Economies : la Cour des comptes pointe les tours de passe-passe de Bercy
Les dépenses de l’Etat se sont stabilisées en 2014. Mais les magistrats de la Cour des comptes dénoncent les opérations de débudgétisation « importantes » réalisées par Bercy pour tenir ses objectifs.
« Le temps de la redistribution est venu », a récemment assuré François Hollande. Le temps de l’effort n’est pas terminé, lui répond en substance ce mercredi Didier Migaud, le premier président de la Cour des comptes, à l’occasion de la présentation de son rapport sur l’exécution budgétaire en 2014 . Amorcée depuis 2010, « la réduction du déficit de l’Etat a été interrompue en 2014 », ce dernier s’élevant à 85,6 milliards d’euros, soit 10,7 milliards de plus qu’en 2013 et « plus de deux fois supérieur à celui d’avant la crise ». La faute à des recettes fiscales qui ont baissé de près de 10 milliards « pour la première fois depuis 2009 », tandis que les dépenses sont juste stabilisées sans « économies structurelles significatives ». En conséquence, la dette a continué de progresser à un « rythme soutenu », atteignant 1.528 milliards fin 2014.
Les chiffres ne sont pas nouveaux. Mais en les alignant les uns derrière les autres, la Cour des comptes vient largement tempéré le satisfecit de Bercy devant des résultats meilleurs que ceux attendu.
Débudgétisations importantes et reports de charges accrus
L’absence de reprise et la très faible inflation avaient contraint le gouvernement à revoir ses prévisions de déficit et de recettes lors de son « opération vérité » sur les comptes publics l’été dernier. Mais pas à renoncer aux économies et aux strict respect de la norme des dépenses de l’Etat. Des « économies » que relativise largement la Cour des comptes : si les dépenses du budget général « ont été stabilisées par rapport à 2013 », c’est « notamment grâce à la diminution de la charge de la dette (-1,73 milliard) ». Or dans le même temps, « certains postes de dépenses croissent de nouveau », constate la Cour (masse salariale, retraite...). Et si « les normes de dépenses, plus strictes qu’en 2013 ont été respectées », c’est « au prix toutefois de débudgétisations importantes et de reports de charges accrus ».
La Cour des comptes dénonce ainsi les tour de passe-passe de Bercy pour tenir ses objectifs de dépense. Dans la ligne de mire des magistrats, les crédits du programme d’investissement d’avenir (PIA) : une rallonge de 12 milliards d’euros avait été décidée pour 2014 par le gouvernement Ayrault : « le dispositif dérogatoire mis en place dans le cadre des PIA a eu pour conséquence d’effectuer 3,3 milliard de dépenses hors du budget de l’Etat. En outre il a été largement utilisé pour combler des insuffisances de crédits budgétaires en contradiction avec son objectif initial ».
Nouveaux décalages de paiement
La Cour des comptes pointe également de nouveaux décalages de paiement. « A la fin de 2014, l’Etat a constitué des dettes à l’égard d’entités, qui vont peser sur 2015 et sur les gestions suivantes », indique-t-elle. Par exemple, la dette de l’Etat à l’égard de la Sécurité sociale a augmenté de près de 50 % en 2014 (368 millions d’euros) ! Qui plus est, la cour des comptes déplore l’usage récurrent de la technique du rabot pour rogner les crédits des ministères et « l’absence d’économies structurelles significatives ».
Le patron d’Altice a été auditionné mercredi par l’Assemblée nationale.Il est revenu sur sa frénésie d’acquisitions et les méthodes de gestion chez SFR.
Première sortie publique pour Patrick Drahi, depuis le rachat de SFR fin novembre. Le président d’Altice-Numericable a passé son premier grand oral devant l’Assemblée nationale mercredi matin. L’homme dont tout le monde parle dans les télécoms ces derniers jours depuis l’annonce du rachat par Altice de l’opérateur américain Suddenlink, s’est montré plutôt ouvert, mais ferme, plaisantant avec les députés, qui l’ont surtout tancé sur les dettes de son groupe et le malaise social grandissant chez SFR.
« J e fais ce métier depuis 25 ans. Mon ambition c’est de développer un groupe international, avant tout familial », a-t-il expliqué, se montrant très serein vis-à-vis des dettes accumulées à la suite de multiples rachats en quelques mois (SFR, Virgin Mobile, Portugal Telecom, Suddenlink), et qui s’élèvent au total à 33 milliards d’euros pour Altice. « La dette que l’on porte est calculée au regard de nos perspectives. Chez Numericable-SFR elle est au même niveau que nos concurrents », a-t-il assuré. Tout en ajoutant que « la dette n’était pas un problème pour une entreprise qui croît. Ce sont les groupes en décroissance qui se focalisent sur la réduction de l’endettement ». « Je ne vais pas faire de croissance boulimique au risque d’hypothéquer mon entreprise », a néanmoins tenté de rassurer le nouveau magnat des télécoms.
Pas prêt pour Time Warner Cable
Revenant sur l’intérêt porté à l’américain Time Warner Cable, que Charter s’apprête à racheter, Patrick Drahi a confié qu’il n’était « pas prêt » à faire le deal. « J’ai discuté deux heures avec le patron. Il était comme un fou, il devait prendre une décision dans l’heure. Je lui ai dit, ce n’est pas possible, on rentre», a-t-il précisé en marge de l’audition. A l'origine, voyant les gros opérateurs américains fusionner entre eux, le patron d’Altice est parti au pays de l’Oncle Sam dans la perspective de racheter les entreprises restantes.
« Si je prends cinq petits morceaux de la taille de Numericable, je deviens aussi gros que Time Warner Cable », calcule-t-il. Le milliardaire restera à coup sûr à l’affût des opportunités qui pourront se présenter outre-Atlantique. Le sera-t-il également en France, où Bouygues Telecom pourrait faire figure de cible pour Altice ? Patrick Drahi n’en a pas fait mention. Mais il a rappelé « la nécessaire consolidation des télécoms en Europe », qui passera par des « rapprochements entre opérateurs dans les pays ».
« SFR était devenue une vraie fille à papa »
Dans l’Hexagone, l’homme est devenu un incontournable des télécoms depuis le rachat de SFR. Bien connu pour sa capacité hors du commun à couper dans les coûts, il ne fait pas que des heureux au sein des effectifs de l’opérateur télécoms, et chez ses fournisseurs, comme le lui ont fait remarquer les députés. « Si malaise il y a, ce n’est pas nous qui l’avons créé, mais nos prédécesseurs. SFR était devenue une vraie fille à papa, qui dépensait sans compter, et laissait la maison-mère (Vivendi, ndlr) régler les factures à la fin du mois. Le papa a changé, et ma fille ne fait pas comme ça ».
Il a donc fallu remettre de l’ordre. Quitte à employer des méthodes de gestion quelque peu rugueuses, mais qui devraient permettre à l’opérateur de renouer avec les investissements et d’améliorer la qualité de son réseau, assure Patrick Drahi. Le patron d’Altice réfute les accusations d’impayés auprès de ses fournisseurs, estimant logique de vouloir payer le « juste prix » pour une prestation. « Nous tentons de responsabiliser davantage les sous-traitants, pour les aider à grandir. On n’a pas intérêt à ce que nos fournisseurs perdent de l’argent ! »
Impatient de pouvoir relancer les investissements dans les infrastructures chez SFR, le premier actionnaire de l’opérateur a indiqué qu’il participerait aux enchères pour les fréquences 700 MHz, tout en indiquant qu’il n’en avait « pas besoin » dans l’immédiat. « Je ferai mon devoir de citoyen », a-t-il annoncé devant la représentation nationale
Casino - Underweight - PT €71
We explore four reasons why we expect Casino share to continue to underperform the European food retail sector index over the next 12 months.
#1 - The stock continues to trade at a premium to its SOTP valuation. Our marked to market valuation of Casino' SOTP (FX and market cap of listed subsidiaries) translates to a value of €69 per share, a 5% discount to the current share price, as can be seen in Exhibit 1 , a level at which we set our price target (from €71 previously). While Casino shares had historically traded at a discount to the Group's SOTP, the shares have been trading at a premium over the past 18 months or so, on our numbers.
One of the assumptions we make to reach a €69 per share SOTP is to value the French retail operations 2015e EBITDA and EBIT at 7.3x and 14.2x, respectively (translating to a valuation of €5.8bn). This compares to 7.9x and 13.4x for the European food retail sector today, a valuation currently supported by a number of potential M&A transactions (such as a potential Ahold-Delhaize tie up, as discussed in our May 13 note, and Tesco's disposals).
Should poor top line trends persist in France, this could require us to assign lower valuation multiples for French operations, and thus potentially lower our price target (applying a 12x multiple on Casino's French EBIT would translate to a theoretical share price of €60.70, we calculate, given the Group's high financial leverage). However, should macro prospects in Emerging Markets (particularly Brazil and Thailand) improve, and should French volumes evolve more favorably, this could lead us to turn more positive on Casino shares.
#2 - Earnings momentum at key subsidiary CBD Pão de Açúcar (~52% of 2015e consolidated EBIT) remains muted. As followers of CBD Pão de Açúcar (covered by Franco Abelardo) will be aware, the company's consensus earnings forecasts for 2015e and 2016e have been consistently revised downwards over the past 12 months. While consensus was forecasting R$6.51 EPS for 2015 in May 2014, R$5.80, broadly in line with MSe of 5.82.
This downwards earnings revision appears to be partly a function of strong macro headwinds (with our Latin America Economics team currently expecting a 1.5% GDP contraction in Brazil, as indicated in their May 15 note). But company-specific issues may have also contributed, related to relative underperformance vs. a number of peers, among them Carrefour, CBD's largest competitor. As seen in Exhibit 4 , LFL sales for CBD Pão de Açúcar's food retail formats were up only +3.4% on a Trailing Twelve Month basis (despite Food CPI being up +8.6% y-o-y during the period) vs. +9.5% for Carrefour. This is one of the widest gap in over a decade. Among company-specific issues, we highlight:
a) Significant management turnover since Casino took full control of CBD Pão de Açúcar in June 2012. As shown in Exhibit 5 , a number of key executives have left since then, with only two members of the current Board of Executive Officers having been with the company for more than three years. In his 4 February report, our colleague Franco Abelardo writes: “We do not question the qualifications and experience of current management, but we do believe there can be a maturation curve until any new executives fully understand the minutiae of their areas inside CBD. In the meantime, CBD may encounter challenges executing its strategy and, more important, leave open room for competition.“
b) Format challenges: ~50% of CBD's food retail formats selling space is made up of hypermarkets (vs. ~25% only at Carrefour, as a comparison), a format that we believe may face a number of structural challenges – including unfavorable demographic trends. While this format mainly caters to large families, the fertility rate has been declining in Brazil over the past 30 years. Today, with 1.8 children per woman of child-bearing years, it is below replacement rate (i.e. 2.1) and below that of France, as a comparison (see Exhibit 6 ).
c) Has CBD Pão de Açúcar focused excessively on cutting costs at its food retail formats over the past 3-5 years - and has this translated to a number of deteriorating metrics, such as stock availability? As Exhibit 7 shows, CBD Pão de Açúcar's food retail formats have posted an increasing EBITDA margin in recent years: while EBITDA as a percentage of sales stood at 7.3% in 2010, it was 8.1% in 2014 (while at the same time during the period, LFL sales were barely above Food CPI, potentially indicating traffic loss). To put this 8.1% in context, Cencosud, Wal-Mart, Carrefour and Tesco posted EBITDA margins in calendar 2014 of respectively 6.9%, 7.5%, 5.0% and 4.7%.
#3 - Downside risk to value of Casino's stake in Big C, in our view. The value of Casino' stake in Thai retailer Big C (covered by Divya Gangahar Kothiyal) has increased significantly over the past five years: while it was worth €700mn in May 2010, it stands at €2.7bn today - see Exhibit8 . This increase in value was justified by the successful integration of Carrefour's assets in Thailand (acquisition finalized in Nov 2010), as well as the rerating of the stock (from a 12-month forward EV/EBITDA multiple of 4.8x in May 2010 to 12.6x today), as investors took some time to understand that Big C's shopping center assets (where rental income accounts for ~45% of consolidated EBIT) should be valued on higher multiples than retail assets. Also, the broader Thai consumer sector valuations have risen 71% (based on PE) during the same period driven by higher growth and profitability which increased sector attractiveness for investors.
However, we believe that there could be downside risk to the value of Casino's stake in Big C. This is due to a combination of factors:
a) The exchange rate of the Thai Bhat vs. the US dollar has been very stable over the past five years, and that has meant an appreciation vs. the Euro. However, Morgan Stanley's Thailand Strategy & Economics teams ”remain bearish on the THB in the medium term” and “expect USD/THB to trade to 34.5 by the end of 2015” - see Thailand: Most Vulnerable in ASEAN andThailand: Remains vulnerable for further details.
b) De-rating risk: the above reports highlight that “the Thai equity market risks de-rating in 2015 on account of rich valuations amidst weakening fundamentals” and that household consumption should remain lackluster, with private debt as a percentage of GDP (154% vs. 53% for Russia or 31% for Mexico) one of the highest in the world among emerging markets - see Exhibit 10
c) As is even more the case than in Brazil, Thailand's fertility rate has dropped significantly over the past two to three decades, translating to a substantial reduction in household size - see Exhibit11 . Divya cites this as one of the reasons why the convenience store channel (7 Eleven, Family Mart, etc.) has been growing substantially faster in Thailand than the hypermarket channel over the past five years.
#4 - Dividend not currently at risk, but we believe potential risks may be skewed to the downside. As indicated in Exhibit 12 , Casino's dividend payout ratio has steadily increased over the past 15 years, reaching 65% in 2014. Casino paid a dividend of €3.12 (stable vs. the previous year) on underlying EPS of €4.80 (down 10% vs. the previous year). Including the negative impact on Casino's EPS from the potential dilutive effect of the Monoprix convertible bond (ORA), Casino's EPS stood at €4.40 (implying a payout ratio of 71%).
In 2015, we expect Casino's payout ratio could increase to over 75%, excluding the dilutive impact of Monoprix' ORA and assuming a stable dividend of €3.12 (our base case), given that we expect a further decline in Casino's underlying EPS (to €4.12). As shown in Exhibit 13 , this would put Casino at the high end of the main listed European food retailers (we expect a range of 26% to 76% this year). This high payout ratio currently translates to a respectable dividend yield (4.2%, based on the €3.12 dividend paid earlier this month) and has provided some support to the shares, we believe.
Given Casino's current debt rating (BBB- with stable outlook, as per Fitch), liquidity (the Group's gross cash position amounted to €2.2bn in December 2014 and its average maturity was 6.2 years) and ability to refinance itself cheaply, we would not expect Casino to cut its dividend in the medium term - something the Group has not done over the past 15 years.
However, we believe the following two elements may indicate more downside risk potential than upside risk:
a) Our calculations indicate the “HoldCo” may be at risk of “burning cash”. Over 90% of Casino's Group net debt is located in France (see Exhibit 1 ), and, over the past three years, the dividends paid by the Casino Group (~€300m per annum on average over the past three years) to shareholders of the parent company were only slightly lower than the operating cashflow generated by Casino's domestic French operations (~€230m) and recurring dividends received by Casino from its listed subsidiaries (~€170m) combined. In 2015, the dividend paid to the parent company would exceed the combined French CF and dividends received by listed subsidiaries by ~€50m, based on our calculations. We believe that this could influence management’s view on dividend policy going forward.
b) Casino's controlling shareholder Rallye (48.4% of economic interest but 60.4% of the voting rights) is able to refinance itself at much lower rates, given the current environment, and is expected to stop burning cash in two to three years (this is already the case for Rallye's parent company, Fonciere Euris). As a result, it is possible that, in the medium term, Casino Group decides to prioritise balance sheet strength over dividend payment.
Time to buy as sparkling cash flow to shine;
* What's changed
Richemont shares are –3% since FY15 results. Results were in-line with expectations but the market has focused on slower current trading (-8% cFX in April), global price adjustments and conservative margin guidance, in our view. We believe this overlooks the multiple underlying positive signals (both cyclical and structural): April-May trading run-rate unchanged vs. 4Q15, continued tight cost management, €900mn cash generated.
* Implications
Richemont is still generating exceptional cash flows (22.7% CROCI FY15 +170 bp yoy) in spite of slower trading and currency-induced margin declines. Retail revenue has accelerated (April +4% vs. +1% FY15) indicating healthy end demand and Cartier continues to perform in the fast-growth jewellery market (+7% cFX). Richemont is also the most
exposed to wealth-led growth (as opposed to middle class income-led demand growth) and global equity markets are +8%-16% ytd which should boost global demand, especially due to cyclicality of wholesale books in HK. We expect +5% cFX group revenue growth in FY16E. We see 65% constant FX gross margin guidance as conservative given the pricing
power of Richemont’s brands, positive channel mix and easing FX pressures. We adjust FY16-18E EBIT –2%-3% to reflect Net-A-Porter in discontinued operations and opex guidance but are still 6%-15% ahead of IBES consensus. We therefore see a clear opportunity in Richemont: 1) 13% EBIT growth pa to FY20E, 2) FCF doubling in FY16E to €2bn, and 3) trading at a 5% discount to luxury (15x 2016E P/E ex. cash) and same market-relative multiple as the Financial Crisis. We reiterate our CL-Buy.
* Valuation
Our 12m PT falls to SFr109.5 (SFr111.8), reflecting our estimate changes. We still apply a 13.5x target 12m forward lease adj. EV/EBITDAR multiple.
* Key risks
Slower than expected demand, unfavourable FX moves and dilutive M&A.
Dow+0.67% S&P+0.92% Nasdaq+1.47% Russell+1.26% Vix 2 13.27 (-5.62%)
US Market closed higher. Mkt rallied on news of Greek officials & Eurogroup members have started crafting a staff-level agreement to secure funds for the country. Reports are saying that two sides have yet to begin working on joint statement. Jeweler Tiffany & Co (TIF 94.54, +9.01) surged 10.5% following better than expected results while Michael Kors (KORS 45.93, -14.66) plunged 24.2% after reporting a one-cent miss and guiding Q1 results below analyst expectations. Also of note, homebuilder Toll Brothers (TOL 36.16, -0.83) lost 2.2% after reporting a two-cent beat on light revenue and narrowing its guidance. energy sector (-0.1%) lagged throughout the session as crude oil struggled, falling 0.8% to $57.57/bbl. Volume were in line with average @ 707mil shares. US After Hours, Broadcom is in Advanced Talks to be Bought by Avago Technologies... NEPT +3.6%, PLKI +3.0%, KMPH +1.7%, TLYS -8.5%, SMTC -7.0%, ANW -1.2% following earnings/guidance, RALY +42.5% (to be acquired by CA Technologies (CA) for $19.50 per share)...Asian indices are mixed despite the broad-based gains on Wall street. Sentiment in China is particularly fragile, as more brokers followed suit with higher margin requirements on growing worries of runaway credit bubble fuelling the equity market. Shanghai Composite entered midday break at its lows down 1.4% on margin adjustments by Guosen Securities and Southwest Securities among others despite fresh fiscal plans from policymakers. China vice Premier Zhang announced the govt will boost transport investment to stabilize economic growth, while CBRC head noted the regulators could allow extending maturities on construction loans to developers to help keep credit lines in the property market open... BOJ Gov Kuroda reiterated Japan is on track to achieving 2% inflation target in H1, adding there were not asset or stock market bubbles. On currency, Kuroda said the market reflects fundamentals of US being the most robust economy at this time. USD/JPY hit new 12-year highs on the passive stance by the central bank despite the recent parabolic yen selloff, rising some 70pips from the lows above ¥124.20. Separately, Japan retail sales were sharply higher, rising 5% y/y due to the rolloff of consumption tax hike last April. Sequentially, retail trade was up 0.4% - below expectations.
Nikkei +0.19% Hang Seng -1.80% Shanghai -2%
Eur$ 1.0914 JPY 123.84 EURCHF 1.0350 GBP 1.5360 RUB $51.9254 WTI $ 57.76 (+0.43%)
S&P -0.13% EuroStoxx -0.35% Dax -0.26% SMI -0.10%
Macro :
- Greece Said to Owe Intl Drugmakers Over EU1.1b: Reuters
- China to Become Germany’s Largest Trade Partner by 2030: HB
- Nowotny Sees No Flexibility on Greece Financing, CNBC Reports
Keep an eye on :
- ADS GY : Nike’s Deal Seems to Track U.S. Claim of FIFA Bribery in Brazil
- AIR FP : Boeing Isn’t Seeing Fluctuation in Demand From Oil Prices
- CAI AV : CA Immobilien 1Q FFO I EU21.8m vs EU16m Y/y; Target Raised
- DTE GY : German Mobile Spectrum Auction Reaches EU1.6b After 11th Round
- DWNI GY : Deutsche Wohnen Capital Increase Price Set at EU21.50
- EOAN GY : E.ON Cut to BBB+ from A- by S&P, Outlook Stable
- ERICB SS : Ericsson Unlikely to Acquire Juniper or Ciena, Citi Says
- LEY FP : Faiveley Transport Targets Sales of EU1.3B in 2017-18
- DEC FP : JCDecaux Files Plan to Buyback Shares at 40 Euros Per Share: AMF
- PTC PL : P. Telecom Board to File Legal Action vs Prior External Auditor
- SRP LN : Serco to Name Centrica Ex-CEO Gardner Chairman, Sky Says
- SOI FP : Soitec Says Refocusing Plan on Core Business Progressing Well
- PC IM : UniCredit CEO Says Counterbid for Pirelli Unlikely: Reuters
- YPSN SW :
>>> Up
*ERICSSON RAISED TO BUY VS NEUTRAL AT CITI
*DIRECT LINE RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*DRILLISCH RAISED TO BUY VS NEUTRAL AT CITI
*LIFE HEALTHCARE GROUP RAISED TO OUTPERFORM AT MACQUARIE
*MEDICLINIC INTERNATIONAL RAISED TO OUTPERFORM AT MACQUARIE
>>> Down
*ALROSA CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*BANCO SANTANDER BRASIL CUT TO UNDERWEIGHT AT BARCLAYS
*BT GROUP CUT TO UNDERPERFORM AT RAYMOND JAMES
*ICAP CUT TO SELL VS HOLD AT NUMIS
*VOESTALPINE AG CUT TO NEUTRAL VS BUY AT CITI
>>> PT Change
>>> Initiation
>>> Call
BN 05/28 04:33 *FRENCH COUR DES COMPTES: STATE TAKES TOO MUCH IN DIVS: ECHOS
French Cour Des Comptes Says Govt Takes Too Much in Divs: Echos
2015-05-28 04:39:37.827 GMT
By David Whitehouse
(Bloomberg) -- France’s state auditor the Cour des Comptes
considers that the government is taking too much in dividends
from its investments in companies such as Air France-KLM and
Engie, Les Echos reports, citing the auditor.
* High short-term returns may damage the long-term interests
of the companies in the view of the Cour des Comptes: Les
Echos.
Link to Company News:{AF FP <Equity> CN <GO>}
For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}
To contact the editor responsible for this story:
David Whitehouse at +33-1-5365-5059 or
dwhitehouse1@bloomberg.net
2015-05-28 04:39:37.827 GMT
By David Whitehouse
(Bloomberg) -- France’s state auditor the Cour des Comptes
considers that the government is taking too much in dividends
from its investments in companies such as Air France-KLM and
Engie, Les Echos reports, citing the auditor.
* High short-term returns may damage the long-term interests
of the companies in the view of the Cour des Comptes: Les
Echos.
Link to Company News:{AF FP <Equity> CN <GO>}
For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}
To contact the editor responsible for this story:
David Whitehouse at +33-1-5365-5059 or
dwhitehouse1@bloomberg.net
Mylan Chairman Sees Novartis, Pfizer as Better Fit for Co.: FD
2015-05-28 04:53:25.624 GMT
By Celeste Perri
(Bloomberg) -- Mylan isn’t for sale to Israeli company
Teva, Het Financieele Dagblad reports, citing interview with
Mylan Chairman Robert Coury.
* Sees a takeover by Pfizer as a possibility, following a
successful Mylan bid for Perrigo
* Says Novartis is also a “fantastic” company
* Says a cooperation with either company would have real
strategic, industrial logic, with “big advantages.”
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Celeste Perri in Amsterdam at +31-20-589-8505 or
cperri@bloomberg.net
To contact the editors responsible for this story:
Vidya Root at +33-1-5365-5018 or
vroot@bloomberg.net
Jurjen van de Pol
2015-05-28 04:53:25.624 GMT
By Celeste Perri
(Bloomberg) -- Mylan isn’t for sale to Israeli company
Teva, Het Financieele Dagblad reports, citing interview with
Mylan Chairman Robert Coury.
* Sees a takeover by Pfizer as a possibility, following a
successful Mylan bid for Perrigo
* Says Novartis is also a “fantastic” company
* Says a cooperation with either company would have real
strategic, industrial logic, with “big advantages.”
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Celeste Perri in Amsterdam at +31-20-589-8505 or
cperri@bloomberg.net
To contact the editors responsible for this story:
Vidya Root at +33-1-5365-5018 or
vroot@bloomberg.net
Jurjen van de Pol
Asian Mid-session Update: AUD falls to 1-month lows on soft CAPEX data; Shanghai retreats as more brokers tighten margins
***Economic Data***
- (AU) AUSTRALIA Q1 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: -4.4% V -2.2%E; 2nd straight decline
- (JP) JAPAN APR RETAIL SALES M/M: 0.4% V 1.1%E; Y/Y: 5.0% V 5.5%E (13-month high)
- (PH) PHILIPPINES Q1 GDP Q/Q: 0.3%V 1.4%E; Y/Y: 5.2% V 6.6%E;
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.7%, S&P/ASX -0.3%, Kospi +0.6%, Shanghai Composite -1.4%, Hang Seng -1.4%, Jun S&P500 -0.1% at 2,120
***Commodities/Fixed Income***
- Jun gold +0.1% at $1,187/oz, Jul crude oil +0.3% at $57.69/brl, Jul copper +0.1% at $2.77/lb
- (US) API Petroleum Inventories: Crude +1.27M v -1.0Me (1st build in 4 weeks); Gasoline -3.6M v -1.2M prior
- SLV: iShares Silver Trust ETF daily holdings rise to 9,862 from 9,857
- JGB: (JP) Japan MoF sells ¥2.30T in 2-yr JGBs; Avg yield: 0.001% v 0.000% prior; bid to cover: 3.83x v 3.90x prior (lowest bid to cover ratio since Nov 2011)
- (CN) PBoC won't conduct open market operations (OMO) in today's session (12th consecutive halt); Net zero position this week (5th consecutive week of neutral position)
- USD/CNY: PBoC sets yuan mid point at 6.1202 v 6.1198 prior setting; weakest Yuan setting since Apr 28th
***Market Focal Points/FX***
- Asian indices are mixed despite the broad-based gains on Wall street. Sentiment in China is particularly fragile, as more brokers followed suit with higher margin requirements on growing worries of runaway credit bubble fuelling the equity market. Shanghai Composite entered midday break at its lows down 1.4% on margin adjustments by Guosen Securities and Southwest Securities among others despite fresh fiscal plans from policymakers. China vice Premier Zhang announced the govt will boost transport investment to stabilize economic growth, while CBRC head noted the regulators could allow extending maturities on construction loans to developers to help keep credit lines in the property market open.
- In Australia, Q1 CAPEX contracted for the 2nd straight quarter and at a much faster pace than anticipated. ABS also posted significant revisions to CAPEX estimates for FY15/16 (A$104.4B, -24.6% y/y and down from A$109.8B prior est) and for FY14/15 (A$149.9B, -8.1% y/y and down from A$152.7B prior est). AUD/USD fell over 70pips in the wake of the data, hitting 1-month lows below 0.7680. Economist with JPMorgan noted the latest data will be more of a drag on GDP than expected but did not go as far as forecasting another RBA rate cut. RBC also said this would probably not be a great surprise to the central bank, and that the latest rate cut was preemptive amid CAPEX deterioration.
- New Zealand cooperative Fonterra reduced its milk payout forecast for the current year by 10c to NZ$4.40/kg, but announced FY15/16 payout target at NZ$5.25/kg and also said dairy prices will likely recover. NZD/USD initially fell 30pips on the announcement to 0.7215 but then reversed all of those losses to trade as high as 0.7270 on forward-looking optimism. Fonterra chairman said rebalancing of supply and demand should take place over the season, leading to sustained price improvement. CEO was also upbeat on recovering demand for dairy products from China and SE Asia.
- BOJ Gov Kuroda reiterated Japan is on track to achieving 2% inflation target in H1, adding there were not asset or stock market bubbles. On currency, Kuroda said the market reflects fundamentals of US being the most robust economy at this time. USD/JPY hit new 12-year highs on the passive stance by the central bank despite the recent parabolic yen selloff, rising some 70pips from the lows above ¥124.20. Separately, Japan retail sales were sharply higher, rising 5% y/y due to the rolloff of consumption tax hike last April. Sequentially, retail trade was up 0.4% - below expectations.
***Equities***
US equities / ADRs:
- RALY: To be acquired by CA technologies at $19.50/shr in cash; valued at $480M; +42.5% afterhours
- UHAL: Reports Q4 $2.43 (ex-items) v $2.17e, R$642.7M v $624Me; -0.4% afterhours
- SMTC: Reports Q1 $0.27 v $0.28e, R$130.1M v $132Me; -7.2% afterhours
- COST: Reports Q3 $1.17 v $1.15e, R$26.1B v $26.6Be
- GOOG: To unveil overhaul of mobile payment products; To launch Android Pay that allows merchants to accept credit card payments from their mobile apps - NY Times
Notable movers by sector:
- Consumer discretionary: Car Inc 699.HK -3.6% (substantial shareholder to dispose shares); Fonterra FCG.NZ -1.2% (cuts milk payout forecast)
- Financials: Changjiang Securities 000783.CN -2.5% , Guosen Securities 002736.CN -0.4%, Southwest Securities 600369.CN -1.8%, China Merchants Securities 600999.CN -1.9% (brokers to tighten margin lending); Sunac China Holdings 1918.HK -3.7%(terminates acquisition of Kaisa); China Real Estate Corp 000736.CN -5.9% (clarification on restructuring); Mizuho Financial Group 8411.JP +5.5% (GE to pursue Japan segment)
- Industrials: Zoomlion Heavy Industry Science and Technology 000157.CN +8.4% (approval to open financial business); JFE Holdings 5411.JP +0.6%, IHI Corp 7013.JP +3.4% (jv awarded order); Sany Heavy 600031.CN +6.8% (to sell phones); Jinzhou Port +10.0% (China to boost transport development)
- Materials: Fortescue Metals Group FMG.AU +0.9% (CEO no interest to sell stake); New Hope Corporation NHC.AU -1.0% (Q3 results); Mirabela MBN.AU -3.9% (on track for guidance)
- Utilities: Kyushu Electric Power Co 9508.JP +1.4% (restart plant); Chubu Electric Power Co 9502.JP +1.6% (jv to be largest buyer of LNG)
- Energy: AGL Energy Ltd AGL.AU -0.6% (potential bid); China Power International 2380.HK +5.0% (to dispose shares in Shanghai Power)
- Healthcare: Ain Pharmaciez Inc 9627.JP +12.3% (FY14/15 results)