(BFW) Goldman Revises ECB View, Forecasts Sovereign QE in 1H 2015

Goldman Revises ECB View, Forecasts Sovereign QE in 1H 2015
2014-11-24 07:00:48.503 GMT


By Max Julius
Nov. 24 (Bloomberg) -- More likely than not that ECB will
announce sovereign QE program in 1H 2015, Dirk Schumacher,
economist at Goldman Sachs, writes in client note dated Nov. 21.
* Goldman previously saw 1-in-3 odds of ECB conducting large-
scale sovereign debt purchases
* Tone of Draghi’s speech on Friday was “dovish surprise”
* ECB president stressed a high degree of urgency in raising
inflation expectations “as fast as possible”
* This signals Draghi sees risk of a de-anchoring of
inflation expectations as having reached a critical
level, higher than Goldman previously estimated
* This signals Draghi sees risk of a de-anchoring of
inflation expectations as having reached a critical
level, higher than Goldman previously estimated</li></ul>
* Unlikely that broad-enough consensus among Governing Council
members exists to announce sovereign QE in Dec.
* NOTE: Analysts said on Friday that Draghi’s comments
suggested further easing is likely soon, while remaining
split on odds of govt bond purchases


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To contact the reporter on this story:
Max Julius in London at +44-20-3525-8917 or
mjulius4@bloomberg.net
To contact the editors responsible for this story:
Deborah L Hyde at +44-20-3216-4829 or
dhyde10@bloomberg.net

>>> Brokers Upgrades & Downgrades - 24th of Nov. 2014

>>> Up
*DEUTSCHE BOERSE RAISED TO BUY VS NEUTRAL AT CITI
*DEUTSCHE TELEKOM RAISED TO OVERWEIGHT AT BARCLAYS
*D’IETEREN RAISED TO BUY FROM HOLD AT ING
*LSE RAISED TO BUY VS NEUTRAL AT CITI

>>> Down
*BANK PEKAO CUT TO NEUTRAL VS BUY AT UBS
*BBA AVIATION CUT TO SELL VS HOLD AT LIBERUM
*HARGREAVES LANSDOWN CUT TO SELL VS NEUTRAL AT CITI
*ZACHODNI CUT TO SELL VS NEUTRAL AT UBS

>>> PT Changes
*D’IETEREN PT RAISED TO EU35 FROM EU32 AT ING

>>> Initiation
*BSKYB REINSTATED NEUTRAL AT GOLDMAN, PT 990P

>>> Call

>>> Danone Espana shareholders ask EUR 800m for 15% stake

Danone Espana shareholders ask EUR 800m for 15% stake 

The Portabella, Carasso, Botton and Fuster families are set to sell a 15% stake in the Spanish dairy company Danone Espana, El Confidencial reported. The shareholders want to exercise a put option to sell the stake to Danone Espana’s 75.6% France-based shareholder Danone, the report said, without citing sources.

As Danone has said it is unwilling to pay the minority shareholders’ asking price of EUR 799m, the potential deal is to be referred to an arbitrator, the report said.

The Portabella, Carasso, Botton and Fuster families currently own 22.1% of Danone Espana, the report noted.
El Confidencial

>>> Telefonica explores strategic alliance with BT; still interested in O2 sale

Telefonica explores strategic alliance with BT; still interested in O2 sale

Telefonica, the listed Spanish telco, is in talks with its UK peer BT to explore a possible strategic alliance, El Confidencial reported, citing people involved in the process. Although no decisions have been made, the telcos are understood to be looking at the possibility of creating what the report described as a European giant to stave off the possible incursion from US rivals.

One possible outcome of the current negotiations would see Telefonica sell O2 to BT in exchange for a 20% stake in the UK operator, the report said.

The move by BT and Telefonica is a reaction, in particular, to the interest expressed from US-based AT&T in acquiring a major European player, the report explained.


Source El Confidencial

>>> What to look at today - 24th of Nov. 2014

Asia equity markets generally traded higher today, after China central bank PBoC cut interest rates over the weekend. Australian miners performed well, including BHP Billiton moved higher by 3.8%, Rio Tinto higher by 3.6%, and Fortescue Metals higher by 9.5%. Shanghai Composite ended morning session at fresh 3-year high. China brokers, insurers, as well as property developers also traded sharply higher on central bank's move. Other sectors such as China railway construction companies traded higher during the morning session, with China Railway Construction Group higher by 8.5%, China Railway Group higher by 7.5% in Shanghai, after Russian Railways announced plan on Moscow-Beijing high-speed railways. During the morning trading session, Shanghai total trading volume was above CNY206B, higher than last trading day's full day volume.- From Hong Kong equity market today, China's largest nuclear plant operator CGN Power announced to raise up to $3.2B in IPO in Hong Kong, also to mark the first nuclear plant operator to list in China... Survey showed 37% of population to vote for Japan Prime Minister Abe's LDP party during Parliament (lower house) election, and 11% to support DPJ, 5% to support Komeito coalition party. Meanwhile, Abenomics disapproval rate at 43%, exceeded approval rate of 38%...Japan equity markets closed on holidays...In US over the weekend, President Obama said to authorize expanded US role in Afghanistan next year. US currently has 9.8K troops remaining in Afghanistan hunting down Al Qaeda...Nikkei Closed Hang Seng +1.77% Shanghai +1.75%...

Eur$ 1.2398 S&P -0.01% EuroStoxx -0.16% Dax -0.21% SMI -0.09%

Macro :
- Russia May Offer OPEC to Cut Output to Boost Prices: Kommersant
- EU Still Seeks Luxembourg Tax Rulings for 2010-13: Agence Europe
- Russia to Promote Free Trade Between EU, Customs Union: RIA
- ECB’s Constancio Says No Decision Made Yet on Sovereign Bonds
- Germany’s Gabriel Urges Utilities to Cut CO2 Emissions: Spiegel


Keep an eye on :
- ABI BB : InBev to Focus Budweiser Marketing on Younger Audience: WSJ
- AAL LN : Anglo Investing $100m in Platinum Cos. to Spark Demand: FT
- ALV GY : Allianz in Pact to Buy TIO’s General Insurance Business
- AV/ LN : Friends Life Says It's in Talks With Aviva on All-Share Merger
- BLT LN : BHP Reassures Investors on Dividends as Deeper Cost Cuts Bite
- BMW GY : Tesla in Talks w/ BMW on Cooperation, CEO Musk Tells Spiegel
- CU FP : Fosun in Talks With Brazil Investor to Raise Club Med Bid: FT
- CSGN VX : Credit Suisse May Announce Leadership Change Before Christmas:SZ - denied this morning Aargauer Zeitung
- DAI GY : China BAIC Motor seeks approval for $2B listing in Hong Kong - (5th largest carmaker, Hyundai & DAI)
- DAI GY : Daimler, Hino Plan Fuel-Cell Bus Sales in Japan, Nikkei Says
- EDF FP : EDF Energy Gets U.K. Approval to Restart 3 Nuclear Reactors
- EDF FP : EDF Board Names Jean-Bernard Levy as Interim Chairman and CEO
- ELE SM : Soros Invests $200M in Endesa to Hold 1.5% Stake, Mundo Reports
- FCC SM : Guggenheim Partners could take 5% stake in rights issue - Expansion
- FCA IM : Chrysler Says Will Increase Speed of Repairs on Jeeps: Reuters
- FLG LN : Friends Life Founder to Get GBP160m in Aviva Deal: Sunday Times
- HAW GY : Hawesko shareholder Margaritoff says takeover offer by Meyer is too low; Schiemann may be willing to sell
- NK FP : Imerys Buy of S&B to Add to EPS From 1st Yr, CEO Tells Investir
- ISP IM : Intesa SanPaolo Considers Bid for RBS’s Coutts, FT Says
- KYG ID : *GREENCORE MAY BID FOR KERRY'S FROZEN FOOD UNIT: INDEPENDENT
- LHA GY : Lufthansa German Market Share Increased, CEO Tells Sueddeutsche
- NFLX US : Netflix Faces Legal Case From French Consumer Group: Le Parisien
- NOVN VX : Novartis Says Signifor Approved in EU for Acromegaly Treatment
- NPRO NO : Geveran Trading may have to make a mandatory offer for the remaining shares in Norwegian Property
- PTC PL : PT Portugal: Oi could devise workaround to PT veto to facilitate EUR 7.025bn sale to Altice
- PG US : Private Equity Firms May Bid for P&G’s Braun, Sunday Times Says
- RLIA SM : Hispania Offers 49 Euro Cents/Shr for Realia Business SA
- SAB LN : SABMiller Agrees Tie-Up With Brazilian Brewer: Sunday Telegraph
- SGO FP : St-Gobain Is Waiting for Best Conditions to Sell Verallia: CEO
- SAN FP : Actavis’s Teflaro, Sanofi’s Jevtana Get Generic Challengers: FDA
- SGL GY : SGL Sees ‘Breakthrough’ for Carbon Technology: Wirtschaftswoche
- SIGN VX : Onex, Partners to Invest $1.25b in SIG Combibloc
- SYNN VX : Syngenta to Cut Jobs, Plans to Save $1b of Costs by 2018
- TEF SM : *TELEFONICA NEGOTIATES STRATEGIC ALLIANCE WITH BT: CONFIDENCIAL
- TLV1V FH : Norilsk Nickel could invest in Finnish Talvivaara - Taloussanomat
- TSLA SU : Paris Taxi Operators Studying Use of Tesla S, Figaro Reports
- TKA GY : ThyssenKrupp CEO Mulls Selling Submarine Division: Sueddeutsche
- TTPH US : Tetraphase up 18% in after Mkt after saying to explore sale after drawing takeover interest
- TIT IM : American Tower to Buy Tim Tower Assets in Brazil for $1.2b
- TIT IM : Telecom Italia Gets Board Backing to Explore Oi Deal in Brazil
- VOW GY : VW CEO May Leave in 2016 When Contract Expires: Wirtschaftswoche

FT : China rate cut will not stop slowdown

China’s surprise interest rate cut late on Friday will not reverse the trend of slower growth and tighter credit, analysts said, describing the move as being more akin to fine tuning than a shift in policy.
Equity markets rallied both at home and overseas on news that the People’s Bank of China had lowered its benchmark deposit and lending rates by 0.25 and 0.40 percentage points respectively. But investors betting on broad-based monetary stimulus from Chinese policymakers are likely to be disappointed.

After a series of targeted stimulus measures earlier this year that largely failed to lower real borrowing costs, the latest move shifts the dial another notch towards easing.
“This really isn’t a change in the direction of monetary policy, so it’s hard to give a reaction that can shake heaven and earth,” Wu Jinglian, a senior government economist who has advised Chinese presidents dating back to Deng Xiaoping, said at a conference on Saturday.
Economists say the rate cut will help lower costs for mortgages and high-rated corporate borrowers but cannot reverse the decline in investment and factory output – key drivers of the economy – unless it is coupled with official directives to increase loan volumes.
Central bank data show overall credit growth through the first 10 months of 2014 is running Rmb1.27tn ($207bn) behind last year’s pace.
Analysts have debated whether the decline is due mainly to intentional efforts by the PBoC to rein in debt, slack credit demand from corporate borrowers faced with declining sales, or risk aversion by financial institutions worried over rising bad loans.
Whatever the reason, there is little sign that the PBoC is prepared to pressure banks to aggressively push loans out the door.
“Given the government’s stated intention to focus on long term structural issues, in terms of growth, we suspect that policies will likely remain behind the curve,” David Cui, equity strategist at Bank of America Merrill Lynch, wrote in a note on Monday.
“The risk to this assessment is if, contrary to our expectation, the government announces more cuts and/or other major growth boosting measures reasonably soon.”
The impact of the rate cut could be further softened by banks’ unwillingness to drop lending rates in line with the PBoC’s new benchmark, which is not binding on lenders.
The PBoC paired its rate cut with a parallel move giving doubling lenders’ margin of flexibility to offer higher deposit rates above the official benchmark. That could leave effective deposit rates largely unchanged, as the impact of the lower benchmark is cancelled out by the wider flexibility banks have to exceed it.
For one-year deposits, the benchmark rate was lowered from 3 per cent to 2.75 per cent. But a 20 per cent margin above the new rate, equal to 3.3 per cent, is identical to the 10 per cent margin permitted above the previous, lower rate.
With their funding costs largely unchanged, banks will have an incentive to keep loan rates high in a bid to preserve margins.
In the initial days following the cut smaller banks have moved first to take advantage of the new freedom on deposit rates. But larger banks are likely to follow suit eventually, analysts say, meaning effective deposit rates could remain largely unchanged in spite of the lower benchmark.
“Our bank adjusted its own benchmarks in line with the central bank but hasn’t issued new rules on how actual loan rates should float above or below. For now we’ll keep using the old guidelines,” said a client manager at Bank of China in Shanghai.

NY Post : DreamWorks Animation boss makes the wrong kind of headlines

Hollywood and Wall Street saw DreamWorks Animation boss Jeffrey Katzenberg make all the wrong kind of headlines last week.
The embarrassing collapse of merger talks with toy-maker Hasbro Nov. 20 sent DreamWorks’ stock down as much as 14 percent that morning. Just two months earlier, DWA had similarly failed merger talks in September with Japan telecom giant Softbank.
But Katzenberg is nothing if not intrepid. While the movie and finance worlds were still buzzing about the failed talks, the movie mogul got out in New York last week to promote DWA’s “Penguins of Madagascar.”
A party at the Bryant Park ice rink saw Katzenberg mingling with actors including Benedict Cumberbatch and Mr. 305, Pitbull.
But Katzenberg did not chat with press or get out on the rink, according to our spies. (We’ll save the thin-ice jokes.)
“Penguins” stars a bunch of accident-prone penguins who brave a vengeful squid named Dave. It opens on Nov. 26 and is distributed by 20th Century Fox.
Other VIPs who took their chances of staying upright on the ice included ABC News’ George Stephanopoulos and actress Debra Messing .

>>> Geveran Trading may have to make a mandatory offer for the remaining shares

Geveran Trading may have to make a mandatory offer for the remaining shares in Norwegian Property

Geveran Trading, the investment company controlled by Norwegian shipping magnate John Fredriksen, may have to make a mandatory offer for all of Norwegian Property (Npro), according to Dagens Naeringsliv.

The Norwegian business daily reported, without citing any specific sources, that Geveran is said to have acquired a 4.7% stake in Npro for around NOK 250m (EUR 29.6m) on Friday, increasing its total stake from 32.87% to 37.54%.

The paper reported that this means that Geveran has surpassed the 33.3% limit which requires the shareholder to make an offer for the remaining shares.


Source Dagens Naeringsliv