>>> Brokers Upgrades & Downgrades - 27th of Nov. 2014

>>> Up
*BARCLAYS RAISED TO BUY VS NEUTRAL AT GOLDMAN
*PFEIFFER VACUUM RAISED TO BUY VS HOLD AT BANKHAUS LAMPE
*SAUDI TELECOM RAISED TO OVERWEIGHT VS NEUTRAL AT HSBC
*SEADRILL RAISED TO NEUTRAL VS SELL AT GOLDMAN

>>> Down
*HSBC CUT TO NEUTRAL VS BUY AT GOLDMAN
*KINGFISHER CUT TO UNDERWEIGHT VS NEUTRAL AT HSBC
*NATIONAL GRID CUT TO EQUALWEIGHT AT MORGAN STANLEY
*THOMAS COOK CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*U-BLOX CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*WOLSELEY DOWNGRADED TO NEUTRAL FROM BUY AT CITI

>>> PT Change
/

>>> Initiation
*ARCELORMITTAL RATED NEW UNDERWEIGHT AT MORGAN STANLEY
*COMPASS GROUP RATED NEW BUY AT BERENBERG, PT 1,262P
*ENEL RESUMED NEUTRAL AT GOLDMAN, PT EU4.50 (EARLIER)
*JIMMY CHOO RATED NEW NEUTRAL AT HSBC, PT 180P
*SODEXO RATED NEW HOLD AT BERENBERG, PT EU85
*STAGECOACH RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT 425P


>>> Call
/

>>> Asian Update

Asian Market Update: China industrial profits slump; AUD rallies as Australia Q3 CAPEX improves

***Economic Data*** - (CN) CHINA OCT INDUSTRIAL PROFITS Y/Y: -2.1% V +0.4% PRIOR (biggest decline since Aug 2012) - (AU) AUSTRALIA Q3 PRIVATE CAPITAL EXPENDITURE (CAPEX) Q/Q: +0.2% V -1.9%E; First increase in 3 quarters - (AU) AUSTRALIA OCT HIA NEW HOME SALES M/M: 3.0% V 0.0% PRIOR - (NZ) NEW ZEALAND OCT TRADE BALANCE (NZD): -0.9B V -0.6BE (4th consecutive month of deficit; largest monthly trade deficit for October in six years) - (KR) SOUTH KOREA OCT CURRENT ACCOUNT BALANCE: $9.0B V $7.4B PRIOR (32nd month of surplus) - (PH) PHILIPPINES Q3 GDP Q/Q: 0.4% V 1.5%E (lowest since Q1 2009); Y/Y: 5.3% V 6.5%E

***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -0.4%, S&P/ASX +0.1%, Kospi +0.2%, Shanghai Composite +0.4%, Hang Seng -0.4%, Dec S&P500 flat at 2,072

***Commodities/Fixed Income*** - Dec gold -0.3% at $1,193, Jan crude oil -1.3% at $72.73/brl, Dec copper +0.3% at $2.97/lb - GLD: SPDR Gold Trust ETF daily holdings fall 2.1 tonnes to 718.8 tonnes; Lowest level since Sept 2008 - (CN) PBoC won't conduct open market operations (OMO) in today's session (1st halt after 33 consecutive drains); Injects net CNY35B this week v injected CNY10B prior (2nd week of injection; Biggest injection in 3 months) - (JP) BOJ offers to buy ¥400B in 5-10yr JGB, ¥240B in 10-25yr JGB and ¥160B in JGB with maturity over 25-yr - (NZ) RBNZ sold net NZ$1M in Oct v net NZ$30M in Sept

***Market Focal Points/Key Themes/FX*** - Asian equity markets are mixed and volatility subdued going into the US Thanksgiving holiday on Thursday. The most active trade remains in the energy space, as Jan WTI crude oil contract hit fresh 4-year lows below $73/brl ahead of the upcoming OPEC meeting.

- Shanghai Composite is among the leading indices, supported by strength in financials and brokers in the wake of approval to provide online brokerage services. PBoC also continued to supply cosmetic doses of liquidity following Friday's rate cut, with this week's net injection as the biggest in 3 months. Speaking at Caijing conference, PBoC Dep Gov Hu remarked the central bank's FX intervention has been greatly reduced and also reiterating intention to build a deposit insurance system in China. Furthermore, just as more press reports speculated a reduction in China's official GDP rate, Hu said 7.4% GDP growth for China is reasonable. In economic data, China industrial profits slumped, further justifying a more proactive PBoC policy stance.

- AUD/USD is among the most active dollar majors, spiking some 70pips toward $0.86 after a much stronger than expected Australia capital expenditure figures. Q3 CAPEX marked its first quarterly growth in 3 years, and the revision for FY14/15 forecast was also to upside - A$153B vs A$145B prior estimate. An economist with ANZ said the figures suggest firms are planning investment growth of just over 5% in current year, implying recovery in the non-mining sectors of the economy. NZD/USD was also up about 40pips above $0.79, helped in part by a sharp decline in net sales of the currency by the central bank in Oct vs Sept levels. Earlier, Kiwi trade balance logged its largest monthly trade deficit for October in six years, exports of dairy slip 24% while the overall shipments to China were down 40%.

- USD/JPY hit a 1-week low below 117.30, tracking a rally in US Treasuries, while also weighing on the Nikkei225 index. Separately, a Nikkei report speculated FY14/15 tax revenues would be at ¥51.5T - about ¥1.5T above prior forecasts. Adjusted for sales tax boost, the govt receipts were estimated at ¥47T, in line with the prior year

***Equities*** US markets: - GSK: Early results in Glaxo's Ebola vaccine trial show no serious side effects and positive immune response - NEJM; +0.2% afterhours

Notable movers by sector: - Consumer Discretionary: SEEK Ltd SEK.AU +2.6% (affirms FY15 guidance); Vocation Ltd VET.AU -15.9% (chairman resigns); Magnum Entertainment Group Holdings 2080.HK -2.1% (H1 results); Luk Fook Holdings 590.HK +8.4% (H1 results) - Consumer staples: Woolworths Limited WOW.AU +2.4% (affirms FY16 guidance); Yakult Honsha 2267.JP -5.5% (Danone considers sale of stake) - Financials: Bank of Queensland BOQ.AU +1.6% (mixed comments from AGM) - Materials: Beadell Resources BDR.AU -4.3% (BlackRock lowers stake) - Technology: Samsung Electronics 005930.KR +7.7% (announces first shares buyback in 7 years)

>>> Gerresheimer could make an acquisition for EUR 200m-EUR 300m (translated)

Gerresheimer could make an acquisition for EUR 200m-EUR 300m

Gerresheimer, the listed German pharmaceutical packaging maker, could make an acquisition for EUR 200m-EUR 300m, Chief Executive Uwe Roeheroff told Boersen-Zeitung.

During a conversation with the German-language daily, Roeheroff said that acquisition targets would need to be a good fit and would need to fulfill certain criteria. He said the company will not buy problematic companies or ones that need restructuring.

Small acquisitions may happen in emerging markets, he said. He added that Gerresheimer may use acquisitions to boost its business offering medical devices in North America, and is closely examining the US market.

He also confirmed that Gerresheimer's 51% stake in its life science joint venture with Thermo Fisher may be sold. He said the business is profitable but has few synergies with Gerresheimer's other activities. He said that while attractive offers will be considered, Gerresheimer is not actively pushing for a sale.


Source Boersen-Zeitung

>>> PT Portugal: Semapa to take up to 10% in Apax Partners/Bain Capital consorti

PT Portugal: Semapa to take up to 10% in Apax Partners/Bain Capital consortium
Story
Semapa, the listed Portuguese cement group, will take up to 10% in the Apax Partners and Bain Capital group making a EUR 7.075bn bid for PT Portugal, a press release said.

In a statement to the CMVM Portuguese Securities Commission, Semapa said it has reached a MoU with Apax and Bain to take between 5% and 10% in the consortium expected to make a binding bid for PT Portugal tomorrow (28 November) to owner Oi, the Brazilian telco.

Semapa's statement, in English, can be seen here.

Apax and Bain were reportedly seeking a Portuguese partner for their offer on PT Portugal, and listed postal services group CTT was said to be interested in joining the consortium. But CTT said in a regulatory filing it will not participate in any joint offer on PT Portugal or acquire any of its shares.

>>> Bwin.party said to have agreed 150p per share cash offer from Amaya

Bwin.party said to have agreed 150p per share cash offer from Amaya

Bwin.party Digital Entertainment, a UK-listed online gambling operator, was said to have agreed to accept a cash takeover offer of about 150p per share from Canadian counterpart Amaya Gaming, The Daily Mail reported. The newspaper’s market report section did not cite a source for the rumour.

Bwin this month confirmed reports of bid talks with several potential bidders. Bwin confirmed that Deutsche Bank is its nominated advisor, The Times reported on 13 November.

The Daily Mail article noted that rival gambling site operator Playtech has previously been mentioned as a potential bidder for Bwin. The high street bookmakers Ladbrokes, Paddy Power and William Hill are also likely to have considered making offers for Bwin, according to the newspaper.

A market report in the Daily Express briefly mentioned chatter that a takeover approach is on the cards for Bwin.party, but did not give any further details and did not cite a source for the speculation.

Bwin.Party Digital Entertainment’s share price closed 1p down at 106p in London yesterday, 26 November, valuing the company at GBP 870m (EUR 1.09bn).


Source Daily Mail, Daily Express, previously reported intelligence

>>> US After Hours Summary: LEDS -15.6% following earnings/guidanc

After Hours Summary: LEDS -15.6% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to news: CJES +2.2% (announced that it has begun soliciting alternative proposals to purchase the company, or a controlling stake in the company, that are superior to its proposed combination with Nabors' completion and production services business), AVNR +0.6% (received a Complete Response Letter from FDA for AVP-825 for the treatment of migraines; the FDA did not request that any additional clinical trials be conducted prior to approval)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: LEDS -15.6%

Companies trading lower in after hours in reaction to news: KITE -1.1% (filed for a $138 mln offering of common stock), TKMR -0.8% (filed for a $150 mln offering of common shares) 

>>> US Close Dow +0,07% S&P +0,28% NAsdaq +0,61% Russell +0,36%

Closing Market Summary: Stocks Advance Despite Disappointing Economic Data

The major averages ended the session near their best levels of the day with the Nasdaq Composite (+0.6%) finishing in the lead. The S&P 500 rose 0.3% to another record high while the Dow Jones Industrial Average (+0.1%) hovered near its flat line throughout the session.

Meanwhile, the benchmark index spent the day in a slow and steady advance despite a heavy batch of disappointing economic data that was reported this morning. The index did show some signs of defensive posturing as all four countercyclical sectors ended ahead of the market while cyclical sectors traded in mixed fashion.

The telecom services sector (+1.2%) finished in the lead after trending higher throughout the day, but more notably, the heavily-weighted health care sector (+0.7%) posted a solid gain with help from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 303.87, +4.20) settled higher by 1.4% to extend this week's gain to 3.0%. Conversely, biotechnology helped the Nasdaq spend the day in the lead.

Although biotech provided a measure of support, the Nasdaq also drew significant strength from chipmakers after Analog Devices (ADI 54.56, +2.85) reported better than expected results. The stock spiked 5.5% while the PHLX Semiconductor Index jumped 2.1% with all but one component ending in the green.

The solid gains among chipmakers helped the technology sector (+0.9%) spend the day in a steady uptrend. However, the same could not be said for the remaining cyclical groups. Financials (+0.2%) held a slim gain throughout the day while consumer discretionary (unch), energy (-1.1%), industrials (-0.2%), and materials (+0.1%) lagged.

Notably, the energy sector widened its November loss to 2.8% as crude oil took another leg down, falling 0.5% to $73.75/bbl.

Treasuries spiked following today's data, but slipped into the close. The 10-yr yield ended lower by a basis point at 2.24%.

Intraday participation was well below average, but volume spiked into the close. As a result, just under 685 million shares changed hands at the NYSE floor.

Economic data was plentiful and almost entirely disappointing. Initial claims, durable orders ex-transportation, personal income/spending, Chicago PMI, Michigan Sentiment, and October pending/new home sales all missed expectations while headline durable orders beat:
  • Initial claims came in at 313,000 (consensus 288,000), which was above the revised prior week count of 292,000 (from 291,000) 
    • Continuing claims fell to 2.316 million from 2.330 million 
  • Durable goods orders increased 0.4% in October following an upwardly revised 0.9% (from -1.3%) decline (consensus -0.6%) 
    • A 45.3% increase in defense aircraft orders helped boost total aircraft demand by 8.7%. The gains in aircraft orders drove overall transportation orders up 3.4% after declining 3.3% in September 
    • Excluding transportation, orders fell 0.9% in October after increasing an upwardly revised 0.2% (from -0.2%) (consensus +0.5%) 
  • Personal income increased 0.2% for a second consecutive month in October (consensus +0.4%) 
    • Personal spending increased 0.2% in October after an upward revision resulted in no change (from -0.2%) in September (consensus +0.3%) 
  • The Chicago PMI for October fell to 60.8 from 66.2 (consensus 63.0) 
  • The University of Michigan Consumer Sentiment report for November was revised down to 88.8 from 89.4 (consensus 90.0) 
  • Pending home sales for October fell 1.1% (expected +0.5%) 
  • New home sales increased 0.7% in October to 458,000 from a downwardly revised 455,000 (from 467,000) (consensus 470,000) 
  • The weekly MBA Mortgage Index fell 4.3% to follow last week's 4.9% increase 
Equity markets will be closed tomorrow and Friday's session will end early at 13:00 ET.

Happy Thanksgiving!

  • Nasdaq Composite +14.6% YTD 
  • S&P 500 +12.1% YTD 
  • Dow Jones Industrial Average +7.6% YTD 
  • Russell 2000 +2.3% YTD

>>> Relative Value/Event: Europe fashion internet

Relative Value / Event: Europe fashion internet

LONG ASOS, YOOX / SHORT ZALANDO YOOX IM: Eur 18.14; ASC LN: GBP 24.86; ZAL GR: Eur 23.20 November 26, 2014 Today, Zalando is up 15% as of this writing and is trading for the first time above its October Eur 21.50 IPO price. As a reminder, we had issued a SELL recommendation on Zalando as the shares were IPOed on overvaluation concerns and lack of profitability when compared to competitors Asos and Yoox. Zalando ended being a very disappointing IPO with the shares trading down to Eur 17 a few days following the IPO. The shares are very strong today following an announcement that the company should reach profitability by the end of the year. In addition, Q3 performance was better than expected. Over that time period, Yoox and especially Asos outperformed. We are re-iterating our SELL recommendation on Zalando, the today's price action represents an excellent trading opportunity to set-up a long Yoox, long Asos / short Zalando position. The trade is justified by relative value (not enough trading history for mean reversion analysis). FULL REPORT ATTACHED