(BofA-ML) The FLow Show : Je Suis Bullish

* Weekly flows: run-up to ECB was "risk-off" with outflows from equities ($4.9bn), but strong inflows to both bond funds ($5.6bn) & precious metals ($2.0bn)
* Front-running of ECB: biggest European equity inflows since Jun’14 ($2.3bn) as buying momentum accelerates from deep Oct’14 lows (Chart 1)
* Largest precious metals inflows since Aug’11 ($2.0bn – Chart 2): Gold the sole Jan conviction trade following brutal break of Swiss franc-euro peg
* Buyers’ strike in beta-assets: EM equity, EM debt & HY bonds remain out-offavor, combining for $50bn of redemptions over the past 10 weeks
* Bond Bulls acc to flows: 57th straight weeks of inflows to IG bond funds…the world's crowded trade (Chart 3)
* Trading Rules worked: risk has rallied since our Bull & Bear index flashed "buy" on Jan 7th, but mostly stocks: ACWI up 307bp; Europe up 926bps; EM up 601bps; Japan up 218bps, US up 187bps

>>> Asset Class Flows
* Equities: $4.9bn outflows (all outflows via mutual funds)
* Bonds: $5.6bn inflows (3 straight weeks) (Table 1)
* Precious metals: $2.0bn inflows (largest weekly inflows since Aug’11)

>>> Equity Flows
* Europe: strongest inflows ($2.3bn) since Jun’14; momentum strong
* EM: 10 straight weeks of redemptions ($3.1bn) (Table 2)
* US: $5.0bn outflows (outflows from both ETF’s and mutual funds)
* Japan: chunky $1.2bn inflows

>>> Fixed Income Flows
* 57 straight weeks of inflows to IG bond funds ($5.4bn)
* HY bond funds see $0.9bn outflows (outflows in 7 out of past 8 weeks)
* 7 straight weeks of outflows from EM debt funds ($1.2bn)
* 28 straight weeks of outflows from bank loan funds ($0.8bn) (Chart 4)
* 18 straight weeks of inflows to muni funds ($0.8bn)
* 14 straight weeks of inflows to MBS funds ($0.6bn)
* $1.9bn inflows to govt/tsy funds

>>> What to look at today - 23rd of January 2015

Dow+1,48% S&P+1,53% NAsdaq+1,78% Russell+2,07%
US Market closed much higher on ECB QE annoucement ($60bil/month till sept. 2016) EUR$ traded down to 1.1334. Crude was down during the session but bounce back after the news of the death of King Abdullah of Saudi Arabia. Tech, Financials, Industrials closed ahead of the broader market, cyclical sectors, defensively-oriented groups spent the day behind the market. Telecom services (-0.6%) and utilities (-0.4%) could not stay out of the red while consumer staples (+1.1%) and health care (+1.3%) ended in the green...Volume were in line with average with 871mil shares...US After Hours INFN +11.5%, MXIM +5.4%, SBUX +4.1%, KLAC -5.1%, AMID -4.2%, ISRG -2.6%, CE -1.6% following earnings/guidance...Upbeat sentiment permeating European and US markets in the wake of a more meaningful ECB QE announcement than anticipated has fed through to Asia, where China is leading the way.China flash HSBC manufacturing PMI portends a contraction for the 2nd straight month but just barely, coming in 3 ticks above consensus and 2 ticks away from the the expansion threshold. HSBC economist noted marginal improvement in domestic demand, but still saw labor market sufficiently weak, recommending further monetary easing. To that end, PBoC said it would maintain prudent monetary policy through timely fine-tuning only a day after its first reverse repo operation at lower offering yield in nearly a year. Separately, China Academy of Sciences forecasted 2015 GDP at 7.2%, down from 7.4% in 2014, even though trade surplus was expected to improve.In Japan, Jan manufacturing PMI continued on expansion track, edging expectations by a decimal point above 52 level. Markit economist noted improvement in operating conditions for Japanese manufacturers, with production and new orders remaining in robust growth territory...Crude Oil spiked up almost 3% to near $47.80 (BAck to $47 now) after confirmed death of Saudi Arabia's King Adbullah despite the well-articulated succession plan. Analysts noted that the rally could reflect some added uncertainty on output agenda, particularly if the Kingdom decides to embark on some public spending to help smooth over the transition.
Nikkei +1.05% Hang Seng +1.10% Shanghai +0.05%

RUB $63.30 RUB €71.70 WTI $47.02 Brent $49.37 CHF 0.8725 EURCHF 0.9893

Eur$ 1.1338 S&P -0.01% EuroStoxx +0.99% Dax +0.61% SMI +0.35%

Macro :
- HSBC China Jan. Flash Manufacturing PMI 49.8; Est. 49.5
- ECB QE’s Economic Impact Uncertain, EUR Weakness May Help: ING
- ECB QE Adds Yuan Depreciation Pressure Against USD: PBOC Pan
- Austria’s Nowotny Says Risks From ECB’s QE ‘Not Insignificant’
- PBOC Says ECB Bond Buying Program to Help China Exports: CCTV
- WTI Crude Futures Rise $1.33 to $47.64/B After Saudi King Dies
- S&P Acts on Five Oil Field Services Companies on Oil Price Drop (Petrofac, CGG, PGS, SDRL, Expro)

Keep an eye on :
- ACS SM : *GOLDMAN, BOAML TO PARTICIPATE IN EU2B ACS LOAN: CONFIDENCIAL
- ALV GY / CS FP : Moody’s Warn European QE Credit Negative For Insurers
- BP/ LN : BP CEO Dudley Says Oil Prices May Stay Low for 3 Years: BBC
- BSLN SW : Astellas/Basilea Drug Wins FDA Panel Backing: FierceBiotech (+5% pre-market)
- CGG FP : outlook negative, cut to B from B+
- CMB BB : Cie Maritime Belge Doesn’t See Sustainable Rates; 4Q Loss $13.9m
- DAE SW : Daetwyler FY Sales Drop 9.4% to Chf1.25b on Sale of Unit
- EDF FP : EDF Said to Weigh Options for $17 Billion Electricity Grid RTE
- GSK LN : Glaxo Ships First Ebola Vaccine to Liberia for Use in Trials
- GSZ FP : GDF Suez Delays Restart of Belgium’s Doel 3, Tihange 2 to July 1
- MC FP : LVMH’s PE Unit to Invest in China Outlet Malls Operator: WSJ
- MAU FP : Maurel & Prom 4Q Rev. EU112m
- NHH SM : UBS Says Placing 7.6% of Spain’s NH Hotel Group
- NOVOB DC : Novo Nordisk Gets Positive Opinion on Saxenda for Obesity
- PGS NO : Petroleum Geo-Services ASA outlook negative, CCR cut to B+ from BB-
- PIC BB : Picanol CEO Tack Buys EU732,825 of Weaving Machine Maker’s Stock
- PTC PL : Novo Banco May Vote In Favor of PT Portugal Sale, Diario Says
- PTC PL : Portugal Telecom Shareholders Approve Sale of PT Portugal
- PUB FP : Publicis CEO Says ECB Moves Don’t Fix Europe’s Underlying Issues
- ROG VX : Regeneron, Roche’s Genentech Working w/ Barda on Ebola Treatment
- SGO FP : Saint-Gobain Oberland Rules Out Div. for 2014 on Writedowns
- SIK VX : Sika Investor Jupiter Says Concerned About Proposed Stake Sale
- SMIN LN : Smiths Group shares on break-up chatter (+5% yesterday on that )
- HO FP : Thales Says DCNS Holding Will Cut EU100m From 2014 Group Ebit
- TEF SM : Hutchison Whampoa Rises Most in 2 Weeks After Talks to Buy O2
- TKA GY : ThyssenKrupp Has to Pay Late Penalty on Submarines: Handelsblatt
- TODS IM : Tod’s 2014 Sales Beat Ests., Confident on Positive 2015 Results
- UBSN VX : UBS Plans Supplementary Capital Return of CHF0.25 Per Share
- VRAP FP : Vranken-Pommery Monopole Says 2014 Revenue Rises 2.5%

>>> Smiths Group shares on break-up chatter

Smiths Group shares on break-up chatter

Smiths Group shares gained 4.99% yesterday, 22 January on vague talk of a break-up of the listed UK-based engineering group, The Daily Mail reported. The newspaper’s market report section did not cite a source for the speculation.

A market report in The Daily Telegraph cited speculative traders who said Smiths is seen as likely to attract a break-up bid.

The Daily Telegraph report said the reason for the rise in Smiths Group’s share price yesterday was not clear, but noted a suggestion that rival Covidien’s upbeat quarterly results may have improved sentiment towards Smiths’ shares.

The Daily Mail item noted that Smiths Group has extended an agreement with the telecoms group AT&T.

Smiths Group’s share price closed 54p up at 1136p in London yesterday, giving the company a market capitalisation of GBP 4.48bn (EUR 5.92bn).

Daily Mail, Daily Telegraph

>>> Brokers Upgrades & Downgrades - 23rd of January 2015

>>> Up
*ADECCO RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*ALTICE RAISED TO NEUTRAL VS SELL AT CITI
*BOIRON RAISED TO HOLD VS SELL AT SOCGEN
*BOLIDEN RAISED TO BUY VS SELL AT UBS
*INFORMA RAISED TO BUY VS HOLD AT SOCGEN
*RANDSTAD RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*SOLVAY SA RAISED TO MARKET PERFORM AT SANFORD BERNSTEIN
*TALKTALK RAISED TO OUTPERFORM AT MACQUARIE
*WARTSILA RAISED TO NEUTRAL VS SELL AT UBS
*X5 RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS

>>> Down
*ANTOFAGASTA CUT TO NEUTRAL VS BUY AT GOLDMAN
*AXEL SPRINGER CUT TO SELL VS HOLD AT SOCGEN
*EXPERIAN CUT TO NEUTRAL VS BUY AT UBS
*FIRST QUANTUM MINERALS CUT TO NEUTRAL VS OVERWEIGHT: JPMORGAN
*GLENCORE CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN
*LUXOTTICA CUT TO HOLD VS BUY AT BERENBERG
*MAGNIT GDRS CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*MICHAEL PAGE CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*MICHAEL PAGE CUT TO NEUTRAL VS BUY AT UBS
*RENTOKIL CUT TO SELL VS NEUTRAL AT UBS
*RTL GROUP CUT TO HOLD VS BUY AT SOCGEN
*TELECITY CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*WOLTERS KLUWER CUT TO HOLD VS BUY AT SOCGEN

>>> PT Changes


>>> Initiation


>>> Call

>>> Asian Update

Asian Mid-session Update: Crude oil spikes on confirmed death of Saudi king; China flash HSBC PMI sees manufacturing contraction for 2nd straight month


***Economic Data***
- (CN) CHINA HSBC JAN FLASH MANUFACTURING PMI: 49.8 V 49.5E (2nd straight contraction)
- (JP) JAPAN JAN PRELIM MARKIT/JMMA MANUFACTURING PMI: 52.1 V 52.0 PRIOR
- (KR) SOUTH KOREA Q4 PRELIMINARY GDP Q/Q: 0.4% (lowest since Q3 of 2012) V 0.4%E; Y/Y: 2.7% V 2.8%E

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.9%, S&P/ASX +1.3%, Kospi +0.8%, Shanghai Composite +1.4%, Hang Seng +1.1%, Mar S&P500 -0.1% at 2,054

***Commodities/Fixed Income***
- Feb gold -0.2% at $1,300, Mar crude oil +1.9% at $47.19/brl, Mar Copper -1.5% at $2.54/lb
- (JP) BOJ offers to buy ¥400B in 1-3yr JGB, ¥400B in 305yr JGB, ¥240B in 10-25yr JGB and ¥140B in JGB with maturity over 25-yr
- (AU) Australia MoF (AOFM) sells A$700M in 3.25% bonds due 2025; Avg yield: 2.6134%; Bid-to-cover: 3.1x
- (US) Weekly Fed Balance Sheet Total Assets for week ending Jan 21st: $4.51T v $4.52T prior; M1 y/y change: 9.4% v 9.4% w/w; M2 y/y change: 5.8% v 5.8% w/w

***Market Focal Points/FX***
Upbeat sentiment permeating European and US markets in the wake of a more meaningful ECB QE announcement than anticipated has fed through to Asia, where China is leading the way. Returning for trade in the afternoon session, Shanghai Composite has made fresh 5-year highs above 3,400, and the rally in Hong Kong is nearly as impressive. China flash HSBC manufacturing PMI portends a contraction for the 2nd straight month but just barely, coming in 3 ticks above consensus and 2 ticks away from the the expansion threshold. HSBC economist noted marginal improvement in domestic demand, but still saw labor market sufficiently weak, recommending further monetary easing. To that end, PBoC said it would maintain prudent monetary policy through timely fine-tuning only a day after its first reverse repo operation at lower offering yield in nearly a year. Separately, China Academy of Sciences forecasted 2015 GDP at 7.2%, down from 7.4% in 2014, even though trade surplus was expected to improve.

USD remained on the offensive, particularly in the afternoon part of the Asia session. EUR/USD was down over 50pips around 1.1320, AUD/USD extended its losses below 0.80 - a 5-year low, while GBP/USD moved below 1.50. ECB's Nowotny remarked that personally he would prefer to have waited before launching QE. In Asia, BOK Gov Lee shrugged off ECB action as in line with expectations, while China's SAFE official warned there may be some spillover impact on the mainland. European focus now turns to Greek elections on Sunday, where Syriza will attempt to prevent a last-minute comeback from the ruling ND party before potentially searching for a governing partner.

Crude Oil spiked up almost 3% to near $47.80 after confirmed death of Saudi Arabia's King Adbullah despite the well-articulated succession plan. Analysts noted that the rally could reflect some added uncertainty on output agenda, particularly if the Kingdom decides to embark on some public spending to help smooth over the transition.

In Japan, Jan manufacturing PMI continued on expansion track, edging expectations by a decimal point above 52 level. Markit economist noted improvement in operating conditions for Japanese manufacturers, with production and new orders remaining in robust growth territory. Recall in the latest decision, BOJ also upgraded its assessment of industrial output. Also of note, BBC reporter citing BOJ Gov Kuroda suggesting that reaching 2% inflation target would be delayed to the end of FY15/16, which is in line with the latest projections of FY15/16 Real CPI 1.0% (down from 1.7%) and FY16/17 Real CPI of 2.2%. USD/JPY traded in about a 50pip range around 118.50.

***Equities***
US markets:
- INFN: Reports Q4 $0.13 v $0.11e, R$186.3M v $182Me; Guides Q1 $0.10 +/- a couple pennies v $0.07e, R$180-190M v $167Me - conf call; +13.5% afterhours
- MXIM: Reports Q2 $0.33 (adj) v $0.29e, R$566.8M v $567Me; +5.4% afterhours
- SBUX: Reports Q1 $0.80 v $0.80e, R$4.80B v $4.79Be; +4.5% afterhours
- ETFC: Reports Q4 $0.26 v $0.23e, R$461M v $445Me; +4.2% afterhours
- DWA: Implements strategic plan to restructure feature film business; To cut 500 jobs; +1.0% afterhours
- COF: Reports Q4 $1.68(core) v $1.74e, R$5.81B v $5.69Be; +0.1% afterhours
- CE: Reports Q4 $1.28 v $1.19e, R$1.56B v $1.69Be; -1.6% afterhours
- ALTR: Reports Q4 $0.36 v $0.35e, R$479.9M v $482Me; -2.0% afterhours
- ISRG: Reports Q4 $4.92 v $4.32e, R$601M v $586Me; -2.4% afterhours
- MSCC: Reports Q1 $0.65 v $0.65e, R$303.6M v $304Me; -3.4% afterhours
- EGHT: Reports Q3 $0.04 v $0.04e, R$41.4M v $41.5Me; -3.4% afterhours
- KLAC: Reports Q2 $0.68 v $0.51e, R$676.4M v $662Me; Guides Q3 $0.63-0.87 v $1.03e, R$685-765M v $811Me - conf call; -5.6% afterhours
- LF: Reports Q3 prelim -$1.77 v $0.28e, Rev $145M v $228Me; Withdraws FY guidance; -24.4% afterhours

- BOX: Said to price 12.5M shares of IPO at $14.00/shr, above expected $11-13/shr range - financial press

Notable movers by sector:
- Consumer Discretionary: Gome Electronics 493.HK -5.2% (FY14 guidance); Daphne International Holdings 210.HK -6.7% (Q4 SSS results); China Southern 1055.HK +1.5% (controlling shareholder raises stake)
- Financials: Haitong Securities 6837.HK +2.9% (FY14 results); Dai-Ichi Mutual Life Insurance 8750.JP +5.1% (approved for Protective acquisition)
- Materials: Arrium Ltd ARI.AU -6.7% (Q2 shipment results); MACA Ltd MLD.AU -11.3% (cuts FY15 guidance)
- Energy: Sinopec Yizheng Chemical Fibre 1033.HK +6.1% (FY14 guidance); Kansai Electric Power 9503.JP +1.3% (press speculation on nuclear reactors extension); Santos STO.AU +4.7% (Q4 production); Tap Oil TAP.AU +3.9% (shareholder raises stake)
- Industrials: Worley Parsons WOR.AU +7.7% (awarded contract)
- Technology: Shanghai Great Wisdom 601519.CN +10.0% (to acquire Xiangcai Securities)

WSJ : Saudi Arabia’s King Abdullah Dies


Saudi Arabia’s King Abdullah Dies
Leader Promoted Stability in Face of Democratic and Islamist Movements That Have Roiled Arab World

RIYADH— King Abdullah bin Abdulaziz al Saud, who insulated Saudi Arabia from the Islamist and democratic forces roiling the Middle East in the name of stability, died at about age 90, according to a royal court statement early Friday morning.

Abdullah’s half-brother, Crown Prince Salman who is 79 years old, was declared king and Prince Muqrin 69, became crown prince, according to the statement, which was read on state television.

Born before his father founded the modern Saudi state in 1932, Abdullah focused his final years on internal and external security threats to a nation he had seen grow into an oil giant and center of political and religious power in the region

In one of his final statements, an address before the nation’s consultative Shoura Council read by his half-brother and heir to the throne earlier this month, Abdullah emphasized that his country was “blessed with security and stability” in the heart of a volatile region.

Abdullah’s half-brother Salman, shown in November at a G-20 meeting in Australia, has been declared king.
For Abdullah, who is widely believed to have run Saudi Arabia for the decade before his accession to the throne in 2005 following the death of his stroke-disabled brother King Fahd, stability was the paramount virtue. He abhorred the revolutions that brought religious fundamentalists to power in Iran in 1979 and then unseated longtime fellow rulers in Egypt, Libya, and Tunisia three decades later.

“The development we are working at must be gradual,” the king said in February 2013 at the swearing-in of new members of his Shoura Council, the closest semblance to a parliament in Saudi Arabia’s absolute monarchy. On the king’s order, the council for the first time added women—30 of them. Like their male counterparts on the council, however, their powers remain purely advisory.

For the House of Saud, Abdullah’s death brought to the fore the politically delicate issue of succession. Saudi law leaves the sitting monarch wide discretion in appointing his successor, stipulating only that the throne passes to the “most upright” of the sons and grandsons of the kingdom’s founder, King Abdulaziz al Saud.

The next in line to the throne is the Saudi state founder’s youngest surviving son, Muqrin bin Abdulaziz. His appointment as deputy crown prince last year by Abdullah, Salman and other senior members of the royal family made clear that none of Abdulaziz’s grandsons was deemed strong enough to ensure a unified and orderly transition of power.

While Saudis will often say in the privacy of their homes that infighting among Abdulaziz’s grandsons and their families is a greater threat to Saudi Arabia’s existing order than popular revolution, the ruling family’s emphasis on order and obedience lowers the likelihood of any power struggle that spills over into civil unrest, political analysts said. This emphasis on continuity also means shifts in the government’s domestic and foreign policies are expected to be slight.

The U.S. had an often fraught relationship with Abdullah in recent years, according to American and Arab officials. The late Saudi monarch was incensed by President Barack Obama ’s failure to follow through on his threats in 2013 to launch military strikes on the Syrian regime for its alleged use of chemical weapons. And Riyadh didn’t believe the White House showed strong enough support for Middle East allies, particularly in Egypt, following the eruption of Arab Spring revolts in 2010.

Saudi King Abdullah bin Abdulaziz al Saud speaks at his private residence in Jeddah in June 2014. ENLARGE
Saudi King Abdullah bin Abdulaziz al Saud speaks at his private residence in Jeddah in June 2014. PHOTO: BRENDAN SMIALOWSKI/PRESS POOL
Secret talks between the U.S. and Iran over its nuclear program also were viewed in Riyadh as a sign of a weakening American-Saudi alliance and evidence that the White House was willing to work behind Abdullah’s back, according to Saudi officials.

U.S. officials said they’ll seek to quickly work with Saudi Arabia’s new rulers to stanch the crises in the region, ranging from Yemen’s civil war to the Islamic State insurgency in Iraq and Syria. American officials have voiced concerns over whether the new monarch will be able to consolidate his power fast enough to respond to these regional threats.

Abdullah saw the future of Saudi Arabia and America as linked, and declared himself a loyal ally of the U.S. As he sought to buttress the kingdom’s status as the standard-bearer of both the world’s Sunni Muslims and the region’s Sunni monarchies, he shared Washington’s reservations over the regional ambitions of Shiite Muslim Iran.

Together with Washington, his government fought al Qaeda and its Saudi-born leader, Osama bin Laden , who was as determined to depose the House of Saud as he was to punish America for deploying “infidel” troops on Saudi soil. After the Sept. 11, 2001, attacks on New York and Washington, Saudi security forces all but eradicated the kingdom’s al Qaeda branch. Saudis have helped foil at least two new plots to bomb American airliners since 2010, according to U.S. and Saudi officials.

In its defense of Sunni interests against what it viewed as Iranian and Shiite encroachment, Saudi Arabia led a Gulf military force into Bahrain in March 2011 to bolster the Sunni royal family there amid protests, some violent, by the island’s Shiite majority. One reason for the kingdom’s supply of arms and money to antigovernment rebels in Syria was Syrian President Bashar al-Assad ’s ties to Iran and to Hezbollah, the Tehran-allied Lebanese Shiite military and political movement.

As he sought to buttress Saudi Arabia’s status as the standard-bearer of both the world’s Sunni Muslims and the region’s Sunni monarchies, the king shared Washington’s reservations over the regional ambitions of Shiite Muslim Iran.

U.S. Secretary of State John Kerry and Abdullah talk before a meeting at the king's desert encampment in Rawdat al-Khuraim on Jan. 5, 2014. ENLARGE
U.S. Secretary of State John Kerry and Abdullah talk before a meeting at the king's desert encampment in Rawdat al-Khuraim on Jan. 5, 2014. PHOTO: BRENDAN SMIALOWSKI/PRESS POOL
His antipathy for Iran and Shiism weren’t Abdullah’s only political preoccupations. Under his rule, Saudi Arabia also opposed political reform movements in the Middle East, whether armed or unarmed, Shiite or Sunni, Islamist or secular.

The king warned in particular of what he saw as the threat from Islamist movements. “There are no half-solutions, and we are not going to kill this evil unless we exert strenuous efforts,” he said in 2013.


While the clamor for change could be muffled or ignored by some of the region’s state-run media outlets, at home it couldn’t be shut out completely, due to the popularity of social media especially among tech-savvy Saudi youth.

“If you are fine, we are fine,” was the oft-repeated, benevolent maxim attributed to Abdullah toward his people. As political upheaval spread through the region after 2011, Saudi YouTube videographers turned the phrase against the government, in unusual public criticism of the regime.

“Are you fine?” the filmmakers asked, knocking on the doors of crumbling tenements in Riyadh, revealing little-discussed poverty in the world’s top oil exporter. The government detained the filmmakers. It didn’t charge them, and all were released.

Saudi officials often depict the kingdom as a steward of the world economy and a leader of the Organization of the Petroleum Exporting Countries (OPEC) because it maintains the production capacity to pump extra oil when needed to calm a volatile market, thanks to its large reserves.

As oil prices steeply declined in the last few months of 2014, the kingdom rejected calls to cut output, a decision that brought prices even further down and put pressure on its oil-dependent budget. Saudi officials justified that decision as a move to protect the nation’s share of the world’s energy market.

In response to the political ferment that still convulses the region, Abdullah increased social welfare spending and pledged hundreds of billions of dollars for the construction of universities, hospitals and other capital projects.

To address housing needs among the kingdom’s growing population, he instituted a mortgage system in 2012. A year later, in a bid to integrate Saudi Arabia more deeply into the global economy, he changed the Saudi weekend from Thursday and Friday to Friday and Saturday, despite objections from religious conservatives that the altered workweek more closely resembled the Jewish and Christian Sabbaths.

Yet having embarked on a massive spending program, the government’s finances are today on an unsustainable path. Some 46.9% of Saudi Arabia’s 27.3 million people are under the age of 24, among whom expectations for a well-paying public-sector job and generous government entitlements remain high, consuming an ever larger amount of the nation’s oil wealth.

In recent years, the government has undertaken to reduce the size of the foreign work force that the country in its early years depended upon for its development. Immigrants, however, still make up more than 30% of the population, and Abdullah leaves behind a country still heavily reliant on cheap foreign labor to perform jobs most young Saudis, even unemployed ones, don’t want.

To his supporters, Abdullah was a benign and at times surprisingly progressive monarch. In a kingdom governed by one of the world’s most stringent interpretations of Sunni Islam, moderates among his supporters saw him as a safeguard against some of the harshest demands of the Saudi religious establishment. With the country’s Shiites, whom most Sunnis regard as infidels, he started a formal dialogue.


Abdullah’s liberal critics maintained that his reputation as a reformer was overstated. They complained his government used religious conservatives as an excuse for refraining from any push for greater modernization and more political freedom. They cite his toughening of legal sanctions against those who criticize the government and its clerical loyalists and the jailing of dozens of political activists, especially after the Arab Spring uprisings in other countries.

During Abdullah’s reign, Saudi women—legally required to have male guardians throughout their lives—saw some easing of enforcement of the controls imposed on them but little broadening of their rights. While Abdullah himself said publicly he saw no harm in women driving, his government ignored women’s petitions and protests demanding they be allowed to drive.

Abdullah’s own existence derived from a tribal tradition for securing peace after conflict. His mother, Fahda, was a member of the al-Rashidi, for decades the most powerful tribe opposing Abdulaziz al Saud in his drive to conquer most of the Arabian Peninsula. When Abdulaziz finally defeated the Rashidi in 1921 on his way to the establishment of the kingdom 11 years later, he married Fahda. Abdullah’s birth year was most commonly given as 1924, though the precise date of his birth isn’t recorded.

When Abdullah was born, the country’s literacy rate was below 5%; now, it is about 85%. Mud walls surrounded the central city of Riyadh, and gates to the city were locked at night. Older Saudis recall easier days when they would meet Abdullah and his brothers in the streets, and can pinpoint the moment in their youths when they first saw a truck in the kingdom, or heard a radio.

Throughout his reign, Abdullah wore a coal-black mustache and spade-shaped beard, dyed to give a hint of vigor at odds with a posture deeply bowed by back ailments.

More than many of his brothers, Abdullah appeared genuinely popular among Saudis. In family homes and in cafes, many ordinary Saudis spoke of him as more caring for the general welfare and less covetous of the kingdom’s wealth than his brothers.

“After Abdullah, there’s no one,” a Saudi Bedouin poet, traditionally Arabia’s truth-tellers and recorders of history, said privately in summer 2012, with a dismissive flip of the hand.


FIT FOR A KING

Abdullah’s Rise to Power

About 1924 Abdullah is born.
Jan. 1, 1996King Fahd cedes power to half-brother Abdullah.
Oct. 28, 2001 Abdullah warns the U.S. that its failure to end Israeli-Palestinian violence could prompt the kingdom to reconsider its ties with the U.S.
Feb. 27, 2002 Abdullah pushes an idea for a broad Arab-Israeli peace process.
December 2002 Abdullah moves to rein in lavish royal weddings.
Aug. 1, 2005 King Fahd dies. Abdullah becomes king soon after.
May 16, 2008Abdullah rebuffs U.S. request for higher oil production.
July 6, 2008Oil markets deal a blow to Saudi Arabia’s efforts to calm prices.
2010-2011 Abdullah sends troops into Bahrain and Yemen to help support allies.
Dec. 25, 2014Saudis unveil a high-spending 2015 budget.
Jan. 23Abdullah dies.

>>> US After Hours Summary: INFN +11.5%, MXIM +5.4%, SBUX +4.1%, KLAC

NAfter Hours Summary: INFN +11.5%, MXIM +5.4%, SBUX +4.1%, KLAC -5.1%, AMID -4.2%, ISRG -2.6%, CE -1.6% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: INFN +11.5%, MXIM +5.4%, ETFC +4.6%, SBUX +4.1%, UPI +3.2%, PLCM +2.4%, FII +2%, RMD +1.8%, RLGT +1.5%, SIVB +0.2%, COF +0.1%

Companies trading higher in after hours in reaction to news: SMLP +4.3% (increased Q4 distribution 3.7% to $0.56 from $0.54 per share), PAHC +3.6% (acquired exclusive North American distribution rights for MJ Biologicals vaccine technologies; focused on the swine industry and additional vaccines for future development), DWA +3.24% (co announced it will implement a new strategic plan to restructure its core feature animation business), CPRX +1.1% (EVP, Chief Commercial Officer disclosed purchase of 21000 shares, worth total of $62.1K)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: KLAC -5.1%, AMID -4.2%, EGHT -3.4%, MSCC -3.4%, ALTR -3%, ISRG -2.6%, CE -1.6%, SWKS -0.9%

Companies trading lower in after hours in reaction to news: CACH -33.3% (weakness attributed to reports of potential bankruptcy filing in the near-term), CPSS -5.0% (disclosed it received a civil investigative subpoena from the Department of Justice), MACK -4.0% (disclosed resignation of Chief Scientific Officer Ulrik B. Nielsen), DRL -2.4% (disclosed that on January 21, 2015 the Board and David E. Hooston agreed that effective January 22, 2015 Mr. Hooston would resume his responsibilities as CFO), PLAY -2.1% (filed for 6 mln share common stock offering by selling shareholders) 

FT : Telefónica set to agree to sell O2 to Hutchison Whampoa for £10bn

Telefónica set to agree to sell O2 to Hutchison Whampoa for £10bn

Telefónica is poised to agree a cash deal of more than £10bn to sell its British mobile business to Li Ka-shing’s Hutchison Whampoa, a move that would create the UK’s largest mobile group.
The deal to merge O2, Britain’s second-biggest mobile operator, with Hutchison Whampoa’s Three is expected to be announced as early as Friday morning, said two people familiar with the situation.

The deal will add to a remarkable shopping spree in corporate Britain by Mr Li, one of Asia’s wealthiest men, following his acquisition of the UK’s Eversholt Rail Group for £1.1bn earlier this week.
Telefónica has been in talks to sell O2 to Hong Kong-based Hutchison Whampoa since similar discussions with BT ended before Christmas.
Executives at Telefónica and Hutchison Whampoa were working out the final details of the deal on Thursday night, one person added. The two groups will enter a period of exclusivity. Both parties declined to comment.
The merger would transform the British mobile market. Ofcom, the industry regulator, has long sought to maintain at least four competitors to keep prices low for consumers. Three, in particular, has been crucial in setting the lower end of pricing with cheap tariffs giving large bundles of data and calls.
Telefónica and Hutchison Whampoa are keen to present their deal to the competition authorities alongside the £12.5bn acquisition of EE by BT, one person said. This would help strengthen their argument that BT is already changing the boundaries of how telecoms should be judged alongside TV and broadband services.
The Spanish telecoms group is worried about being left with a declining mobile business in a market where rivals are adding other business lines such as fixed telecom, TV and broadband to their offers.
Telefónica also wants the cash to help reduce its high net debt levels and fund deal making in more core countries such as Brazil.
Hutchison Whampoa, meanwhile, has recently freed additional money to strike deals in Europe following a corporate reorganisation. Berenberg has estimated that Hutchison’s restructuring could boost spending capacity to about to €9bn-€10bn.
The combination of O2 and Three would create the largest mobile operator in the UK with more than 31m subscribers — or about 41 per cent of the market, followed by EE with 32 per cent and Vodafone with 24 per cent.
However, the regulator is likely to push for the combined network to give up some of its spectrum, which is used to broadcast mobile signals. This would entail at least offering low-cost access to its networks for other competitors that use them such as TalkTalk, Tesco Mobile or Virgin Media.
Despite Ofcom’s potential reservations, the decision would likely be taken in Brussels given the international ownership of the two groups.
Similar deals in countries such as Germany and Austria have been approved, albeit with some concessions to boost competition.
The British mobile user may be in for a shock, however, given clear evidence that fewer mobile companies would mean an almost immediate increase in prices. This would be a boost for all companies in the sector, including rivals such as Vodafone.
Berenberg calculates that synergies could be worth in the region of £2bn-£5bn in total based on 3 per cent to 6 per cent annual savings by merging operations. A sale at £10bn would reflect a multiple of 7-8 times earnings estimated for 2015, according to analysts, in line with the multiple BT is paying for EE.