>>> US Gapping Down

Gapping down
In reaction to disappointing earnings/guidance: SWI -11.9%, CYT -9%, ANGO -3.3%, EDGW -2%


Other news: DSCO -17.8% (announces an underwritten public offering of units; size not disclosed), NRX -17.5% (prices $7.5 mln public offering of 1.5 mln shares of common stock and warrants at $5 per share and accompanying warrant), TROV -8.7% (to sell shares of its common stock), RDHL -6.5% (prices its upsized offering of 2.462 mln ADSs at $16.25/share), NBG -2.7% (cont vol surrounding Greek banking system), FIT -1.7% (cont vol post IPO), ESV -1.6% ( ConocoPhillips (COP) confirms a notice of termination for the three-year ENSCO DS-9 drillship contract -- ESV does not anticipate a material negative impact to its financial results for 2015 and 2016), XOMA -1.5% ( confirms its gevokizumab development partner, Servier, remains on track to report top-line pivotal Phase 3 EYEGUARD-B data the week of July 20, 2015), XRX -1.2% (announces changes in its Government Healthcare Solutions strategy resulting from review of future market opportunities; will record an impairment charge of $0.08/share), WPX -0.9% (prices its upsized offering of 30 mln shares of its common stock at $10.10/share), GEL -0.5% (prices its offering of 9 mln common units representing limited partner interests at $43.77/share)

Analyst comments: BBY -4.5% (downgraded to Underperform from Buy at BofA/Merrill), CS -2.2% (downgraded to Hold from Buy at Deutsche Bank), STAG -2.1% (downgraded to Sell from Neutral at UBS), NOV -1.7% (downgraded to Sell from Neutral at UBS)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SLH +29.2%, (very light volume; completes the acquisition of 100% of Identifix; guides FY16) HTZ +15.1%, ( Files 10-K, Up to date on all regulatory filing; Reaffirms $1 bln share repurchase program), GOOGL +13.3%, GOOG +12.1%, MDRX +8.1%, ERIC +4.9%, AMD +3.7%, ALV +3.4%, STI +2.1%, GE +1.7%, SLB +1.4%, HON+1.4%, RECN +1.2%

M&A news: DISH +1.3% (rebound from late weakness on reports of DISH / TMUS deal stalling)

Select China related stocks trading higher: YOKU +13.2%, CMCM +3.7%, NOAH +2.4%, JD +2.1%, BITA +1.9%, TEDU +1.8%, DANG +1.5%, JMEI +1.4%, QIHU +1.2%

Other news: ICLD +6.8% (warded over $2.3 mln in next-gen WiFi and DAS networks from existing and new clients), FBRC +3.3% (Voce Capital Management disclosed 5.1% passive stake in 13G filing; Voce has engaged in discussions with management), ALU +2.8% (in symp with ERIC), BLRX +2.6% (filed for $75 mln mixed securities shelf offering), NFLX +1.8% (cont momentum), TSLA +1.5% (2:00 pm ET press conference; topic of the call has not yet been announced), RECN +1.2% (announced that effective as of August 31, 2015 Donald B. Murray will retire from his position as Executive Chairman and will remain Chairman of the Board)

Analyst comments: RKUS +3.2% (upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey), BXLT +1.4% (initiated with an Outperform at Cowen), ILMN +0.9% (initiated with a Buy at Canaccord Genuity), ARMH +0.8% (upgraded to Buy at Investec), LFL +0.6% (upgraded to Neutral from Sell at Goldman
)

>>> US Early premarket gappers

Early premarket gappers

Gapping up: HTZ +15.1%, GOOG +12.1%, YOKU +11.9%, MDRX +8.1%, ALV +4.8%, CMCM +4.4%, AMD +3.7%, JMEI +3.6%, FBRC +3.3%, FBRC +3.3%, CLF +3.2%, NOAH +3%, BLRX +2.6%, ALU +2.3%, STI +2.1%, BITA +1.9%, TEDU +1.8%, NFLX +1.8%, GE +1.7%, TSLA +1.6%, SLB +1.4%, HON +1.4%, DISH +1.3%, DANG +1.3%, RECN +1.2%, QIHU+1.2%, RECN +1.2%, JAH +1%

Gapping down: DSCO -17.8%, NRX -15.3%, BGMD -12.9%, SWI -11.9%, CYT -9%, TROV -7.7%, BBY -3.3%, ANGO -3.3%, NBG -2.7%, CS -2.1%, EDGW -2%, ESV -1.6%, FIT -1.6%

(The Economist) The loss of El Dorado : After the commodity boom, the region nee

The loss of El Dorado

After the commodity boom, the region needs a new formula for growth

IT WAS wonderful while it lasted. For much of this century Latin America saw robust economic growth, a big fall in poverty and a swelling of the middle classes. Now the good times are over. Emerging markets everywhere are subsiding like a cooling soufflé. But Latin America has gone stone cold. The IMF expects growth of just 0.9% in 2015, which would be the fifth successive year of deceleration. Many economists are talking of a new normal of growth of only 2% or so a year—less than half the region’s pace during the boom.
What has gone wrong? The short answer is that the great commodity supercycle triggered by the industrialisation of China is over. Rising exports of minerals, soya beans and fuels lifted many South American economies. Without that fillip the region has converged downwards to the 2.4% long-term growth rate of Mexico, which is not a big commodity exporter.
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Worse, the commodity bonanza prompted distortions that may limit new sources of growth. Many Latin currencies became overvalued, wounding the competitiveness of non-commodity firms. Consumption soared; investment sagged. While Asia built factories, Latin America erected shopping centres.
The net result is not wholly negative. Past Latin American commodity booms ineluctably ended in financial busts. This time only countries, such as Venezuela, that have repeated old mistakes—fiscal populism, protectionism and government meddling—face a crisis. Most of the region has become more resilient after years of responsible macroeconomic policies, with stronger banks and lower public debt.
For a boom-bust continent, resilience is not to be sniffed at. But it will not ensure faster growth that endures. To get rich, Latin America must boost its abysmally low rate of productivity growth and diversify its economies (see article). That, in turn, means moving beyond the tired ideological debate between market and state that still bedevils the region’s politics. Latin America needs both better-functioning markets, with more competition, and much smarter government.
Start with productivity. In 1960 the efficiency with which Latin America combined capital and labour was three-quarters that of the United States. Now it is just over half. The obvious causes of this gap are the lack of transport, the paucity of innovation and of skills; and a swollen informal sector. Dealing with this requires more than just education and infrastructure. The lack of appropriate housing and urban-planning policies, for instance, means that many workers must spend hours a day commuting. Many don’t bother, preferring to set up subsistence businesses in their own back yards. Similarly, improving child care or tackling violent crime would boost growth (by letting women seek more productive work and reducing the extortion that deters businesses from expanding).
A golden opportunity
The second priority is to take regional integration seriously. Economies become more diversified and sophisticated when their businesses join regional supply chains. That process has powered East Asia’s growth, and that of northern Mexico (though not its south) thanks to its ties to the United States. In South America too many leaders talk about unity while practising protectionism. A good start would be to turn Mercosur, based on Brazil and Argentina, from a largely fictional customs union into a proper rules-based free-trade area.
None of these reforms will pay off quickly. None will be easy to get through, especially since many of the region’s presidents are unpopular and their governments tarnished by corruption. But without the easy pickings of the boom, the hard work of structural reforms is the only way to boost growth and welfare. The sooner its leaders realise that, the better the region’s prospects.

(HSBC) Altice : Upgraded to Buy : M&A Growth Driven in US & Europe TP €162

(HSBC) Altice : Upgraded to Buy : M&A Growth Driven in US & Europe TP €162 from €101.
highest Price target in the market.

Upgrade to Buy: Gobble, gobble – still hungry for growth
* More scale: new Altice share class opens M&A-driven growth prospects in the US and in Europe
* Current high debt is sustainable given the prospects of efficiency gains in the companies already acquired
* Upgrade to Buy from Hold: new target price of EUR162 (from EUR101), taking into account potential from more acquisitions


** Running fast, but not without direction
After announcing the acquisition of US cable operator Suddenlink (20 May) and finalising
the acquisition of Portugal Telecom (2 June), Altice management is already talking about its
interest in KPN, BT Group or Telecom Italia (Bloomberg, 26 June 2015) in addition to
potential M&A in US cable (WSJ, 9 July 2015). We also think that consolidation in France is
still a possible scenario from next year despite a failed attempt in June. Hence, we expect
Altice to expand its footprint further in the next 12 months.

Is it too fast and/or too much? The very high pace at which the group is expanding is, to
our view, a function of the interest rate environment and the absence of competition to gain
control of its targets, rather than an uncontrolled shopping spree. These conditions will not
last for ever and Altice knows this. Does it already have too much debt? Rather than focus on
the EUR32bn consolidated debt, we prefer to consider each of the regional debt silos: France,
the US and the combination of Altice’s other assets together with the holding structure. Each
generates free cash flows that are higher than the service of the debt contracted to acquire the
assets. The US acquisition is on a separate credit pool with little recourse risk to the rest of
the group. Numericable-SFR in France will, according to our forecasts, deleverage rapidly.
Altice SA and Altice International debts are backed by the strong free cash flows at Portugal
Telecom. At present, the debt is mostly at fixed rates and without significant refinancing
before 2019. At that point, we calculate leverage would reach 1.0x in France, 3.6x in the
US and 4.8x at Altice International and the holding combined, levels that we think should
open access to the high yield market to refinance the debt by then.

New valuation, new rating: We raise our operational forecasts, driven by the consolidation of
Portugal, and add Suddenlink to our valuation. Our updated DCF-based sum-of-parts yields a
fair value of EUR130 (was EUR101) to which we add EUR32 from potential value creation
from accretive acquisitions. We set a new target price of EUR162 (from EUR101) or 10.2x
EV/EBITDA 2016. This is a premium to the sector (7.4x for telcos, 9.0x for cable), but
EBITDA CAGR 2015-17 (before further acquisitions) is 12% vs 5% for the rest of the sector.

(BFW) Gemalto May Profit From E-Sim, Share Drop Is Opportunity: Kepler

Gemalto May Profit From E-Sim, Share Drop Is Opportunity: Kepler
2015-07-17 07:20:39.490 GMT


By Kasper Viita
(Bloomberg) -- Reported electronic sim card talks “should
be at least neutral, more likely positive” for Gemalto, Kepler
Cheuvreux (buy) says in note.

* New technology shouldn’t change ecosystem much, operators
likely to keep access mgmt to their networks
* Current technology providers have no reason to lose
their presence as their skills in OS, platforms are
critical for e-Sim
* Co. not making any margins on chips, still likely to sell
its embedded software to secure network authentication,
generate same profits with higher margins in embedded
software & products segment
* Co. may generate “significantly” more rev. in platforms &
services segment due to increased requirement for on-demand
connectivity platforms for remote activation/subscription
mgmt
* Kepler sees good buying opportunities as market expectations
remain low, momentum is gradually improving
* Shares down 1.1%
* NOTE: Gemalto dropped 5% yday as FT reported Apple, Samsung
are in advanced talks with telecom groups for introducing e-
Sim cards


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To contact the reporter on this story:
Kasper Viita in London at +44-203-525-9219 or
kviita1@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-3525-2645 or
jludden@bloomberg.net