>>> Brokers Upgrades & Downgrades - 4th of MArch 2015

>>> Up
*FAURECIA RAISED TO BUY VS NEUTRAL AT GOLDMAN
*GEMFIELDS RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*ISRAEL DISCOUNT BANK RAISED TO BUY AT UBS
*RIGHTMOVE RAISED TO NEUTRAL VS SELL AT CITI
*TUPRAS RAISED TO NEUTRAL AT UBS
*VALEO RAISED TO NEUTRAL VS SELL AT GOLDMAN

>>> Down
*AIR FRANCE CUT TO NEUTRAL VS BUY AT GOLDMAN
*AMADEUS IT CUT TO HOLD VS BUY AT BERENBERG
*AURELIUS CUT TO HOLD VS BUY AT BERENBERG
*BERENDSEN CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*INDITEX CUT TO MARKET-PERFORM VS OUTPERFORM AT BERNSTEIN
*KELLER CUT TO ADD VS BUY AT NUMIS
*LAIRD CUT TO HOLD VS BUY AT LIBERUM
*NORSK HYDRO CUT TO UNDERPERFORM VS BUY AT BOFAML
*SVENSKA HANDELSBANKEN CUT TO NEUTRAL VS BUY AT GOLDMAN
*TAYLOR WIMPEY CUT TO NEUTRAL VS BUY AT CITI
*TRAVIS PERKINS CUT TO HOLD VS ADD AT NUMIS

>>> PT Change


>>> Initiation
*ADLER REAL ESTATE RATED NEW BUY AT BERENBERG, PT EU15.50
*FINECO BANK RATED NEW NEUTRAL AT CITI, PT EU5.7
*TELE COLUMBUS RATED NEW BUY AT GOLDMAN, PT EU15.3

>>> Call
>> Stock
*NORSK HYDRO EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY

>>> What to look at today - 4th of March 2015

Dow -0.47% S&P-0.45% NAsdaq -0.56% Russell -0.63%
US Market Closed Lower, after rallying 3.5% in the last 3 weeks...volume were low @ 727mil shares, Health care and technology both suffered from losses among high-beta components...the consumer discretionary sector (-0.2%) finished ahead of the market thanks to the relative strength of media names like CBS (CBS 62.80, +1.05) and Time Warner Cable (TWC 156.74, +1.23). Meanwhile, most retail names struggled, but AutoZone (AZO 652.00, +2.47), Best Buy (BBY 39.17, +0.54), and Dick's Sporting Goods (DKS 56.00, +0.58) gained between 0.4% and 1.4% after reporting better than expected results. among cyclical sectors, energy (+0.2%) displayed relative strength throughout the day while crude oil fought to maintain its early-morning gain. The energy component jumped 1.9% to $50.54/bbl after testing its unchanged level shortly after the cash open...US After Hours EFUT +43.6%, NPTN +19.1%, CDXS +13.8%, SWHC +10.0%, TNET -17.9%, BOBE -17.3% following earnings/guidance...BOBE -17.3% (Board announced it will not pursue a sale or spin-off of the BEF Foods business segment at this time; co also reported earnings)...India central bank (RBI) announced another intra-meeting decision to cut interest rates by 25bps, lowering repurchase rate to 7.50%, reverse repo rate to 6.50%, and marginal standing facility rate to 8.50%. This marks the 2nd consecutive easing unveiled by the RBI in this surprise fashion, following the mid-January unexpected 25bps easing and a rate hold in early February. Recall the most recent Jan CPI YoY reading for India was 5.1%, less than 5.6% expected, giving the central bank further room to act...HSBC released China Feb Services PMI data at 52.0, an improvement versus Jan reading of 51.8. Economists from HSBC said China's service sector remained expansionary, though the rate of growth remained modest, adding the solid rise in new orders suggests activity growth may pick up in the months ahead. PBoC deputy governor Yi Gang spoke from Chinese People's Political Consultative Conference (CPPCC) meeting session, noting PBoC is focused on the risk of deflation and will look at economic situation in future monetary policy decisions. Shanghai composite traded lower by 0.2% during the morning session.

Nikkei -0.59% Hang Seng -0.57% Shnaghai +0.08%

RUB $ 61.90 WTI $50.49 (-0.06%) Brent $60.54(-0.79%) EURCHF 1.0748

Eur$ 1.1166 S&P -0.07% EuroStoxx+0.14% Dax+0.16% SMI+0.27%


Macro :
- Hollande Says No French Tax Increases in 2015, 2016 and 2017
- Germany May Exempt EU20m of Co. Assets From Inheritance Tax
- HSBC India Feb. Composite PMI 53.5 vs 53.3 in Jan.
- HSBC China Feb. Services PMI 52 vs 51.8 in Jan.

Keep an eye on:
- SPR GY : Axel Springer 2014 Rev. Up 8%, Ebitda Up 12%; Div. Plan Misses
- GBB FP : Bourbon Margins May Drop After 36% Profit Slump on Oil Crash
- DAI GY : China May Fine Mercedes Up to $80m in Antitrust Probe: Jiemian
- EDF FP : Macron Wants EDF, Areva Strategic, Ops Integration: Figaro
- EDP PL : EDP CEO Says 2015 Investment Will Be Slightly Less Than in 2014
- EKTAB SS : Elekta 3Q Core Ebita Misses Est.; Keeps FY Forecasts
- FCA IM : Ferrari IPO float may be more than 10% - Milano Finanza daily edition
- GSZ FP : GDF Suez French Gas Prices to Rise ‘Slightly’ in April
- HEN3 GY : Henkel 4Q Adj. Ebit Misses Ests., Organic Sales Beat
- INGA NA : ING to Sell Remaining Stake in Voya Financial, Voya to Buy Back $600m in Shrs From ING;
- KPN NA : KPN Said to Revive Sale of Belgian Mobile-Phone Unit Base
- MMB FP : Lagardere Plans to Sell Belgian Press Distribution Network: Tijd
- NOK1V FH : Nokia Chairman Says Handset Sale Was Best Option: Kauppalehti
- PWTN SW : Panalpina 4Q Ebit CHF22.3m, Est. CHF32m
- GENP FP : Stallergenes Majority Investor Proposes Merger With Greer
- TEMN SW : Temenos Buys Multifonds for EU235m; Raises 2015 Outlook

>>> Ferrari IPO float may be more than 10%

Ferrari IPO float may be more than 10%

Fiat Chrysler Automobiles (FCA) could decide to boost its float for the IPO of its luxury car subsidiary Ferrari beyond the 10% presently planned, Italian language daily Milano Finanza reported. The report cited FCA CEO Sergio Marchionne who said that the float could be increased from 10% to 20% in order to satisfy expected high demand.

The item also cited Marchionne as noting that FCA is studying whether to create a holding above Ferrari that would be listed rather than the operating company. The report said that the holding would be headquartered in the Netherlands while the listing would take place on the NYSE.

Marchionne noted that if the holding is created, the operational activities of Ferrari would continue to be in Italy with taxes being paid there.

Source Milano Finanza daily edition

(The Telegraph) Eurozone faces first regional bankruptcy as debt debacle stalks


Eurozone faces first regional bankruptcy as debt debacle stalks Austria's Carinthia

Fitch has stripped Austria of its AAA rating, adding that 'within a short space of time the debt dynamics of Austria have deteriorated significantly'

The Alpine region of Carinthia faces probable bankruptcy after Austria’s central government refused to vouch for debts left by a disastrous banking expansion in eastern Europe and the Balkans.
It would be the first sub-sovereign default in Europe since the Lehman Brothers crisis, comparable in some respects to the bankruptcy of California's Orange County in 1994 or the city of Detroit in 2013.
Austria’s finance minister, Jörg Schelling, said Vienna would not cover €10.2bn (£7.4bn) in bond guarantees issued by the Carinthian authorities for the failed lender Hypo Alpe Adria, or for the "Heta" resolution fund that succeeded it. This leaves the 550,000-strong province on the Slovene border to fend for itself as losses spin out of control.
“The government won’t waste another euro of taxpayer money on Heta,” he said, insisting that there must be an end to moral hazard. The Hypo affair has alredy cost taxpayers €5.5bn. The Austrian state has said it will cover €1bn of its own guarantees “on the nail” but nothing more.
Sources in Vienna suggested that even senior bondholders are likely to face a 50pc writedown, becoming the first victims of the eurozone’s tough new “bail-in” rules for creditors. These rules are already in force in Germany and Austria, and will be mandatory everywhere next year.
“We are at a very delicate phase when Europe’s banking system switches from a bail-out regime into a much tougher bail-in regime, and Austria has just thrown this into sharp relief,” said sovereign bond strategist Nicholas Spiro. The biggest bondholders are Deutsche Bank’s DWS Investment, Pimco, Kepler-Fonds and BlackRock. The World Bank also owns €150bn of Hypo debt.
Austria’s banking regulators surprised markets by intervening over the weekend to wind down Heta and suspend debt payments until 2016 after discovering a further shortfall in capital of €7.6bn. The surge in the Swiss franc in January after the collapse of Switzerland’s currency floor against the euro appears to have been the last straw, setting off another wave of likely losses from eastern European mortgages denominated in francs.
“This is getting bigger and bigger,” said Marc Ostwald from Monument. “They kept kicking the can down the road but it is finally catching up with them, and Heta won’t be the last. There is a whiff of the Irish situation in this story. Carinthia stood as guarantor for debts that it could not possibly cover,” he said. There are many regions that could slide into difficulties, including Belgium's Wallonia, or the Italian region of Sicily.
The Hypo bonds were underwritten in the boom years before the Lehman crisis by Austria’s populist leader Jorg Haider, then governor of Carinthia, leaving it to a subsequent social democrat team in Klagenfurt to sort out the mess.
Carinthia’s governor, Peter Kaiser, said his government is not liable for the debts unless Heta is definitively declared bankrupt – as opposed to just a moratorium - and vowed to defend his region in the courts. He warned that Carinthia would face a “dramatic situation” if bankruptcy does in fact go ahead, as widely expected.
Austria has not suffered any immediate fallout from Heta’s latest woes. It was able to sell five-year bonds on Tuesday at yields below zero for the first time ever as investors scramble to amass EMU sovereign debt before the European Central Bank launches quantitative easing next week. The ECB aims to buy €60bn of bonds each month, but there is already a chronic shortage of assets available on the market.
The IMF says Austria is lagging on reforms
This "QE-effect" masks the underlying reality that Austria is no longer a blue-chip borrower. Fitch stripped the country of its AAA rating last month, cutting it one notch to AA+. “Within a short space of time the debt dynamics of Austria have deteriorated significantly,” it said.
The agency said the debt ratio was likely to peak at 89pc of GDP this year – 15 percentage points higher than expected just 18 months ago – due to the lingering effects of the banking crisis and weak growth in nominal GDP. The various bank bail-outs have cost 11pc of GDP, twice as bad as Britain’s travails.
Fitch warned that Austrian bank exposure to Russia, Ukraine and the rest of eastern Europe is €194bn, or 59pc of the country’s GDP, though part of this is acting as a conduit for investors in western Europe.
William Jackson, from Capital Economics, said Austrian banks face a double squeeze as borrowers in Hungary and the Balkans struggle with both deep property slumps and a slide in their local currencies. “These foreign currency debts are a slow-burn issue. The non-performing loans emerge over time,” he said.
The International Monetary Fund said in its latest healthcheck on Austria that three large banks – Raiffeisen, Erste and Volksbanken – are vulnerable to any shocks. “Risks remain elevated. Bank profitability suffers from rising non-performing loans, risk costs and write-offs,” it said.
The IMF said Austria’s reforms have largely stalled. The country has one of the highest barriers to services in Europe, the worst subsidies at 3.75pc of GDP, the highest tax share on labour at 58pc, a high rate of early retirement, and high state spending at 52pc of GDP, compared with 45pc in Germany.
While Austria remains a rich and successful country, it is slithering towards the bottom of the reform league. France looks less sluggish by comparison, and Greece looks almost Thatcherite.

>>> Asian Update

Asian Mid-session Update: India cuts rates in second straight intermeeting decision; Australia Q4 GDP meets consensus


***Economic Data***
- (IN) INDIA CENTRAL BANK (RBI) CUTS REPURCHASE RATE BY 25BPS TO 7.50%, effective immediately (intra-meeting decision)
- (CN) CHINA FEB HSBC SERVICES PMI: 52.0 V 51.8 PRIOR
- (HK) HONG KONG FEB HSBC PMI: 50.7 V 49.4 PRIOR (1-year high)
- (AU) AUSTRALIA Q4 GDP Q/Q: 0.5% V 0.6%E; Y/Y: 2.5% V 2.5%E
- (AU) AUSTRALIA FEB AIG PERFORMANCE OF SERVICES INDEX: 51.7 V 49.9 PRIOR (1st expansion in 12 months)
- (JP) JAPAN FEB MARKIT SERVICES PMI: 48.5 V 51.3 PRIOR (1st contraction in 4 months)
- (NZ) New Zealand Q4 Value of All Buildings Q/Q: 0.3% v 1.0%e

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.1%, S&P/ASX -0.6%, Kospi +0.2%, Shanghai Composite -0.9%, Hang Seng flat, Mar S&P500 -0.1% at 2,103

***Commodities/Fixed Income***
- Apr gold +0.1% at $1,206, Apr crude oil -0.2% at $50.54/brl, May Copper +0.3% at $2.66/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 2.7 tonnes to 760.8 tonnes; Lowest since Jan 30th
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1525 v 6.1543 prior setting
- (US) API PETROLEUM INVENTORIES: CRUDE: +2.9M (8th straight build) v +4.5Me, GASOLINE: +0.53M v -2Me, DISTILLATE: -0.29M v -2.5Me
- (KR) South Korea Feb Foreign Reserves: $362.4B v $362.2B prior
- (JP) BOJ offers to buy ¥350B in 1-3yr JGBs, ¥400B in 3-5 yr JGBs, and ¥400B in 5-10yr JGBs
- (TW) Taiwan sells NT$130B in 1-yr bills at 0.585% v 0.598%on Dec 4th

***Market Focal Points/FX***
- India central bank (RBI) announced another intra-meeting decision to cut interest rates by 25bps, lowering repurchase rate to 7.50%, reverse repo rate to 6.50%, and marginal standing facility rate to 8.50%. This marks the 2nd consecutive easing unveiled by the RBI in this surprise fashion, following the mid-January unexpected 25bps easing and a rate hold in early February. Recall the most recent Jan CPI YoY reading for India was 5.1%, less than 5.6% expected, giving the central bank further room to act. Rupee and Indian fixed income moved higher on the announcement, while the main equity index rose to record level. RBI noted softer inflation readings may persist in H1 before firming slightly in H2, adding the INR currency has remained strong relative to peer nations, which is undesirable in that it boosts disinflation.

- Australia Q4 GDP met expectations y/y and missed by a decimal q/q, as the prior quarter's sequential reading was also revised higher to 0.4% from 0.3%. AUD/USD initially softened on the release before strengthening by about 20pips to 0.7830 following the data. GDP components saw final consumption growth rising to +0.8% v +0.6% prior and terms of trade decline narrowing to -1.7% v -3.5% prior. Separately, RBA's Edwards remarked GDP must grow at least 3% to lower unemployment, but also noted property market inflation remains too fast given conditions in other parts of the economy.

- HSBC released China Feb Services PMI data at 52.0, an improvement versus Jan reading of 51.8. Economists from HSBC said China's service sector remained expansionary, though the rate of growth remained modest, adding the solid rise in new orders suggests activity growth may pick up in the months ahead. PBoC deputy governor Yi Gang spoke from Chinese People's Political Consultative Conference (CPPCC) meeting session, noting PBoC is focused on the risk of deflation and will look at economic situation in future monetary policy decisions. Shanghai composite traded lower by 0.2% during the morning session.

***Equities***
US markets:
- CECO: Reports Q4 -$0.12 v -$0.31e, R$174.2M v $237Me; +12.9% afterhours
- SWHC: Reports Q3 $0.15 v $0.11e, R$130.6M v $125Me; +10.1% afterhours
- TIVO: Reports Q4 $0.07 v $0.04e, R$114.1M v $117Me; +6.4% afterhours
- AMBA: Reports Q4 $0.68 v $0.48e, R$64.7M v $56.6Me; +6.1% afterhours
- AVAV: Reports Q3 $0.10 v $0.06e, R$68.4M v $72.0Me; +2.3% afterhours
- ASNA: Reports Q2 $0.07 v $0.08e, R$1.29B v $1.30Be; -5.5% afterhours
- VEEV: Reports Q4 $0.09 v $0.09e, R$87.0M v $85.5Me; -12.8% afterhours
- TNET: Reports Q4 $0.10 v $0.37e, R$126.9M v $139Me; -16.3% afterhours
- BOBE: Reports Q3 $0.60 v $0.69e, R$357.2M v $359Me; Board will not pursue a sale or spin-off of the BEF Foods business segment; -18.1% afterhours

Notable movers by sector:
- Financials: China Vanke 000002.CN -0.2% (Feb sales results)
- Materials: China Resources Enterprise 291.HK -4.1% (FY14 guidance)
- Energy: Hanergy Solar Group 566.HK +12.8% (FY14 results)
- Technology: Sharp Corp 6753.JP -4.9% (S&P cuts rating)
- Healthcare: Australian Pharma API.AU +3.6% (H1 guidance); China Traditional Chinese Medicine 570.HK +4.0% (FY14 guidance)
- Telecom: China Unicom 762.HK -1.8% (FY14 results)

>>> US After Hours : EFUT +43.6%, NPTN +19.1%, CDXS +13.8%, SWH

After Hours Summary: EFUT +43.6%, NPTN +19.1%, CDXS +13.8%, SWHC +10.0%, TNET -17.9%, BOBE -17.3% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: EFUT +43.6%, NPTN +19.1%, CDXS +13.8%, CECO +13.1%, SWHC +10%, NHTC +9.7%, AMRN +8.4%, TIVO +6.8%, AMBA +6%, LRE +4.2%, ZLTQ +2.3%, AVAV +1.6%, CPIX +1.6%, REGI +0.7%, TGT +0.2%

Companies trading higher in after hours in reaction to news: TBK +1.6% (acquired Doral Money and assumed management of Doral CLO portfolio), CPIX +1.6% (announced positive top-line results from Phase 2 study of Hepatoren in patients with Hepatorenal Syndrome; sNDA for Caldolor (ibuprofen) injection submitted), CPTA +1.4% (declared a special distribution in the amount of $0.50 per share of the Company's common stock, to be paid monthly over the remainder of 2015; provides portfolio activity), GME +0.8% (increased quarterly dividend 9% to $0.36 per share), CNI +0.8% (announced intent to purchase for cancellation up to 1.2 mln of its common shares in a private agreement between CN and an arm's-length third-party seller)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: TNET -17.9%, BOBE -17.3%, DARA -16%, BV -11.9%, VEEV -8.6%, ASNA -5.5%, RCPT -2.4%, GERN -1.7%, XEL -0.5%, ABM -0.4%, BONA -0.1%

Companies trading lower in after hours in reaction to news: CYCC -18.3% (announced proposed public offering of common stock, size not disclosed), BOBE -17.3% (Board announced it will not pursue a sale or spin-off of the BEF Foods business segment at this time; co also reported earnings), NSPH -13.3% (co will conduct a special meeting of stockholders; stockholders will be asked to approve amendments to increase the authorized shares of its common stock from 150 mln to 250 mln shares, and to effect a reverse stock split with a ratio in a range of between 15-to-1 and 25-to-1), NSPR -10.9% (announced proposed public offering of common stock and warrants; sizing not disclosed), VEEV -8.6% (announced intent to acquire Qforma CrowdLink, termos not disclosed; co also reported earnings), RATE -4.6% (filed to delay Form 10-K; co's Audit Committee concluded that previously issued financial statements should no longer be relied upon), GERN -1.7% (co is conducting organization resizing), XPLR -1.6% (announced proposed public offering of common stock; sizing not disclosed), EXXI -1.5% (commenced a private offering to institutional buyers of $1.25 bln principal amount of Senior Secured Second Lien Notes due 2020), APAM -1.4% (announced offering of ~3.83 mln shares of common stock), ABCO -1.2% (filed to delay Form 10-K) 

WSJ : reserve Bank of India Cuts Benchmark Rate for Second Time This Year


Reserve Bank of India Cuts Benchmark Rate for Second Time This Year
Central bank cuts its main repurchase rate by 0.25 percentage point

MUMBAI—India’s central bank surprised markets with an unscheduled cut to its key lending rate for the second time since the beginning of the year, indicating that it is joining a world-wide trend of monetary easing that is driving global interest rates to multiyear lows.

The Reserve Bank of India cut its main repurchase rate by 0.25 percentage point to 7.5%, according to a news release posted on its website. The bank said it acted following favorable inflation figures and because it was satisfied with some structural overhauls in the government’s budget, which was unveiled last week.

“Disinflation is evolving along the path set out by the Reserve Bank in January 2014 and, in fact, at a faster pace than earlier envisaged,” Gov. Raghuram Rajan said in a statement

Falling oil and commodity prices have helped lower India’s consumer-inflation rate to below 6% in recent months. If India’s inflation remains in check and the central bank continues to lower interest rates as expected, then India could see its gross domestic product growth climb further, economists predict.

Indian shares jumped to a new high after the rate cut, with the benchmark index rising to 30,024.74.

>>> US Closing Market: Influential Sectors Lead Market Lower

Closing Market Summary: Influential Sectors Lead Market Lower

The stock market endured a broad-based retreat on Tuesday that caused the S&P 500 (-0.5%) to surrender the bulk of its advance from Monday. The benchmark index settled ahead of the Nasdaq Composite (-0.6%) with eight sectors registering losses. All in all, it is worth pointing out that today's pullback occurred after the S&P 500 rallied nearly 3.5% in just three weeks, suggesting the retreat resulted from profit taking after a big run.

Equity indices began the day amid pressure from a few influential sectors like health care (-0.9%), technology (-0.8%), and industrials (-0.7%). The three sectors lagged throughout the day while the remaining sectors finished closer to their flat lines.

Health care and technology both suffered from losses among high-beta components. The iShares Nasdaq Biotechnology ETF (IBB 337.92, -1.83) settled lower by 0.5% after being down as much as 1.7% in the early going. Meanwhile, chipmakers pressured the technology sector after Micron (MU 29.67, -1.57) was downgraded to ‘Neutral' at Nomura. Shares of MU fell 5.0% while the broader PHLX Semiconductor Index slumped 1.9%.

The relative weakness among high-beta names was not isolated to health care and technology components. In fact, homebuilders also lagged with the iShares Dow Jones US Home Construction ETF (ITB 27.23, -0.43) falling 1.6%. However, the consumer discretionary sector (-0.2%) finished ahead of the market thanks to the relative strength of media names like CBS (CBS 62.80, +1.05) and Time Warner Cable (TWC 156.74, +1.23). Meanwhile, most retail names struggled, but AutoZone (AZO 652.00, +2.47), Best Buy (BBY 39.17, +0.54), and Dick's Sporting Goods (DKS 56.00, +0.58) gained between 0.4% and 1.4% after reporting better than expected results.

Elsewhere among cyclical sectors, energy (+0.2%) displayed relative strength throughout the day while crude oil fought to maintain its early-morning gain. The energy component jumped 1.9% to $50.54/bbl after testing its unchanged level shortly after the cash open.

Also of note, the utilities sector (+0.7%) settled in the lead, narrowing its 2015 decline to 6.0%. The remaining countercyclical groups registered losses, but consumer staples (-0.4%) and telecom services (-0.1%) settled ahead of the broader market.

Treasuries settled near their lows after sliding from their overnight highs. The 10-yr yield rose three basis points to 2.12%.

Tuesday's participation was a bit below average with roughly 727 million shares changing hands at the NYSE floor.

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while ADP Employment Change for February (consensus 220K) will be reported at 8:15 ET. The ISM Services Index for February (consensus 56.5) will cross the wires at 10:00 ET while the Federal Reserve's March Beige Book will be released at 14:00 ET.
  • Nasdaq Composite +5.2% YTD 
  • Russell 2000 +2.6% YTD 
  • S&P 500 +2.4% YTD 
  • Dow Jones Industrial Average +2.1% YTD