>>> Telecom Italia shareholders reject conversion of savings shares into ordinar

Telecom Italia shareholders reject conversion of savings shares into ordinary shares; approve enlargement of BoD
The ordinary and extraordinary sessions of the Telecom Italia Shareholders' Meeting met today chaired by Giuseppe Recchi. The Shareholders' Meeting recorded the presence of 55.67% of the Company's ordinary share capital.

In the extraordinary session, the Shareholders' Meeting did not approve the conversion of savings shares into ordinary shares with the following voting percentages:

62.5% of the attending share capital voted in favour;
1.5% of the attending share capital voted against;
36.1% of the attending share capital abstained.

The resolution needed the favourable vote of the 2/3 of the attending share capital.

In the ordinary session the Shareholders' Meeting:

approved the proposal by the shareholder Vivendi SA to enlarge the Board of Directors of Telecom Italia from 13 to 17 members;
approved the appointment of four new Directors, according to the list presented by the shareholder Vivendi SA: Arnaud Roy de Puyfontaine, Stéphane Roussel, Hervé Philippe and Félicité Herzog; the new members will remain in office for the remaining term of the existing Board
approved to increase the overall remuneration of the Board of Directors, until the end of the term, in proportion to the number of Directors appointed

The Shareholders' Meeting ended at 5.40 p.m.

***

Following the rejection of the mandatory part of the savings shares conversion operation, the grounds on which the resolution, submitted for consideration by the Special Shareholders' Meeting of savings shareholders of the Company convened for 17 December 2015, is based fall short.

A previous report said that TI would have made EUR 570m from the conversion

>>> BPM has UBI Banca and Banco Popolare as likeliest candidates for merger – re

BPM has UBI Banca and Banco Popolare as likeliest candidates for merger 

Banca Popolare di Milano (BPM), the listed Italian bank, has listed rivals UBI Banca and Banco Popolare as the likeliest candidates for ts merger partners to three, Il Messaggero reported. The Italian language daily said in a unsourced report that BPM no longer sees Carige as a candidate and is also considering pursuing a standalone strategy.

The item added that UBI Banca is proposing a pure merger via incorporation. The report said that this operation would create Italy's third largest banking group with EUR 165bn in assets.

The report said that the Banco Popolare offer is similar, but it is offering for the headquarters of the merged bank to be in Milan while Verona, Banco Popolare's home city, would have operational headquarters. The report said that this contrasted with UBI's offer, which would have the merged entity's headquarters in UBI's home city of Bergamo while an operational headquarters would be set up in Milan.

The item added that one of the factors that make come into play is that Banco Popolare has more NPLs at EUR 14.4bn to UBI's EUR 9.8bn.

Il Messaggero

>>> Maurel & Prom approaches Ophir and Tullow regarding potential merger - repor

Maurel & Prom approaches Ophir and Tullow regarding potential merger

Etablissements Maurel & Prom (EPA:MAU), the France-based oil-exploration group, has approached rivals including UK-headquartered Ophir Energy (LON:OPHR) and Tullow Oil (LON:TLW) to discuss a potential consolidation deal, The Irish Independent reported.

Prospective buyers have been informally contacted regarding possible combinations which would enable Maurel & Prom to increase its scale and cut costs at a time when oil prices have hit almost a six-year low, according to individuals familiar with the situation.

Maurel may still opt to retain its independence and a sale is not a foregone conclusion, the sources cautioned.

Neither Tullow, Ophir nor Maurel wished to comment, the item reported.

The report noted that yesterday, 15 December, Maurel increased its takeover offer for the France-based energy company MPI Energy (EN:MPI) in an attempt to lower taxes and costs and position itself more advantageously.

Irish Independent

>>> Aveva's potential bidders had been waiting for conclusion of

Aveva's potential bidders had been waiting for conclusion of discussions with Schneider Electric 

Potential bidders for Aveva [LON:AVV] had been holding off until the UK-based software company’s takeover discussions with Schneider Electric [EPA:SU] were concluded, the Financial Times reported. The newspaper cited people close to the situation for the information, which appeared in an article about Aveva and Schneider’s failed talks regarding a proposed GBP 1.3bn (EUR 1.78bn) reverse takeover by the French industrial group.

It had been expected that Aveva and Schneider would conclude their negotiations early next year, the article said.

As previously reported, potential bidders for Aveva included General Electric and Emerson, the item noted.

Aveva Chief Executive Richard Longdon, quoted in a longer edition of the same report on the Ft.com website, said he would not be surprised if other potential bidders indicated interest today. Longdon added that the Aveva board is open minded about other bidders.

An analyst cited by the report said he doubted that another suitor would emerge in the near future.

Longdon said the industrial rationale for the deal remains strong, but added that the process had taken too long.

Aveva had been increasingly frustrated at the length of time the discussions were taking, with some complaining that Schneider did not have sufficient focus on concluding the deal, the article added.

Aveva’s share price fell 616p to 1550p at the close of trading in London yesterday, valuing the company at GBP 991m.

>>> US After Hours

After Hours Summary

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings:  JRJC +42.1%, HEI +1.8%

Companies trading higher in after hours in reaction to news:  FVE +36.7% (6.1% holder William F. Thomas/Gemini Properties disclosed proposal to FVE to acquire 33 facilities and explore strategic alternatives), HPY +11.7% (to be acquired by Global Payments (GPN -2.3%) for $4.3 bln, or $100/share), GBSN +11.7% (announced it was issued a patent for its compositions for signal amplification), HART +6.3% (announced 2.5 year $15 mln common stock purchase facility with Aspire Capital), PRKR +5.9% (filed complaint with the ITC), CZR +1.8% (Fitch affirmed Caesars IDR at 'CC' & CERP/CGPH IDRs at 'B-'; Upgrades Corner Investment to 'B-).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings:  LAKE -6.3%, GPN -2.3%, CBT -1.4%

Companies trading lower in after hours in reaction to news:  CTCT -3.8% (disclosed it receives subpoena from the Boston Regional Office of the SEC), CBT -1.4% (announced it is pleased with Mercury and Air Toxics Standards regulation appeals court ruling; warns about weak market conditions).



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>>> Asian Update

Asian Mid-session Update: Asia joins the risk-on parade on the eve of expected FOMC liftoff


***Economic Data***
- (JP) JAPAN DEC PRELIMINARY PMI MANUFACTURING: 52.5 V 52.6 (8th straight month of expansion)
- (AU) AUSTRALIA NOV SKILLED VACANCIES M/M: 1.2% V 1.6% PRIOR
- (AU) AUSTRALIA NOV WESTPAC LEADING INDEX M/M: -0.2% V +0.1% PRIOR; first decline in 3 months
- (NZ) NEW ZEALAND Q3 CURRENT ACCOUNT BALANCE (NZ$): -4.7B V -4.9BE
- (KR) SOUTH KOREA NOV UNEMPLOYMENT RATE: 3.4% V 3.4%E
- (US) OCT NET LONG-TERM TIC FLOWS: -$16.6B V $33.6B PRIOR; TOTAL NET TIC FLOWS: +$68.9B V -$175.1B PRIOR; China Total holding of US Treasuries: $1.254T v $1.258T prior; 2nd straight month of reduced holdings

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 +2.6%, S&P/ASX +2.3%, Kospi +2.1%, Shanghai Composite +0.7%, Hang Seng +2.2%, Feb S&P500 +0.3% at 2,042

***Commodities/Fixed Income***
- Feb gold +0.2% at $1,063/oz, Jan crude oil flat at $37.08/brl, Mar copper +0.3% at $2.06/lb
- (US) API Petroleum Inventories: Crude: +2.3M v -1.9M prior; largest build in 3 weeks
- (CN) China MOF sells 7-yr bonds, avg yield 2.98%
- USD/CNY: (CN) PBoC sets yuan mid point at 6.4626 v 6.4559 prior; multi-year low Yuan setting
- (JP) BOJ offers to buy ¥350B in 1-3yr JGBs, ¥350B in 3-5yr JGBs, ¥400B in 5-10yr JGBs

***Market Focal Points/FX***
- The popular risk-off trends of the couple of weeks - namely short high-yield debt, short stocks, short energy, and long JPY - are all being unwound over the last 24 hours, as investors look ahead to Wednesday's monumental Fed announcement that will likely signal the start of the tightening campaign. US yields were higher, even though the markets generally expect a "dovish" hike that will underscore the gradual pace of rising rates. Thus the focus will be not only on the Fed funds rate and the statement but also the latest projections, particularly the changes in the "dot plot" that will guide the velocity of the policy tightening expectations. Asia markets have joined in on the rally, with most impressive gains in Tokyo on weakness in the Yen. USD/JPY was up nearly 40pips approaching 122 late in the day, tracking higher US yields. In other USD majors, AUD/USD traded about 15pips around 0.72 handle, NZD/USD fell nearly 40pips to a low of 0.6740 on cautious Fin Min comments, and EUR/USD was in a 30pip range below $1.0950. New Zealand's Fin Min English noted exporters prefer weaker NZD against USD, somewhere in mid to low $0.60s.

- Most notable economic data came out of Japan with an early look into December conditions via prelim Manuf PMI data. 52.5 print was a decimal below last month but remained in expansion for 8th month. New orders also rallied to 54.1 v 53.6 prior, while new export orders slid to 52.4 v 53.2 prior. Markit economist said the growth in total new work picked up to the second-highest since October last year, supported by strong overseas demand. The data come on the heels of cautious commentary in Nikkei press about inflation, pointing to yesterday's Tankan CPI view and low TIPS yields suggesting market participants were not too optimistic on BOJ's 2% inflation target.

- Bank of Korea unveiled a lower CPI target for 2016-18 period of 2.0% vs 2.5% -3.5% target for 2013-15. BOK also cut 2015 GDP target to 2.7% from 3.1% prior forecast and 2016 GDP to 3.1% from 3.3% prior forecast. Economists with ANZ noted the revisions pave the way to more BOK easing with two 25bps moves in Q1 and Q2 of next year.

- In China, PBoC adviser Fan Gang said economy is facing adjustments but still has potential to grow over the long term. Fan pointed to continued issues around industry overcapacity, bad loans, and Internet finance as key risks. Separately, Pres Xi spoke at World Internet Conference calling for internet security and global cooperation, while also acknowledging China economy is facing "certain downward pressure." Also of note, China energy names were higher as China temporarily stopped adjusting domestic gasoline prices in response to latest air quality issues - a move speculated as weighing on demand.

- Stateside, House speaker Ryan announced US Congress has reached a $1.1T agreement on the budget. Among its most notable provisions, US lawmakers agreed to lift the ban on crude exports and also includes 5-year solar tax credit extension.

***Equities***
US equities / ADRs:
- JRJC: Reports Q3 $0.39 v -$0.11 y/y, R$37M v $21.1M y/y; Signed a framework agreement to sell 90% of equity stake in Shanghai Meining Computer Software; +44.5% afterhours
- HPY: Global Payments to acquire Heartland Payment Systems for $100/shr or $4.3B, combining leading payments technology companies; +11.8% afterhours
- DOV: Cuts FY15 guidance to $3.69 (ex charges) v $3.73e (guided $3.73-3.80 prior); Guides initial FY16 EPS $3.85-4.05 v $4.01e, Rev +2-5%; -3.0% afterhours
- GPN: Adjusts Q2 and FY16 guidance following HPY acquisition; -3.4% afterhours

Notable movers by sector:
- Consumer discretionary: Shimamura 8227.JP -0.4% (9-month result speculation); Park24 Co Ltd 4666.JP +3.5% (FY14/15 result); Crown Limited CWN.AU +13.7% (said to return certain assets to private hands); Dulux Group DLX.AU -0.2% (guidance)
- Financials: WesFarmers WES.AU +3.6% (divestment)
- Industrials: Xinyi Glass Holding Co 868.HK +2.6% (profit alert)
Samsung Engineering Co; 028050.KR +11.5% (guidance)
- Technology: Advanced Semiconductor Engineering 2311.TW +2.9% (raises bid for Precision Industries)
- Materials: Iluka Resources ILU.AU +2.7% (cuts guidance); Metallurgical Corporation of China 601618.CN -0.6% (YTD result); China Polymetallic Mining 2133.HK -3.3% (in talks for acquisitions); Drillsearch Energy DLS.AU +4.8% (recommends to vote for merger with Beach); Whitehaven Coal WHC.AU +8.3% (raises guidance)
- Energy: Xinyi Solar 968.HK +1.5% (profit alert); China Coal Energy 1898.HK +3.8%(Nov result)

>>> US After Hours


After Hours Summary

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings:  JRJC +42.1%, HEI +1.8%

Companies trading higher in after hours in reaction to news:  FVE +36.7% (6.1% holder William F. Thomas/Gemini Properties disclosed proposal to FVE to acquire 33 facilities and explore strategic alternatives), HPY +11.7% (to be acquired by Global Payments (GPN -2.3%) for $4.3 bln, or $100/share), GBSN +11.7% (announced it was issued a patent for its compositions for signal amplification), HART +6.3% (announced 2.5 year $15 mln common stock purchase facility with Aspire Capital), PRKR +5.9% (filed complaint with the ITC), CZR +1.8% (Fitch affirmed Caesars IDR at 'CC' & CERP/CGPH IDRs at 'B-'; Upgrades Corner Investment to 'B-).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings:  LAKE -6.3%, GPN -2.3%, CBT -1.4%

Companies trading lower in after hours in reaction to news:  CTCT -3.8% (disclosed it receives subpoena from the Boston Regional Office of the SEC), CBT -1.4% (announced it is pleased with Mercury and Air Toxics Standards regulation appeals court ruling; warns about weak market conditions).

>>> US Close Dow+0.90% S&P+1.06% Nasdaq+0.87% Russell+1.41%

Closing Market Summary: Stocks Climb Ahead of Fed Decision Day

The stock market enjoyed a broad-based rally on Tuesday, which lifted the S&P 500 (+1.1%) back above its 100-day moving average (2,030). The benchmark index extended this week's gain to 1.5% ahead of tomorrow's FOMC announcement, which is widely expected to call for the first fed funds rate hike since 2006.

Overnight, the early portion of the Asian session was highlighted by some caution among investors, but the overall sentiment began improving once the attention shifted to Europe. Accordingly, markets in France (+3.2%), Germany (+3.1%), and the UK (+2.5%) soared amid broad support.

Contributing to the upbeat sentiment was a rally in crude oil as the energy component climbed despite greenback strength that sent the Dollar Index (98.22, +0.62) higher by 0.6%. As for oil, WTI crude surged 2.7% to $37.32/bbl, taking the energy sector (+2.9%) along for the ride.

The growth-sensitive energy sector settled atop the leaderboard, but despite today's surge, the sector is still down 7.8% for the month. Similarly, the financial sector (+2.4%) was also at the forefront of today's advance after showing relative weakness as of late. The economically-sensitive group narrowed its December loss to 2.0% versus a 1.8% month-to-date decline for the S&P 500. Recent concerns about the high-yield bond space were masked by a 1.6% spike in iShares iBoxx $ High Yield Corporate ETF (HYG 80.12, +1.29), which returned to its range from Friday.

Staying on the cyclical side, the top-weighted technology sector (+0.4%) settled behind the broader market as Apple (AAPL 110.49, -1.99) slid 1.8% to extend yesterday's retreat. However, the relative weakness in the top tech component was partially offset by gains among semiconductor names. The PHLX Semiconductor Index rose 1.5% with Qualcomm (QCOM 48.02, +1.19) surging 2.5% after the company boosted its guidance and announced plans to maintain its organizational structure.

Elsewhere, the industrial sector (+0.1%) could not keep pace with the market after 3M (MMM 148.13, -9.50) lowered its guidance. The Dow component settled lower by 6.0% while another sector member—Deere (DE 77.24, -1.70)—slumped 2.2% after peer AGCO (AGCO 46.04, -3.38) cut its earnings and revenue outlook.

Today's rally in stocks was met with selling interest in the Treasury market. The 10-yr note settled near its session low, pushing the benchmark yield to 2.27% (+5 bps).

Investor participation was ahead of average as more than 940 million shares changed hands at the NYSE floor.

Economic data included CPI, Empire Manufacturing, and NAHB Housing Market Index:

  • The Consumer Price Index was unchanged in November (consensus 0.0%) while core CPI increased 0.2% in November (consensus +0.2%)
    • On a year-over-year basis, total CPI is up 0.5%, representing the highest level since December 2014
    • On a year-over-year basis, core CPI is up 2.0%, representing the highest level since May 2014
  • The Empire Manufacturing Survey for December improved to -4.7 from -10.7 reported in November while the consensus expected a reading of -5.9
  • The NAHB Housing Market Index slipped to 61 from 62 while the consensus expected an improvement to 63

Tomorrow, weekly MBA Mortgage Index will be reported at 7:00 ET while November Building Permits (consensus 1.15 million) and Housing Starts (consensus 1.135 million) will be reported at 8:30 ET. The November Industrial Production report (consensus 77.5%) will cross the wires at 9:15 ET and the latest policy decision from the Federal Open Market Committee will be released at 14:00 ET (consensus 0.5%).

  • Nasdaq Composite +5.5% YTD
  • S&P 500 -0.8% YTD
  • Dow Jones Industrial Average -1.7% YTD
  • Russell 2000 -6.0% YTD