see pdf attached
Affaire LSK: enquête préliminaire contre DSK pour escroquerie et abus de biens sociaux
Le parquet de Paris a ouvert le 28 juillet une enquête préliminaire contre Dominique Strauss-Kahn pour escroquerie et abus de biens sociaux en lien avec son ancienne société d'investissement luxembourgeoise en faillite LSK, ont annoncé vendredi 16 octobre France Inter et Le Parisien magazine. Une source judiciaire a confirmé qu'une enquête préliminaire avait été ouverte cet été à la suite d'une plainte déposée par un ex-actionnaire de LSK. Une des premières tâches des enquêteurs devrait être d'entendre le plaignant, Jean-François Ott, pour lui faire préciser les termes de sa plainte, a ajouté cette source.
Se posent en effet des questions de compétence du tribunal de grande instance de Paris, les infractions présumées visées ayant au moins pour partie été commises à l'étranger, précise cette source. La plainte avait été déposée le 30 juin par Jean-François Ott, qui affirme avoir souscrit une augmentation du capital de LSK de 500.000 euros. Persuadé qu'on lui a présenté, en amont de cet investissement, une situation financière de LSK qui n'était pas conforme à la réalité, il a porté plainte pour "escroquerie", "abus de biens sociaux" et "faux" contre les anciens administrateurs de LSK, dont l'ancien directeur général du Fonds monétaire international (FMI).
Depuis, selon France Inter et Le Parisien Magazine, "une seconde plainte a été déposée par un ex-banquier macédonien". La radio ajoute que l'avocat de Dominique Strauss-Kahn, Jean Veil, explique que son client n'avait pas de "rôle opérationnel" dans le groupe et a lui-même été trompé.
Ou sont les 100 millions d'euros?
"La première question que devra se poser la brigade financière de la Police Judiciaire de Paris, qui a été saisie de l'affaire, est: comment ont été dilapidés les 100 millions d'euros aujourd'hui réclamés par 156 créanciers de multiples nationalités?", peut-on lire sur le site de France Inter.
LSK, dont Dominique Strauss-Kahn voulait faire un fonds spéculatif de 2 milliards de dollars, a été déclarée en faillite en novembre 2014, quelques semaines après le suicide à Tel Aviv de son fondateur et dirigeant, Thierry Leyne. DSK avait quitté la présidence de LSK quelques jours avant ce décès.
Selon France Inter et Le Parisien magazine, "DSK a pris la tête d'un groupe à la gestion douteuse. A l'été 2013, soit un mois avant son arrivée, elle affiche déjà une perte de 13 millions d'euros. Sa principale filiale, Assya Luxembourg a du mal à payer ses notes de téléphone, d'électricité, de fournitures de bureau... Les salaires seront bientôt versés avec du retard. Quant aux dossiers clients, beaucoup sont incomplets, rangés dans des dossiers papiers, alors que tout devrait être informatisé".
"Plutôt que de placer l'argent des clients sur le marché, Assya Luxembourg outrepasse ses mandats de gestion et l'investit en partie dans des actions +maisons+. En clair: elle rachète les titres de ses filiales pour en faire monter artificiellement le cours", selon l'enquête journalistique.
Le cabinet Ernst & Young avait émis "des réserves sur la valeur réelle des filiales de LSK. Puis, à l'automne 2013, incapable d'attester de la sincérité des bilans qui lui sont présentés, il démissionne de son mandat de commissaire aux comptes", s'étonnent les journalistes.
>>> Asset Class Flows
* Equities: $2.6bn inflows (first inflows in 4 weeks) (note $4.3bn
* ETF inflows vs $1.7bn mutual fund outflows)
* Bonds: $3.8bn inflows (largest in 12 weeks)
* Precious Metals: $0.3bn inflows (largest in 7 weeks)
>>> Equity Flows
* Japan cracks: $1.6bn outflows (biggest 3w outflows since Nov’14)
* EM is back: first inflows in 14 weeks ($0.7bn)
* Europe defiant: $3.1bn inflows (inflows in 20 out of past 22 weeks)
* US: muted $0.7bn inflows ($2.8bn ETF inflows vs $2.0bn mutual fund outflows)
* By sector, Healthcare: 4 straight weeks of outflows (longest streak since Jan’13); by contrast, Consumer funds see largest inflows in 3 months ($0.9bn)
>>> Fixed Income Flows
* First outflows from Govt/tsy funds in 15 weeks (albeit small $0.1bn)
* $2.6bn inflows to HY bond funds (largest in 8 months)
* $0.4bn inflows to EM debt funds (first inflows in 12 weeks & largest in 5 months)
* $0.5bn inflows to IG bond funds (first inflows in 5 weeks)
* 11 straight weeks of outflows from bank loan funds (albeit tiny $56mn)
>>> Talking Points
Risk-on: equity & bond funds both record inflows for first time in 10 weeks...signals turn
in risk-off sentiment...note BofAML Trading Rules remain in "buy" territory, bar the
Breadth Rule which flipped from "buy" to "neutral" this week (Table 3 & Chart 4).
Junk-on: largest HY bond inflows in 8 months & largest EM debt inflows in 5 months
(Chart 1)...collapse in Fed hike expectations gives oversold junk "yield" a bid.
Quality-off: first outflows in 15 weeks from Government bond funds.
Japan-off: $1.6bn outflows & largest 3-week outflows since Nov’14 (Chart 2)...as faith
in higher US rates/dollar evaporates, as does confidence upcoming BoJ QE weakens yen.
Gold-on: largest inflow in 7 weeks...reflects weaker US$ and QE "policy failure" hedging.
EM-on: first EM equity inflows in 14 weeks...first signs of rotation to "weak US$" plays
Europe-defiant: $3.1bn inflows (inflows in 20/22 weeks)...many clients using Eurozone
as hedge against surprise EM-upside.
US cyclical-on: muted $0.7bn inflows belie divergence between $2.8bn ETF inflows &
$2.0bn mutual fund outflows; ETF inflows all to macro-sensitive, cyclical themes e.g.
QQQ, IWM, XLI, XLY...hints that growth expectations troughing.
Unhealthy: 4 straight weeks of global Health Care fund outflows (longest streak since
Jan’13); by contrast, global Consumer funds see largest inflows in 3 months ($0.9bn).
GWIM resilient: BofAML private clients have added risk in each of the past 4 weeks
(Chart 5); and note 2015 on course to be first year since 2012 that private clients have
bought more common stocks than ETFs (Chart 6).
Consensus is currently: low growth/low EPS/low rates here to stay, but no recession;
trading ranges hold (SPX 1850-2050, GT30 2.8-3.2%, DXY 93-100); sell rallies into
strength; own (sensible) growth, (safe) yield, (high) quality; rent
EM/resources/commodities.
Contrarian trader: FMS/flows argue for rotation to "weak dollar" plays e.g. CRB, EM
resources/FX, industrials; breach of SPX 2050 requires ECB/BoJ to boost growth
expectations without FX devaluation.
* Introducing Beat Factor
Beat Factor identifies our most out-of-consensus stock ideas within BofAML coverage
of FTSEEurofirst 300 stocks. It compares our analysts’ price objectives and earnings
estimates from our proprietary iQdatabase with sell-side consensus estimates of those
items, using a quantitative approach. By aggregating bottom-up estimates of all our
developed Europe coverage, the framework also finds sectors where our analysts are
most upbeat/downbeat vs consensus, as well as our bottom-up Pan-European market
view. We would be updating the Beat Factor every month.
Market Beat
On aggregating 460 stocks, BofAML analysts expect a 12 month return of 13%, broadly
in line with consensus. However, our analysts are more optimistic on FY1 earnings than
consensus, expecting FY1 EPS growth of 3.6% (versus consensus nil growth) but
downbeat on FY2 EPS growth of 5.3% (versus 7.7% consensus). The sentiment is
broadly neutral as we upgraded ratings for seven stocks and downgraded for equal
number of stocks last month (Chart 8).
Sector Beat
BofAML analysts expect above-market returns in Technology (25% upside), Health Care
(21%) and Telecoms (19%). Based on Beat Factor, Technology and Financials are most
favored (Chart 11). Energy is the only sector where we expect absolute negative returns
(-5%) and is the most downbeat sector as per Beat Factor (Chart 11).
Stock Beat
Stock Beat lists the top 30 most out-of-consensus stock ideas from our coverage in the
FTSEurofirst 300 Index. Table 1 shows the top-10 out-of-consensus longs and shorts -
for the full list of 30 stocks, please see Table 3. Lists are updated monthly.
A couture gem but conglomerate discount likely to widen
We initiate coverage of Christian Dior with a Hold rating, a target price of €182 and a TSR
of 8%. We highlight five key considerations: 1) the resilience of its two assets, Dior Couture
and LVMH, given the current uncertainties; 2) Dior couture has one of the strongest top-line
growth rates in the sector; 3) ongoing margin expansion; and 4) a proven management
team; but 5) a holding company discount that has shrunk materially recently.
A well positioned name with regard to current uncertainties Dior Couture in our view is
in a position to face the current EM uncertainties with more ease than some competitors
thanks to: 1) a smaller contribution from EM, 2) exposure to the less cyclical soft luxury
segments, and 3) its proactive DOS expansion strategy in the region.
Financials are set to improve Guidance is for sales of €2bn in 2016. CEO, Mr Toledano,
has informally mooted €4bn for 2021, which we find too ambitious (implying a 14.6%
CAGR vs SGe at 11.7%). However, we do think a scale effect from revenue growth will
boost the EBIT margin through better absorption of fixed costs (A&P at 16.2% in FY14 and
14.8% in FY17e, vs 6-7% at peers). This takes the margin from c.13% to 18% over time.
A below-average holding company discount The recent all-time low in the holding
company discount (at c.5-10%) and current equity market volatility lead us to adopt a
cautious stance. In particular, we don’t see any structural changes in the stock’s catalysts:
1) no short- to medium-term change in the shareholding structure; and 2) market multiples
are at an all-time high since 2003-2004.
We value the stock at €182 Our target price is based on SOP calculations: 1) We value
the commercial Christian Dior operations on DCF (WACC at 9.5% and LT growth at 4%);
2) we value the 40.9% stake in LVMH both at the average of our €182 LVMH TP and the 1m
stock price average of €152 (and average them); 3) We value its 6,000sqm of real estate at
€240m and treasury shares at €495m (combined c.2% of our EV); and 4) we apply a 15%
discount to EV to reflect the last three years’ average discount.
The main risks to our TP Upside: 1) change in the holding structure; 2) upgrade to LVMH
estimates. Downside: 1) slowing demand among EM consumers; 2) lack of operating
leverage; 3) downgrade to LVMH estimates; and 4) strong equity market volatility. The main
catalysts Newsflow on EM, margin levels and rationalisation of the shareholding structure.
Update While LVMH’s share price volatility, notably of late, has caused investors to question its
appeal, we highlight our preference for LVMH vs Christian Dior. This note reviews the rationale
for our LVMH Buy rating, the risks attached to the stock, and the suggested investor strategy.
Buy rating rationale: Our thinking, previously given (details overleaf), boils down to this. LVMH
now offers superior organic sales growth vs the sector, EBIT margin stabilisation at 18-19% (in
line with the sector average from H2 after a drop of c.100bp p.a. since 2011), FCF generation
now supported by below-sector-average capex /sales ratio (5% vs peers at 5.0-6.0%), albeit
slightly hampered by now-above-average c.33% tax rate (sector at 28%), and 5-10% PE
discount vs peers even though financials are mostly in line or better than the sector and in our
view are less uncertain. Lastly, it is possible that the rapid expected degearing will lead to
enhanced shareholder return. What is hampering the stock then? a) Stock status: the
combination of low investor interest in the sector, an already large positive consensus on the
stock, and the stock’s high liquidity and role as a sector proxy; b) Group profile: as it is highly
diversified, the group is vulnerable to much of the negative macro-economic / political / FX /
financial markets newsflow currently weighing on consumers’ discretionary spending and
investors’ minds. This creates short-term spikes in demand volatility and gives investors a sense
of a lack of sustained consumer demand/consistent industry trends. c) Earnings profile:
volatile divisional performances from one quarter to the next remove any sense of a stable and
predictable environment. However, its diversification is currently an asset rather than a liability in
our view, as it enables LVMH to generate quarterly sales growth trends in the mid single digits.
SG view Putting all of this together leads us to the following strategy: in volatile markets a
buy-and-hold works for periods beyond our investment horizon because the share price is
more volatile than the fair value of the portfolio (currently boosted by the KPIs described
above). So investors should take advantage of the low entry points that appear periodically.
Note that our recent upgrade to Buy was triggered by the low share price in late August.
How we value the stock SG’s TP is the average of SOP/DCF with a 9.5% WACC and 4% LT
growth (see models pages 4, 5).
Events, catalysts & risks Risks to the price target: if the cognac sales rebound is shortlived;
if LV growth remains low.
Following meetings with clients in the US, Europe and Asia over the past few weeks, we make the following observations:
1) Confusion;
2) Growth pessimism;
3) China concerns;
4) QE not working and has run out of steam;
5) Two new concerns often cropped up (the $0.5trn decline in global FX reserves, the rising political tide against profits);
6) Regional views: Pessimism on GEM equities is extreme, except in Asia. Investors are happy to stick with Europe (growth, low margins, QE-friendly ECB), but have largely capitulated on Japan (too exposed to China and leveraged to global GDP);
7) The recent rotations have hurt the majority of investors;
8) What was not mentioned: Eurozone politics, US debt ceiling, Russia's involvement in Syria or the UK referendum on the EU.
In sum, we think clients are focused more on risks, which are abnormally high, rather than reward, which is also high.
Dow+1.28% S&P+1.49% Nasdaq+1.82% Russell+2.27%
US Market closed higher. The broad-based rally in the U.S. followed an overnight session that featured dovish comments from two European Central Bank members, setting expectations for more monetary easing from the central bank. This started with Vitor Constancio who spoke in Hong Kong, joining the chorus of voices calling on the Federal Reserve to delay its first rate hike while Ewald Nowotny said that more needs to be done by the ECB in light of soft inflation data. financials (+2.4%) leading the way, telecom services (+2.3%) and health care (+1.3%), IBB +4.4%. volume were the highest of the week with 993mil shares...US After Hours HSC +2.1%, YUM +1.8%, WAL +1.0%, WYNN -8.2%, SAVE -3.8%, SLB -0.9%, AMD -0.5% following earnings/guidance, PTCT +6.0% on Phase 3...Asian indices are mixed and searching for catalysts and direction despite a final hour surge on Wall St. Nikkei225 is outperforming, tracking a bounce in USD/JPY pair back above 119 after a rise in core US CPI figures restored some hopes that the FOMC could still move this year. focus falls on Monday (Sunday evening US time) release of China Q3 GDP and the balance of Sept economic data. Overnight, China's lending data topped estimates and M2 was in line. Economist with HSBC cited "recovering home market and accelerated infrastructure investment contributing to the growth" in reflecting on China lending data
Nikkei +1.08% Hang Seng +0.50% Shanghai +1.185
Eur$ 1.1385 CNY 6.3583 JPY 119.10 GBP 1.5481 EURCHF 1.0835 BRL 3.7994 RUB$ 61.43 WTI $47.03 (+1.4%)
S&P -0.12% EuroStoxx +0.46% Dax +0.644 SMI +0.06%
Macro :
- Draghi’s Words Mean Little to European Markets Expecting Action
Keep an eye on :
- AIR FP : Air France-KLM Board, CEO, Prefer Growth Plan Over Reductions
- AIR FP : Airbus Seeks Financing From Emirates for A380 Neo: Tribune
- AZN LN : Astra Gets FDA Response Letter for Saxagliptin/Dapagliflozin
- BATS LN : BAT Pays BRL9.3b to Buy 343m Shrs of Brazil Unit Souza Cruz
- BOSS GY : Hugo Boss Revises 2015 Goals, Cites Weak 3Q Results -->-8% pre open
- CA FP : Carrefour 3Q Sales In Line; Other Europe LFL Sales Beat Ests.
- DBK GY : Deutsche Bank Said to Plan Sale of U.S. Private-Client Brokerage
- ELI1V FH : Elisa 3Q Revenue, Net Income Beats Ests.; Raises FY Outlook
- ENEL IM : Tax Cut in Italy to Favor Generators, Boosting Enel, A2A: Citi
- GLEN LN : Glencore Plans More Debt Cuts to Help Win Upgrade in Credit Rating - http://on.wsj.com/1hH6YGF
- GLEN LN : *BLACKROCK ADDS TO GLENCORE POSITION THROUGH SEPT. 16 PLACEMENT
- HPL GY : Hapag-Lloyd May Consider 20%-30% Profit Dividend in Year’s Time
- LSE LN : London Stock Exchange Launches Interest Rate Derivatives Venture
- MOBB BB : Belgian Cable Deregulation Delays Mobistar TV to 2016: Tijd Link
- NESN VX: Nestle Chairman ‘Moderately Optimistic’ on European Growth: WB, Says China Sales Recovery Slower, N. America Better
- NEX FP : Nexans CFO Says Hasn’t Felt Particular Slowdown in Car Demand
- RCO FP : Remy 2Q Cognac Organic Sales Drop Less Than Est, China Improving
- SHP LN : Shire preparing bid for Radius Health - http://bit.ly/1hHc5qt
- TIT IM : Tel. Italia Says Wide Time Margin, Guarantees in Fintech Deal
- VAC FP : Pierre & Vacances: FY Rev. EU1.44B vs EU1.42B
- UCG IM : UniCredit Reiterates Confidence in Managers’ Actions
- VOD LN : Vodafone Said in Branding Deal With Russia’s MTS in Ukraine: FT
- VOW GY : VW Loses Market Share in Europe in Sept. as Recalls Loom, from 23.7% to 23.3%