TELECOM ITALIA Reuters reports that Telecom's mobile unit could become a magnet that brings together other middle-sized mobile companies around Europe to create a large group, CEO Marco Patuano said in an interview with la Repubblica newspaper on Sunday. He also said that partnering with fibre optic company Metroweb to build a broadband network in Italy will depend on whether it would create conflicts with regulators. On Saturday, Il Sole 24 Ore reported, without citing anyone, that French media group Vivendi would gradually increase its stake in Italy's biggest phone group to 25 percent from 21.39 percent currently.Also jp Morgan has reduces its position from 10.134% to 9.982%.
Le SUV Captur est visé.
Ford et Mercedes ont aussi des modèles pointés du doigt.
Rude journée en perspective pour Renault. Le constructeur automobile sera auditionné ce lundi 18 janvier par la commission technique mise en place par la ministre de l'Ecologie, du Développement durable et de l'Energie, Ségolène Royal. L'objectif de cette commission : s'assurer que les constructeurs ne manipulent pas les tests d'homologation des véhicules, comme l'a fait Volkswagen via un logiciel permettant d'activer les systèmes de dépollution en cas de contrôle, et de les suspendre en condition de route.
Renault est dans la tourmente, depuis que la CGT du site d'ingénierie de Lardy a révélé jeudi, dans un tract, que la répression des fraudes (DGCCRF) avait mené début janvier des perquisitions sur trois sites du constructeur. Le cours de Renault avait alors plongé de plus de 20 %, avant de clôturer en recul de 10 %.
Sur le fond, les résultats du constructeur français aux premiers tests de la commission concentrent les interrogations. Les véhicules Renault - notamment un utilitaire Euro 5 et un SUV Captur de norme Euro 6 dont les résultats ont été partagés avec la commission - ont récolté de mauvaises notes, sur les émissions de CO2 mais aussi de NOx (dioxide d'azote). C'est surtout le Captur qui est au centre des interrogations, avec des rejets de NOx multipliés par plus de cinq par rapport aux limites fixées par la réglementation et les tests.
Ces véhicules ont enchaîné trois tests différents : un essai basé sur le cycle européen NEDC, un autre destiné à repérer un éventuel logiciel truqueur, et un troisième test conduit sur route. Bilan : les tests du Captur ont fait émerger un défaut technique qui conduit à bloquer le système de dépollution. Renault devrait ainsi proposer une action correctrice à ce problème, jugé technique, via un rappel. Mais le constructeur concentre aussi les interrogations sur les tests sur circuit, avec des rejets très élevés. Du côté des spécialistes de l'automobile, on rappelle que ce type de test n'a pas de valeur légale - la réglementation actuelle ne prévoit que des essais en laboratoire, et les premiers tests sur route seront appliqués en 2017.
Reste que, vu le niveau de décalage observé, Renault va devoir s'expliquer. Et convaincre que le problème est avant tout le fruit de choix technologiques minimalistes - Renault a fait le pari de la technologie « piège à NOx » plutôt que des solutions plus évoluées de type SCR utilisées par PSA - qui peuvent être revus, et non pas de manipulations destinées à respecter les normes tout en bloquant les systèmes sur la route. Les ministres Ségolène Royal et Emmanuel Macron ont de leur côté affirmé, tout comme le constructeur, qu'il n'y avait aucun logiciel truqueur.
Parmi les 10 résultats de tests déjà partagés - 22 ont été menés au total - d'autres marques sont pointées du doigt, comme Ford sur un C-Max Euro 6 lors du test sur circuit, ou Mercedes, dont une Classe S 350 Euro 6 a donné des résultats incohérents. Les deux constructeurs martèlent qu'ils n'ont intégré aucun logiciel. A l'inverse, PSA, Toyota ou BMW ont pour l'heure passé les tests avec succès.
Whether you like the deal or not, Shire-Baxalta valuation is compelling – time to buy
Shire and Baxalta have agreed terms of a $31bn merger. To bring Baxalta to the negotiating table, and to counter the effect of Shire’s 26% share price decline since the initial failed all-share offer in August 2015, approx. 40% will now be funded in cash. Whilst Baxalta may not have been Shire’s best M&A option in our view, it is nonetheless a value-enhancing deal. Everything has a price and we conclude Shire-Baxalta’s should be >30% ahead of current market value. Upgrade to Outperform, TP 5700p.
1) Do the pro forma figures ‘stack up’? YES
Assuming Shire can extract $550m of cost and $300m of sales synergies from the combined
business, we see 6% EPS accretion and projected returns ahead of cost of capital by 2019. Not
stellar perhaps, but certainly not disastrous.
2) Is a potential future tax liability a significant concern? NO
Our discussions with US tax experts lead us to conclude that whilst there are elements of tax
liability risk around the deal, Shire appears well positioned to avoid any tax bill. Under a bear case
scenario the buy case remains intact; fair value including a $3.5bn tax liability is 5015p.
3) Is the valuation attractive? YES
Shire-Baxalta trades on 11.6x 2017 PE, a 30% discount to the Large Pharma group (16.7x). On an
EV/NPV basis, the NewCo trades in line with peers (0.85x vs ave 0.86x). Shire-Baxalta offers a
superior 2017-2020 growth profile vs peers; sales +8% (vs +5% ave), EPS +11% (vs +9% ave).
Next catalysts
Dyax shareholder vote on 21 Jan, Shire shareholder vote on Baxalta May/June, SHP607
(retinopathy of prematurity) P2 data and lifitegrast US filing 1Q16/approval 3Q16.
Lux in flux: Highlighting the 4 big themes for 2016; LVMH up to Buy
We believe 2016 will see the earnings cycle for luxury bottom out and that there are selective buying opportunities in the sector following a 16% share price fall on 10% EPS downgrades over the LTM. We forecast sales growth to slow to +3.4% in 2016 (from +4%-5% over the past 2 years) resulting in a c.3% cut to our FY16-17 estimates. As China continues to dominate and the consumer shifts to digital we believe the operating environment has become more complex – we are less concerned on demand for luxury, but have increased concerns on margins. We advocate investments in the most durable cash generators in luxury (LVMH and Richemont) and highlight 4 dominant themes we see for 2016.
Lift of Iran Sanctions pushed Crude lower, Saudi Arabia, Kuwait & Qatar markets were trading sharply lower yesterday...Crude @ $28.92 (-1.7%)...US Market closed for MArtin Luther King Day...Asian equity markets opened lower after Friday's rout on Wall St, but the selling was more contained by the afternoon hours. China measures on the currency and policy front helped ease some worries and S&P500 futures erased early 0.7% decline. Among key Asian equities, Shanghai Composite also flipped into positive on strong housing data. Oil prices were down as much as 4% after confirmed lifting of Iranian sanctions over the weekend, but WTI returned above the $30 handle later in the session. In FX, USD/JPY was up 50pips from the lows above 117.20. PBoC set the Yuan stronger relative to the close for the 7th straight session. A setting of 6.5590 was also the strongest since the mini-devaluation of Jan 6th while the margin of strength relative to the prior setting was the highest in 4 weeks. Attempts to discourage one-way action the Yuan were also on display in the policy actions, as regulators announced an increase on RRR for Yuan deposits among offshore clearing banks, raising the cost of borrowing to short the currency. PBoC added the rules - effective Jan 25th - were not expected to affect domestic liquidity, and that the central bank will continue to use multiple policy tools to maintain ample liquidity. China, Premier Li announced that 2015 GDP would be close to 7%, with services sector now accounting for nearly half of China growth and consumption also taking up a bigger part of the economy. China GDP, along with other 2015 and Dec metrics will be released tomorrow. In Japan, PM Abe noted the govt continues to monitor financial markets, with some weakness coming in the EM space. BOJ Gov Kuroda reiterated the central bank will maintain policy easing as long as needed to achieve 2% inflation target, adding the easing is exerting intended effects. Kuroda also reiterated that while the economy is no longer in deflation, it has not reached the point where there are no lingering risks or concerns.
Nikkei -1.12% Hang Seng -1% Shanghai +0.35%
Eur$ 1.0887 CNH 6.5872 CNY 6.5791 JPY 117.25 GBP 1.4282 CHF 1.005 RUB$ 78.5802 WTI $28.90 (-1.77%)
S&P+0.17% EuroStoxx+0.45% Dax+0.66% SMI+0.66%
Macro :
- Poland Cut to Bbb+ From A- by S&P, Outlook Negative
- ING Sees ‘Major Sell-Off’ Next Week in Poland After S&P’s Cut
- SAC’s Steinberg Wins Dismissal of SEC Insider Trading Case
- Flood of Iranian Crude Won't Change Motor-Fuel Prices in China
- Dallas Fed Quietly Suspends Energy Mark-To-Market On Default Contagion Fears : http://bit.ly/1n3g0AW
- Iran Sanctions to End as IAEA Verifies Nuclear Deal Implemented
- Mideast Stocks Plummet as Iran Plans to Boost Crude Exports
Keep an eye on :
- AALB NA : Aalberts Industries Buys Ushers Machine & Tool Co.
- AC FP : Accor Hotels Opening 15-20 Hotels in Germany Annually: FAZ
- ADEN VX : Adecco Sees Small Uptick in Organic Growth in 4Q
- ADP FP : Aeroports De Paris to Invest EU650m in Baggage-Control Equipment
- AIR FP : Airbus CEO Says He’s ‘Bullish’ on China Despite Market Rout
- AIR FP : Iran to Buy 114 Airbus Jets, May Seek Boeings Post-Sanctions : http://on.wsj.com/1llbMTT
- AIR FP : Airbus to Test Helicopter Ride Service with Uber: CEO Enders : http://on.wsj.com/1Klk9FL
- AH NA : Ahold interested in 130 DA pharmacies in NetherlandsP
- AAL LN : Anglo American Said to Hire Banks to Sell Assets in Brazil:Globo
- BEAV US : B/E Aerospace's cash generation capacity may attract buyers - Barron's
- BSLN SW : Actelion not interested in Basilea - Finanz und Wirtschaft
- BAYN GY : Bayer Unit Wins Confirmation of $455.4 Mln Patent Case Award
- BNP FP : BNP Chairman: Europe is Changing, at Turning Point for Growth
- BPM IM : Banco Popolare CEO confirms close to merger with Banca Popolare di Milano - Il Messaggero
- EN FP : Bouygues, Ferrovial Eye Laing O’Rourke Australia Ops: Australian
- CO FP : Casino Says to Soon Conduct Review of Credit Rating With S&P
- CBK GY : Commerzbank Said to Seek Successor for Chairman Mueller: Spiegel
- CBK GY : Commerzbank Luxembourg Fined for Tax Evasion: Sueddeutsche Z.
- DEB LN : Incoming Debenhams Chairman Cheshire Sees Upside: Sunday Times
- EDF FP : EDF Sees Higher Provisions Hurting 2015 Net Income by EU500m
- SFER IM : Ferragamo CEO Norsa Sees Less Impact From Forex in 2016
- FER SM : Bouygues, Ferrovial Eye Laing O’Rourke Australia Ops: Australian
- FUM1V FH : Fortum could be interested in acquiring E.ON's Swedish hydro power business - Talouselama
- HEI GY : HeidelbergCement issues EUR 625m debt certificates, reducing refinancing needs for Italcementi acquisition
- HDD GY : Heidelberger Druck Says China Business Stable: Euro am Sonntag
- ICAD FP : Icade to Pursue Divestments, CEO Wigniolle Tells Investir
- ITV LN : ITV Chairman Norman to Step Down This Year: Sky News
- LHA GY : Lufthansa to Tackle Eurowings Flight Delays: Stadt-Anzeiger
- MMT FP : M6 to Lose Money in Soccer Euro 2016 Finals, CEO Tells Figaro
- NG/ LN : Canadian Pension Funds May Bid for National Grid Unit: Telegraph
- NRE1V FH : Nokian Renkaat makes an attractive target - Talouselama
- OHB GY : OHB Expects EU1 Billion Annual Sales by 2020: Handelsblatt
- ORA FP : Orange Mkt Share Must Not Rise With Bouygues Telecom: Arcep
- ORA FP : Orange CEO Says Doesn’t Want Bouygues Talks to Drag On for Weeks
- UG FP : Peugeot 208, 508 Show No Anomalies in Emissions Tests: JDD
- PAH3 GY : Porsche, Piech Families Stand by VW CEO Mueller: Bild am Sonntag
- RNO FP : Renault Summoned by French Govt. Commission, Les Echos Says
- RHK GY : Asklepios Looking Into Possible Acquisitions: Boersen-Zeitung
- SAB LN : Lion Capital Plans Bid for Peroni, Grolsch Brands: Sunday Times
- SHP LN : Shire CEO Confident Shareholders Will Vote for Baxalta Deal
- SHP LN : Shire CEO Says Baxalta Deal Isn’t About Cost Savings, Taxes
- SUN SW : Sulzer Considering Options Including Merger With Competitor: FAS
- TEF SM : O2, Three Face Tough Merger Conditions From Europe: Telegraph
- TEF SM : Telefonica Eyes AT&T’s $10b Latin American TV Assets: Reuters http://reut.rs/1J9cyiF
- TIT IM : Telecom Italia CEO Doesn’t See Crossborder Takeover: Repubblica
- TIT IM : Vivendi increases stake in Telecom Italia to 21.39% - Les Echos
- VIV FP : Canal Plus, Sky, Others Combine to Fight Netflix: WSJ : http://on.wsj.com/1JaWQnb
- VOLVB SS : Volvo risks being split up if profitability does not improve - Dagens Industri
- VOW GY : VW’s Audi Unit Trims Expenses for WEF Sponsoring in Davos: FAS
>>> Up
*ANTOFAGASTA RAISED TO OVERWEIGHT AT JPMORGAN
*BHP BILLITON RAISED TO NEUTRAL AT JPMORGAN
*CAIXABANK RAISED TO OVERWEIGHT AT MORGAN STANLEY
*CNP RAISED TO BUY VS NEUTRAL AT NOMURA
*ELIA RAISED TO BUY FROM HOLD AT ING; PT RAISED TO EU47.70
*EUTELSAT RAISED TO BUY VS HOLD AT HSBC
*ITV RAISED TO BUY VS HOLD AT HSBC
*KERING RAISED TO NEUTRAL VS SELL AT GOLDMAN
*KUEHNE & NAGEL RAISED TO OUTPERFORM VS SECTOR PERFORM AT RBC
*LVMH RAISED TO BUY VS NEUTRAL AT GOLDMAN
*LUNDIN PETROLEUM RAISED TO NEUTRAL VS SELL AT UBS
*PREMIER OIL RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*SGS RAISED TO OUTPERFORM VS SECTOR PERFORM AT RBC
*SHIRE RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
>>> Down
*AIR FRANCE-KLM CUT TO SECTOR PERFORM VS OUTPERFORM AT RBC
*GAM HOLDING CUT TO NEUTRAL VS BUY AT UBS
*KAZ MINERALS CUT TO NEUTRAL AT JPMORGAN
*KGHM CUT TO UNDERWEIGHT AT JPMORGAN
*NORSK HYDRO CUT TO NEUTRAL AT JPMORGAN
*RIO TINTO CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*SOLVAY CUT TO SELL VS HOLD AT BERENBERG
>>> PT Change
>>> Initiation
*ATHABASCA OIL RATED NEW SECTOR PERFORM AT RBC, PT C$1.75
*DRAX RATED NEW HOLD AT JEFFERIES, PT 210P
>>> Call
>> Stock
*GENERALI, GEOX, TOD’S EXIT SHORT STOCKS AT MEDIOBANCA
*FERRAGAMO, LANDI RENZO, TREVI SET AS NEW SHORTS AT MEDIOBANCA
*POP. EMILIA, MEDIASET EXIT LONG STOCKS AT MEDIOBANCA
*BANCO POPOLARE, SIAS SET AS NEW LONGS AT MEDIOBANCA
>> Sector
*IT SECTOR CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*UTILITIES SECTOR RAISED TO OVERWEIGHT VS UNDERWEIGHT: JPMORGAN
Volvo risks being split up if profitability does not improve - Dagens Industri
Volvo, the listed Swedish truck manufacturer, risks being split up if it does not improve its results, according to Dagens Industri.
The Swedish business daily cited a Handelsbanken Capital Markets analyst who said that Volvo now needs to show that the cost-cutting program, which the company initiated in 2012, is starting to take effect.
A Nordea Fonder asset manager agreed, saying that Volvo may risk being split up if it does not improve. He said further that Volvo needs to improve underlying profitability in 2016 to more than its reported results and that decreasing the instability of the company's results is necessary.
The paper also speculated whether Volvo's new CEO, Martin Lundstedt, will make structural changes to Volvo, such as spinning of its Construction Equipment unit. The Handelsbanken analyst said that this may well occur if things do not change and pointed out that Volvo's major shareholders Industrivarden and Cevian Capital may for push for it.
The item noted that Volvo's share price has dropped by around 30% comparing the 37% rise in the stock exchange during the last five years.
Dagens Industri
Nokian Renkaat makes an attractive target - Talouselama
Nokian Renkaat, the Finnish tyre maker is an attractive acquisition target, according to a report in Talouselama.
The Finnish-language piece cited Jukka Oksaharju from Nordnet, who said that Nokian Renkaat is an attractive investment target for various reasons.
Oksaharju said that the company is an attractive target for an acquirer, the publication said.
The company had sales of about EUR 1bn.
Talouselama
Fortum could be interested in acquiring E.ON's Swedish hydro power business - report
Fortum [HEL: FUM1V], the Finnish energy company, could acquire the German energy company E.ON’s [ETR: EOAN] Swedish hydro power business, according to Talouselama.
The Finnish language piece cited Henri Parkkinen, an analyst from Pohjola Bank, who noted that Fortum should be concentrating on its key market areas and it could take advantage of the German E.ON’s troubled situation.
Parkkinen said E.ON may be looking to exit Sweden. The German company has several hydro power stations in Sweden and these would be of interest to Fortum, the article noted. It said the Swedish Vattenfall is unlikely to be able to acquire E.ON’s hydro business because of competition issues but for Fortum, which has previous experience in hydro, it could be a suitable target.
Talouselama