>>> What to look at today - 10th of December 2014

US Market Closed Mixed with Dow & S&P down and NAsdaq & Russel higher at the end of the day. After China Performance and move on greece, sentiment was very cautious...The strength among small caps emboldened investors to delve into some other high-beta areas like biotechnology and chipmakers...Outside of technology, energy (+0.9%), materials (+0.3%), and industrials (+0.1%) were the only other advancers on the cyclical side. The energy sector ended in the lead while crude oil jumped 1.1% to $63.82/bbl...Volume were ahead of average @ 810mil shares...VIX @ 14,89 +4,79%...After the biggest decline in Shanghai A-shares in 6 years on Tuesday, today's session is notably more benign. China CPI slowed to a 5-year low of 1.4% and PPI fell by the biggest y/y rate in 18 months. Slowing consumer inflation was attributed in part to continued fall in oil prices, as non-food component slowed to 1.0% from 1.2%. Disappointing CPI/PPI numbers prompted a fresh round of analyst calls for more PBoC easing to take place as soon as this month...USD/JPY pair remains under pressure just below ¥119, consolidating the sharp US-morning dive to the ¥118 handle. Japan cabinet official Seko said the govt should include measures dealing with the adverse effects of weak yen in the economic stimulus, as voter surveys showed concerns over the excessive decline in exchange rate. An Asahi report did note that the ruling LDP/Komeito coalition could actually come away with a super-majority on election-day Sunday with more than 2/3 of seats in lower house of Parliament. Japan economic data saw Manufacturing BSI survey for Q4 miss estimates, as corporates also lowered projections for FY14/15 capital spending to +4.9% y/y from +5.7% prior forecast...Nikkei -2,25%.. Hang Seng +0,62%..Shanghai +3.13%

Eur$ 1,2389 S&P +0,08% EuroStoxx +0,50% Dax +0,58% SMI+0,43%

Macro :
- China Nov. Auto Sales 1.78m Units
- China Nov. Consumer Prices Fall 0.2% on Month

Keep an eye on :
- ACA FP : Credit Agricole to Discuss Chifflet Succession Dec. 17: Echos
- ATC NA : Altice Signs Definitive Pact W/Oi to Buy Portugal Telecom
- BG LN : APA Group Planning A$1.8b Rights Issue for BG Assets: AFR
- BP/ LN : BP to Invest More Than $12b in Egypt in Next 5 Yrs: Reuters
- CU FP : Fosun Group to Make New Offer for Club Mediterannee: FT Bidders aim to list Club Med in Hong Kong and Brazil,
- CDI FP : Christian Dior: Shareholders Adopt All Resolutions at Meeting, tp ay gross dvd E3,10/shr
- DTE GY : Deutsche Telekom Wins Cable Fees Clash With Kabel Deutschland
- DTE GY / TMUS US : T-Mobile Offers Unlimited 4G LTE Data for Businesses
- JAZ SM : Alken Sells Jazztel Stake, Ending Bid to Raise Price: Expansion
- NFLX US : Mark Cuban remains positive on the company and would buy more if the price went lower
- UG FP : Peugeot Citroen Plans EU1.5B of Investments to 2017: L’Agefi
- PTC PL : Portugal Telecom Says Isabel dos Santos Offer Too Low
- ROG VX : Roche Says Data Show Prognostic Value of Preeclampsia Test
- SAN FP : Sanofi’s Weinberg to Focus on Diversification: Handelsblatt --> in veterinary medication
- SAN SM : Santander: Not Considering Buying Santander Consumer USA Shrs
- SRG IM : S&P cuts rating one notch to BBB from BBB+; outlook revised to Stable from Negative
- STAN LN : U.S. Said to Be Ready to Extend Standard Chartered Probe: WSJ
- TSCO LN : Tesco Insurers Said to Face Possible Payouts for Legal Costs: FT
- TUI GY : TUI AG FY Underlying Ebita Beats Estimates
- VIV FP : Vivendi Outlook to Positive From Stable by S&P
- VWS DC : Vestas: U.S. Court Approves $5m Payment to Settle Class Action
- ZTS US : Zoetis Spiked After Sanofi Vet Med Comments in Handelsblatt

>>> Brokers Upgrades & Downgrades - 10th of December 2014

>>> Up
*AIR FRANCE-KLM CUT TO SECTOR PERFORM AT RBC CAPITAL
*AMLIN RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*BP RAISED TO BUY AT DEUTSCHE BANK
*PRYSMIAN RAISED TO BUY VS NEUTRAL AT GOLDMAN
*SERCO RAISED TO NEUTRAL VS UNDERWEIGHT AT HSBC
*SPIRENT RAISED TO BUY VS HOLD AT LIBERUM
*ZUMTOBEL RAISED TO NEUTRAL VS UNDERWEIGHT AT HSBC

>>> Down
*MIDSTATES PETROLEUM CUT TO HOLD VS BUY AT SOCGEN
*MEGAFON CUT TO UNDERWEIGHT AT BARCLAYS
*M.VIDEO CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*MILLICOM CUT TO UNDERWEIGHT AT BARCLAYS
*MTS CUT TO EQUALWEIGHT AT BARCLAYS
*SHELL CUT TO HOLD AT DEUTSCHE BANK
*VIMPELCOM LTD CUT TO UNDERWEIGHT AT BARCLAYS

>>> PT Changes


>>> Initiation
*CERVED RATED NEW BUY AT BERENBERG, PT EU5.80
*CLOETTA RATED NEW BUY AT BERENBERG, PT SEK29.60
*MONITISE RATED NEW BUY AT JEFFERIES, PT 45P
*RENTOKIL RATED NEW NEUTRAL AT UBS, PT 112P
*TLG IMMOBILIEN RATED NEW BUY AT UBS, PT EU14

>>> Call

FT : Bidders aim to list Club Med in Hong Kong and Brazil

Bidders aim to list Club Med in Hong Kong and Brazil

Fosun International and its partners bidding to take control of Club Méditerranée intend to list the French holiday group in Hong Kong and Brazil to raise funds worth hundreds of millions of euros.
Fosun, China’s largest privately held conglomerate, and its partners would use the new listings to help fund an ambitious investment programme, allowing one of the biggest brands in global tourism to expand in emerging markets such as China, Latin America and Russia.

“We intend to raise new capital in Hong Kong and São Paulo,” Nelson Tanure, the Brazilian investor, told the FT on Tuesday. Mr Tanure is a partner in Fosun’s Gaillon Invest II special-purpose vehicle.
The plans come as Gaillon is locked in a ferocious battle with Italian investor Andrea Bonomi for control of Club Med in what has now become the longest takeover struggle in French history.
Mr Tanure, who joined Fosun’s bid as a minority partner, said that Gaillon was gearing up to outbid Mr Bonomi yet again. “We are going with a new offer,” Mr Tanure said.
Mr Tanure, who has interests in oil and gas, telecoms and real estate in Brazil, said that Gaillon would look to retain a 51 per cent stake in the French holiday group following the planned listings. He confirmed that the group would also keep Club Med listed on the Paris stock market.
On Friday, Mr Bonomi and his partners, which include US private equity firm KKR, said they would offer €24 per share for Club Med, valuing the company at €915m. That came just four days after Gaillon had improved its own offer to €23.50.
Mr Bonomi said that he would take the specialist in all-inclusive getaways private so as to allow time to implement his investment strategy. “Club Med needs a period of calm,” he told a press conference.
Mr Tanure said that Fosun, whose partners include Club Med management, was in discussions with two new partners that were looking to join the Gaillon Invest II vehicle — though he did not give details.
Gaillon has rejected the tactic of making a substantial single increase in its offer in the hope of dissuading Mr Bonomi and his Global Resorts vehicle from bidding again.
Instead, it has decided to continue to bid incrementally. France’s stock market authority, the AMF, has said that any new bids must be at least 2 per cent higher than the €24 per share offer made by Mr Bonomi.
Gaillon Invest II has also decided to take its time presenting a new offer. It has until December 19 to do so, and is likely to delay presenting an offer until that date — or near it. “We are not going to lose this deal,” Mr Tanure said.

(BFW) Alken Sells Jazztel Stake, Ending Bid to Raise Price: Expansion

BN 12/10 06:25 *ALKEN SELLS JAZZTEL STAKE, ENDING BID TO RAISE PRICE: EXPANSION
Alken Sells Jazztel Stake, Ending Bid to Raise Price: Expansion
2014-12-10 06:31:42.828 GMT


By Ben Sills
Dec. 10 (Bloomberg) -- Alken Asset Management sells entire
6% stake in Jazztel saying other stocks off better
opportunities, Expansion reports.
* Alken had rejected Orange’s bid of EU13 / shr for Jazztel,
saying co. was worth EU20 / shr
* NOTE: Last week, Orange’s Jazztel Bid Gets In-Depth EU Probe
on Pricing Concerns Link

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bsills@bloomberg.net

>>> Asian Update

Asian Market Update: China CPI falls to 5-year lows amid energy price slump


***Economic Data***
- (CN) CHINA NOV CPI Y/Y: 1.4% V 1.6%E (5-year low)
- (CN) CHINA NOV PPI Y/Y: -2.7% V -2.4%E (33RD STRAIGHT MONTH OF DECLINE; Steepest fall in 18 months)
- (JP) JAPAN Q4 BUSINESS SURVEY INDEX (BSI) LARGE ALL INDUSTRY Q/Q: 5.0 V 10.0E; BSI LARGE MANUFACTURING Q/Q: 8.1 V 12.7 PRIOR
- (JP) JAPAN NOV CONSUMER CONFIDENCE: 37.7 V 39.5E (4th straight monthly decline and lowest since April)
- (JP) Japan Oct Conference Board Leading Economic Index m/m: 0.4% v 0.3% prior
- (JP) JAPAN NOV CGPI (PPI) M/M: -0.2% V -0.3%E (4th consecutive decline); Y/Y: 2.7% V 2.6%E (8-month low)
- (AU) AUSTRALIA DEC WESTPAC CONSUMER CONFIDENCE INDEX: 91.1 (lowest since Aug 2011) V 96.6 PRIOR; M/M: -5.7% V +1.9% PRIOR
- (AU) AUSTRALIA OCT HOME LOANS M/M: 0.3% V 0.1%E (1st rise in 3 months)
- (NZ) New Zealand REINZ Nov House Price Index: 4,118.7 v 3,989 prior; House Sales Y/Y: +6.5% v -2.4% prior
- (KR) SOUTH KOREA NOV UNEMPLOYMENT RATE: 3.4% V 3.5%E (4-month low)
- (KR) South Korea Nov Bank Lending to Households (KRW): 513.7T v 507.7T prior
- (KR) South Korea Nov Import Price Index M/M: -0.8% v -1.1% prior; Y/Y: -7.9% (27th consecutive decline) v -7.6% prior
- (PH) PHILIPPINES OCT UNEMPLOYMENT RATE: 6.0% v 6.7% PRIOR

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -1.8%, S&P/ASX flat, Kospi -1.3%, Shanghai Composite +0.4%, Hang Seng -0.2%, Dec S&P500 -0.1% at 2,057

***Commodities/Fixed Income***
- Feb gold flat at $1,230, Jan crude oil -0.9% at $62.94/brl, Mar copper -0.5% at $2.91/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 3.7 tonnes to 721.8 tonnes; Highest level since Nov 17th, biggest increase since Sept 10th
- (US) API PETROLEUM INVENTORIES: CRUDE: +4.4M (largest build since Oct 15th) v -2.5Me, GASOLINE: +6.7M v +2Me, DISTILLATE: +4.3M v +0.5Me
- (US) PIMCO: Raises Total Return Fund's holding of US Treasuries to 37% in Nov from 35% in Oct
- (JP) BOJ offers to buy ¥450B in 1-3yr JGB, ¥450B in 3-5yr JGB, ¥240B in 10-25 yr JGB and ¥160B in JGB with maturity over 25-yr
- JGB: (JP) Yield on Japan's 10-yr JGB falls to 20-month low of 0.4%
- (AU) Australia MoF (AOFM) sells A$600M in 4.5% bonds due 2033; Average yield: 3.4022%; Bid-to-cover: 1.85x
- USD/CNY: (CN) PBoC sets yuan mid point 6.1195 v 6.1231 prior setting (strongest Yuan setting since Mar 3rd)

***Market Focal Points/Key Themes/FX***
- After the biggest decline in Shanghai A-shares in 6 years on Tuesday, today's session is notably more benign. China CPI slowed to a 5-year low of 1.4% and PPI fell by the biggest y/y rate in 18 months. Slowing consumer inflation was attributed in part to continued fall in oil prices, as non-food component slowed to 1.0% from 1.2%. Disappointing CPI/PPI numbers prompted a fresh round of analyst calls for more PBoC easing to take place as soon as this month. ANZ note forecasted a RRR cut, and JPMorgan issued 2015 easing projections containing one more PBOC interest rate cut, 2-3 RRR cuts, and other targeted measures. Regulators also scrambled to address the spike in market volatility, issuing a warning to retail investors about the risks in equity trading while also calling brokerages to determine the impact of yesterday's market drop. Separately, China Securities Depository and Clearing (CSDC) announced that new stock accounts in the week of Dec 5th rose over 60% to 598K - the highest total since 2009.

- USD/JPY pair remains under pressure just below ¥119, consolidating the sharp US-morning dive to the ¥118 handle. Japan cabinet official Seko said the govt should include measures dealing with the adverse effects of weak yen in the economic stimulus, as voter surveys showed concerns over the excessive decline in exchange rate. An Asahi report did note that the ruling LDP/Komeito coalition could actually come away with a super-majority on election-day Sunday with more than 2/3 of seats in lower house of Parliament. Japan economic data saw Manufacturing BSI survey for Q4 miss estimates, as corporates also lowered projections for FY14/15 capital spending to +4.9% y/y from +5.7% prior forecast.

- Australia Westpac Consumer Confidence slumped to its lowest level in over 3 years. Chief economist remarked that while concerns over job security may be an overreaction, they do pose "significant risks to spending, particularly over the course of the next few months." AUD/USD fell to session lows below $0.8270 after the China CPI data but has since recovered above $0.8320 going into Australia close.

- Ahead of tomorrow's RBNZ rate decision, the NZIER Shadow Board forecasted a 67% chance of a hold, up from 62% before the last decision. A more neutral RBNZ statement would likely put further pressure on the kiwi, with market expectations previously anticipating renewed tightening in the first half of 2015. Earlier today, NZD/USD fell to $0.7660 after Fonterra cut its FY14/15 payout forecast for farmgate milk price to NZ$4.70/kg from NZ$5.30/kg, citing geopolitical uncertainty and subdued demand from China amid elevated inventory levels.

***Equities***
US markets:
- VG: Announces Strategic Initiatives; To exit Brazil consumer operations; Board approves $100M share buyback program (about 15% of market cap); +2.4% afterhours
- BRCM: Guides Q4 higher to R$2.075-2.15B v $2.09Be ($2-2.15B prior); increases dividend, approves $1B buyback program (4.3% of market cap); -0.6% afterhours
- CMTL: Completes Review of Strategic Alternatives; will remain independent; -3.9% afterhours
- YUM: Guides initial FY15 EPS growth of at least 10%; -4.4% afterhours
- KKD: Reports Q3 $0.18 v $0.20e, R$122.9M v $124Me; -5.1% afterhours

Notable movers by sector:
- Consumer Discretionary: Skymark Airlines 9204.JP +8.7% (ANA considers alliance)
- Energy: Senex Energy SXY.AU +6.3% (capex plan for rest of FY15); Beach Energy BPT.AU +1.1% (new agreement with Origin Energy)
- Industrials: Geely Automobile 175.HK -0.3% (Nov result)
- Technology: Tencent 700.HK -1.6% (Chairman cut stake)
- Utilities: GCN Power 1816.HK +20.1% (IPO debut)
- Telecom: PCCW 8.HK +1.4% (approval to extend TV license)

>>> US After Hours: KFY +3.5%, ALOG +2.7%, HQY +1.0%, FRPT -8.

After Hours Summary: KFY +3.5%, ALOG +2.7%, HQY +1.0%, FRPT -8.5%, KKD -4.9%, YUM -4.6%, BRCM -0.9% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: KFY +3.5%, ALOG +2.7%, HQY +1.0%

Companies trading higher in after hours in reaction to news: SEV +15.2% (selected to provide motor controllers for new hybrid electric 4-door sedan), APAM +1.4% (reported November 30,2 014 AUM of $109.5 bln), BMY +0.4% (increased quarterly dividend 2.8% to $0.37 from $0.36 per share)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: FRPT -8.5%, KKD -4.9%, YUM -4.6%, BRCM -0.9%

Companies trading lower in after hours in reaction to news: IG -4.3% (announced proposed offering of $125 mln of convertible senior notes due 2019), CMTL -3.9% (completed review of strategic alternatives; Co to remain independent), CVEO -2.0% (to be replaced in the S&P MidCap 400 by KLX Inc.), AGIO -1.6% (announced that it is offering to sell up to $175 mln of its common stock in an underwritten public offering), BRX -1.2% (announced secondary offering of ~5.61 mln shares of common stock for selling stockholders), GPT -0.7% (announced public offering of 45 mln shares of common stock

>>>> USClose : Dow -0,29% S&P -0,02% Nasdaq +0,54% Russell +1,79%

Closing Market Summary: Stocks End Mixed Despite Opening Plunge

The major averages ended the Tuesday session on a mixed note after starting the day with sharp losses. The Russell 2000 and Nasdaq Composite paced the rebound, climbing 1.7% and 0.5%, respectively, while the S&P 500 settled just below its flat line. The Dow shed 0.3% and was the weakest performer among the key indices.

Equity futures were pressured this morning after the overnight session featured a 5.4% plunge in China's Shanghai Composite, which endured its biggest one-day decline since 2009. The dive occurred after the index soared 25.0% in a month and was catalyzed by the People's Bank of China taking measures to tighten liquidity conditions. The central bank fixed the USDCNY exchange rate at its highest level since July and imposed stricter collateral rules on short-term loans.

The cautious sentiment carried over to the European session with Greece's ASE Index sinking 12.8% while the country's 10-yr yield surged 91 basis points to 7.95% after Prime Minister Antonis Samaras called for a presidential election. This took place right after the country was granted a two-month extension to meet its bailout requirements and the early indications suggest the election could put the Coalition of the Radical Left (Syriza) in power, which rattled markets. Adding insult to injury, Germany reported a 3.1% decline in November imports, which was the biggest drop in almost two years.

Despite the global weakness, U.S. equities did not spend much time near their early lows. In fact, the Russell 2000, which led the rebound, marked its low five minutes into the session and never looked back. Since most stocks in that arena are domestically-oriented, they benefited from the consideration that the difficulties for Greece and China make the U.S. economy (and market) look comparatively better. It didn't hurt either that the NFIB Small Business Optimism Index for November hit its highest level (98.1) since February 2007.

The strength among small caps emboldened investors to delve into some other high-beta areas like biotechnology and chipmakers. The iShares Nasdaq Biotechnology ETF (IBB 314.92, +1.13) gained 0.4%, but the health care sector (-0.4%) underperformed throughout the session.

However, biotechnology did help the Nasdaq make it into the green while chipmakers climbed off their opening lows with the PHLX Semiconductor Index returning to its flat line. Large cap components of the technology sector (+0.5%) also displayed some strength with Apple (AAPL 114.13, +1.73), Google (GOOGL 536.11, +5.38), and Oracle (ORCL 41.87, +0.50) adding between 1.0% and 1.5%.

Outside of technology, energy (+0.9%), materials (+0.3%), and industrials (+0.1%) were the only other advancers on the cyclical side. The energy sector ended in the lead while crude oil jumped 1.1% to $63.82/bbl.

Although biotechnology and chipmakers contributed to the rebound, another high-beta group—transport stocks—did not play along. The Dow Jones Transportation Average (-0.6%) ended in the middle of its intraday range with airlines showing broad weakness after Spirit Airlines (SAVE 73.77, -10.70) issued disappointing guidance in reaction to increased promotional activity among its peers. Shares of SAVE plunged 12.7% while DJTA components Delta Air Lines (DAL 46.33, -1.01) and United Continental (UAL 62.52, -1.73) lost 2.1% and 2.7%, respectively.

Treasuries rallied in the morning, but surrendered a portion of their gains into the close. The 10-yr yield fell four basis points to 2.22%.

Also of note, the Dollar Index (88.73, -0.31) posted its second consecutive decline with the dollar giving ground to the yen. The dollar/yen pair was down as much as 300 pips and tested the 118.00 level before recovering to 119.60 into the afternoon.

Participation was a bit ahead of average with more than 810 million shares changing hands at the NYSE floor.

Economic data was limited to wholesale inventories and JOLTS:
  • Wholesale inventories increased 0.4% for a second consecutive month in October after an upward revision to the September data (from 0.3%) while the consensus expected an increase of 0.2% 
    • Durable inventory levels were flat in October after increasing 0.7% in September with increases in hardware (1.6%) and machinery (0.4%) offsetting declines in autos (-1.4%) and professional equipment (-0.7%) 
    • Nondurable inventories increased 1.2% in October after being unchanged in September with petroleum inventories falling 1.9%, which was more than offset by gains in farm products (3.6%), drugs (3.2%), and groceries (1.1%) 
  • The Job Openings and Labor Turnover Survey for October indicated job opening increased to 4.834 million from 4.685 million 
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the Treasury Budget for November will cross at 14:00 ET (consensus -$59.00 billion).
  • Nasdaq Composite +14.1% YTD 
  • S&P 500 +11.4% YTD 
  • Dow Jones Industrial Average +7.4% YTD 
  • Russell 2000 +2.0% YTD

(BFW) Santander: Not Considering Buying Santander Consumer USA Shrs

BFW 12/09 20:14 *SANTANDER: NOT CONSIDERING BUYBACK SANTANDER CONSUMER USA SHRS
BN 12/09 20:14 *SANTANDER NOT CONSIDERING BUYBACK SANTANDER CONSUMER USA SHRS
Santander: Not Considering Buying Santander Consumer USA Shrs
2014-12-09 20:16:24.331 GMT


By Vivek Shankar
Dec. 9 (Bloomberg) -- Banco Santander comments in e-mailed
statement.
* SC pares gains
* NOTE: Earlier, Santander Said to Consider Possible Buyout of
U.S. Auto Unit Link

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>>> Federal Reserve proposes larger capital surcharge on 8 largest SIFI banks

Federal Reserve proposes larger capital surcharge on 8 largest SIFI banks 
- Total shortfall on latest proposal amounts to $21B for all banks; some banks could meet their individual surcharge totals
- Notes that firms that use short term wholesale funding need more capital 
- Surcharge amounts to 1-4.5% of assets and is based on the size of the bank in addition to its interconnectedness and reliance on short term funding