>>> Deutsche Post does not rule out buys; could target start-ups (translated)

Deutsche Post does not rule out buys; could target start-ups

Deutsche Post, the German postal service group, will consider acquisitions, Manager Magazin reported quoting Frank Appel, the chairman of Deutsche Post. During a lengthy interview, the magazine asked Appel whether he is reluctant to push for large takeovers because of his experiences during the group’s foray into the US market.

Appel explained in the article that Deutsche Post has learned its lessons from the US experience. He said that one needs to question what added value a takeover target has for existing customers, and what the deal will cost if it, against all odds, turns out to be a failure. Appel acknowledged that Deutsche Post did not consider these issues enough before moving into the US market, but now discusses these aspects at length when pondering new deals.

Manager Magazine suggested that this means Deutsche Post values an original business idea of a potential target more than its size, and asked Appel whether start-ups are an interesting option. The magazine highlighted that a number of US start-ups are making great strides with so-called “same-day-delivery” concepts. Appel made clear in the article that he is not willing to discuss potential takeover targets, but acknowledged that Deutsche Post could be interested in start-ups that bring a new business perspective to the table.

Deutsche Post has a market cap of EUR 31.318bn.


Source Manager Magazin

>>> Banca Cesare Ponti attracts interest of Banca Leonardo

Banca Cesare Ponti attracts interest of Banca Leonardo

Banca Cesare Ponti, the private banking subsidiary of listed Italian bank Banca Carige, has attracted the interest of Banca Leonardo, Italian-language daily Milano Finanza reported. The report cited sources close to the dossier who said that Banca Leonardo was looking to participate in the auction to sell off Banca Cesare Ponti.

The report said that Intesa Sanpaolo was also believed to be interested, as were suitors from France and Switzerland.

The report said that the sale is part of plans by Carige to cover an EUR 814m capital shortfall identified by the European Central Bank.

As previously reported, Banca Cesare Ponti has assets totalling EUR 30m and that the bank could be sold off for up to EUR 50m.


Source Milano Finanza daily edition

>>> PT Portugal: CTT could take 20% stake in Bain Capital-Apax Partners consorti

PT Portugal: CTT could take 20% stake in Bain Capital-Apax Partners consortium - report (translated)
Story
CTT, the listed postal services group, could join the Bain Capital and Apax Partners consortium bidding for PT Portugal, reported Diario Economico. Sources close to the situation told the Lusophone paper that CTT is considering a 20% stake in the Bain-Apax consortium, which will table its binding offer for PT Portugal to Brazilian telco Oi by the end of this week.

CTT is being brought into the Bain-Apax bidding group to bring synergies between its extensive Portugal branch network and PT outlets, the sources said. CTT would invest around EUR 200m in the PT Portugal acquisition using its own cash resources. Bain and Apax tabled a preliminary EUR 7.075bn bid for PT Portugal to trump the rival EUR 7.025bn cash bid from French telco Altice.

Meanwhile, Diario de Noticias cited sources familiar with the process as saying that Bain and Apax are seeking Portuguese partners for their PT Portugal takeover bid. The UK and US investment firms have held recent meetings with CTT over the potential PT Portugal disposal by Oi, the sources said.


Source Diario Economico, Diario de Noticias

>>> *ROLLS ROYCE RATED NEW OVERWEIGHT AT MORGAN STANLEY - see details

Rolls’ shares are down 32% YTD, and the stock is now a consensus hold. This has created an interesting opportunity, and we initiate at OW for the following reasons:
(i) Civil value case still intact: Our positive view on the civil cycle means Rolls can continue to grow its main business. Growth spurts temporarily depress cash flow and margins, but we expect growth to eventually decelerate and the installed engine base to get sufficiently big as to make new engine deliveries less dilutive on aftermarket, resulting in improved margins and cash flow. Our DCF-based bull case price target of 1310p captures the embedded or back-end loaded value of the installed base and implies 55% upside.
(ii) Prudent capital structure a strength and an opportunity: Rolls’ net cash position supports further growth investments in civil and should allow it to successfully navigate further volatility in the shorter cycle businesses. It also implies scope for materially increased shareholder returns. While this may be unlikely in the near term given an uncertain macro environment, we view it as an optionality that is best captured in our bull case valuation.
(iii) Expectations materially rebased – scope for a rerating: Earnings have been cut by around 16% this year, and a small decline in profitability next year relative to this is now in the price. Consensus may even be coming out on the low side for 2016, in our view, and we are 5% ahead. With Rolls' shares having entirely given up their premium rating versus the market, we think delivery in-line with (or even ahead) of expectations from here can catalyse a rerating to our 1040p PT, which offers 23% upside.
Where could we be wrong? Risks to our investment case are: (i) an early end to the current civil aerospace cycle, though Rolls could be viewed as somewhat hedged in that while growth would slow, near-term margins and cash conversion would improve; (ii) a deeper slowdown in the shorter cycle businesses than we currently anticipate, as explored in our bear case; and (iii) any unexpected ramifications from the SFO investigation into Rolls, which is ongoing.

>>> US After Hours Summary: BLOX +7.8%, VEEV +7.2%, VNET -14.0%, CTRP

After Hours Summary: BLOX +7.8%, VEEV +7.2%, VNET -14.0%, CTRP -5.6%, TIVO -2.0%, HPQ -1.3% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: BLOX +7.8%, VEEV +7.2%, ADI +2.3%

Companies trading higher in after hours in reaction to news: HTZ +1.8% (Icahn disclosed 10.77% active stake in amended 13D filing, up from 8.48% stake disclosed on August 20, 2014), HAIN +1.2% (announced 2-for-1 stock split), NECB +0.7% (approved the repurchase of up to 255,123 shares, or ~5.0% of the outstanding common stock), MGA +0.6% (obtained issuer bid exemption orders to permit purchases by way of private agreement)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: VNET -14.0%, CTRP -5.6%, PWRD -5.3%, AVAV -3.8%, TIVO -2.0%, HPQ -1.3%, BAMM -0.5%, XNET -0.3%, CUB -0.2%, NMBL -0.1%

Companies trading lower in after hours in reaction to news: MDVN -1.5% (announced that Joseph Lobacki will join the co as CCO on Dec 8, 2014), LLEX -1.4% (received NASDAQ notice regarding listing requirements; issuance of the letter has no immediate effect on the listing of co's common stock) 

>>> Asian Update

Asian Market Update: Shanghai hits new 3-year highs; Crude Oil slumps ahead of OPEC

***Economic Data***
- (AU) AUSTRALIA Q3 CONSTRUCTION WORK DONE Q/Q: -2.2% V -1.9%E; biggest decline in 11 quarters
- (CN) China NOV Westpac Consumer Confidence index: 111.0 v 110.9 prior
- (KR) SOUTH KOREA NOV CONSUMER CONFIDENCE: 103 V 105 PRIOR (14-month low)

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.1%, S&P/ASX +0.8%, Kospi +0.2%, Shanghai Composite +0.8%, Hang Seng +0.2%, Dec S&P500 +0.1% at 2,070

***Commodities/Fixed Income***
- Dec gold +0.1% at $1,199, Jan crude oil -0.3% at $73.88/brl, Dec copper +0.3% at $3.01/lb
- (US) API PETROLEUM INVENTORIES: CRUDE: +2.8M (2nd consecutive build) v 0e, GASOLINE: +0.04M v +1Me, DISTILLATE: -1.3M v -1Me
- (US) CME raises Crude Oil margins by 4.1%
- (AU) Australia MoF (AOFM) sells A$700M in 2.75% bonds due 2024; Avg yield: 3.1397%; Bid-to-cover: 2.96x
- JGB: (JP) Japan MoF sells ¥399.6B in 1.7% 40-yr bonds, bid to cover: 3.18x v 2.54x prior
- (CN) China Ministry of Finance (MoF) sells 5-yr bonds at 3.4069% yield
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1354 v 6.1390 prior setting (strongest Yuan setting since March)

***Market Focal Points/Key Themes/FX***
- Asian indices were bid up in the wake of new highs on Wall St, as investors cheered both the much better than expected US Prelim GDP and renewed easier bias of the PBoC. Shanghai Composite is at the forefront of the rally, rising to fresh 3-year highs near 2,600. Hong Kong is up a more moderate 0.2%, with markets watching for any repercussions of the overnight decision by local police to clear out Occupy Central protests. November Westpac/MNI consumer confidence reading for China nudged higher, and resident economist noted the survey is "consistent with our view that domestic demand bottomed out in the September quarter."

- Ahead of today's OPEC meeting, Jan WTI energy prices remain under heavy pressure and near multi-year lows below $74/brl. Selloff in the US session followed comments from Rosneft CEO, noting Saudi Arabia, Russia, Mexico, and Venezuela energy ministers merely agreed to monitor prices and would not cut production. There's is little evidence of a drain in supply in the short-term data, as the build in API weekly inventories was again above consensus.

- In Japan, the more dovish BOJ board member Shirai reiterated she would prefer that the time span to reach the 2% inflation target was extended so as not to hurt consumers. Shirai also noted domestic economy does continue a moderate recovery, expecting consumption and CAPEX to improve further. USD/JPY traded in a narrow 30pip range around 117.80, even as JPMorgan lifted its target on the pair to ¥120 v ¥117 prior by Q1 of 2015. Former MoF official Sakakibara (Mr. Yen) disagreed, noting the decline in JPY is likely near its end.

***Equities***
US markets:
- ADI: Reports Q4 $0.69 v $0.68e, R$814M v $801Me; +2.0% afterhours
- HTZ: Investor Icahn raises stake to 10.8% from 8.7% - 13D/A filing; +1.7% afterhours
- HLF: CEO said to have exercised 750K shares in options set to expire in Dec - tweet from CNBC's Wapner; +0.9% afterhours
- HPQ: Reports Q4 $1.06 v $1.05e, R$28.4B v $28.8Be; -0.6% afterhours
- CTRP: Reports Q3 $0.36 (adj) v $0.22e, R$347M v $337Me; -6.8% afterhours

Notable movers by sector:
- Consumer Discretionary: Mantra Group MTR.AU -4.7% (affirms FY15 guidance); Skymark Airlines 9204.JP +4.0% (Japan authority to consider ANA-Skymark alliance)
- Financials: Huatai Securities 601688.CN +10.0% (to list in Hong Kong); Shanghai Pudong Development Bank 600000.CN +0.7% (acquires Shanghai Trust)
- Energy: Karoon Gas Australia KAR.AU +8.2% (provides drilling update)
- Industrials: Gem-year Industrial 601002.CN +3.9% (awarded order); China Railway Construction Group 601186.CN +1.1%, China Railway Group 601390.CN +1.2% (China approves additional railway projects); Honda Motor 7267.JP -2.9% (acknowledges failure to report accidents)

>>> US Close Dow-0,02% S&P-0,12% Nasdaq+0,07%

Closing Market Summary: Stocks End Flat Following Upward Q3 GDP Revision

The stock market ended the Tuesday session on a flat note. The S&P 500 shed 0.1% after spending the day in a ten-point range while the other indices also settled near their unchanged levels.

Despite the flat finish, equity indices rallied at the start after the second revision to Q3 GDP surprised to the upside (3.9%; Briefing.com consensus 3.2%). However, the opening spike marked the session high for the S&P 500, which returned to unchanged by the end of the first hour.

The S&P 500 dipped into the red during morning action with the move taking pace amid weakness in the energy sector (-1.6%). The growth-sensitive group widened its week-to-date loss to 2.3% after a meeting between Russia, Saudi Arabia, Mexico, and Venezuela did not produce an agreement to reduce output. Crude oil also retreated on the news, but saw a short-lived spike on its way down in reaction to reports OPEC members may opt to cut supply at Thursday's meeting in order to stem the recent decline in price. The energy component ended lower by 2.2% at $74.09/bbl.

The energy sector was the lone decliner of note while most of the remaining groups ended with modest gains. The consumer discretionary space (+0.3%) finished in the lead after a few names reported earnings. Brown Shoe (BWS 31.29, +2.81), DSW (DSW 34.39, +0.74), and Signet Jewelers (SIG 131.59, +8.60) beat estimates while Tiffany & Co (TIF 107.62, +2.61) missed by a penny. The sector finished in the lead even though homebuilders lagged with the iShares Dow Jones US Home Construction ETF (ITB 25.93, -0.15) shedding 0.6%.

Elsewhere, the industrial sector (+0.2%) also finished near the lead with help from transport stocks. The Dow Jones Transportation Average extended to a fresh record, ending higher by 0.4%. Airlines benefitted from lower fuel prices with Delta Air Lines (DAL 44.08, +0.57) advancing 1.3%.

Another cyclical sector—technology—led at the start, but narrowed its gain to just 0.1% by the close.
Apple's (AAPL 117.61, -1.02) market cap briefly crossed the $700 billion mark in the morning, but the top-weighted sector component retreated into the close. Unlike Apple, the sector was able to avoid turning negative thanks to gains in other large components like Intel (INTC 36.32, +0.07) and Facebook (FB 75.63, +1.62).

Treasuries notched their lows in reaction to the GDP report, but rallied throughout the day. The 10-yr yield ended lower by five basis points at 2.26%.

Participation was ahead of average with more than 830 million shares changed hands at the NYSE floor.

Economic data included Q3 GDP, Case-Shiller 20-city Index, FHFA Housing Price Index, and Consumer Confidence:
  • Third quarter GDP was revised up to 3.9% in the second estimate from 3.5% while the consensus expected a reading of 3.2% 
    • All of the gain in third quarter GDP resulted from an upward swing in inventories 
    • Real final sales were revised down to 4.1% from 4.2% 
    • The positive surprise was mostly the result of an unexpected upward revision to personal consumption expenditures with goods spending in the third quarter revised up to 4.3% from 3.1% 
  • The Case-Shiller 20-city Index for September rose 4.9%, which was ahead of the consensus (4.6%) 
  • The September FHFA Housing Price Index was unchanged to follow last month's 0.4% uptick 
  • The Consumer Confidence Index dropped to 88.7 in November from a downwardly revised 94.1 (from 94.5) while the consensus expected an increase to 96.0. 
    • The Present Conditions Index declined to 91.3 from 94.4 while the Expectations Index fell to 87.0 from 93.8 
Tomorrow will be busy on the economic front with the MBA Mortgage Index set to cross the wires at 7:00 ET. Weekly Initial Claims, October Durable Orders, and October Personal Income/Spending Data will be released at 8:30 ET while the Chicago PMI for November will cross at 9:45 ET. The final reading of the Michigan Sentiment Survey will be released at 9:55 ET while New and Pending Home Sales will be reported at 10:00 ET.
  • Nasdaq Composite +13.9% YTD 
  • S&P 500 +11.8% YTD 
  • Dow Jones Industrial Average +7.5% YTD 
  • Russell 2000 +2.1% YTD

>>> HPQ beats by $0.01, misses on revs; guides Q1 EPS within range (midpoint bel

HPQHewlett-Packard beats by $0.01, misses on revs; guides Q1 EPS within range (midpoint below consensus); reaffirms FY15 EPS guidance (37.63   +0.13)

Reports Q4 (Oct) adj. earnings of $1.06 per share, $0.01 better than the Capital IQ Consensus Estimate of $1.05; revenues fell 2.5% year/year to $28.41 bln vs the $28.76 bln consensus.

* Personal Systems revenue was up 4% year over year with a 4.0% operating margin. Commercial revenue increased 7% and Consumer revenue decreased 2%. Total units were up 5% with Desktops units down 2% and Notebooks units up 8%.  * Printing revenue was down 5% year over year with an 18.1% operating margin. Total hardware units were down 1% with Commercial hardware units up 5% and Consumer hardware units down 4%. Supplies revenue was down 7%.  * Enterprise Group revenue was down 4% year over year with a 14.8%.  * Enterprise Services revenue was down 7% year over year with a 6.8% operating margin operating margin. Co issues guidance for Q1, sees EPS of $0.89-0.93, excluding non-recurring items, vs. $0.93 Capital IQ Consensus.

Co reaffirms guidance for FY15, sees EPS of $4.83-5.03, excluding non-recurring items, vs. $3.96 Capital IQ Consensus Estimate. 

HP generated $2.7 billion in cash flow from operations in the fourth quarter, down 4% from the prior-year period. HP also utilized $750 million of cash during the quarter to repurchase approximately 21.7 million shares of common stock in the open market. HP exited the quarter with $15.5 billion in gross cash. 

>>> Twitter evaluating potential acquisition

Twitter evaluating potential acquisition

Twitter, Inc. (NYSE: TWTR) is evaluating a potential acquisition.

The news came accidentally, when Twitter CFO Anthony Noto inadvertently tweeted his support for the particular deal. The tweet was apparently intended as a private message.

"I still think we should buy them," Noto wrote. "He is on your schedule for Dec 15 or 16 -- we will need to sell him. I have a plan."

The identity and details of the company Noto was referring to is not known.

The tweet itself was removed, but several news organizations and blogs published screenshots of the message.

>>> Worldwide Tablet Growth Expected to Slow to 7.2% in 2014 Along With First Ye

Worldwide Tablet Growth Expected to Slow to 7.2% in 2014 Along With First Year of iPad Decline 
- IDC The worldwide tablet market is expected to see a massive deceleration in 2014 with year-over-year growth slowing to 7.2%, down from 52.5% in 2013, according to a new forecast from International Data Corporation. At the core of this slowdown is the expectation that 2014 will represent the first full year of decline in Apple iPad shipments. Both the iPad and the overall market slowdown do not come as a surprise as device lifecycles for tablets have continued to lengthen, increasingly resembling those of PCs more than smartphones