LCM Dawn Patrol – 11.07.13 – Invensys by Schneider. EM flows by MS. MS top picks into earnings… Week End.

 

Bonjour,

 

Europe set to open up today following the strong rally in the US market. Asia was strong this morning (MSCI Asia +3.14%) thanks to India. Today is an important day for US banks as both JPM and Wells Fargo publish.

 

Portugal asks Troika to postpone audit, Schneider Electric is in talks about a 3.3bn offer for Invensys, Qatar is interested by a RWE unit and Infosys beats exp (+ve for SAP,CAP,ATOS)

 

Today : SP and IT CPI, EU Ind. Prod, US PPI and Michigan

 

WEEK END

 

 

RESTO: Clandestino. Now this is different, great food. 8 rue Crozatier, 75010 Paris.
RESTO. Open in July (a selection by le Figaroscope): http://bit.ly/1780bvi
FILMO: Plein Soleil. A new digitally remastered vesion of this great movie. Like the talented Mr Ripley, but better…

 

 

NEWS

 

Merkel Sees No Second Greek Debt Writedown, Suedwest-Presse Says

 

RWE in Talks With Quatar Group to Sell Its Dea Oil/Gas Unit: WSJ
schneider $5bn offer for Invensys is fair says Ben Uglow (MS analyst) as Schneider is subscale; deal will provide entry into key process platform. Deal is earnings neutral.

Generali Makes Formal Request for Squeeze-Out at German Unit
Swedish Match: Takeover talk rife, Daily Mail reports without citing sources
Deutsche Telekom: Allegations About Cartel, Price Fixing Wrong
Infosys
jumps 15% after earnings beat > positive for SAP, CAP, SOW in Europe
Elisa 2Q Net Eu47.3 Mln; Analyst Est. Eu43.9 Mln
BP, Shell, Statoil said to Face FTC scrutiny in U.S. Oil Probe : Agency probing whether cos. manipulated oil benchmarks published by Platts.
Ford Europe CEO Stephen Odell tells reporters doesn’t plan further capacity reductions in Europe; sees 1.5m-2m units of industry overcapacity removed by European automakers.

 

 

 

CURRENT STUFF

 

China’s finance minister said growth of 6.5% or 7% would not “be a big problem” in Washington. In response to a question on whether there’s a limit on slower growth that officials would tolerate, Lou Jiwei said, “It’s difficult to give you a limit. But from the data we have, we have the confidence.” He also said, ““please don’t forget that our expected GDP growth rate this year is 7 percent.” The official target is 7.5%. (Bloomberg)

 

Swiss deal on US tax cheats nears. “A group of Swiss banks is lining up to deliver key information to U.S. authorities investigating tax evasion, potentially moving a long-running legal battle further toward a close.” (Wall Street Journal)

 

Stock funds drew $13.6b inflows in wk to July 10, while bond funds lost $2.7b, Markus Rosgen and Yue Hin Pong,Citigroup analysts, write in report today, citing EPFR Global data.  Developed-market equity funds lured $15.7b, leading stock fund inflows; emerging-market equity funds had outflows of $2.1b. Asian funds lost $727m in wk, 9th wk of outflows.

 

 

STRATEGY

 

Morgan Stanley Equity Funds flow analysis.

Dedicated EM Equity funds reported outflows of US$2.09bn for the week ending Jul 10, 2013.
EM Asia Equity Funds = (-US$ 0.67 bn)
EMEA  Equity  Funds = (-US$ 0.07 bn)
GEMs  Equity Funds =  (-US$ 1.28 bn)
LatAM  Equity Funds = (-US$ 0.08 bn)
Within overall EM Dedicated funds, ETF funds reported outflows of US$ 1.65 bn for the current week .

UPS&DOWNS

 

Conviction into Earnings (MS, Britz) 13 Stocks with Near-Term Catalysts
We highlight 13 names for which Morgan Stanley Research analysts have high conviction going into earnings season. Analysts expect the shares to move materially over the next 15-60 days on upcoming results or imminent news flow during the period. Positive: Accor , Anglo American, Beiersdorf, Deutsche Bank , Edenred, Magnit , Orange , Safran, Shire , Technip, Yandex. Negative: Tele2, Turk Telecom,

 

Sandvik (MS, Almerud) Mining estimates to fall more before market sees value
We believe investors need to see consensus earnings expectations come down before mining capex related stocks start to look good value. Our analysis indicates we are not there yet.

 

ALCATEL RAISED TO NEUTRAL VS SELL AT GOLDMAN
BANK ASYA RAISED TO BUY VS UNDERPERFORM AT BOFAML
BARCLAYS CUT TO REDUCE VS BUY AT NUMIS
CONTINENTAL CUT TO HOLD VS BUY AT BANKHAUS LAMPE
GAGFAH RAISED TO BUY VS HOLD BERENBERG
GETINGE CUT TO NEUTRAL VS BUY AT SWEDBANK
GETINGE RAISED TO BUY VS SELL AT NORDEA
HIKMA PHARMACEUTICALS CUT TO NEUTRAL VS BUY AT GOLDMAN
IL&FS TRANSPORTATION CUT TO NEUTRAL VS BUY AT GOLDMAN
JERONIMO MARTINS RAISED TO BUY VS NEUTRAL AT UBS
KGHM POLSKA MIEDZ CUT TO UNDERPERFORM VS NEUTRAL AT BOFAML
LEGAL & GENERAL CUT TO NEUTRAL VS BUY AT NOMURA
OSRAM LICHT AG RATED NEW ’BUY’ AT DEUTSCHE BANK
PRUDENTIAL RAISED TO BUY VS REDUCE AT NOMURA
RESOLUTION RAISED TO NEUTRAL VS REDUCE AT NOMURA
RTL GROUP RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
SSAB RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
ST JAMES’S PLACE RAISED TO BUY VS NEUTRAL AT NOMURA
WARTSILA CUT TO NEUTRAL VS OUTPERFORM AT EXANE
 

OVERNIGHT MARKETS:

 

Asian markets
Nikkei 225 up +51.29 (+0.35%) at 14,524
Topix up +8.40 (+0.70%) at 1,203
Hang Seng down -83.82 (-0.39%) at 21,354

US markets
S&P 500 up +22.40 (+1.36%) at 1,675
DJIA up +169.26 (+1.11%) at 15,461
Nasdaq up +57.54 (+1.63%) at 3,578

European markets
Eurofirst 300 up +6.84 (+0.57%) at 1,197
FTSE100 up +38.45 (+0.59%) at 6,543
CAC 40 up +28.45 (+0.74%) at 3,869
Dax up +92.32 (+1.14%) at 8,159

Currencies
€/$ 1.31 (1.31)
$/¥ 99.01 (99.06)
£/$ 1.52 (1.52)

Commodities ($)
Brent Crude (ICE) down -0.06 at 107.67
Light Crude (Nymex) down -0.03 at 104.88
100 Oz Gold (Comex) up +2.20 at 1,282
Copper (Comex) down -0.01 at 3.18

10-year government bond yields (%)
US 2.57%
UK 2.39%
Germany 1.62%

CDS (closing levels)
Markit iTraxx SovX Western Europe -0.43bps at 100.2bp
Markit iTraxx Europe +1.64bps at 113.57bp
Markit iTraxx Xover +9.58bps at 455.56bp
Markit CDX IG +1.12bps at 86.56bp

Sources: FT, Bloomberg, Markit

 

 

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Bonjour,

Europe set to open up today following the strong rally in the US market. Asia was strong this morning (MSCI Asia +3.14%) thanks to India. Today is an important day for US banks as both JPM and Wells Fargo publish.

Portugal asks Troika to postpone audit, Schneider Electric is in talks about a 3.3bn offer for Invensys, Qatar is interested by a RWE unit and Infosys beats exp (+ve for SAP,CAP,ATOS)

 

Today : SP and IT CPI, EU Ind. Prod, US PPI and Michigan

WEEK END

Description: Description: Profil de l'étape

RESTO: Clandestino. Now this is different, great food. 8 rue Crozatier, 75010 Paris.
RESTO. Open in July (a selection by le Figaroscope): http://bit.ly/1780bvi
FILMO: Plein Soleil. A new digitally remastered vesion of this great movie. Like the talented Mr Ripley, but better…

NEWS

Merkel Sees No Second Greek Debt Writedown, Suedwest-Presse Says

RWE in Talks With Quatar Group to Sell Its Dea Oil/Gas Unit: WSJ
schneider $5bn offer for Invensys is fair says Ben Uglow (MS analyst) as Schneider is subscale; deal will provide entry into key process platform. Deal is earnings neutral.

Generali Makes Formal Request for Squeeze-Out at German Unit
Swedish Match: Takeover talk rife, Daily Mail reports without citing sources
Deutsche Telekom: Allegations About Cartel, Price Fixing Wrong
Infosys
jumps 15% after earnings beat > positive for SAP, CAP, SOW in Europe
Elisa 2Q Net Eu47.3 Mln; Analyst Est. Eu43.9 Mln
BP, Shell, Statoil said to Face FTC scrutiny in U.S. Oil Probe : Agency probing whether cos. manipulated oil benchmarks published by Platts.
Ford Europe CEO Stephen Odell tells reporters doesn’t plan further capacity reductions in Europe; sees 1.5m-2m units of industry overcapacity removed by European automakers.

CURRENT STUFF

China’s finance minister said growth of 6.5% or 7% would not “be a big problem” in Washington. In response to a question on whether there’s a limit on slower growth that officials would tolerate, Lou Jiwei said, “It’s difficult to give you a limit. But from the data we have, we have the confidence.” He also said, ““please don’t forget that our expected GDP growth rate this year is 7 percent.” The official target is 7.5%. (Bloomberg)

Swiss deal on US tax cheats nears. “A group of Swiss banks is lining up to deliver key information to U.S. authorities investigating tax evasion, potentially moving a long-running legal battle further toward a close.” (Wall Street Journal)

Stock funds drew $13.6b inflows in wk to July 10, while bond funds lost $2.7b, Markus Rosgen and Yue Hin Pong,Citigroup analysts, write in report today, citing EPFR Global data.  Developed-market equity funds lured $15.7b, leading stock fund inflows; emerging-market equity funds had outflows of $2.1b. Asian funds lost $727m in wk, 9th wk of outflows.

STRATEGY

Morgan Stanley Equity Funds flow analysis.

Dedicated EM Equity funds reported outflows of US$2.09bn for the week ending Jul 10, 2013.
EM Asia Equity Funds = (-US$ 0.67 bn)
EMEA  Equity  Funds = (-US$ 0.07 bn)
GEMs  Equity Funds =  (-US$ 1.28 bn)
LatAM  Equity Funds = (-US$ 0.08 bn)
Within overall EM Dedicated funds, ETF funds reported outflows of US$ 1.65 bn for the current week .

UPS&DOWNS

Conviction into Earnings (MS, Britz) 13 Stocks with Near-Term Catalysts
We highlight 13 names for which Morgan Stanley Research analysts have high conviction going into earnings season. Analysts expect the shares to move materially over the next 15-60 days on upcoming results or imminent news flow during the period. Positive: Accor , Anglo American, Beiersdorf, Deutsche Bank , Edenred, Magnit , Orange , Safran, Shire , Technip, Yandex. Negative: Tele2, Turk Telecom,

Sandvik (MS, Almerud) Mining estimates to fall more before market sees value
We believe investors need to see consensus earnings expectations come down before mining capex related stocks start to look good value. Our analysis indicates we are not there yet.

ALCATEL RAISED TO NEUTRAL VS SELL AT GOLDMAN
BANK ASYA RAISED TO BUY VS UNDERPERFORM AT BOFAML
BARCLAYS CUT TO REDUCE VS BUY AT NUMIS
CONTINENTAL CUT TO HOLD VS BUY AT BANKHAUS LAMPE
GAGFAH RAISED TO BUY VS HOLD BERENBERG
GETINGE CUT TO NEUTRAL VS BUY AT SWEDBANK
GETINGE RAISED TO BUY VS SELL AT NORDEA
HIKMA PHARMACEUTICALS CUT TO NEUTRAL VS BUY AT GOLDMAN
IL&FS TRANSPORTATION CUT TO NEUTRAL VS BUY AT GOLDMAN
JERONIMO MARTINS RAISED TO BUY VS NEUTRAL AT UBS
KGHM POLSKA MIEDZ CUT TO UNDERPERFORM VS NEUTRAL AT BOFAML
LEGAL & GENERAL CUT TO NEUTRAL VS BUY AT NOMURA
OSRAM LICHT AG RATED NEW ’BUY’ AT DEUTSCHE BANK
PRUDENTIAL RAISED TO BUY VS REDUCE AT NOMURA
RESOLUTION RAISED TO NEUTRAL VS REDUCE AT NOMURA
RTL GROUP RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
SSAB RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
ST JAMES’S PLACE RAISED TO BUY VS NEUTRAL AT NOMURA
WARTSILA CUT TO NEUTRAL VS OUTPERFORM AT EXANE

OVERNIGHT MARKETS:

Asian markets
Nikkei 225 up +51.29 (+0.35%) at 14,524
Topix up +8.40 (+0.70%) at 1,203
Hang Seng down -83.82 (-0.39%) at 21,354

US markets
S&P 500 up +22.40 (+1.36%) at 1,675
DJIA up +169.26 (+1.11%) at 15,461
Nasdaq up +57.54 (+1.63%) at 3,578

European markets
Eurofirst 300 up +6.84 (+0.57%) at 1,197
FTSE100 up +38.45 (+0.59%) at 6,543
CAC 40 up +28.45 (+0.74%) at 3,869
Dax up +92.32 (+1.14%) at 8,159

Currencies
€/$ 1.31 (1.31)
$/¥ 99.01 (99.06)
£/$ 1.52 (1.52)

Commodities ($)
Brent Crude (ICE) down -0.06 at 107.67
Light Crude (Nymex) down -0.03 at 104.88
100 Oz Gold (Comex) up +2.20 at 1,282
Copper (Comex) down -0.01 at 3.18

10-year government bond yields (%)
US 2.57%
UK 2.39%
Germany 1.62%

CDS (closing levels)
Markit iTraxx SovX Western Europe -0.43bps at 100.2bp
Markit iTraxx Europe +1.64bps at 113.57bp
Markit iTraxx Xover +9.58bps at 455.56bp
Markit CDX IG +1.12bps at 86.56bp

Sources: FT, Bloomberg, Markit


Max Kamir | Cross Asset Sales | Louis Capital Markets | 39, rue Cambon – 75001 Paris | T: +33 1 53 45 10 74 | M: +33 6 30 41 27 57 | F: +33 1 55 04 04 59 | mkamir@louiscapital.com | www.louiscapital.com

Authorised and regulated by the Financial Conduct Authority,

Banque de France and l’Autorité de Contrôle Prudentiel 

http://www.louiscapital.com/pdf/Disclosures.pdf

 

 


IMPORTANT NOTICE:

Unless otherwise stated within the attachment, the above information is not determined to be research and is not from LCM Research but it may refer to a research analyst/research report. Unless indicated, these views are the author’s and may differ from those of the research department of Louis Capital Markets, LP or its affiliates. We do not represent this is accurate or complete and we may not update this.

The information contained herein is confidential and is intended solely for the addressee(s). It shall not be construed as a recommendation to buy or sell any security. Any unauthorized access, use, reproduction, disclosure or dissemination is prohibited. Neither Louis Capital Markets, LP nor any of its subsidiaries or affiliates shall assume any legal liability or responsibility for any incorrect, misleading or altered information contained herein.

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