The Dawn Patrol – 28.06.12 – On the European Summit. MS and the Growth Scare. GS expects a 25bp ECB cut.

Kalimera,

Markets to open up today on expectations of announcements during the European summit which starts today at 15:00. US. Macro eyes will look at German unemployment, Eurozone consumer confidence, US GDP QoQ. And Italy to sell €2.5b 4.75% 2017 bonds and €3bn of 5.5% 2022 bonds (at 11:00).

Iliad Raised To Overweight From Underweight at Barclays

GEMALTO, with Orange, deploys NFC SIM cards in France.

JPMorgan on French Banks, analysing the proposal of M. Hollande to seperate speculative activities. Worst case would be a 10% earnings decline. SG remains the top pick.

CURRENT THEMES

On the European Summit
I guess, you’ve already read everything that can be supposed about the outcome of today’s meetings. It starts at 15:00 Paris time. Not much can be really hoped for given Angela’s comments yesterday. The most markets can hope for is the use of the exisiting funds (EFSF and ESM) to lower the yields on Spanish and Italian bonds. The only concrete proposals are the ones about the banking union proposed by Van Rompuy.

Also, an executive board member of the European Central Bank said that a rate cut would be an option when the bank meets next week, reports Reuters

STRATEGY

Nouriel Roubini Perfect Storm – Business Insider http://read.bi/NEqsX4

Stocks That UBS Clients Are Short – Business Insider http://read.bi/LQ0HCC

GS (Pill) European Views
We now expect a 25bp cut in the repo rate in July, but with the deposit facility rate left on hold Print Friendly

MS (Peters, Minack & co) Global Cross Asset Strategy
The Growth Scare

The team reminds us that the Eurozone crisis is only one of the problems that the markets face. Growth is lacking, growth is slow and the governments may not have the tools needed to deal with it. The growth scare has already taken its toll on EM, commodities and cyclicals…

The team is bearish on DM and bullish on EM on a long term perspective. They see EM outlook improving in 2H12 with region differentiation and see a Chinese soft landing. They still prefer the US tactically and wait for stronger signs of stimulus in China. They also like Credit (US more than EU). In terms of currencies, they like USD and JPY. Still cautious on commodities.

EUROPEAN EQUITIES

FINANCIALS
– Barclays
was fined GBP290m, the largest penalties ever imposed by regulators in the U.S. and U.K., for having tried to manipulate Libor
– Deutsche Bank is said to walk away from iWatt IPO as lead underwriter following a dispute over valuation with co. CEO
– BBVA says that the board, today, approved a 10 euro cent per-share gross dividend against 2012 earnings
– ING Groep
’s unit in South Korea will seek profit from trade finance, national debt mediation and derivatives
– Lloyds enters into final talks regarding the sale of 632 Branches to Co-Op
– SocGen
Kept as Preferred French Bank at JPMorgan
– Standard Chartered
Cut to Hold vs Buy at Citic Securities

INDUSTRIAL/MINERS/SERVICES
– Glencore was said to meet with Qatar’s sovereign wealth fund in London yesterday over the fund’s demand that it raise its bid for Xstrata; Gelencore may drop Xstrata’s merger if Qatar fund presses price; Glencore may bump Xstrata offer to 3.0x, SocGen says
– Peugeot is to announce Aulnay Closure by the end of July, Figaro says
– Fiat
’s joint venture with Guangzhou Automobile Group Co. began producing the Viaggio compact sedan at the new plant in Changsha in central China today
– BMW said it considered starting a contract assembly with the Dutch car plant NedCar
– Airbus is set to announce plans for its first commercial-jet assembly line in U.S.; it said it favour the City of Mobile as Alabama Plant Site
– Air France sells and leases back A380-800, made in 2009, for 9 years and 6 months to the Japanese company, Fuyo General
– Rio Tinto
’s Bell Bay aluminum smelter signs new power supply agreement, which will start from July 1 and will supply the operation until 2025, reports Bloomberg
– Polymetal Cut To Neutral VS Buy at UBS
– Skanska wins the order to build a shopping center in Oslo for SK1b
– Adecco
Raised to Equalweight at Morgan Stanley
– Randstad Raised to Equalweight at Morgan Stanley

UTILITIES/OIL/HEALTHCARE/CHEMICALS
– BP gets oligarchs to agree to TNK-BP Board Meeting, Bloomberg reports; Lawmakers are nearing a deal on the two-year transportation bill that includes key components of legislation that would funnel billions of dollars in fines from 2010 BP oil spill to the five Gulf States
– Fresenius acquires shares equal to 3.6% of Rhoen Klinikum Cap; It says the EU22.50 cash offer remains unchanged
– RWE plans to help operators of renewable energy power plants in Germany to market the electricity their facilities produce
– Lanxess
Cut To Neutral VS Buy at Citi
– Veolia Environnement
Rated New Sell At ING, PT Eu8
– Suez Environnement Rated New Hold At ING, PT Eu9.5

TMT
America Movil reaches it goal of 28% stake in ROYAL KPN after agreeing to acquire 40m shrs in tender offer
– Deutsche Telekom says T-Mobile USA Chief Humm is to step down
– Colruyt forecasts revenue growth of 3%-5% this year
– Bouygues
Rated New Equalweight At Barclays; PT Eu23.5
– Iliad
Raised To Overweight From Underweight at Barclays
– Infineon
PT Cut to Eu6.5 From Eu8.3 at ING, Stays Buy

RETAIL/CONSUMER/LUXURY
– Accor wants to ppen 200 Mercure Hotels by 2015, Le Figaro says
– Danone buys control of Morocco’s Centrale Laitiere for EU550m
– Reckitt Benckiser
Cut to Neutral vs Outperform at Credit Suisse

SMALL/MIDCAPS
– Hornbach 1Q Sales in-line with ests.; reiterates forecast; 1Q rev. EU918.8m vs. est. EU919.5m; 1Q Ebit EU75.4m vs. est. EU75m
– 3i Group Raised To Buy VS Neutral at Citi
– Axis Communications
sees its China sales rising by more than 60% for ‘several years,’ CEO says- Baccarat‘s second-biggest shareholder contests capital increase, reports Les Echos
– Monte Paschi‘s CEO says that liquidity was sound and, thus, that funding was not a problem; PT Cut to EU0.25 vs EU0.3 at BofA
– Gesco expects EU430m of sales in year to March 31 2013 vs EU415m in financial year 2011/2012
– Bwin.Party Digital Entertainment
Cut to Equalweight at Barclays; 2012 Ebitda Est. Cut 10% on Poker Revenues at UBS
– U-Blox acquires the U.K. based Cognovo for $16.5m
– Millennium & Copthorne
Raised to Overweight at Morgan Stanley
– ERG
PT Cut to EU6.5 vs EU7.5 at Nomura; Kept at Reduce
– Ruspetro Rated New Buy At Goldman, PT 256p

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
I http://www.louiscapital.com

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