The Dawn Patrol – 29.08.12 – On Jackson Hole, Spain, the Fiscal Cliff and French Debt.


Markets expected to open flat as markets are still waiting for something to happen in Jackson Hole… Macro eyes on US Q2 GDP, US home sales and the Beige Book.

BOUYGUES Q2 sales slightly better than consensus thanks to better construction number, but the telco side dropped meaningfully. Expect some downgrades for Bouygues and upgrades at Iliad…

Accor 1H Ebit Beats Est.; 1H Ebit EU212m vs est. EU206.6m. ; Sees 2012 Ebit EU510m-EU530m ; Aims to operate room base 40% under franchise agreements, 40% under management contracts, 20% in owned or leased hotels by 2016; (Reported 1H rev. EU2.72b, LFL sales up 3.6% on July 17)

L’oreal Rev. EU11.21b vs est. EU11.08b;1h Operating Profit €1.9 bln vs est €1.92 bln; 1H Adj. Net €1.66b vs est. €1.64b ; Co. confirms goal of outperforming market in 2012

L’Oreal Cut to Neutral from Buy at UBS while JPM thinks the share buyback soothes the margin miss and remains positive as the co reiterated its sales outlook.


On Jackson Hole
There isn’t much that should suprise us this Friday. in yesterday’s Dawn Patrol you can read GS’ view of what to expect from Bernanke on Friday (ie the monetary impact of QE on the economy) and as the FT wrote last night, expectations for QE3 have been lowered.

US data lowers expectations for QE3 –

On Spain
As we saw yesterday with the release of the ECB data on money and credit statistics (MFI), M3 was stronger was expected due to a surge in overnight deposits. Lending to households and corporates remains weak particularly in Spain. Spain also showed record rates of contraction of deposits and record sales of government securities. Barclays goes further by analysing the flows in details at a country level and the data for Spain is really poor in terms of deposit with €8bn drop in households deposits (-10.9% YoY).

On the Fiscal Cliff
You know that big cliff in front of us that one dares looking at. GS’ Hatzius team is out with a short note on the subject. They try to assess if the fiscal cliff is already weighing on the US economy by analysing industries with large exposure to government spending. And it’s not really conclusive has it had no meaningful impact on growth yet. But the team acknowledge that this exercise is subject to many caveats.

On the French Debt
Article on bloomberg: France Debt ‘Significantly Overvalued,’ General Re Says – Bloomberg


MS (Carr and Co) European Strategy
What does it normally look like at the top?

Can MSCI Europe move above 11x 12m PE?

In recent weeks MSCI Europe’s 12m PE has moved up toward 11x, which has marked the top of the range since early 2010. We look across a number of indicators to assess the prospects of European equity valuations moving above their recent trading range.
#1 Market timing indicators remain in buy territory
#2 Sentiment indicators are less constructive
#3 High beta and cyclical outperformance muted
#4 Fundamental growth data is improving
Longer-term returns depend on Europe growing nominal GDP faster than its borrowing costs




Raiffeisen 2Q net income and net interest income missed analysts estimates; 2Q Net EU160m vs est. EU165m; 2Q NII EU841m vs est. EU866m; 2Q loan-loss provisions EU247m vs est. EU253m ; 2Q f&c income EU376m vs est. EU370m ; 2Q trading income EU130m vs est. EU81m ; 1H CT1 ratio 10.1% ; Raiffeisen up 39% YTD vs 6% gain in SX7P; 9 buys, 10 holds, 6 sells; avg. PT EU28.08


Banco Sabadell wants to reduce the workforce of CAM by 1,773, Bloomberg reports

ING Groep wants to sell its Asian businesses but has failed to find a single buyer, may sell its $1 billion Hong Kong insurance unit as a separate entity, Reuters reported

Standard Chartered’s IDRs jumps as much as 8%; trading vol >3x 3-mo daily avg


Vienna Insurance PT Cut to Eu42.8 VS Eu46.90 at Berenberg



– AirAsia may sign 100-Jet Airbus order at Berlin show, Bloomberg says

– Norway is joining Qatar in opposition to the $70bn merger between Glencore and Xstrata

LUFTHANSA’s did not go on strike today, Bloomberg reports

Petrofac was awarded a contract for Arenque Area Development by Pemex; The Co. plans to improve recovery factor and increase production from core area of field using horizontal wells and secondary recovery techniques, it says


Melrose Restarted Overweight At JPMorgan, PT 275p



– Alnylam’s experimental injectable drug to treat high cholesterol may arouse partnership interest from AstraZeneca, Daichi Sankyo, Takeda, Bloomberg reports

Royal dutch Shell says that it is shutting Convent, Louisiana, refinery for storm

Syngenta is to buy Dupont Professional Products Unit for $125 Mln


Akzo Nobel Raised to Outperform from Neutral at Credit Suisse

Eni PT Raised to EU21 vs EU19.5 at Deutsche Bank; Kept at Buy

Fortum Raised To Neutral at JPMorgan

GDF Suez Cut to Neutral From Buy at BofA; PT Unchanged at Eu20

Novozymes Raised To Buy From Neutral at Goldman Sachs

SSE Raised to Buy, Centrica Upgraded to Neutral at BofA

Verbund PT Cut to Eu19 VS Eu24 at Berenberg, Stays Hold



Atos employs more than 40 doctors and nurses who have been reported to U.K. medical regulators for allegedly classifying sick and disabled people as fit for work when they’re not, the Independent reports

SamsungElectronics says it will fight Apple’s attempt to ban the sale of some of its smartphones in the US with “all necessary measures”. (Wall Street Journal)


Dassault Systemes Rated New Sell At Baader Bank, PT Eu67

Reed Elsevier Raised To Overweight From Neutral at JPMorgan

SAGE Rated New Buy at Baader Bank, PT 335p

SAP Rated New Hold at Baader Bank, PT Eu53



Accor 1H Ebit Beats Est.; 1H Ebit EU212m vs est. EU206.6m. ; Sees 2012 Ebit EU510m-EU530m ; Aims to operate room base 40% under franchise agreements, 40% under management contracts, 20% in owned or leased hotels by 2016; (Reported 1H rev. EU2.72b, LFL sales up 3.6% on July 17)

L’oreal Rev. EU11.21b vs est. EU11.08b;1h Operating Profit €1.9 bln vs est €1.92 bln; 1H Adj. Net €1.66b vs est. €1.64b ; Co. confirms goal of outperforming market in 2012


L’Oreal has no plans to cut prices due to an economic slowdown in Europe, Les Echos reported


Diageo PT Raised to 1,830p VS 1,550p at Citi, Stays Neutral

L’Oreal Cut to Neutral from Buy at UBS

Pernod Ricard Results to Be Strong, Kept at Buy at Nomura



Banco Popolare 1H Net EU30m Vs Est. EU15.8m Loss; Core tier 1 ratio at 10.2% June 30.; net interest income EU916.7m vs EU890.9m yr earlier; operating profit EU511m vs est. EU407m

Bourbon Sales and Ebitda Miss; 1H rev. EU568m vs est EU573m; 1H Ebitda 181m vs est. EU186m ; 1H net income EU17m ; Sees demand for offshore service vessels rising over next two years; Set up hedging contracts to cover all its estimated Ebitda exposure in 2012 at avg euro FX rate of $1.3070

D’Ieteren 1H Rev, Pretax Profit beat ests.; 1H rev. €3.01b vs est. €2.96b ; 1H recurring Ebit €150.5m vs est. €127.7m ; 1H net EU119.3m ; 1H current pretax profit EU126.0m vs est. EU103.3m ; Net debt EU556.5m end of June vs EU850.2m on Dec. 31; D’Ieteren keeps forecast for ~25% drop of current pretax profit this year

Impregilo 1H operating rev. EU1.21b vs est. EU1.16b. ; 1H Ebit EU12.7m vs est. EU45.4m ; 1H Loss EU29.2m vs Est. Net EU6.5m ; Impregilo preparing new business plan to refocus on general contracting after shareholder Salini took control of board on July 17


Banca Monte dei Paschi di Siena expects to issue bonds to govt by year end ‘at latest’


Banco Popolare PT Raised to EU1.2 vs EU1.13 at UBS

Cfao SA Cut to Neutral From Buy at UBS

Hera Beats Italy Downturn, Kept at Buy at Citigroup

Monte Paschi Cut To Sell From Neutral at Citi

Meyer Burger Technology Rated New Underperform at Credit Suisse

Nemetschek Rated New Buy At Baader Bank, PT Eu35

Neste Oil Raised To Neutral From Sell at UBS

Nobel Biocare Raised To Buy From Hold at Berenberg

Realtech Rated New Hold At Baader Bank, PT Eu5

Software AG Rated New Buy at Baader Bank, PT Eu30

Temenos Rated New Sell At Baader Bank, PT Sf11.40

Travis Perkins Cut To Hold From Buy at Jefferies

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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