcome the allowance of the
Danish compromise.
* Names most impacted. The announcement explains a c4% rally in CASA
(OP, TP EUR15.1). Other banc-assurance groups that could be impacted
include; Natixis (OP, TP EUR7.1), Soc Gen (OP, TP EUR58.2), KBC (N, TP
EUR60.9) and Caixa (N, TP EUR3.7). We estimate the impact of the
proposal and believe that it will enable banks to maintain 20 - 250bps of
CET1 (which under the original rule, would have been deducted from 2019).
CASA could benefit the most (avoid a 250bp deduction), Caixa (85bp), KBC
(30bp), Natixis (c20bp) and Societe Generale (c20bp), 2015E.
* Has the ECB changed tack – we do not think so. Although, the SSM
voted to keep the Danish compromise (Reuters, 19 October, 2015), we do
not believe the ECB has changed tack on bank regulation. We believe (part
of the reason) to allow risk weighting of insurance is that it was too difficult to
change national laws (Danish compromise and DTA's are part of the CRR,
adopted in EU, June 2013). That said, even if regulatory headwinds continue,
the worst outcome could be avoided and EU Banks are, at c1.0x TBV,
2016E, already priced for regulatory risk.
Dow-0.32% S&P-0.28% Nasdaq-0.32% Russell-0.69% VIX 16.07 (+5.1%)
US Market closed slightly lower for a 3rd day, volume were below average due to veterans day commemoration. energy sector (-1.9%) pressured by a 2.9% drop in crude oil, which fell to $42.96/bbl, representing the lowest settlement since late August, health care (-0.9%), consumer discretionary (-0.5%), and financials (-0.2%) also struggled. IBB-1.5%, closed just above its 50d MA. Macy's tumbled 14.0% on disap. guidance and was responsible for retail weakness. consumer staples space outperformed throughout the day with Roundy's (RNDY 3.57, +1.39) surging 63.8% after agreeing to be acquired by Kroger (KR 37.03, -0.24) for $3.60/share in cash, which represents a 65.0% premium to Tuesday's closing price. US After Hours NEFF +6.5%, PLKI +4.9%, NTES +4.6%, DGLY -25%, FRPT -18.6%, SHLX -4.6%, FLO -3.5% following earnings/guidance. Asian equities are mixed without much conviction on Wall St, but the session did produce some fireworks in Australia FX space. China based Netease and Lenovo reported results that also exceeded expectations. Lenovo saw its first quarterly loss in several years, but it was not as steep as anticipated, and Revenue also beat expectations. Lenovo announced steep reduction in H1 CAPEX, but its PC market share was still industry leading 21.2% while shipment decline of 6% was less than industry. Shares were up over 4% for the session after Q2 result.
Nikkei +0.03% Hang Seng +2.03% Shanghai -0.20%
Eur$ 1.0756 JPY 122.95 CNY 6.3673 GBP 1.5206 RUB$ 65.52 WTI $43.18 (+0.56%)
S&P +0.18% EuroStoxx -0.32% Dax -0.26% SMI +0.06%
Macro :
- ECB Isn’t Committed to More Easing Next Month, Coeure Says
Keep an eye on :
- ABI BB :Anheuser-Busch InBev-SABMiller Deal May Brew More M&A for Rivals
- AGN NA : Aegon Posts 3Q Net Loss, Takes 3Q Charges of EU950m
- AMUN FP : Amundi Sets IPO Price at EU45/Shr; SocGen Raises EU1.5B
- BAE LN : BAE Said Close to Selling U.S. Manpower Assets to Veritas: Rtrs
- BG/ LN : Shell-BG Deal Review in China Moves on to Phase III: PaRR
- GBF GY : Bilfinger Says On Course to Reach Full Year Forecast
- BT/ LN : BT CEO Patterson Says Deutsche Telekom Shares Vision for Network
- DTE GY : Deutsche Telekom Dutch Unit May Get Bids From Apax, CVC: Reuters
- DLG GY : Atmel, Dialog Deal Still Expected to Be Approved: RBC
- DIC GY : DIC Asset 3Q Net Income Jumps; Confirms 2015 Forecast
- MF FP : Eurazeo 3Q Sales EU1.06b, Up 6.6%
- EXO IM : Exor Completes Placement of 12m Treasury Shrs at EU42.60/Shr
- RMS FP : Hermes 3Q Asia-Pacific Sales Miss Ests., Leather Beats
- HOT GY : Hochtief 3Q EBIT EU175.1m vs Adj EU225.7m Y/Y
- ILD FP : Iliad 3Q Rev. Grows as Mobile Subscribers Added
- KPN NA : KPN to Weigh Telefonica Deutschland Divestment Each Quarter: CEO
- SDF GY : K+S Sees Dividend for 2015 in Range of EU1.02- EU1.41/Share
- LHA GY : Lufthansa Strike Losses in ‘Double-Digit’ Millions: Bild
- MRK GY : Merck KGaA 3Q Ebitda Pre-Items Beats Est., Lifts 2015 Forecast
- MVC SM : Metrovacesa to Propose EU1B Capital Increase: Confidencial
- ORI SS : Oriflame 3Q Operating Profit, Sales Beat Estimates
- BPEM IM : Popolare Emilia 3Q Net Income EU9.4m vs EU25.2m Y/y
- RWE GY : RWE 9-Month Adj. Net Misses Estimates, Confirms 2015 Forecasts
- SBMO NO : SBM Offshore 9-Mo. Directional Rev. $2.06b; Keeps Rev. Outlook
- SPM IM : Italy Regulator: Tender Offer for Rest of Saipem Not Required
- SAZ GY : Stada Expects ’Substantial’ Decrease in Adj. Ebitda This Year
- SIE GY : Siemens 4Q Industrial Profit Beats Estimates; Plans Buyback (up to €3b)
- TEL NO : Telenor CFO, General Counsel Put on Leave Amid VimpelCom Probe
- TEF SM : Telefonica’s Vila Sees ‘Attractive’ Possibility in Mexican IPO
- TOD IM : Tod’s 3Q Rev. Misses; Ebitda In Line, Confirms Outlook
- UCG IM : UniCredit CEO Ghizzoni Excludes Capital Increase
- VIV FP : Vivendi Bought Own Shares at EU19.83/Shr
- VOD LN : Vodafone CEO Doesn’t Rule Out Liberty Asset Talks in Future, CEO Says India IPO to Include Review of Tower Venture
- VOW3 GY : Winterkorn Resigns From Audi Chairman Post
- YOOX IM : Yoox Net-A-Porter: Accelerated Bookbuild Offer on YNAP Shares
- WIE AV : Wienerberger 3Q Misses Estimates; Sees Restructuring Charge
>>> Up
*BANK PEKAO RAISED TO HOLD VS SELL AT SOCGEN
*DIASORIN RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX
*JUNGHEINRICH RAISED TO HOLD VS REDUCE AT HSBC
*KPN RAISED TO BUY AT HSBC
*LEROY SEAFOOD GROUP RAISED TO BUY AT NORDEA
*MAIL.RU RAISED TO BUY AT SBERBANK CIB; PT $23.30
>>> Down
*ASTALDI CUT TO UNDERPERFORM VS NEUTRAL AT MEDIOBANCA
*EDP CUT TO HOLD AT HSBC
*FINCANTIERI CUT TO NEUTRAL VS BUY AT CITI
*GENUS CUT TO HOLD FROM BUY AT LIBERUM
*KUKA CUT TO EQUAL WEIGHT VS OVERWEIGHT AT BARCLAYS
*MAN GROUP CUT TO SECTOR PERFORM AT RBC CAPITAL
*SAUDI CERAMIC CUT TO NEUTRAL VS BUY AT GOLDMAN SACHS
*UBI CUT TO HOLD VS BUY AT SOCGEN
*VOESTALPINE CUT TO SELL VS NEUTRAL AT CITI
>>> PT Change
>>> Initiation
*CHORUS CLEAN ENERGY RATED NEW BUY AT BERENBERG, PT EU13.9
*COVESTRO RATED NEW BUY AT CITI; PT EU40
*COVESTRO RATED NEW BUY AT KEPLER CHEUVREUX, PT EU38
*COVESTRO RATED NEW BUY AT CITI; PT EU40
*COVESTRO ADDED TO EUROPE 1 LIST AT BOFA
*GEMALTO RATED NEW SELL AT BERENBERG, PT EU54.4
*INGENICO RATED NEW SELL AT BERENBERG, PT EU84.5
*PAYSAFE RATED NEW BUY AT BERENBERG, PT 431P
*SAFECHARGE RATED NEW BUY AT BERENBERG, PT 324P
*WORLDLINE RATED NEW SELL AT BERENBERG, PT EU19.4
>>> Call
Asian Mid-session Update: Australia employment soars, sending AUD currency and bond rates higher; BOK on hold; Lenovo loss smaller than expected
***Economic Data***
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
- (AU) AUSTRALIA OCT EMPLOYMENT CHANGE: 58.6K (highest since Mar 2012) V +15.0KE; UNEMPLOYMENT RATE: 5.9% (5-month low; Matches lowest level since Nov 2013) V 6.2%E
- (AU) AUSTRALIA NOV CONSUMER INFLATION EXPECTATION: 3.5% V 3.5% PRIOR
- (NZ) NEW ZEALAND NOV ANZ CONSUMER CONFIDENCE INDEX: 122.7 V 114.9 PRIOR; M/M: 6.8% V +3.7% PRIOR
- (NZ) NEW ZEALAND OCT BUSINESS MANUFACTURING PMI: 53.3 V 55.0 PRIOR
- (NZ) NEW ZEALAND OCT FOOD PRICES M/M: -1.2% V -0.5% PRIOR; 3rd consecutive decline
- (JP) JAPAN OCT PPI M/M: -0.6% (5th straight decline) V -0.4%E; Y/Y: -3.8% (7th straight decline) V -3.5%E
- (JP) JAPAN SEPT MACHINE ORDERS M/M: 7.5% (first rise in 4 months) V 3.1%E; Y/Y: -1.7% (2nd consecutive decline) V -4.6%E
- (CN) China Oct fiscal revenue CNY1.44T, +8.7% y/y v 9.4% prior, fiscal spending CNY1.35T, +36.1% y/y v 26.9% prior
- (UK) UK OCT RICS HOUSE PRICE BALANCE: 49% V 45%E
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 flat, S&P/ASX +0.1%, Kospi flat, Shanghai Composite -1.0%, Hang Seng +1.0%, Dec S&P500 +0.2% at 2,073
***Commodities/Fixed Income***
- Dec gold +0.2% at $1,087/oz, Dec crude oil +0.6% at $43.17/brl, Dec copper -0.1% at $2.21/lb
- JGB: (JP) Japan's MOF sells 30-year JGB sells ¥726B in 1.40% 30-year bonds; Avg yield: 1.385% v 1.350% prior; Bid to cover: 3.17x v 3.33x prior
- (CN) PBoC to inject CNY10B in 7-day reverse repos (38th consecutive injection); Net zero position this week (2nd consecutive week of neutral position)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3628 v 6.3614 prior setting; 8th straight weaker setting; weakest Yuan setting since Oct 19th
- (JP) Japan investors bought net ¥1.0T in foreign bonds v ¥883B in prior week; Foreign investors bought net ¥170B in Japan stocks v bought ¥187B in prior week
***Market Focal Points/FX***
- Asian equities are mixed without much conviction on Wall St, but the session did produce some fireworks in Australia FX space. Employment change of 58.6K new jobs was the biggest in 3 1/2 years, while unemployment matched the lowest level in 2 years. Participation rate was not sacrificed by the net job creation, rising to 65.0%. The closely tracked Hours Worked component also saw the biggest increase in 9 months. The impressive jobs data produced a 80pip spike in AUD/USD to 0.7150 and the Yield on Australia 3-year Bond rose over 5bps to 2.15% - a 4 1/2 month high - as traders repriced odds on expectations of another RBA cut in Q1 of next year all the way down to mid 20%-ile. Australia stocks initially sold off slightly but then turned positive in a notable transition to "good news is positive for stocks" theme.
- Bank of Korea held rates unchanged at 1.5% for the 5th straight month as widely expected. BOK did note that economic sentiment has improved, but also warned about the risks around US rate liftoff and China economic slowdown. BOK's Lee said it was a unanimous decision, also pledging to keep policy accommodative to support growth.
- China based Netease and Lenovo reported results that also exceeded expectations. NTES was up some 6% afterhours after posting Q3 $2.24 v $1.79e, R$1.05B v $891Me. Online games Rev rose to CNY5.2B v CNY2.3B y/y. Lenovo saw its first quarterly loss in several years, but it was not as steep as anticipated, and Revenue also beat expectations. Lenovo announced steep reduction in H1 CAPEX, but its PC market share was still industry leading 21.2% while shipment decline of 6% was less than industry. Shares were up over 4% for the session after Q2 result.
***Equities***
US equities / ADRs:
- ANGI: IACI proposes to acquire the company at $8.75/shr in cash, valuing it at over $500M; ANGI has declined to engage with IACI; +11.0% afterhours
- NTES: Reports Q3 $2.24 v $1.79e, R$1.05B v $891Me; +6.0% afterhours
- PLKI: Reports Q3 $0.46 v $0.44e, R$61.1M v $61.4Me; approves $200M buyback (17% of market cap); +5.6% afterhours
- NCR: Blackstone said to be near a deal to take an over 15% minority stake for over $800M; NCR also plans a $1B share buyback announcement (22% of market cap); +2.7% afterhours
- JBLU: Reports Oct load factor 84.0% v 83.5% y/y; -0.6% afterhours
- FRPT: Reports Q3 -$0.05 v -$0.04e, R$30.6M v $30.0Me; -20.0% afterhours
- DGLY: Reports Q3 -$0.32 v -$0.00e, R$5.1M v $7.0Me; -24.8% afterhours
Notable movers by sector:
- Consumer discretionary: G8 Education GEM.AU +2.4% (acquistion); Seven West Media SWM.AU +1.0% (guidance); SEEK SEK.AU +1.3% (sell stake in IDP Education); Surfstitch Group SRF.AU +4.7% (acquisition, reaffirms guidance); Toppan Printing Co 7911.JP +3.2% (H1 result)
- Financials: Macau Legend Development 1680.HK +0.9% (Q3 result); Computershare CPU.AU +5.4% (reaffirms guidance)
- Industrials: Aurizon Holdings AZJ.AU +4.1% (share buyback)
- Technology: Asustek Computer 2357.TW -1.1% (Q3 result); Lenovo 992.hk
- Materials: Sims Metal Management SGM.AU -17.7% (guidance)
- Energy: GCL-Poly Energy Holdings 3800.HK -0.6% (Q3 result); Santos STO.AU -27.8% (entitlement offer)
- Healthcare: Ramsay Health Care RHC.AU +1.0% (guidance)
- Telecom: ZTE Corp763.HK -1.4% (terminates share buyback plan)