Not much… Just some more concerns on Spain and China.


Europe set for slightly better start. Wall St closed a touch lower after disappointing data. Ireland is expected to have endorsed fiscal stability pact. Spain denies reports of talks with IMF re bailout, as did IMF head Christine Lagarde, who met with the Spanish deputy PM yest. EU’s Olli Rehn warned single currency area could disintegrate without fiscal discipline. Macro eyes on US non-farms with cons 150k after ADP climbed less than forecast.


On Spain
There is no money left… Madrid announced last night that €97bn had left the economy in the first quarter. (

Late last night the WSJ published an article saying the IMF was investigating ways to help Bankia, but this was denied by Mrs Lagarde later.

On China
The NBS PMI declined in May to 50.4 vs 53.3 in April and consensus’ expectations of 52. The production index declined to 52.9 from 57.2 and the new orders dropped to 49.8 from 54.5. One may hope for the government to take aggressive measures to boost the economy. We could get another cut in the RRR over the week end but most economists think it will happen later and if the CPI drops below 3M.

The HSBC PMI came out at 48.4 vs 49.3 previously.

On the Fed
Apparently, Dow Jones ran a story last night saying that the current European crisis could push the Fed towards action via bond buying or another Operation Twist in the short term.


Financière d’Uzes launches a wine fund


– BANCO SABADELL’s Chairman says that the Bankia crisis and the capital needs of lenders formed from former savings banks has ‘opened the possibility’ that Spain may have to seek a European bailout
– Mediobanca is seeking to remove Assicurazioni Generali’s CEO because the investment bank wants to improve the performance of Italy’s biggest insurer
– Deutsche Bankunit wins a $900 million capmark loan portfolio, including 57 loans on ~65 properties, reports Reuters
– Dexia gets a four-month extension of €45 billion of government funding backstops, until September 30th
Munich Re Raised to Buy vs Neutral at UBS

– BHP BILLITON’swritedown on value of US onshore gas assets likely close to $2-$3b rather than mkt expectations $5-$10b
– RIO TINTO’s procurement from China in 2012 will increase by $300 million from last year, reaching $1.5 billion, according to Bloomberg
– Glencore’s bid for Viterra has been approved by Ontario Superior Court
– Xstrata’s costs for its deal with Glencore are seen at $101.2-$116.3 million
– Ciments Francais sells 51% Afyon stake to Cimsa for ~€25 million
– ACS will not sell more Iberdrola shares, says Bloomberg
– EADS’ CFO says that it is conducting a feasibility study to determine whether ‘it makes sense’ for it to have its own bank
– Air France-KLMshareholders reject a €400,000 severance payment to the former CEO
– Volkswagen says that it is to create a board position to oversee China operations
– Peugeot plans layoffs at Rennes, Sochaux and Mulhouse, reports La Tribune
– RENAULT has signed a framework agreement with the Algerian government to build a factory in Algeria, according to Le Figaro
– Pirelli is investing $400 million in Mexico in its first plant in the country and will become Latin America’s largest tire producer by 2017
– Xstrata and Glencore’s merger is ‘finely balanced,’ UBS says
European capital goods Raised to In-line vs Cautious at Morgan Stanley
– SKF Raised to Overweight vs Equalweight at Morgan Stanley
– Finmeccanica Upgraded to Buy vs Neutral at UBS; PT increased to EU5 vs EU4
– Maersk Raised to Neutral vs Underweight at JPMorgan
– Gecina Raised to Neutral vs Underweight at JPMorgan
– PSP Swiss Property Raised to Neutral vs Underweight at JPMorgan
– Axel Springer Raised to Neutral vs Underweight at JPMorgan
– EADS PT Raised to EU37 From EU27 at Jefferies
– Tenaris Cut to Underperform vs Neutral at Credit Suisse; PT unchanged at EU15

Spain’s Industry Ministry is considering a plan to increase a tax paid by electricity producers to up to €5 per megawatt from €0.5, says Bloomberg
– AstraZeneca’s Chairman says that the CEO search is an ‘immediate priority’, reports the FT
– Shire’s CEO says that its search for acquisitions is being helped by reduced funding from venture capitalists for biotechnology start-ups
– Sanofi’s president of global R&D says that it is advancing its overhaul of research and development, with the goal of becoming the industry leader in bringing new medicines to market
– Eni is unlikely to import crude in July once EU Tehran sanctions start, according to Reuters
– Repsol YPF’s investors criticised the Chairman over his handling of the company’s Argentine unit, whose expropriation wiped €14 billion from its the market value
– Novartis is pricing in near worst-case scenario, Morgan Stanley says; Reiterates Overweight, PT SF59
– RWE Removed from Best Ideas at Morgan Stanley
– Enel PT Cut to EU2.45 vs EU2.7 at BofA; Kept at Underperform

Improved corporate confidence will be the key driver for investing in technology, says Bloomberg
– Portugal Telecom says that Brazil’s Telemar Norte Leste has raised its stake in the company to 10%
– Telefonica’s plan for an initial public offering of its O2 Germany unit follows a course that has failed to reap rewards for competitors over the past decade, reports Bloomberg; it may raise €1.5 billion through asset sales
– KPN is looking for investors in China and the Middle East, according to Bloomberg
Sell Kabel Deutschland as FCF is under pressure, Citi says
– PhilipsRaised to Equalweight vs Underweight at Morgan Stanley; PT EU16 vs EU14.40, Removed from Best Ideas

– British American Tobaccoand Philip Morris International are seeking to derail Russian plans to crack down on smoking in the world’s largest tobacco market after China
– Pernod-Ricard Kept as Pick in Spirits at JPMorgan; Kept at Overweight, PT Raised to EU84
– Kingfisher PT Cut to 355p vs 370p at HSBC; Kept at Overweight

– Neopost1Q rev. EU248m; maintains full-year growth and operating margin forecasts
– La Banque Postaleis examining a possible takeover of Credit Immobilier de France at the urging of the state, according to Les Echos
– Dialog Semiconductor Initiated at Equalweight at Morgan Stanley
– Eurocommercial Properties Cut to Neutral vs Overweight at JPMorgan
– Quintain Estates & Development Raised to Overweight vs Neutral at JPMorgan
– Ingenico Reinitiated at Outperform at Exane; PT increased 63% to EU44
– Saras PT Cut to Eu0.72 VS Eu0.85 at Citi; Kept at Sell
– William Hill PT Raised to 260p vs 220p at Morgan Stanley; Kept at Underweight

Max Kamir

Louis Capital Markets UK,LLP

Authorised and regulated by the FSA and Banque de France

39-41 rue Cambon

75001 Paris

T +33 (0)1 53 45 10 74

E mkamir


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