*PUTIN: RUSSIA IS BACKING SYRIAN GOVT IN FIGHT VS TERRORISM
*PUTIN: RUSSIA IS PROVIDING, WILL PROVIDE MILITARY AID TO SYRIA
*PUTIN: IMPOSSIBLE TO CURB ISLAMIC STATE W/O SYRIAN ARMY INPUT
Sole24Ore reports that Telecom Italia could potentially reduce its current 60% stake in Inwit to ca. 36% through the creation of a midco vehicle between them that would own the stake in Inwit and then open its capital to new investors. F2i is named as one of those potential investors.
TIT now consolidates INW with 60% stake. If TIT confers INW stake to "Midco" then immediately crystallizes +17% INW performance since IPO, which is worth approx. €265m. By applying a 27.5% tax rate TIT would get a €192m benefit at bottom line. On FY16 IMI est of Net Income of €1.4bn, this would mean a potential +13% increase on EPS.
After the conferment of INW stake to Midco, then according to Sole article TIT would then lower its stake in the Midco to 60% thus cash in ca. €300m
TIT now consolidates INW with 60% stake. If TIT confers INW stake to "Midco" then immediately crystallizes +17% INW performance since IPO, which is worth approx. €265m. By applying a 27.5% tax rate TIT would get a €192m benefit at bottom line. On FY16 IMI est of Net Income of €1.4bn, this would mean a potential +13% increase on EPS.
After the conferment of INW stake to Midco, then according to Sole article TIT would then lower its stake in the Midco to 60% thus cash in ca. €300m
*PUTIN SAYS AFGHANISTAN SITUATION IS OF MAJOR CONCERN
* Risk and macro capitulation
The summer FMS anomaly of high cash levels and high macro optimism has been corrected via sharp Sept declines in global growth expectations (lowest since Jul'12) & equity allocations (lowest since Sep'12). Unambiguous pessimism means risk assets riper for a rally (note investors don’t want a Fed hike this week). If no rally, then markets ominously hinting “recession” and/or “default” imminent.
* Goodbye TINA1…
Asset allocators cut stocks & commodities (to 2008 levels) to seek the alternatives of bonds (highest allocation since May'13) & cash (Exhibit 1)…cash levels rose back to 5.5%, equal to the 2008 highs. Note also Hedge Fund gross asset exposure sank to lowest since Jun'12.
* …Goodbye Janet
Growth fears + default fears (75% say Chinese recession or EM default the big “tail risks") + liquidity fears (liquidity conditions "poor"/"very poor" at 3-year high)…no surprise investors expecting Fed to hike this week fell from 48% to 25%.
* Autumn Pain Trades
“Recession-like” allocations to EM (all-time low), UK (4-year low), Energy (all-time low), Materials, Commodities & Cash are vulnerable to dovish Fed/stronger autumn growth. In contrast, “expansionary” allocations to Europe, Banks, Tech & Consumer Discretionary vulnerable to US/China policy mistake & weaker growth in coming months.
* The Contrarian FMS Trades
Contrarian trades struggled in August. The Sept FMS nonetheless shows extreme positions & good contrarian opportunities in EM & commodities. Our September trades: long EM, short Eurozone; long commodities, short cash; long energy, short tech.
VALLOUREC (Hold, TP E9), We initiate coverage on Vallourec with a Hold rating and a TP of EUR9. 2015 is likely to be a difficult year for Vallourec, as H2 could be worse than H1, which is likely to mean further downward consensus revisions. As a result, the share price is likely to remain under pressure until year-end and Q3 will be a strong catalyst. That said, the company is on track in terms of cost-cutting as laid out in its Valens plan, and it is likely to benefit from other technical effects (end of destocking, forex impact, etc.) next year. We expect revenues and margins to recover from 2016 and especially in 2017-18. We also think the financial structure is sufficient with no short-term need for fresh capital, plus M&A is unlikely.
Saipem to see FSI enter as shareholder through three-stage plan
Eni, the listed Italian petroleum group, is in talks with FSI, the strategic investment funding owned by Italian Treasury holding CdP, over the fund taking a stake in Saipem. An item in the Italian language Carlo Festa Blog cited unspecified rumours saying that Eni is putting forward a three-stage plan that would lead to FSI taking a stake in listed oil services group Saipem.
The item said that the first stage would be to refinance Saipem's debt. The second stage would be to organise a EUR 1.5bn capital increase. Creditor banks are insisting on the capital increase as part of a refinancing deal, the item said.
The report said that the third stage would see FSI take a stake via capital increase. This phase should take place at the beginning of next year, the report added.
Carlo Festa Blog
Thomas Cook rumoured to be set for buyout by shareholder Fosun; Kuoni also a target for Fosun, TUI
Thomas Cook is rumoured to be a buyout target for Fosun International, the China-based conglomerate which acquired a 5% stake in the UK-listed travel agency chain six months ago, The Daily Mail reported. City chatter also suggested Fosun might attempt a takeover of Switzerland-based travel group Kuoni, through Thomas Cook, or directly, the market report said.
The rumours indicated Thomas Cook’s UK-based competitor TUI Travel might also be interested in moving on Kuoni, the report said.
Thomas Cook has a GBP 1.76bn (USD 2.72bn) market cap on the London Stock Exchange.
Daily Mail