| |||
|
MTD Performance: SX5E -2.53%,UKX -2.93%, CAC -2.40%, DAX -1.81%, IBEX -4.14%,FTSE MIB -1.92%, S&P500 -2.36%
Best & Worst Performing Sectors: TRAVEL & LEISURE - Short squeeze in the airlines puts sector top of pile..u/c METALS & MINERS - Bottom of the pile again, China pain still very clear...-7%
ELEKTA - Squeezed as orders/sales beat, huge short base, 18.4%............+8% NEOPOST - Beat on 2Q numbers, sees slight improvement in sales, 7% SI.....+8% INSAT - Rallying post successful launch, pushing on in flight connectivity+7% RUBIS - Beat on numbers on Monday 1H net EUR80m vs EUR52m, +45% YTD.......+6% AIR FRANCE - Indicative of covering in sec, +ve investor meeting with CEO.+6% UCB - Osteoporosis drug romosozumab met its goals in phase 3 study........+6% ASHTEAD - Revs +26% incl rental revenue +20%, SI 4.6%, cont to push short.+5% RYANAIR - Passenger numbers +10% YoY, Jacobs: had a 'very strong summer'..+5% TITR IM - TI said to consider $6 billion stock conversion.................+5% ASTRAZENECA - Announces partnership with ARX for brodalumab drug..........+4% AMEC FOSTER - H1 results in line with recent IMS, rev and EBITDA fine.....+4% SYNGENTA - To divest global vegtble seeds business & annces USD2bn buyback+4% GRF/P SM - FTSE AW changes announced, MLe +2.2m 28x ADV, close Sept 18th..+4% MEGGITT - Continues to rally, bid spec rumours the driver 16% off highs...+4% COBHAM - Cont August rally (+8%) having digested composites biz to MGGT...+3% EASYJET - Rallied post solid traffic stats and upgrade to guidance........+3% AB INBEV – Company not interested in diversifying into spirits, flat YTD..-3% BASF - BBG says may be liable for asbestos from Englehard acquisition.....-3% GEMALTO – Continuing selloff aftr disp. #s on 26 Aug(lwr margin & inc opx)-3% PREMIER FARNELL – To be deleted from FTSE250 on Sept18, MLe -1.8m 1.83 ADV-3% QSC – According to CFO, Stefan Baustert, company may cut divdend, flat YTD-3% AIRBUS - We think Asian airlines profit cycle at peak.Poses risks to AIR..-4% BP - We DOWNGRADE to Underperform. Risks of capex cuts & dilutive M&A.....-4% BUREAU VERITAS - #s broadly inline but outlook weaker & likely FX d'grades-4% AMADEUS – We d/grde to Neutral, w/ LHA GDS-surcharge disputes have begun..-4% VIVENDI - Revenues beat, but margins a touch light. We keep a Buy rating..-4% IMMOFINANZ – Secondary placing intention regarding BUWOG announced........-4% PGS – Redces CAPEX 2016 by USD50m, sees weak market conting well into 2016-4% CASINO – >50% of sales comes from S.America,SA curncies weakened this week-6% DIPLOMA – Org. growth headwinds continued, COO steps down, -5% YTD........-5% CAIRN ENERGY – BAML downgrade from Buy to Neutral, -21% YTD performance...-5% EVONIK – Institutional Inv. sold 6.99m shrs @31.80 (CS is sole book runne)-5% DRAX – FTSE AW changes announced, MLe -6.9m 3.8 ADV, close Sept 18th......-5% COMMERZBANK – Chief Risk Officer Schmittmann is stepping down @end of year-5% GERRY WEBER – Leaves MDAX index will be included to SDAX,-45% YTD.........-5% INGENICO – Secured backing fom banks for Worldpay bid,-15% snce BID inten.-6% ENGIE - We DOWNGRADE to Underprfrm, we see grwing risk of dvdnd cut aft‘16-6% LANXESS – To be deleted from DAX on Sept. 21, BAML BUY-rating, +11% YTD...-6% TELEFONICA - We d/grde to U/P, EM exposure warrants a more cautious view..-6% WEIR – To be deleted from FTSE100 on Sep18, MLe-2.1m 1.93ADV..............-6% ILIAD – Govt is considering audiov. tax on televisn to incl internet boxes-7% FLGHF ZUERICH – H1 net CHF40.2m vs est. CHF43m, -11% since Aug, +7% YTD...-7% ASOS – CEO Nick Robertson will step down 15y aftr he co-founded, +8% YTD..-7% EDF – Flamanville nuclear reactor startup delayed to 4Q ’18 from 2017.....-8% RWE – To be deleted from Euro Stoxx 50 on Sept. 21th, BAML U/P-rating.....-8% REPSOL – To be deleted from Euro Stoxx 50 on Sept.21th, BAML U/P-rating...-9% HALFORDS – Sees cyclng sales belw curnt est. for 2Q,-18% snce high in Aug-11% GLENCORE – Grwing inv. concerns that it may be forcd into an equity issue-14% ABENGOA – El Confi report: some banks won’t underwrite planed capitl incr-13% LONMIN – To be deleted from FTSE250 on Sept 18th, MLe -2.9m 0.46 ADV.....-16%
EMEA HF WEEKLY DIGEST:
Hedge Fund News: ~ Kevin Stadtler’s Stadtler Capital Management is opening to new investors this month. The equity long/short tech-focused fund has been closed to investors since September 2014 and will be capped at $250m. ~ Aberdeen Asset Management launched the Aberdeen Alternative Strategies Fund with $500m as the firm’s first alternatives fund that can be marketed across the EU. ~ Hedge Fund launches in Asia are on track to decline for the 3rd straight year as equity-market volatility prompted investors in the region to pare risk. ~ Hedge funds reduced net exposure to 77% going into Q3 2015, the first reduction since Q3 2013. However, net exposure in USD notional increased by 0.7% to $791bn, a record high. ~ Hedge funds owned 5.95% of the Russell 3000 floats at the start of Q3 2015, a new record high.
Flow: ~Cash: Another volatile week, clear selling in the tech and telco space on the move lower (Deutsche Tel, Nokia, Alcatel etc.). ~ Options: flow has been relatively quiet this week following last week’s chunky hedges whilst futures flow was heavily skewed to sell. ~ Program: A busy first half of the week on PT with month end and MSCI rebalance on Monday followed by a strong start to the month with total flow above average.
Top Research of the Week:Bullish Euro Telcos but Downgraded Telefonica to Underperform (EUR12.50 PO) ~ We believe the European Telcos sector is well positioned to outperform, with investors positioned neutrally and the sector on track to meet and beat growth levels implied in current valuation. ~ Two positive drivers: mobile data (where we see usage growth outstripping deflation in lower tiers), and convergence where we see evidence of structurally lower churn and ARPU stability. ~ Two new thematic drivers: Content, where we see TV as an increasing factor in telco growth strategies, although market make up is significantly diverse and E-Sim, which could be a boost to machine to M2M growth within the wider internet of things, but from a consumer perspective we see as an emerging threat to the telco operators. ~ Bearish on TEF due to EM exposure as a significant risk to earnings, dividend and valuation.
Top Trade for Next Week: Sell Home Retail into Trading Statement – Thursday 10th ~ Continues to lose market share to Dixons and Carphone Warehouse. ~ Amazon really starting to hurt them. ~ Yes net cash but burning through it. ~ 45,000 workers will be hurt by new minimum wage changes; management will have to quantify the impact.
MEGA Europe: ~ Gilles Moec believes that the ECB will announce an extension to QE by year end, but are waiting for China / Fed before acting. ~ Positioning looking more supportive in Europe, limited flow in options market (still dominated by banks), but we have been big sellers of EU futures and cash unwinds continue (note SX7E, SXQP underperformance today) ~ Our flows show short positioning in EURUSD is 35%-40% off the highs so there is scope for Euro to trade back towards 1.10. FX will lead equities, EUR weakness buy Dax ~ Inflation falling in Europe, with growth increasing. Buy high-yielding equities again. BAML basket MLEILRDV Index (low-risk dividend names) outperformed meaningfully in Q1 this year last time this trade worked
BAML USA: ~ Hartnett - Expects a Fed hike & a Sept mkt rally, with the stage set by forced selling of crowded winners, limited financial system contagion, China stimulus and a very "dovish" Fed hike will likely spark a tactical rally. If Fed doesn't hike & investors don't abandon hope on growth, barbell of Über-growth & Über-value should outperform. ~ Flows – 1st equity inflows into the US for 3 weeks ($8.4bn). Caveat: $7.2bn of inflows were via SPY, which could be short interest, via create-to-lend process. ~ Risk Parity – Much has been made recently of the threat of forced selling by risk parity and other quant funds during recent market shocks. ~ Molson Coors – If you think ABI will buy SAB then TAP is a great derivative trade in the US. Very likely to buy out the US MillerCoors JV which would be 35-55% accretive in 2106 on our numbers.
BAML Asia: ~ A continuation of the same theme from European clients, not engaging in the markets and fading the bounce. ~ Shortened China week due to V-day saw some shorts being taken off, especially with the continued National Team support to the markets. Crucial to see CNY and SHCOMP next week. ~ Seeing sellers of India – the well owned names, either due to redemptions or locking in of the performance as the markets feel heavy. ~ Interestingly some Long funds have been looking at consumer staples in China, incoming requests as these are now perceived to be at attractive levels.
BAML EEMEA: ~ Between the crucial ECB and Fed meetings, we maintain our constructive view on EEMEA on a one-month horizon though volatility will be high between today’s US payrolls and Sep 17. ~ In EM equities all of our timing tools triggered “buy” signals this week. ~ Chinese monetary conditions improved most since 1Q14, which then led to a multi-month EM rebound. And the Sep 17 Fed hike our US team expects should clear the air for some covering of the large EM underweight across asset classes. ~ From a valuation perspective, EMFX is now the cheapest vs. fair value since 2009 thought not as cheap as after the Asian crisis. ~ In equities we prefer CEE and South Africa as they tend to be relatively correlated with G-10 equities and don’t have much idiosyncratic downside risk.
Stock Loan: ~ BWIN.PARTY – Withdraws recommendation for 888 offer and supports GVC’s raised bid – 25p in cash and 0.231 new shares for every share of BPTY. GVC to raise £150mln via s share placing. ~ NESTE / FORTUM - Reuters reported that Finland is planning to sell shares in state-owned companies worth about €1.6bn by 2018 to finance growth projects.
|