>>> Casino - Muddy Waters Update - see attached

Neither Casino nor its more vocal defending analysts have given us reason to adjust our estimate of Casino’s equity value of approximately €7 per share. On the contrary, since we announced our short thesis on December 17th, five of Casino’s six listed subsidiaries have dropped in value by 8% to 27%. With Rallye’s NAV less than zero at Casino’s current share price, we similarly have not seen a reason to change our estimate of its value.
Casino’s response to our short thesis reminds us of the reaction from Noble Group (NOBL SP) to our April 2015 short thesis. When we shorted Noble it was rated BBB- (like Casino). We criticized Noble for its leverage and aggressive accounting (similar to our criticism of Casino). Noble has since been downgraded by both ratings agencies and its stock has declined by 64%.
To encourage transparency and accuracy we’re publishing a list of 10 questions for the company to answer on the January 14th call. Many of the questions get to the heart of whether there is truly a recovery in Casino’s France retail business. Addressing our questions will go a long way toward allowing investors to determine whether our opinion, that Casino is a highly-levered, poorly performing business being hollowed-out and managed primarily to buy time for the massive debt its controlling shareholder has amassed, is reasonable.

>>> Casino mulling to acquire stake in SMU before IPO - report (translated)

Casino mulling to acquire stake in SMU before IPO - report (translated)
Story
Casino Group, the mass-market French retailer, is interested to acquire a stake in SMU, the Chilean retailer, before SMU carries out its long awaited IPO, Diario Financiero reported.

The Spanish-language article, without citing any source, said that Casino expressed its interest on this potential deal with SMU to one of the banks that is looking to participate in the IPO.

SMU’s IPO is likely to be carried out in 2016, the item noted. The company has still not selected the banks that will act as underwriters and agents for the IPO.

SMU is not looking to sell a stake in the company, the item pointed out, citing unnamed sources.

A previous report said that SMU’s IPO may be carried out in the first half of 2016.

SMU is controlled by Corp-Group which holds a 78.59% stake. Southern Cross has 12.4%, the Bravo family holds 3.35% and ILC and the Repetto family hold 3.2% and 2.45% respectively, as reported.

Diario Financiero, previously reported intelligence

WSJ : Why Banks Should Stop Stars Dodging Bonus Rules

Why Banks Should Stop Stars Dodging Bonus Rules

U.K. regulators want to stop bonus buy-outs from undermining post-crisis rules on pay.

There is something suspect about people who change jobs too frequently—but some senior bankers have become more worried about this in the past year or two.

The fear is that staff can dodge responsibility for negligence or outright wrongdoing by jumping ship to a rival and having their unpaid bonuses bought out by a new employer, a regular practice in the battle for star bankers and traders.

The Bank of England wants to close this loophole in the U.K. by making new employers enforce punishments demanded by old employers. This could be a minefield for both sides, but shareholders should lend their support: it could help ensure banks don’t pay big signing-on fees for bad apples.

Postcrisis rules on pay were designed to change the balance of risks between individuals and banks. In most countries, bonuses are going to be paid over longer periods to give more time for bad behavior or poor risk management to come to light. And once awarded, bonuses can be stopped from vesting, or even demanded back.

When supposed stars are poached by rivals, their unvested bonuses will often be paid-out by the new employer. U.K. regulators want firms to honor the same terms on bonuses and potential clawback, rather than paying out upfront.

This will require cooperation between firms and demands that former employers don’t act vindictively against the disloyal. The regulator says banks will have to demonstrate fairness in seeking to punish former employees. And rightly those former employees would be able to challenge attempts to restrict their pay.

There is a danger that for both sides the process could involve too much cost and hassle to ever be effectively used. But shareholders should back the idea in the U.K. and elsewhere. Attempts to hold bankers to account through pay are undermined if serial job-hoppers can skirt the rules, leaving employers past and present bearing the risk.

Poachers should be gamekeepers, too.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: MFLX -16.8%, F -2.8%, (Ford Motor sees record 2015 adj. pre-tax profit at the high end of guidance, with 2016 adj. profit equal to or higher; announces $0.25 special dividend), TSCO -2.7%,CSX -1.9%, FANG -1.3%, STJ -0.4%


Other news: FXCM -14.5% (FXCM reports December and Q4 metrics; Says ongoing sales process may not be completed in Q1 as previously indicated), HQCL -2.4% (sells a portfolio of three operating PV power plants in the UK for ~$90 mln plus working capital to the NextEnergy Solar Fund), EQY -1.7% (commences a public offering where it will sell ~11.3 mln shares of co common stock ), FANG -0.9% (guides Q4 2015 production and FY16 production; announces 2.25 mln common stock offering)

Analyst comments: LYG -2.7% (downgraded to Underperform at Exane BNP Paribas), AXP -1.4% (downgraded to Neutral from Buy at Goldman), CONN -1% (downgraded to Hold from Buy at Stifel)