>>> WIRED Magazine Names 12-Year-Old Mexican Paloma Noyola Bueno 'The Next Steve


WIRED Magazine Names 12-Year-Old Mexican Paloma Noyola Bueno 'The Next Steve Jobs'

Mexican student Paloma Noyola Bueno has been toted "The Next Steve Jobs" by Wired Magazine in their November issue. The fifth grader, who scored first place in math and third place in Spanish on a national test, is emblematic of a new system of education achieving remarkable results. The 12-year-old lives in Matamoros, Tamaulipas in Mexico's far north. Her tiny school sits next to a trash dump across from the U.S. border: the Bureau of Diplomatic Security reports that drug related violence is of high concern in the area with people being "victims of armed robberies, sexual assaults, auto thefts, murder, and kidnappings." Despite all this, the José Urbina López School has captured the attention of the nation thanks to the remarkable, ground-breaking teaching methodology of Paloma's teacher Sergio Juarez Correa.

Juarez Correa himself grew up in Matamoros, and similarly underwent a school system that has become antiquated and ineffective. Wired reports that Correa found the state-approved curriculum "mind-numbingly boring" and achieved poor test results and a complete lack of student engagement. Indeed, a 2011 UNESCO study shows that while 98 percent of Mexican children are enrolled in primary school, only 73 percent make it to Secondary School. More shocking still, only 29 percent of the population make it to tertiary level. Indeed, Vanguardia reports that in 2012, the generation prior to Paloma's, 45 percent of students failed math and 31 perent did not pass Spanish. By Paloma's year, only 7 percent failed math and only 3.5 percent failed Spanish. This high-achieving class, it seems, could indeed produce the next Steve Jobs. The incredible results are thanks to a remarkable new approach by Correa.

It has long been known that children are more likely to engage in learning material when they are given the freedom to explore and problem-solve independently, to engage in the material in their own unique way. Systems like the Montessori Method, which encourage independent thinking have achieved remarkable results: in her 2005 Ph. D study on the Montessori system, Dr. Angeline Lillard of the University of Virginia found that Montessori students were more interested in learning, more disciplined, more independent and had a deeper understanding of geography, history and science. Correa also examined the work of Sugata Mitra, an Indian scientist whose experiments demonstrated that "if you put a computer in front of children and remove all other adult restrictions, they will self-organize around it, like bees around a flower."

Inspired by these methods of independent learning, Correa created a completely new method of teaching for his class. He placed the students in small groups, allowing them to learn from each other as much as they learnt from Correa himself. He inspired the students to engage with their own curiosity: asking "what did they want to learn about?" Despite a lack of technological capabilities in the school, Correa would still bring his students a wide scope of information: he would go home and research any topic that interested the students on the web, bringing in the information that was most relevant to them. Correa has embraced the fact that we have moved from the industrial era to the age of information: images, texts and information are processed at remarkable speeds. By inspiring and engaging kids in their own interests, inspiring them to solve problems and act independently, educators like Correa are are allowing children to fulfil their ultimate potential. Paloma's results speak for themselves.

(JPM) Thales : Upbeat dinner with management, scope for upside

Upbeat dinner with management - scope for shares to move higher

On Thursday 17 September Thales' CEO, Patrice Caine, and CFO, Pascal
Bouchiat, hosted a dinner for the sell-side community. We believe the overall
message was positive and there is scope for the shares to move higher both
from potential EPS upside and a potential re-rating.

* Defence market improving; Middle East is key: Thales is clearly more
positive on the outlook for its defence sales compared to 12-18 months ago.
The main driver is the M.East region. Already this year Egypt has signed a
firm contract for Rafale fighter jets (Thales has a c25% share of the Rafale)
and Qatar has selected the Rafale (with the firm deposit from Qatar
expected in the next 1-2 quarters). France hopes the UAE will also buy the
Rafale. DCNS (in which Thales has a 35% stake) hopes to sell surface
warships to Qatar.

* Scope to beat the 9.5% to 10% group EBITA margin target: Thales'
current guidance is to achieve an EBITA margin of 9.5% to 10% by 2017-
18, although we believe it could be at or above the 9.5% level as early as
2016. CFO Bouchiat said that Thales could achieve a group EBITA margin
above 10% (without giving a timeframe) but that it was too early to
formally commit to that.

* Capital allocation – scope for higher dividend payout ratio: Thales is
generating FCF well in excess of its total cash dividend payout and so was
questioned on how it planned to deploy its surplus cash. Thales says that the
current guidance of a 35% dividend payout ratio is a floor. It would prefer to
raise the dividend payout ratio than to buyback shares. CEO Caine
commented that he is not a fan of large M&A transactions which he believes
rarely create shareholder value.

* Transport Division problems "relatively easy to fix": Thales Transport
Division (mostly rail signaling) has performed poorly recently. It is expected
to make a small loss in 2015 and only to be around breakeven in 2016.
However, Thales believes that it can achieve normal transport industry
margins of 7-% "in time". The current problems relate to taking on contracts
in export markets where it proved harder than expected to adapt European
technology to local conditions. Thales' CEO noted that 3-4 years ago its
Avionics division faced technology challenges "ten times more complex"
that in Transport today, but today Avionics is one of Thales' top performing
businesses.

* DCNS outlook harder to predict: Thales does not have management
control of the DCNS naval shipbuilder (as mentioned above, it has only a
35% stake). The business was heavily loss-making in 2014 from
diversification into civil areas (renewable energy, civil nuclear power) and
losses on a nuclear submarine programme. DCNS is on track to do slightly
better than breakeven in 2015 but the roadmap for 2016-18 is rather unclear
to us.

(Barcap) Telecom Italia and Vivendi

Telecom Italia and Vivendi

Brazil vs Vivendi

We update our TI estimates for the latest fx moves, leading us to cut 2015e/2018e
EBITDA and EPS by between -1% to -3%. We cut our PT to EUR1.15 for ords which
leaves only a 4% upside, unattractive vs c. 16% for the sector. However we note that
Vivendi (EW) keeps increasing its stake in TI and the press is speculating that it
could go to a 20% stake. We struggle with the strategic merits of Vivendi’s
investments but it is likely to continue to support TI shares and we remain EW. TI
trades on 16e EV/EBITDA of 6.4x and EV/OpFCF of 12x, in line with peers. We
prefer DTE (OW), TEF DE (OW), BT (OW) and ORA (OW) in the sector.

Cutting estimates on Latam fx. TI is exposed to Brazil through its subsidiary TIM P that
represents c 19% of the group’s EBITDA (8% of EV). We update our forecasts to reflect
the lower EUR/BRL since our last update, we now use an average EUR/BRL 3.7 for 2015
and 4.5 thereafter, respectively a -6% and -18% depreciation. This leads us to cut group
estimates: 2015e EBITDA by -1% and c. -3% for the following years with a similar impact
on EPS. We cut our PT for ords from EUR1.20 to EUR1.15, leaving only +4% upside.

Improvements in Italian mobile, investments in fixed. We expect the domestic mobile
to inflect in the next 12 months as price aggression has materially diminished. The
recently announced merger between WIND and Hutch should sustain the more rational
competitive environment. The collapse of the merger proposal in Denmark raised
uncertainty as to whether the deal in Italy could also fail, but we believe the Italian
market presents different characteristics and the deal is therefore likely to go through.
On fixed, TI is investing to roll-out a NGN. This should enable it to foster faster growth
of the BB retail market, although it should lose on wholesale due to higher competition.

What is Vivendi’s end goal? Vivendi holds 15.5% of TI’s ordinary shares and may raise it
to 20% (Les Echos). Vivendi is not represented at the BOD but is surely aware that TI’s
bylaws allow a shareholder with a simple majority to get two-thirds of the BOD seats. We
note though that previous non-Italian investors had a mixed experience in exercising
control. Regarding the “what for” we see little possibility or need for a rapid change in TI’s
strategy or operations. BBG reported that Vivendi may push for a sale of Brazil: we do not
believe this is possible short term (see On the road in Brazil). Les Echos report that
Vivendi sees strategic merits in TI’s customer base to sell content. But we do not see
why that requires taking a stake in TI. So Vivendi may just be opportunistic, building a
controlling stake at no premium. With Orange (OW) saying that if cross-border merger
started TI could be a partner, Vivendi may be just playing consolidation upside.

Risks: The main upside risk is that Vivendi decides to make a full bid on TI.
Consolidation in Brazil happening sooner than our expectations is another upside risk.
The main downside risks are that the merger of WIND and Hutch does not go through.
Brazil is another risk. Barclays economists recently cut GDP forecasts for Brazil (Brazil:
Recession, Deficits And Downgrades), so risk is on the downside.

(BofA-ML) The Thundering World : No Hike, No Rally

The Fed Blinks
Fed admits China/Wall St threatens to reverse Main St recovery; Fed confirming “deflationary recovery” (Chart 1); risk can rally but sell into strength; upside for risk assets constrained by growth outlook, downside protected by Fed.

Fragile Wall Street + perilous China = “tactical delay” in Fed hike according to our economists; BofAML say Dec hike likely; but if no autumn risk rally despite ultra-dovish Fed & bearish sentiment = markets hinting “recession” and/or “default” imminent.

Short-term tactics: negative for US$, banks. EM>DM, resources>banks, gold>US$, REITs>cash, growth>value decent tactical trades.

Deflationary recovery means “growth”, “yield”, “quality” remain structurally bid; we stay long US$, volatility, real estate & stocks>bonds; but SPX>2040-2070, GT30>3.2%, DXY>97 needs stronger global growth in Q4.

Bearish risk = deflationary bust: Asia banks indicate crisis; Q3 EPS recession. FMS says Discretionary, Banks, Tech & Eurozone most at risk should peak liquidity coincide with EPS recession…SPX<1870, GT30<2.8%, DXY<93...at least until new extreme policies introduced (Fed QE4, China QE1 or a G7 shift toward fiscal policy stimulus).

(BofA-ML) The Flow Show: Equity inflows, bond outflows before FOMC

Equity inflows, bond outflows before FOMC
--> Ahead of Sept FOMC big $24bn equity inflows (driven by short-covering in SPY & largest inflows to Japan funds in 17 months)
--> EM assets still shunned: 10th week of EM equity outflows; 8th week of EM debt fund redemptions

>>> Asset Class Flows
* Equities: big $23.8bn inflows (largest in 10 weeks) (caveat: an outsized $11.4bn inflow via SPY)
* Bonds: $3.3bn outflows (6 straight weeks)
* Precious Metals: $0.2bn outflows (3 straight weeks of modest outflows)

>>> Equity Flows
* Japan: big $5.1bn inflows (largest since Apr’14) (inflows in 28 out of past 30 weeks)
* US: $16.7bn inflows (largest in 2015) (caveat: $11.4bn inflows via SPY)
* Europe: $2.0bn inflows (inflows in 17 out of past 18 weeks)
* EM: $2.2bn outflows (silver lining = smallest outflows in 10 weeks)
* By sector: healthy $0.8bn inflows to healthcare funds; $0.6bn outflows from consumer funds (4 straight weeks)


>>> Fixed Income Flows
* Govt/tsy funds eke out 11th straight week of inflows (albeit small $0.1bn)
* HY bond funds end 7 straight weeks of outflows with tiny $89mn inflows
* $1.9bn outflows from EM debt funds (8 straight weeks)
* $1.1bn outflows from IG bond funds
* 7 straight weeks of outflows from bank loan funds ($0.2bn)
* 6 straight weeks of outflows from muni funds ($0.5bn)

>>> What to look at today - 18th of September 2015

Dow-0.39% S&P-0.26% Nasdaq+0.10% Russell+0.44% VIX 21.76
US Market closed lower after long awaited FOMC Meeting, policy statement from the Federal Reserve was virtually a carbon copy of the previous directive. The FOMC acknowledged positive labor market conditions in the U.S., but indicated that concerns related to an economic slowdown in China have outweighed the domestic positives. Ms. Yellen stressed that these developments have weighed on the inflation outlook, contributing to today's decision to maintain status quo. Furthermore, Ms. Yellen emphasized that the expected rate path is more important than the first rate hike, indicating that the Committee expects to see rate normalization by 2018. Hearing ‘2018' in that context was music to the market's ears, inviting a stampede of buyers in stocks while Treasuries spiked to highs with the 10-yr yield falling ten basis points to 2.20%. The post-FOMC move higher was followed by a dive to new lows, with the reversal paced by the financial sector (-1.4%), which settled in the red as bank stocks responded to rates remaining lower for longer. The sector accelerated its decline as Fed Chair Yellen responded to a question about the possibility that the U.S. falls into a Japan-like deflationary trap. To little surprise, Ms. Yellen said that such a scenario is not anticipated at this time. Technology also weighted on the market, ORCL -4%. industrials (-0.5%), energy (-0.1%), and materials (-0.5%) succumbed to the afternoon selling pressure. Volume were in line with acerage at 975mil shares. US After Hours PDEX +25.9%, AKS +12.8%, LQ -5.1%, ADBE -2.4% following earnings/guidance, VBLT +15.7% on Phase 2 results...China put out its housing prices that continued to recover. Across top 70 cities prices m/m were +0.6% (3rd straight increase) v +0.2% prior, while y/y the decline slowed to -2.3% v -3.7% prior (12th straight decline). HKMA chief Chan still expressed concern over local economy and property market, just as China Pres Xi reiterated the economy is resilient, with capacity to maintain medium to high growth rate in long term. In Japan, the BOJ released the minutes of its Aug meeting that saw members agree Japan economy will continue modest recovery and noted inflation expectations on the rise. Sentiment produced little market reaction, as it follows a more recent policy statement this week where the BOJ cut its assessment of exports and output. Also of note, high-profile former MoF official Sakakibara said continued Yen weakness is unlikely, and that there's greater chance of a move to ¥115-120 range then to ¥125 level.

Nikkei -1.53% Hang Seng +0.53% Shanghai +0.93%

Eur$ 1.1412 CNY 6.3622 JPY 119.70 GBP 1.5581 EURCHF 1.0972 RUB$65.6420 WTI $46.74 9(-0.34%)

S&P +0.03% EuroStoxx -0.35% Dax -0.40% SMI-0.70%

Macro :
- FOMC See Longer-Run Median Federal Funds Rate at 3.50%
- Yellen May Emulate Taper Template and Raise Rates in December
- It’s Party On in Credit Markets as Fed Stays at Zero for Longer
- China Home-Price Growth Widens to More Cities Amid Rate Cuts
- The Brazilian Dealmaker Who Wowed Buffett Is Reshaping the World

Keep an eye on :
- ABG/P SM : Abengoa Loans Said to Fail to Draw Buyers Even at 60% Discount
- ABG/P SM : Blackstone, Cerberus May Inject Cash Into Abengoa: Expansion
- ABI BB : Belgian Stock Regulator to Analyze AB InBev Option Trade: Tijd
- AC FP : Colony Capital in Talks to Buy French Auto Chain: Reuters
- ATL IM : Atlantia Said in Advanced Talks to Sell Stake in Rome Airport
- ATC NA : Altice Will Do More U.S. Cable Acquisitions, Alliances: Drahi
- ATC NA : FCC Considering CVC/Altice Merger in ‘Open, Fast’ Process
- BAYN GY : Bayer Mulls Legal Steps on Xarelto Copy Application in U.S.: FAZ
- BBVA SM : BBVA mandates N+1 to sell its Italian consumer financing unit BBVA Finanzia
- BMW GY : BMW Sees FX, Commodity Benefit of Three-Digit Millions: Boersen
- IMT LN : Could be a target for Japan Tobacco
- KNEBV FH : Kone CEO Sees Good Growth Potential in China in Few Years: DI
- LLOY LN : Lloyds May Be Investigated by U.K. Serious Fraud Office: FT
- SAB LN : Altria Said to Hire Credit Suisse, Perella for ABI-SAB
- SHP LN : Shire CEO Says Can’t Promise Lifitegrast Approval by Pdufa Date
- VNF1R LR : Vitol Buys 43.3% Stake in Ventspils Nafta for 1.77 Euros a Share
- VOLVB SS : Volvo Cars to Spend EU200m on CMA Platform in Ghent Plant: Tijd

>>> Europe : Brokers Upgrades & Downgrades - 18th of September 2

>>> Up
*ADIDAS RAISED TO BUY VS HOLD AT HSBC, PT EU84
*ALTICE RAISED TO HOLD VS REDUCE AT KEPLER CHEUVREUX
*BANCO SANTANDER RAISED TO BUY VS NEUTRAL AT CITI
*BOLIDEN RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*CONTINENTAL RAISED TO BUY VS NEUTRAL AT GOLDMAN
*DNB ASA RAISED TO BUY AT HSBC
*HEINEKEN RAISED TO BUY AT HSBC
*IMMOFINANZ RAISED TO BUY VS HOLD AT SOCIETE GENERALE
*KORIAN RAISED TO BUY AT HSBC
*OXFORD INSTRUMENTS RAISED TO HOLD VS SELL AT BERENBERG

>>> Down
*DEUTSCHE PFANDBRIEFBANK RATED NEW NEUTRAL AT JPMORGAN
*KAZ MINERALS CUT TO UNDERPERFORM VS NEUTRAL AT EXANE
*NYRSTAR CUT TO UNDERPERFORM VS NEUTRAL AT EXANE
*ROTORK CUT TO REDUCE AT NOMURA

>>> PT Change


>>> Initiation
*GLENCORE RESUMED EQUALWEIGHT AT MORGAN STANLEY, PT 217P
*SAFT GROUPE RATED NEW HOLD AT SOCIETE GENERALE, PT EU32

>>> Call