TheChek News Flow

EI Towers issued the following press release on 2 April:

With reference to the press release issued last 27 March, with which the Company disclosed that last 26 March Consob, pursuant to article 102, sub-section 4, TUF, asked the offeror for supplementary information and informed it of the suspension of the terms of the preliminary investigation, the Company announces that on April 1 Consob (pursuant to art. 10 bis, Law 241, August 7, 1990 and art. 12 of the Consob General Rules on Administrative Proceedings, approved by resolution no. 18388 dated November 28, 2012), informed the Company, among other things, that:

(i) in light of the new fact represented by the official news release of the Ministry of the Economy and the Treasury no. 73 dated 28 March last, after the formalisation of the Offer and also after the clarifications provided by EI Tower with the press release dated 25 March last, the clarification by the current controlling shareholder RAI with the news release of 31 March last “of its intention not to tender its shares and, in any case, of the need to maintain a 51% stake in the share capital of Rai Way, makes it impossible at the present time for the “condition” to be satisfied of reaching the minimum threshold of 66.67%, on which the effectiveness of the Offer, to which the application to approve the Document refers, is conditional as established, amongst other things, by the Offeror. Such non feasibility also applies to any condition which has the objective of achieving a controlling stake. The non feasibility of the aforementioned “condition”, to which the entire industrial plan underpinning the extraordinary operation is connected - in consideration of the fact that to date the Offeror has not manifested its intention to eliminate and/or amend it - represents an impediment to the acceptance of the application to approve the Offer Document.”

(ii) EI Towers has the right to present written comments, accompanied where necessary by documents, within the term of ten days;

(iii) the terms for the conclusion of the proceeding, previously suspended last 26 March, are interrupted and will restart on the date of presentation of the comments or, if they are not presented, from the expiry of the term of ten days provided for their presentation.

EI Towers will submit to Consob, within the above-mentioned term of ten days, its comments and decisions, taking into due account the new facts occurred after the promotion of the Offer.

The activist hedge fund Elliott Advisers has added to its voting rights in the UK-listed investment trust Alliance Trust from 5.07% to 9.94%. The stock exchange announcement from Alliance Trust of 1 April disclosing the transaction can be viewed here.

Background:

Elliott Advisers has proposed three nominees for election to the Alliance Trust board. As previously reported, Elliott has also criticized governance and costs at Alliance Trust.

Dollar shock, policy shock (25 rate cuts), EPS shock. 3rd consecutive quarter of loss for bonds & commodities, 3rd consecutive gain for US dollar. Extension of Max Liquidity, Minimum Growth narrative in Q1 allowed risk assets to rally modestly.

Q1 AA total returns: stocks +2.4%, bonds -1.7%, commodities -4.9%, US dollar +9.0%. Stocks nonetheless extremely resilient, most particular those relating to Silicon Valley's boom: the market cap of US Tech & Biotech is now $4.2 trillion, thus exceeding that of the entire Euro-area ($4.1 trillion) and also that of all Emerging Markets ($3.9 trillion).

...expect some reversal in US dollar (watch DXY 95), bear market rally in commodities, resources, EM. Volatility (or cash, gold) remains "buy in dip" trade in '15. Biggest Q2 call: US GDP Big (>3%)...Fed hikes get priced-in; small (3rd consecutive quarter not much above <2%)..."secular stagnation" back in play. Either

way volatility wins.

Europe GDP probably outpaced US GDP in Q1. EU positioning, policy, profit cycle all bullish. China stocks surging as commodities collapse shows bull case for China is liquidity not growth. Has rallied hard but global capital likely to continue to frontrun China easing.

Good news? Not necessarily to Takahide Kiuchi, the leading voice against the Bank of Japan’s whatever-it-takes approach to monetary easing. Since late last year, the central bank has voted 8-1 every month to continue its policy, and each time, Mr. Kiuchi has been the lone dissenting board member.

The fear of the former Nomura Securities chief economist is that a bond market where the central bank has such a big role could invite dangerous volatility. He also believes excessively loose monetary policy could lead to bubbles forming.

Saturday marks two years since Bank of Japan Gov. Haruhiko Kuroda introduced his first “bazooka” of monetary easing, turning Japan into a laboratory for whether radical steps to force prices to rise can succeed. Mr. Kuroda says that despite some bumps along the way, Japan is on track to achieve 2% inflation.

But Mr. Kiuchi has opposed further monetary easing, he said on March 5, because “the positive effects that could be brought about by the expansion would not be worth the accompanying costs and side effects.”

As the market’s main buyer of bonds, the Bank of Japan’s heavy hand could be the main driver of low interest rates, according to Mr. Kiuchi. Separate from potential overheating in stocks or property, he fears a sudden collapse of confidence in the easing policy or the health of the government-bond market that would send interest rates soaring.

Mr. Kiuchi’s lonely dissent is rooted in a view of the bank’s history. Back in Japan’s bubble days a quarter-century ago, critics said the bank kept interest rates too low for too long, then popped the bubble too abruptly. The current BOJ system, created by a 1998 law, is partly meant to prevent such mistakes by giving a stronger role to a governing board of people drawn from various backgrounds rather than have policy set by career central-bank officials.

For now, the government is paying less than 0.4% interest on 10-year bonds, but with falling liquidity—a potential result of the BOJ’s dominance in the government-bond market--“the market would become less resilient against negative shocks and thereby become unstable more easily,” Mr. Kiuichi said in the March speech.

He may be a lone dissident for now, but his views reflect growing discomfort about what Mr. Kuroda has done. If the BOJ chief feels compelled to ease even more later this year, as many economists expect, the Kuroda-Kiuchi clash could be a harbinger of a broader debate.

At the core of the clash is a differing view of Japan’s current state, in which prices seem to have stabilized after more than a decade of deflation but aren’t rising. Mr. Kiuchi thinks trying too hard to go further could cause distortions and deflect attention from structural changes.

Mr. Kuroda, backed by Prime Minister Shinzo Abe, says that only by firmly getting 2% inflation to take hold can Japan see a true revival. “Overcoming deflation itself will contribute to raising Japan’s growth potential,” Mr. Kuroda said last month. “People will start to take more risks and invest in new ventures.”

Mr. Kuroda has gunned for an element of surprise with aggressive steps and a public-relations campaign emphasizing his policy’s effectiveness. Mr. Kiuchi’s monthly dissent tends to undermine that message.

The 51-year-old Mr. Kiuchi joined the central bank’s nine-member governing board in July 2012. Former colleagues at Nomura Securities describe the classical-music buff as a straight arrow who spoke politely even to junior staffers and frowned on the lowbrow humor sometimes heard on brokerage floors.

Kohei Otsuka, a member of parliament who helped select Mr. Kiuchi for the BOJ, said the economist wasn’t the type to flatter clients. “He’s not a sales-pitch kind of guy,” said Mr. Otsuka.

When Mr. Kiuchi arrived at the central bank, he was viewed as eager to expand monetary stimulus, and he supported Mr. Kuroda’s initial bazooka two years ago.

But from the start, Mr. Kiuchi couched his support for stimulus with caution about how much it could achieve and wariness about side effects. He said in 2013 that monetary easing and the resulting drop in the yen wouldn’t necessarily cause a sharp increase in Japanese exports, a prediction that has mostly been borne out so far.

Inflation initially revved up but has fallen back in recent months, hitting zero in February. That is partly because of lower oil prices, but also because consumer demand is weak.

To Mr. Kuroda, this was a reason to ramp up his policy, which he did on Oct. 31 by raising the central bank’s government-bond purchases by ¥30 trillion to ¥80 trillion ($670 billion). Three colleagues joined Mr. Kiuchi in voting against the October move. Those three later backed off and said they would support Mr. Kuroda for now, leaving Mr. Kiuchi as the sole objector.

To Mr. Kiuchi’s concerns, the Kuroda camp responds that as long as the Bank of Japan is buying debt at an aggressive pace, it would be hard for bond yields to get out of control. “I don’t see any circumstances that would cause damage,” said the bank’s deputy governor, Hiroshi Nakaso, at a news conference last month.

But people familiar with Mr. Kiuchi’s thinking said he feels he must play the role of stopgap to discourage further loosening. They said he has told visitors: “I’ll say what I want to say.”