>>> Volvo could generate up to SEK 60bn (EUR 6.4bn) by selling non-strategic sta

Volvo could generate up to SEK 60bn (EUR 6.4bn) by selling non-strategic stakes and assets 

Volvo [STO:VOLV-A], the Swedish truck manufacturer, could generate up to SEK 60bn (EUR 6.4bn) by selling non-strategic holdings and assets, according to Dagens Industri.

The Swedish business daily reported that Martin Lundstedt is set to take over as new CEO of Volvo next week and speculated that he will likely investigate closely which holdings and assets are strategic for the company and which can be sold off.

The paper also wrote, citing unnamed sources, that some of Volvo's major shareholders are unhappy with the fact that the company owns so many assets that lead to very little or no return, such as Volvo's private jet company, Blue Chip Jet. The paper calculated that Volvo gain SEK 60bn by selling off non-strategic company holdings, assets and real estate.

The paper listed several holdings which are unlikely to be seen as strategic and may therefore come up for sale. The paper also cited Volvo's Investor Relations manager, Christer Johansson, who confirmed that the company will have to consider whether or not to dispose of anything which is deemed non-strategic, but that he did not wish to comment on which holdings or assets may be involved.

The item pointed to Volvo's 25% in the Mongolian mining truck and fire engine maker, Mongolia Hauler Joint Stock [SHA:600262], a stake which is worth around SEK 2bn (EUR 214m).

Another possible candidate for disposal is American second-hand truck vendor, Arrow Truck Sales, which is thought to be worth SEK 2-3bn (EUR 214-321m). The paper also mentioned Volvo's 25% stake in the German engine producer, Deutz [ETR:DEZ], which could be worth around SEK 1bn (EUR 107m) and San Francisco-based Volvo Group Venture Capital which could raise SEK 1bn (EUR 107m) if its portfolio is sold.

The paper also pointed to Volvo Information Technology with a turnover of SEK 9.7bn (EUR 1bn) as well as Volvo's vast real estate portfolio which Danske Bank estimated in an analysis to be worth up to SEK 40bn (EUR 4.3bn).

A Danske Bank analyst said that Volvo should place all of its real estate in one company and list it in Stockholm. He said that Volvo would distribute the company to its shareholders and retain a controlling stake.

Danske Bank calculated that spinning off the properties would increase Volvo's shareholder value by 15%. Meanwhile, Volvo's Christer Johansson commented that properties used for production by the company are seen as very strategic and will not be disposed of.

The original article appeared in print, Page 6.

Source Dagens Industri

(BarCap) Kering : Is Gucci realy only worth 7.7 x 2016 Earnings

Kering

Is Gucci really only worth 7.7x PE?

Taking a relatively simplistic approach to a sum of the parts based on PE, we believe Gucci is currently valued at 7.7x 2016E. Within this we assume that Bottega Veneta, Saint Laurent and Other luxury will be valued at 21x – the same as Tod’s, Ferragamo and Prada while Puma is valued at its current quoted value. To reach our price target, Gucci would be valued at 14.7x PE – still a 20% discount to the sector. While Q3 will not be a blockbuster quarter, we do not believe it will be worse than current weak expectations and see limited downside at this time. With the new Cruise collection now launched and the new creative director ramping up the product portfolio, we believe the worst is over for Gucci and retain our OW rating and €200 price target.

- We expect Gucci to show no growth in Q3 ahead of the new collections

- Kering Q3 to show similar growth to H1

- Valuation remains very cheap: we believe that BV and Saint Laurent together with the other luxury operations would have a value near the monobrand Italian stocks Tod’s (21.4x), Prada (20.0x) and Ferragamo (23.1x). With Puma quoted on 38.8x, this results in Gucci being valued at just 7.7x assuming EBIT is a good proxy for net income. We believe this offers real value given the size of the brand and its excellent distribution. We value the group at €200 implying a multiple of c14.7x for Gucci.

>>> What to look at today - 12th of October 2015

Asian markets are mixed, with China markets broadly outperforming and Australia trading softer despite the strength in basic materials. Energy markets are more volatile than typical in early electronic trade - Nov WTI crude is up about 1% on bullish remarks by OPEC chief and also Qatar Oil Min. Markets in China are helped by upbeat comments from PBoC Dep Gov Yi Gang, who said the equity correction is almost over and the stock turbulence would have limited impact on economy. NDRC State planning agency official offered similar remarks, noting the economy is basically stable. Finally, there were local press reports that PBoC has expanded a relending credit program to 9 provinces and cities, resulting in more credit capacity for local banks. BOJ Gov Kuroda spoke at the IMF meeting in Lima, downplaying expectations for further BOJ easing. Furusawa recommended that Japan govt proceeds with the 2nd sales tax hike to maintain its credibility, while a separate Nikkei report stated Tokyo is preparing to cut effective corporate tax rate to less than 30% in FY17/18 from 32.1% current average. There was more notable Fed speak over the weekend, with high profile comments coming out of Fed vice chair Fischer diminishing the perceived by traders link between rate liftoff and global economic weakness. Fischer said the Fed will be "cognizant" of overseas risks, but does not "anticipate" the global economic weakness to delay interest rate liftoff. ECB's Coeure also spoke, stating Eurozone inflation will move back to 2% "very slowly". EMC: Said to look for other potential suitor after an offer from Dell; Asked for a "go-shop" provision as part of Dell agreement

Nikkei +1.64% Hang Seng +1.03% Shanghai +3.05%

Eur$1.1371 CNY 6.3275 JPY 120.16 GBP 1.5333 EURCHF 1.0932 RUB$61.3860 WTI $49.94 (+0.60%)

S&P -0.06% EuroStoxx+0.12% Dax+0.18% SMI+0.01%

Macro :
- Russia May Cut Oil Export Tax to 36% From Sept Next Year: Tass
- China Stock Rally-to-Rout About to Repeat for Chartist Schroeder
- China’s Lou Says U.S. Not Ready for Interest Rate Hike: Xinhua
- Spain Fin Min de Guindos: Reiterates view to meet 2015 budget deficit to GDP target of 4.2% and confident it will be below 3.0% in 2016
- ECB chief Draghi: Concerned about Greece debt sustainability; country needs element of debt relief, Debt relief would not be credible if not accompanied by strong ownership of bailout program by the Greek govt
- Fed's Fischer says 2015 U.S. rate rise 'an expectation, not a commitment' http://reut.rs/1Po5QFI
- Fischer voices caution on global risks to US outlook - http://on.ft.com/1Nzo4EU
- Renzi revives Italy’s €410bn wealth fund - http://on.ft.com/1ZrGYkX
- The Number Biotech Bargain Hunters Have to Watch - http://on.wsj.com/1jXjd3E

Keep an eye on :
- AXFO SS : Axfood Says 3Q Sales, Profit Stronger Than Co. Expected
- BP/ LN : BP CEO: Will Take Time for Oil Supply, Demand to Rebalance
- CSGN VX : Credit Suisse Plans as Much as CHF2B Cost-Cutting Program: SaS
- CSGN VX : Credit Suisse CHF6b-CHF8b Share Sale ‘Discomforting’: Macquarie
- DBK GY : Deutsche Bank Said to Mull Sale of Abbey Life Insurance Unit
- FCA IM : Fiat Chrysler, UAW Deal Said to Boost Tier 1 Ratification Bonus
- FCA IM : Ferrari Plans to Sell 17.2m Shares for $48-$52 in IPO
- FCA IM : Ferrari see Q3 Rev €720/€730mil, EBITDA €210/215mil
- GALP PL : Galp Says Eni Reduced Holding in Portuguese Oil Co. to 4.997%
- GLEN LN : Glencore Looks to ‘Streaming’ Deals for Quick Cash - http://on.wsj.com/1ZrHJKP
- Hasting IPO : Hastings Group IPO Priced at 170p, Values Co. at GBP1.12b
- HSBA LN : Some HSBC Investors Said to Push for Talks About CEO: Times
- SDF GY : K+S Confirms EU780m-EU860m Profit Goal: Frankfurter Allgemeine
- MEANR NA : Mota-Engil Africa Plans to Request Delisting of Shares, proposed E6,1235/sh vs 3.77 friday 62.43% premium
- UG FP : Peugeot Labor Union to Sue Carmaker Over Job Transfers: AFP
- PFV GY : Busch and Pfeiffer Vacuum speculated to be mid-term merge candidates 
- PC IM : Pirelli to Remain Formula One’s Tire Supplier Thru ’19: Reuters
- Poste Italiana IPO : Poste Italiane Valued at Up to EU9.8b, IPO Starting Oct. 12
- RIO LN : Rio Tinto Says It Won’t Cut Copper Output: FT
- ROG VX : Roche, Novartis Dismiss Merger or Big M&A in SRF1 Interview
- RWE GY : Germany’s Atomic Plant Operators Say Nuclear Provisions Suffice
- RDSA NA : Shell Plans 1Q Partial Shutdown at Qatar Gas-to-Liquids Plant
- SAB LN : SABMiller Backer Says Brewer Has Better Prospects Than AB InBev
- SAB LN : AB InBev Said to Make Improved Offer for SABMiller: Sunday Times
- SAB LN : ABInBev Said to Discuss Raising SABMiller Bid to About 43 Pounds
- SAB LN : Light Beer Gets in Touch With Serious Side http://on.wsj.com/1VM94b7
- SN/ LN : Olivier Bohuon insists Smith & Nephew can prosper on its own - http://on.ft.com/1ZrGv21
- SPD LN : Sports Direct CEO Criminally Charged Over USC Collapse: Guardian
- TUIG GY : TUI to Propose ‘Significant’ Dividend Increase: Euro am Sonntag
- UTIW US : UTI Worldwide Competing Bid Possible, Maxim Group Says
- VOW3 GY : Volkswagen to Cut Revamped Phaeton Model to Save Money: Spiegel
- VOW3 GY : Lower Saxony State Gov Seeks VW Corporate Culture Change: DPA

>>> Europe : Brokers Upgrades & Downgrades - 12th of October 2015

>>> Up
*BERENDSEN RAISED TO OUTPERFORM AT RBC CAPITAL
*EURASIA DRILLING RAISED TO BUY AT VTB CAPITAL, PT $12.5/GDR
*GEA GROUP RAISED TO BUY VS HOLD AT BERENBERG
*HAYS RAISED TO OUTPERFORM AT RBC CAPITAL
*RWE RAISED TO BUY AT SOCIETE GENERALE
*SAFCO RAISED TO NEUTRAL AT EFG-HERMES

>>> Down
*ANGLO AMERICAN PLATINUM CUT TO SECTOR PERFORM AT RBC CAPITAL
*HEXAGON CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*LINDT & SPRUNGLI CUT TO NEUTRAL VS BUY AT UBS
*TECHNIP CUT TO SELL VS NEUTRAL AT CITI

>>> PT Change


>>> Initiation


>>> Call

>>> Asian Update

Asian Mid-session Update: China extends recovery on upbeat PBoC comments,

***Economic Data***
- (NZ) New Zealand REINZ SEPT House Sales Y/Y: 38.3% v 41.7% prior

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 closed, S&P/ASX -0.7%, Kospi +0.4%, Shanghai Composite +3.4%, Hang Seng +1.3%, Dec S&P500 -0.1% at 2,005

***Commodities/Fixed Income***
- Dec gold +0.2% at $1,158/oz, Nov crude oil +0.7% at $50.0/brl, Dec copper flat at $2.41/lb
- OPEC chief al-Badri: OPEC countries will not be affected if US decides to eliminate its oil export bank - financial press
- Qatar Oil Min Al Sada: Oil prices have bottomed; Sees signs of recovery to take place in 2016 - financial press
- (KR) South Korea sells 5-yr govt bond, avg yield at 1.820%
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3406 v 6.3493 prior setting; strongest Yuan setting since Aug 12th

***Market Focal Points/FX***
- Asian markets are mixed, with China markets broadly outperforming and Australia trading softer despite the strength in basic materials. Energy markets are more volatile than typical in early electronic trade - Nov WTI crude is up about 1% on bullish remarks by OPEC chief and also Qatar Oil Min. In FX, USD/JPY is little changed above ¥120 with Tokyo closed for holiday, AUD/USD trading in a 40pip range finding support at the $0.73 handle, and NZD/USD initially falling to 0.6670 before bouncing above 0.67. EM FX is also mixed and volatile - USD/SGD was up about 80pips above 1.4020, KRW gained over 1% against USD, and offshore Yuan is at its strongest level since devaluation around 6.3250 after another stronger fix by the PBoC.

- Markets in China are helped by upbeat comments from PBoC Dep Gov Yi Gang, who said the equity correction is almost over and the stock turbulence would have limited impact on economy. NDRC State planning agency official offered similar remarks, noting the economy is basically stable. Finally, there were local press reports that PBoC has expanded a relending credit program to 9 provinces and cities, resulting in more credit capacity for local banks.

- BOJ Gov Kuroda spoke at the IMF meeting in Lima, downplaying expectations for further BOJ easing. Kuroda said inflation is gradually rising, and the price dynamics are as anticipated. IMF Managing Director Furusawa was of similar opinion, noting CPI rise is gradual in Japan when excluding the effect of low energy prices. On the fiscal side, Furusawa recommended that Japan govt proceeds with the 2nd sales tax hike to maintain its credibility, while a separate Nikkei report stated Tokyo is preparing to cut effective corporate tax rate to less than 30% in FY17/18 from 32.1% current average.

- Australia materials names, especially gold miners, are higher on rallies in metals and 6-week highs in gold seen on Friday. Financials are underperforming, in part weighed down by an AFR report speculating that major banks may have to cut dividends since they lag their overseas peers based on their non-risk- weighted "leverage ratios".

- There was more notable Fed speak over the weekend, with high profile comments coming out of Fed vice chair Fischer diminishing the perceived by traders link between rate liftoff and global economic weakness. Fischer said the Fed will be "cognizant" of overseas risks, but does not "anticipate" the global economic weakness to delay interest rate liftoff. ECB's Coeure also spoke, stating Eurozone inflation will move back to 2% "very slowly".

***Equities***
US equities / ADRs:
- EMC: Said to look for other potential suitor after an offer from Dell; Asked for a "go-shop" provision as part of Dell agreement - financial press

Notable movers by sector:
- Consumer discretionary: SA SA International Holdings 178.HK -0.3% (golden week sales); Cabcharge Australia Ltd CAB.AU -2.3% (ACCC proposes to deny ihail app); China Eastern Airlines 600115.CN +5.0% (Sept result)
- Financials: Poly Property Group Co Ltd 119.HK +3.4% (Sept result); China State Construction Holdings 3311.HK +3.1% (Sept result); Poly Real Estate Group Co 600048.CN +2.9% (Sept result); China Overseas Land 688.HK +3.6% (spin-off proposal); Country Garden 2007.HK +2.4% (YTD result)
- Industrials: Cardno Ltd CDD.AU -0.7% (divestment); Guangzhou Automobile Group 2238.HK +0.9% (Sept result); China Railway Construction Corp 1186.HK +1.0% (approval to unit's Hong Kong IPO); Daewoo Shipbuilding & Marine 042660.KR +2.4% (additional loss speculation)
- Technology: Hon Hai Precision Industries 2317.TW +1.7% (cooperation with Alibaba)
- Materials: Doray Minerals Ltd DRM.AU +5.3% (Q3 result); Independence Group IGO.AU +8.9% (gold prices rise); Evolution Mining EVN.AU +8.7% (new discoveries)
- Energy: Santos Ltd STO.AU -2.4% (equity issue and job cuts speculation)
-Telecom: China Mobile941.HK +2.3%, China Telecom 728.HK +6.3% (investment in China Tower)
- Utilities: Transurban TCL.AU -0.5% (Q1 result)

FT : SABMiller investor calls for AB InBev to raise offer

SABMiller investor calls for AB InBev to raise offer

The fourth-largest shareholder in SABMiller is pushing for Anheuser-Busch InBev to improve its £65bn offer, less than 72 hours ahead of a bid deadline imposed by UK regulators.
A senior official at South Africa’s state-owned Public Investment Corporation, which manages more than $130bn in pension funds and is the country’s most powerful investor, said that key among its concerns was clarification of a proposed listing of a combined brewer on the Johannesburg Stock Exchange.

The comments from PIC highlight a split among investors just days before the 5pm expiry on Wednesday by which, under Takeover Panel rules, AB InBev must make a formal offer or walk away for six months.
Carlos Brito, AB InBev chief executive, has not ruled out making a hostile bid, but said last week that he hoped SABMiller’s board would back an offer.
With the exception of US tobacco maker Altria, which is SABMiller’s biggest shareholder, the board last week rejected AB InBev’s cash offer of £42.15 per share in cash and a partial share alternative as “very substantially undervaluing” the brewer.
Altria has said it is willing to accept an offer of £42.15, or higher, and has called on SABMiller chairman, Jan du Plessis, to negotiate with AB InBev. But Colombia’s Santo Domingo brewing dynasty, which holds 14 per cent of the company and has two board seats, voted to reject the offer.
The two largest shareholders control 41 per cent of the brewer.
Alejandro Santo Domingo, scion of the Colombian brewing dynasty, and one of the two members of the family investment vehicle, BevCo, on the SABMiller board has emerged as the kingmaker in what would be the biggest takeover of a London-listed company.
Without BevCo’s support, AB InBev cannot finance its offer, which is dependent on the two largest shareholders opting for the partial share offer, though it is theoretically open to all shareholders.
PIC, which holds about 3 per cent in SABMiller, said it also wanted a share transaction rather than a cash deal. The PIC official said he was concerned that AB InBev was “looking to satisfy the two major (SAB) shareholders first”.

Mr Brito has repeatedly said the partial share offer was designed “for and with” the major shareholders.
The PIC official said: “It’s very important for them to come back with a better offer that takes care of all shareholders’ concerns. Most importantly, if there’s a listing it must be immediate, it must be through a swap of shares. There’s no way we are going to accept cash because we don’t know what to do with that cash in the current market.”
He added that the PIC would be guided by SAB’s board.
A listing on the JSE for any new entity is seen as a critical condition for SABMiller’s South African investors, which collectively hold 10 per cent in the brewer. The country’s pension funds are required to invest 75 per cent of the funds in domestic assets.

AB InBev has said any new entity would have a secondary listing on the JSE, but South African shareholders say it is unclear if it would be deemed a domestic stock.
Cape Town-based Investec Asset Management, which holds about 0.2 per cent in SAB, has also written to the brewer’s board outlining its issues around a proposed deal.
“We want SAB’s board to engage with InBev . . . we are supportive of the SAB board rejecting the £42.15 offer by InBev,” Rob Forsyth, a portfolio manager at Investec said.
“We think as shareholders of both companies, there can be a higher price that satisfies both sets of shareholders and is fair and we would like the board to work towards that.”