The Dawn Patrol – 06.03.13 – MS really likes RWE, ASM-, Axel Springer-, Henkel, VOD! GS on Saipem… More!!!


European stocks are seen slightly softer at the open on Wednesday as investors lock in some profits on the previous session’s jump to multiyear highs and nervousness creeps in ahead of key central bank meetings and data due this week. Clues on the U.S. non-farm payrolls data for February, meanwhile, can come from the ADP report on private sector employment at 1415 (Paris time).

SX5E Futures: 2683.00y +59.00. Support at 2669 then 2633 & 2680. Resistance 2687/ 2701 then 2751

Today, we’ll monitor the EZ Q4 GDP revision, and in the US the MBA Mortgage applications, and the ADP for clues on this Friday’s NFP (don’t you feel it’s repetitive sometimes?).

Bootleg – Full Length.
With Joel Tudor (for those who don’t know, Joel is a (the most) famous longboard surfer and Jiu Jitsu champion… And he rips!)



DANSKE BANK – Danish philanthropic association Realdania is planning to halve its stake in the country’s biggest lender with a share sale worth as much as $1 billion.
EDP – Portugal’s biggest company, posted a 10 percent fall in net profits, hit by the recession in the region, and said another tough year lies ahead due to a regulatory squeeze on energy prices.
VODAFONE – UP 5% last night. Verizon Communications has weighed several options involving its relationship with Vodafone and its joint ownership of Verizon Wireless ranging from ending its wireless venture with the European company to a full merger with Vodafone, Bloomberg reported.
ASM – The Dutch semiconductor equipment maker reported a fourth-quarter loss as sales at chip dicing and packaging equipment business fell 28 percent sequentially.
EDENRED – French financial holding company Eurazeo said it is selling its 10.2 percent stake in French vouchers and pre-paid cards group Edenred through a private placement. Colony Capital, which holds 21.5 percent of Edenred in concert with Eurazeo, said in a statement it planned to keep its 11.3 percent stake and 14.08 percent of the voting rights.
VIVENDI – The conglomerate said a New York court had dismissed securities fraud claims by GAMCO Investors related to the 2001-2002 period when the group verged on bankruptcy under former chief executive Jean-Marie Messier.

Samsung has agreed take an equity stake in troubled Japanese group Sharp (Financial Times)(Bloomberg)

Five stocks accounted for a third of the Dow Jones rally (IBM, CAT, MMM, CVX and UTX). (Wall Street Journal)

Roche Says FDA Approves Test for Hepatitis C Therapy Response

AstraZeneca Pharma Falls After Parent Plans to Cut Stake

HSBC sells a portfolio of U.S. consumer and homeowner loans for USD 3.2bn. BBG

Stanchart Rises to 22-Month High After FY Profit Beats Estimates

Glencore Rises Most in 2 Mos. After Ebitda, Sales Beat Estimates

Henkel 4Q Organic Sales Rise 4%, Sees Growth in 2013

Axel Springer 2012 Ebitda Beats; Digital Contributes Most Rev. Outlook looks poor.

Scor FY Net EU418m vs EU330m; Div. EU1.2/Shr


On Markets
Now, we’re in a bull market aren’t we? All the lights are green. Ventral banks want to keep rates low for long, the PMI data for Feb is positive and it seems that the US politicians are ready to find a solution to avoid a government shutdown. In Europe, the Italian elections are over, the markets seem to care less about the risks or believe that it’s not as bad as feared (for now…).

I still believe that we’ve reached a plateau in terms of valuation and that selection is still the name of the game. BUT since everyone wants a bite, we could see major indices continuing their rise with all the major large caps going up as well. So keep the exposure on the big names and cherry pick the smaller ones with strong FCF generation, high barriers to entry, international exposure and if possible reasonable valuations…

On Bonuses

Europe Holds Firm on Bank Bonus Rule. The U.K. found no allies in its opposition to strict caps on bankers’ bonuses in the European Union, leaving lenders with little hope that the new rules will be changed significantly before they are formally adopted. (WSJ).

On Banks
Citi considering pulling back from 21 countries: New CEO Mike Corbat told investors at a conference in Boston the bank has to be “extremely disciplined” with capital distribution, and highlighted “unsustainable” performance in countries, that had “a very low” return on assets of less than 0.4% and high costs as a proportion of revenues. He did not specify which countries. Citi has operations in more than 100 countries. (Financial Times)


RWE AG (M, Chada): Management action underappreciated
RWE set out progress on cost cutting, a path to material capex cuts, and the likely exit from the E&P business. Even in a tough environment, this should drive improved cashflow generation, which looks attractive. The discount to peers continues to look overdone, in our view.

Galp Energia (JPM, Nitin Sharma) 2013 Capital market day – upbeat presentation; focus on exploration and appraisal upside
Galp’s 2013 Capital Markets Day was hosted by the senior management team, led by CEO Manuel Ferreira De Oliveira and CFO Filipe Silva. As in past, the focus of the information download today was the upstream segment – rightly so, given the importance of the segment in Galp’s equity story. Galp’s end 2012 3C resources have increased to 3,245mn boe (+21% vs end 2011) and 3P reserves increased to 783mn boe (+10% vs end 2010) – so strong growth continues in the company’s resource base. Overall, an upbeat presentation we remain convinced on the exploration and appraisal upside in this name. YTD 2013, Galp has delivered a TSR of 0.5% which is broadly in-line with the performance of the sector.

Saipem (GS, Tarr) Buy: Margin recovery to drive upside; up to Buy and onto Conviction List
We upgrade Saipem to Buy (CL) as we believe the stock is discounting no recovery in returns despite world-class assets. The shares are down 50% from the September highs, and we see a recovery in E&C margins in 2014/15 driving upside. PT €27.

Valeo (GS,Puetter) Buy: Poised to rerate further; reiterate CL Buy with new €58 12-month PT
We reiterate our Conviction Buy on Valeo and increase our 12-month price target to €58 from €51.Our FY13-15E EBIT forecasts rise by 4%-7%.Our FY13 operating margin forecast is 5% ahead of Valeo’s guidance. For FY13/14 our forecasts are 7% and 18% ahead.

Sodexo (GS, Edelman) Buy: Increasing margins far from priced in; remain Conviction Buy
We expect Sodexo to achieve significant earnings growth given organic growth, the rebasing of its margin to 6.3%, and bolt-on M&A. This is not reflected in a valuation in line with history, in our view, and we see 22% upside potential. CL Buy.

Acciona Cut From Conviction Sell At Goldman, Still a Sell
Saipem Raised To Conviction Buy VS Neutral at Goldman
Tesco Raised To Outperform VS Neutral at Credit Suisse
Debenhams Cut To Neutral VS Overweight at JPMorgan
Fiat Industrial PT Raised to EU7.2 vs EU6.4 at Berenberg
CNH Global Cut to Sell VS Hold at Berenberg
Luxottica PT Raised to Eu41 VS Eu36 at Berenberg; Kept at Buy
Gecina Raised To Neutral VS Sell at UBS
SES Raised to Buy VS Neutral at Citi
Inditex Raised To Buy VS Hold at Deutsche Bank
Edenred Cut To Reduce VS Neutral at Nomura


Asian markets
Nikkei 225 up +204.52 (+1.75%) at 11,888
Topix up +12.31 (+1.25%) at 1,001
Hang Seng up +233.50 (+1.03%) at 22,794

US markets
S&P 500 up +7.00 (+0.46%) at 1,525
DJIA up +125.95 (+0.89%) at 14,254
Nasdaq up +42.10 (+1.32%) at 3,224

European markets
Eurofirst 300 up +20.66 (+1.77%) at 1,189
FTSE100 up +86.32 (+1.36%) at 6,432
CAC 40 up +77.43 (+2.09%) at 3,787
Dax unchanged 0.00 (0.00%) at 7,870

€/$ 1.31 (1.31)
$/¥ 93.17 (93.28)
£/$ 1.51 (1.51)

Commodities ($)
Brent Crude (ICE) up +0.34 at 111.95
Light Crude (Nymex) up +0.20 at 91.02
100 Oz Gold (Comex) up +3.00 at 1,578
Copper (Comex) up +0.95 at 350.60

10-year government bond yields (%)
US 1.90%
UK 1.99%
Germany 1.45%

CDS (closing levels)
Markit iTraxx SovX Western Europe -1.88bps at 101.71bp
Markit iTraxx Europe -3.85bps at 112.37bp
Markit iTraxx Xover -12.54bps at 435.54bp
Markit CDX IG -1.49bps at 83.28bp

Sources: FT, Bloomberg, Markit


One comment

  1. Abbou · · Reply

    Salut max , merci je suis ds le sud temps moyen mais bon ptite photo

    Envoyé de mon iPhone

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