The Dawn Patrol – 27.03.13 – Safran, MS on SAP, JPM on TEF and VIV…


European stocks are seen rising on Wednesday, extending the previous session’s gains and tracking a rally on Wall Street, where robust data on home prices and manufacturing fuelled optimism about the pace of the economic recovery.

SX5E Futures: Support at 2578 then 2556. . Resistance 2608/11 then 2669. Looks like opening around 2584 which would also leave intra day gap support at 2581

Today, we’ll continue to wonder if EU politicians have any clue about what they really want. François Hollande comments last night on the fact that the crisis is happening because there is no Banking Union and that banks capitalising should be done via the ESM is not really in line with the German thinking. Also the Eurogroup president Mr Dijsselbloem said that deposit guarantee systems are national. He also confirmed that the Cyprus bailout could become a template…

Macro: Eurozone Consumer Confidence, Eurozone Business Confidence, European HICP Flash, Spanish Current Account, Italian Retail Sales, Italian Industrial Orders,

Also watch for placings… The market is ripe and although the high liquidity calls for more M&A, we should see a series of placements as valuations are high…

Want to know what banking is like in Cyprus (and probably France soon).



SAFRAN – France is selling about 13m shares for as much as €452m – shares are being sold at 34.50/34.80€. SG managing the offering.

Spain/Italy: BlackRock Inc. the world’s largest money manager, has cut holdings on Italy and Spain government bonds over the past three months and may shed more if the euro zone’s growth outlook deteriorates.

Intesa SanPaolo, UniCredit, Monte dei Paschi di Siena. The IMF said last night that Italy’s financial system has shown remarkable resilience in face of a severe and prolonged recession at home and a major crisis in Europe.

Carrefour plans to regionalise French hypermarkets, the company will present its plans to labour representatives today. Les Echos

TDC. NTC selling its 6.8% stake in TDC. BBG

Mediaset scraps dividend after first annual loss on impairments

Enel may buy 20% of trans-Adriatic pipeline, CEO tells Reuters


The world’s pool of Aaa-rated government debt has fallen 60 per cent since the start of the financial crisis. The loss of top ratings by the US, UK, and France have helped shrink the stock of debt deemed Aaa by Fitch, Moody’s and Standard & Poor’s from almost $11tn at the start of 2007 to $4tn in 2013 (Financial Times).

European regulators to charge banks over derivatives: “European antitrust authorities are moving soon to bring a case against some of the world’s largest banks alleging collusion in the $27 trillion dollar market for credit derivatives, people familiar with the investigation said. The probe by the European Commission involves 16 financial groups. It focuses on whether they sought to stifle competition from exchanges in the market for credit-default swaps, which pay out when a country or a company defaults on its debts.” (Wall Street Journal)


SAP AG (MS, Wood): Could Cloud Be a Blue Sky for SAP?
SAP’s valuation has, we believe, been constrained by the perceived threat from SaaS. But after 2 major acquisitions we see SAP’s €2bn 2015e Cloud sales target as achievable and accelerating group growth. In turn, this should enable the multiple to increase and so we raise our PT to €73 from €67.

Telefónica Deutschland (JPM, Wittig) Mobile market getting tougher, lowering forecasts and cutting our recommendation to Neutral In this report we lower our numbers following a slightly weaker than expected Q4, to reflect what is a distinctly more challenging German mobile market environment, in our view. Speculative upside related to network sharing or market consolidation seems mitigated by a number of complexities and balanced by spectrum newsflow. We lower our YE2013 target from €6.5 to €6.3 and cut our recommendation to Neutral.

Vivendi (JPM, Lo Franco) A potential Media Telecom break up could imply significant upside to current share price The potential imminent sale of Maroc Telecom is likely to catalyse market attention onto the break up value of Vivendi. According to our estimates, a spin-off of telecom assets and a focus on media, would increase our SoP based PT by 12% to €22.7, implying 40% upside to the current share price. Recent news flow and mgmt. commentary at FY12 results have reinforced our view on the likelihood of a potential break-up. The recent suspension of the GVT sale process (“after bidders failed to meet an asking price of about €7bn” source FT March 15) is not good news, although the sale of Maroc Telecom remains, in our view the key priority (and central case to our scenario since May ’12). As expected (see our previous report 25 Feb. ’13) we reduce our Vivendi EBITA (by -3.6%/ -3.6% in ‘13/’14) and EPS (-7.3%/-5.7% in ‘13/’14) forecasts post FY12 results, however we increase our PT to €20.3 from €19.9.

Aegon Added To Conviction Buy List at Goldman 3/26 15:00

Brenntag Raised To Buy From Hold at Bankhaus Lampe 3/26 15:34

British Land Raised To Buy VS Hold at SocGen 7:30

Derwent London Raised To Hold VS Sell at SocGen 7:31

Gfk Raised To Buy VS Neutral at Citi 7:36

Great Portland Raised To Hold VS Sell at SocGen 7:31

Hammerson New Europe Real Estate Sector Top Pick At SocGen 7:35

Havas Raised To Buy VS Neutral at Citi 7:37

Kazakhmys Raised To Buy VS Sell at SocGen 7:29

Klepierre Cut To Hold VS Buy at SocGen 7:32

Kuoni Reisen Raised To Buy VS Hold at Deutsche Bank 8:01

LVMH Raised to Buy VS Neutral at BofAML 7:28

Mediaset Spa Raised To Equalweight VS Underweight at Barclays 7:17

Millicom Raised To Buy VS Hold at Nordea 7:53

Portugal Telecom Raised To Neutral at Credit Suisse 7:23

Prosiebensat.1 Cut To Neutral VS Buy at Citi 7:37

Reed Elsevier Raised To Buy VS Hold at Berenberg 7:25

RTL Group Raised to Buy VS Hold at Deutsche Bank 8:01

Sky Deutschland Raised To Buy VS Neutral at Citi 7:38

Spirent Cut To Equalweight VS Overweight at Morgan Stanley 7:19

Syngenta Cut To Neutral VS Overweight at HSBC 7:57

Telefonica Deutschland Cut To Neutral VS Overweight at JPMorgan 7:07

Wereldhave Cut To Hold VS Buy at SocGen 7:33

Wolters Kluwer Cut To Sell VS Hold at Berenberg 7:25


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