Germany Chemicals Industry Group (VCI): Raises 2015 sales growth forecast to +0.5% vs -0.5% prior; cites weaker euro
- Guides 2015 chemicals production +1.5%, prices approx -2% y/y
- H1 Production +1%, chemical sales +0.5%, producer prices -3%
- The industry continues to benefit from the weak euro, but notes lack of sustained momentum for global economy.
LG Group says rumor of Google's plan to buy LG Electronics stake 'absolutely not true'
LG Group has denied that the rumor that California-based tech giant Google [NASDAQ:GOOGL] plans to buy a stake in its electronics unit LG Electronics [KRX:066570], Yonhap News reported.
The report cited the LG Group’s response as saying that the rumor is absolute not true.
LG Electronics shares jumped in the morning trading session on a market rumor that Google is planning to buy a 35% stake in the company. The rumored stake purchase would make Google a larger shareholder than LG Group in the electronics firm, as reported.
The report didn’t say where the rumor comes from.
Yonhap News
European E&P stocks appear to be trading at significant discounts to NAVs, reflecting uncertain crude price trajectory and balance sheets, and the subsequent impact on the development timelines of pre-FID projects. This
report investigates what is priced into current prices in terms of key projects assuming a more conservative longer-term oil price of $75/bbl (vs Credit Suisse at $85/bbl l-t). We think the risk/reward is starting to look favourable for Africa Oil and Tullow Oil (both upgraded to Outperform from Neutral). We downgrade Ophir to Underperform from Neutral because we are sceptical about timelines for EG FLNG in a tough LNG environment. Lundin has the least uncertainty around its portfolio, but is fairly valued. Genel has potentially the biggest upside, but much will hinge on export payments. Our target price changes reflect mostly the rolling forward of NAVs, and reducing risking in some instances as we defer project spend to manage balance sheets.
■ Africa Oil (O/P from N): South Lokichar Basin has a competitive breakeven and, at SKr14/sh, the shares are pricing in a three-year delay to guidance for first oil in ~2020 at $75/bbl long term and no further resource upgrades.
■ Tullow Oil (O/P from N): Kenya and Uganda are key pre-FID projects. A share price of 285p/sh implies $70/bbl l-t, and a three-year delay to a Kenyan/Ugandan development, which we believe is too conservative.
■ Genel (O/P): MBB is a strategic project, but the timeline for FID is uncertain against a tough macro print. Assuming $75/bbl, the current share price assumes MBB will not happen. Export payments will be a key catalyst.
■ Lundin (N): Johan Sverdrup is the key value driver, and operator STL is using its A-team to develop this field. In the context of our more conservative forecast for most of its development projects, which are post-FID, we look at whether Lundin is attractive at $75/bbl Brent – and it appears fairly valued.
■ Det Norske (N): Execution of Ivar Aasen is important, but Johan Sverdrup accounts for 79% of our NAV. The market is currently pricing in $72/bbl for Det Norske, assuming Johan Sverdrup reaches first oil in 2020.
■ Ophir (U/P from N): Removing EG FLNG (a more speculative project) from its portfolio, the value of Ophir is 93p/sh at $75/bbl.
■ Cairn (U/P): Senegal is the key pre-FID project for Cairn, and at 174p, the market is pricing $81/bbl, assuming FID in 2018, and first oil in 2022.
Ofcom's recently published its Strategy Review of Digital Communications – Discussion document. There has been widespread UK press coverage of the decision by Ofcom to include in the Review the idea of a Structural Separation of Openreach, BT's local access network, as one of a range of options. Ofcom Chief Executive Sharon White confirmed that Ofcom would not have included the option in the strategy document if it wasn’t a serious option.
Press reports describe Ofcom considering whether splitting Openreach from BT may be the best way to improve competition in the sector and follows complaints that the network's performance has often been poor. Sky's public reaction to the news was typical, calling on Ofcom to ask the Competition and Markets Authority to begin a full competition enquiry.
The Strategy review is about much more than just Structural Separation
Ofcom's review is the first in 10 years and is considering how regulation should be shaped
for the next 10 years. It outlines four challenges for regulation:
■ How to encourage Investment and innovation and widespread availability.
■ How to encourage a competitive market
■ Empowering consumers and businesses to take advantage of competitive markets
■ Regulation where necessary, but to deregulate elsewhere
Sage, the UK accounting software company that is racing to reshape its business to compete with web-based rivals, has reassured analysts that it is set to meet full-year earnings guidance.
In a quarterly trading update, the FTSE 100 business said it was confident of achieving a 28 per cent operating margin this financial year, with at least 6 per cent revenue growth.
Such words of reassurance are important for investors in Sage, whose new chief executive Stephen Kelly, who took the top job at Sage last November, has vowed to overhaul the Newcastle based business,
Somewhat like a company that still sells music CDs in the face of competition from Spotify and iTunes, Sage's traditional business of installing software in customers' offices is threatened by nimbler start-ups whose products are web and so-called "cloud" based.
Sage is moving with the times as fast as possible, however. Its online cloud-based accounting and payroll system Sage One had 86,000 paying customers at the end of its last financial year, although this compares with over 1m customers who are still using its traditional, on-premise products.
Mr Kelly has launched a plan to attract millions of new customers with a mobile accounting apps that could allow business owners to do their books on their smartphones.
For the first nine months of this year, Sage said on Wednesday, group revenue increased 6 per cent on an organic basis.
The third quarter growth was 7.5 per cent, year on year, although this was flattered by relatively weak trading in the comparable period last year.
Goldman’s Currie Sees Gold Dropping Below $1,000 on Dollar (2)
2015-07-22 06:04:40.825 GMT
(Updates price in sixth paragraph.)
By Debarati Roy
(Bloomberg) -- Goldman Sachs Group Inc.’s Jeffrey Currie
says the worst is yet to come for gold and that prices could
fall below $1,000 an ounce for the first time since 2009.
“With the more positive outlook on the dollar, and with
debasement risk starting to fade, the demand to use gold as a
diversifying asset against the U.S. dollar becomes less and less
important,” said Currie, who told investors to sell in 2013
before the metal’s biggest collapse in three decades.
Prices this week slumped to the lowest since 2010. The rout
is deepening amid mounting speculation that U.S. interest rates
will climb this year, curbing the appeal of bullion because it
doesn’t pay interest like competing assets. At the same time,
China bought less of the metal than analysts were expecting, and
the dollar keeps getting stronger.
Currie isn’t alone in predicting more declines. ABN Amro
Bank NV’s Georgette Boele and Robin Bhar of Societe Generale AG
say bullion will approach $1,000 by December. Money managers are
holding the smallest net-bullish bet on gold since the U.S.
government data begins in 2006. The metal has led a retreat
among raw materials, as the Bloomberg Commodity Index this week
fell to a 13-year low.
“The risks are clearly skewed to the downside in this
environment,” Currie, Goldman’s New York-based head of
commodities research, said in a telephone interview on Tuesday.
“There is a probability that the market trades below $1,000
this year given our broader commodity view.”
Bullion Drops
Gold for immediate delivery fell 0.8 percent to $1,092.10
an ounce at 2:03 p.m. in Singapore, Bloomberg generic pricing
showed. The metal retreated to $1,086.18 on Monday, the lowest
level since March 2010.
More than $4.4 billion has been erased from the value of
exchange-traded products backed by gold since June 30. Holdings
are the smallest since 2009, data compiled by Bloomberg show.
“In longer term, we definitely like playing this market on
the short side,” Currie said. “We think we are in a structural
bear market, not only in gold, but across the commodity complex,
as the individual commodity stories are reinforcing to one
another, creating a negative feedback loop.”
For Related News and Information:
Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting
Why Buy Gold Baffles Investors as Top Forecaster Sees More Pain
Gold Speculators Least Bullish on Record as Rate Rise Approaches
Top Commodity Stories:CTOP<GO>
Top Metals & Mining: METT <GO>
To contact the reporter on this story:
Debarati Roy in New York at +1-212-617-5307 or
droy5@bloomberg.net
To contact the editors responsible for this story:
Millie Munshi at +1-212-617-5543 or
mmunshi@bloomberg.net
Susan Warren
2015-07-22 06:04:40.825 GMT
(Updates price in sixth paragraph.)
By Debarati Roy
(Bloomberg) -- Goldman Sachs Group Inc.’s Jeffrey Currie
says the worst is yet to come for gold and that prices could
fall below $1,000 an ounce for the first time since 2009.
“With the more positive outlook on the dollar, and with
debasement risk starting to fade, the demand to use gold as a
diversifying asset against the U.S. dollar becomes less and less
important,” said Currie, who told investors to sell in 2013
before the metal’s biggest collapse in three decades.
Prices this week slumped to the lowest since 2010. The rout
is deepening amid mounting speculation that U.S. interest rates
will climb this year, curbing the appeal of bullion because it
doesn’t pay interest like competing assets. At the same time,
China bought less of the metal than analysts were expecting, and
the dollar keeps getting stronger.
Currie isn’t alone in predicting more declines. ABN Amro
Bank NV’s Georgette Boele and Robin Bhar of Societe Generale AG
say bullion will approach $1,000 by December. Money managers are
holding the smallest net-bullish bet on gold since the U.S.
government data begins in 2006. The metal has led a retreat
among raw materials, as the Bloomberg Commodity Index this week
fell to a 13-year low.
“The risks are clearly skewed to the downside in this
environment,” Currie, Goldman’s New York-based head of
commodities research, said in a telephone interview on Tuesday.
“There is a probability that the market trades below $1,000
this year given our broader commodity view.”
Bullion Drops
Gold for immediate delivery fell 0.8 percent to $1,092.10
an ounce at 2:03 p.m. in Singapore, Bloomberg generic pricing
showed. The metal retreated to $1,086.18 on Monday, the lowest
level since March 2010.
More than $4.4 billion has been erased from the value of
exchange-traded products backed by gold since June 30. Holdings
are the smallest since 2009, data compiled by Bloomberg show.
“In longer term, we definitely like playing this market on
the short side,” Currie said. “We think we are in a structural
bear market, not only in gold, but across the commodity complex,
as the individual commodity stories are reinforcing to one
another, creating a negative feedback loop.”
For Related News and Information:
Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting
Why Buy Gold Baffles Investors as Top Forecaster Sees More Pain
Gold Speculators Least Bullish on Record as Rate Rise Approaches
Top Commodity Stories:CTOP<GO>
Top Metals & Mining: METT <GO>
To contact the reporter on this story:
Debarati Roy in New York at +1-212-617-5307 or
droy5@bloomberg.net
To contact the editors responsible for this story:
Millie Munshi at +1-212-617-5543 or
mmunshi@bloomberg.net
Susan Warren
Dow-1% S&P-0.42% Nasdaq-0.21% Russell-0.49% VIX 12.22
US MArket Closed lower. Tech was holding before AAPL earnings. United Technologies fell 7.1% after below-consensus revenue and lowered earnings guidance for the year overshadowed an earnings beat. the energy sector (+0.1%) tried to resist the market-wide pressure, but could only eke out a slim gain while crude oil rose 0.9% to $50.87/bbl. Also of note, the top-weighted technology sector (-0.5%) settled just behind the broader market. health care (-0.4%) and consumer staples (-0.3%) settled near the broader market while telecom services (-1.7%) and utilities (-1.0%) underperformed throughout the session. Apple beats by $0.04, reports revs in-line, misses iPhone estimates; guides Q4 revs below consensus, margins in-line, stock -6.8% after hours...FCC Poised to Approve AT&T's $49 Billion Acquisition of DirecTV...Volume in line with average at 700mil shares...US After Hours ISRG +11.7%, CMG +2.1%, GPRO +1.3%, AAPL -6.6%, MSFT -4%, YHOO -1.5% following earnings/guidance...Asian equity markets are broadly lower, tracking weakness in US indices along with disappointing set of earnings from some of the tech heavyweights afterhours. Shares of Apple and Microsoft were down 7% and 4% respectively, weighing on US futures. Front month S&P e-minis are down another 8pts or about 0.4% in electronic trade, while Dax, CAC, and FTSE futures are down about 0.2% heading toward European open. China Conference Board leading index showed another marginal increase, and resident economist noted growth continues to be driven by bank credit rather than stronger performance in the real economy, justifying "fragile" economic outlook. In that vein, China economist Ba Shusong warned annual GDP could slow to 6.0-6.5% in next 5 years, since the recent growth drivers of investment and exports were not sustainable. Ba further called for a more proactive fiscal policy approach.
Nikkei -1.02% Hang Seng -1.14% Shanghai -0.73%
Eur$ 1.0935 JPY 123.66 GBP 1.5568 EURCHF 1.0480 RUB $57.0250 WTI $50.19 (-1.32%)
S&P -0.39% EuroStoxx-0.25% Dax -0.34% SMI +0.01%
Macro :
- Goldman Raises 3-Mo. View on EU Stocks, Cuts View on U.S. Stocks
Keep an ey on :
- ABBN VX : ABB in Cevian’s Sights May Result in Push to Break Up: Real M&A
- ATLN VX : Actelion CEO seeks to defuse takeover talk - Reuters Link : http://reut.rs/1IjOCIa
- ADP FP : French Government to Sell Nice Airport Stake in 2016: Les Echos
- AFR LN : Afren Postpones EGM to Discuss Revised Restructuring Plan
- AIR FP : Airbus China Plant to Deliver A330 Jet in 2018: Xinhua
- AREVA FP : Areva Reactors Unit Now Valued at About EU2.7B, Figaro Says
- BAR BB : Barco 1H Adj. Ebitda EU40.5m; Doesn’t Compare With Est. EU57.9m
- BBVA SM : BBVA Chairman Tells AE He Will Gradually Scale Down Role
- BLT LN : As Commodity Rout Deepens, BHP Output Cuts Seen Flagging Bottom -->-1.55% in Australia
- BMPS IM : Speculation that top shareholders may not renew agreement with the company - Italian Press
- BT/ LN : Sky Tells Regulator BT Purchase of EE Would Hurt Competition
- AM FP : Dassault Aviation to Make Three Rafales a Month, La Tribune Says
- DECB BB : Deceuninck 1H Net EU4.75 Mln; Est. EU3.3 Mln; Confirms Forecast
- GET FP : Eurotunnel 2Q Rev. Rises 9% to EU343.9m vs EU316.2m Restated
- FCT IM : Fincantieri Order Book EU16b; Sees Margins Still Affected
- BAER VX : Julius Baer CEO Collardi Says Strong Franc May Fuel M&A: L’Agefi
- SDF GY : K+S rejects Potash Corp's new attempt at takeover talks - Reuters Link : http://reut.rs/1Mn6tih
- KNEBV FH : Toshiba Completes Sale of 24.2m Class-B Shares in Kone
- LONN VX : Lonza 1H Sales CHF1.91b, Est. CHF1.85b; Reiterates 2015 Outlook
- NOK1V FH : Nokia Said to Debut Virtual Reality Product Next Wk: Re/code
- RDSA NA : Royal Dutch Shell Cut to AA- From AA by S&P, Outlook Negative
- S32 LN : South32 Takes $1.3b Impairment Charge on Manganese Assets
- SSABA SS : SSAB 2Q Oper. Profit Ex-Items Misses Est.; Sales In Line
- SAP GY : SAP CFO Not Interested in Buybacks, FT Says
- SCHP VX : Schindler EGM Proposal Is Illegal, Swiss Takeover Board Says
- SIE GY : Siemens CEO Sees Big Health-Care, Infrastructure Demand in Iran
- SIK VX : Sika’s Urs Burkard Says Founding Family to Fulfill Contract: T-A
- LOCAL FP : Solocal Cuts 2015 Internet Growth Forecast; Net to Be Stable
- TEF SM : Telefonica Fined EU6M by CNMC Regulator
- TEMN VX : Temenos 2Q Non-IFRS Rev. $132.4m vs Est. $128.2m
- TIE1V FH : Tieto 2Q Ebit Ex-Items Profit Beats Est.; Outlook Unchanged
- VATT SS : Vattenfall's sale of its German brown coal operations could be delayed -Dagens Industri
>>> Up
*ARYZTA RAISED TO BUY VS NEUTRAL AT GOLDMAN
*BOUYGUES RAISED TO BUY VS HOLD AT JEFFERIES
*HUGO BOSS RAISED TO OUTPERFORM AT RBC CAPITAL
*MITCHELLS & BUTLERS RAISED TO ADD VS HOLD AT NUMIS
*PREMIER OIL RAISED TO BUY VS ADD AT NUMIS
*TATE & LYLE RAISED TO NEUTRAL VS SELL AT GOLDMAN
>>> Down
*AUTOLIV CUT TO NEUTRAL VS BUY AT BOFA
*BANK OF IRELAND RAISED TO BUY VS NEUTRAL AT NOMURA
*BORDERS AND SOUTHERN CUT TO HOLD VS BUY AT NUMIS
*ENQUEST CUT TO ADD VS BUY AT NUMIS
*FAROE PETROLEUM CUT TO HOLD VS BUY AT NUMIS
*RENTOKIL CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*SAIPEM CUT TO UNDERPERFORM VS NEUTRAL AT MEDIOBANCA
*SARTORIUS STEDIM BIOTECH CUT TO HOLD VS BUY AT SOCGEN
*STMICROELECTRONICS CUT TO NEUTRAL VS BUY AT CITI
*VALEO CUT TO UNDEPERFORM VS NEUTRAL AT BOFA
>>> PT Change
>>> Initiation
*AXIARE RATED NEW BUY AT CITI, PT EU13.90
*BENI STABILI RATED NEW NEUTRAL AT CITI, PT EU0.76
*BRITISH LAND RATED NEW BUY AT CITI, PT 1,096P
*CAIRN ENERGY RESUMED HOLD AT NUMIS, PT 175P
*CAPITAL & COUNTIES RATED NEW BUY AT CITI, PT 591P
*DEUTSCHE ANNINGTON RATED NEW BUY AT CITI, PT EU33.6
*DEUTSCHE WOHNEN RATED NEW BUY AT CITI, PT EU29.7
*DERWENT LONDON RATED NEW BUY AT CITI, PT 4,710P
*FONCIERE DES REGIONS RATED NEW NEUTRAL AT CITI, PT EU87.80
*GECINA RATED NEW NEUTRAL AT CITI, PT EU126
*GRAND CITY PROPERTIES RATED NEW BUY AT CITI, PT EU20.5
*GREAT PORTLAND ESTATES RATED NEW BUY AT CITI, PT 1,038P
*HAMMERSON RATED NEW BUY AT CITI, PT 800P
*ICADE RATED NEW BUY AT CITI, PT EU83.90
*INTU PROPERTIES RATED NEW BUY AT CITI, PT 395P
*KLEPIERRE RATED NEW SELL AT CITI, PT EU36.90
*LAND SECURITIES RATED NEW BUY AT CITI, PT 1,596P
*MERLIN ENTERTAINMENTS RATED NEW NEUTRAL AT UBS, PT 485P
*NATIXIS REINSTATED NEUTRAL AT CREDIT SUISSE, PT EU7.68
*QUINTAIN RATED NEW BUY AT CITI, PT 160P
*SEGRO RATED NEW BUY AT CITI, PT 524P
*SHAFTESBURY RATED NEW BUY AT CITI, PT 1,169P
*UNIBAIL-RODAMCO RATED NEW SELL AT CITI, PT EU200.3
>>> Call
Actelion CEO seeks to defuse takeover talk Link : http://reut.rs/1IjOCIa
ZURICH, July 22 (Reuters) - Actelion Chief Executive Jean-Paul Clozel said he was determined to keep the Swiss biotech company independent, batting away speculation it could become the next takeover target for U.S. firms seeking lower taxes by relocating abroad.
Europe's biggest biotech company has been rumoured as a potential tax inversion target and its strong pipeline of drugs to treat pulmonary arterial hypertension (PAH) could also attract bidders.
Dublin-based Shire Plc last week became the latest drugmaker to be snapped up as part of this trend in a $55 billion deal with U.S. rival AbbVie Inc.
But Clozel, who co-founded Actelion in 1997, said Actelion would be better off as an independent concern, a view he said investors shared.
"Actelion - having a reasonable size, a culture of innovation and science - has the best chance to grow in a healthy way as an independent company and this benefits the shareholders," Clozel said in an interview.
"Our shareholders are really supporting us in the present situation."
Helvea analyst Olav Zilian said expectations of a tax-driven takeover were already priced into Actelion's shares, which have shot up 45 percent so far this year making it the best performer on the Swiss blue-chip index.
"If there's no bid, there will be pressure on the share price," said Zilian, who has a 'hold' rating on the company.
The shares were up 2.4 percent at 0921 GMT, giving the firm a market capitalisation of around 13.5 billion Swiss francs ($15.02 billion). The European healthcare sector was up 0.4 percent.
Zilian said Actelion's size could restrict the number of potential U.S. suitors since the value of the target company post-deal must be between 20 and 40 percent of the combined business to benefit from lower taxes.
He said U.S. biotechs Amgen and Gilead would be too large, while Celgene and Biogen Idec were very different businesses to Actelion and would be a poor fit.
Under pressure from the European Union, Switzerland is also reforming its corporate tax laws, which could act as a further deterrent to any potential bidders.
HEALTHY PIPELINE
While a tax inversion deal with a U.S. firm may be tricky to execute, traders said Actelion could be attractive to other European drugmakers looking to replenish their pipelines and pick up specialist expertise.
"Actelion is the answer to AstraZeneca's chronic pipeline shortage, GlaxoSmithKline's need for expansion and would be an easy morsel for Roche or Novartis to digest," Hobart Capital Markets trader Justin Haque said.
The Swiss biotech's prospects have brightened over the past year after it won approval in the United States and Europe for Opsumit, a treatment for PAH which is a follow-on to its current flagship product, Tracleer.
A strong launch of Opsumit, which beat expectations with sales of 38 million francs in the second quarter, has reassured investors that the company's sales and growth prospects are intact, despite the loss of exclusivity on Tracleer from 2015.
"We are really very confident that Opsumit is not only going to be replacing but also topping Tracleer, but we must not be too impatient, it will take time," Clozel said.
Buoyed by Opsumit's launch, Actelion raised its full-year outlook and now expects core earnings growth in at least a mid-teens percentage range in 2014. In February, it expected low single-digit percentage growth.
Core earnings rose to 233 million Swiss francs in the second quarter, lifted by strong product sales and rebate reversals and well ahead of the 171 million average forecast in a Reuters poll.
Strong data from another PAH drug called Selexipag in June have also boosted optimism about further earnings. Clozel said Actelion hoped to file the drug for approval with regulators at the end of this year or the start of next.