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WEEK IN FOCUS: NOW AVAILABLE IN RESEARCH SECTION: European focus will be on the reaction to the latest set of reform measures that Greece has submitted to creditors in the hope of receiving much needed bailout funds

European focus will be on the reaction to the latest set of reform measures that Greece has submitted to creditors in the hope of receiving much needed bailout funds.
Elsewhere, the US monthly jobs report on Good Friday will be another important indicator toward the timing of rate lift-off from the Federal Reserve.

The Greek debt crisis is set to be the focal point of European attention as the country awaits a further tranche of bailout funds in order to meet its repayment obligations next month. Greece submitted a series of reform proposals on Friday ahead of Monday’s deadline detailing measures which it hopes will raise around EUR 3bln in tax revenues. The country’s European creditors are set to examine the plans over the weekend before finally giving their assent to dispensing EUR 7.2bln of desperately needed bailout cash. However, should the proposals fall short of the creditors’ standards then Greece has threatened to stop its debt repayments as the government faces a further EUR 3.4bln of settlements this month with another IMF loan repayment due on April 9. In the event that the reform proposals are not accepted by creditors, Greek debt yields could significantly increase given the aggressive rhetoric of the government and the precarious situation of state finances.

The US nonfarm payrolls (NFP) report on Good Friday will be the most important data release this week given the ongoing speculation about the timing of the first Fed rate hike. Investors will be paying close attention to the average hourly earnings component of the report as wage inflation remains subdued and is expected to pick up throughout the course of this year. Market reaction could be more restrained than is normally the case with NFP as European and US equity markets are closed while fixed-income markets also close early. However, another strong jobs number coupled with an uptick in wages could see US yields rise across the curve as rate hike expectations are brought forward following March’s dovish FOMC statement.

(RANsquawk)

RANsquawk INSIGHTS: Barclays on the outlook for USD

- Barclays: Economists at the bank say revisions by the FOMC to long-term unemployment estimates indicate a larger amount of slack remain in the US labour market. Furthermore, they forecast the greenback to hold off from substantial moves either way and resume its upward trend only when clear signals of improvements in dual mandate are evident. 

(RANsquawk)

Additional Metals stories post the release of the Metals Opening News…

Friday’s CFTC report shows real money accounts increased longs in Silver, which  increased for the first time in 2 months, to a net long of 19,248 contracts with Copper net longs also increasing. Net longs in Gold fell by 3,468 to 31,653, which is the lowest level in a year. (RTRS)

(RTRS)

DAILY EUROPEAN EQUITY OPENING NEWS: NOW AVAILABLE IN RESEARCH SECTION – Marks & Spencer (MKS LN) – The Co. are expected to show a bounce back in clothing sales in its trading update this week after 14 consecutive quarters of declines

**In order to give you European Equity news faster the Daily European Equity Opening News will now be complete at 0700BST/0100CST recapping all of the overnight equity news**

 

**From 0700BST/0200CDT we will cover all equity news in real time over the audio and headline feed and the full audio rundown will now be at 0715GMT/0115CDT**

 

**There will be an additional audio rundown at 0750BST/0250CDT recapping any company news which has hit the wires since 0715BST/0115CDT ahead of the European equity open**

 

30th MARCH 2015

 

ASIA

Asia stocks mostly rose led higher by Chinese equities after PBoC Governor hinted at more easing and as details emerged over China’s Silk Road economic belt plans which will help boost infrastructure in the country. Hang Seng (+1.35%) rose the most for the year while the Shanghai Comp (+1.30%) touched its highest level since May’08. Nikkei 225 (+0.53%) shrugged off poor Japanese IP data, which fell most since June’14, while the ASX 200 (-1.35%) was the session’s laggard amid weakness across the commodities and energy complexes.

Chinese Steelmakers – Major Chinese steelmakers are expected to post losses in Q1, citing weak demand and falling product prices. (BBG)

 

FTSE

UK Banks – BoE are set to unveil tough new stress tests today in order to shore up capital reserves further. (Sunday Times)

Royal Dutch Shell (RDSA LN) – Co. have delayed plans for AUD 100mln Western Australia Drilling. (AFR)

RSA Insurance (RSA LN) – Activist investor Cevian Capital have doubled their stake in the Co. to 13% in order to increase pressure on CEO Stephen Hester. (Sunday Times)

Glaxo (GSK LN) – Co.’s meningitis B vaccine (Bexsero) has been added to UK child immunisation scheme. (Observer)

SAB Miller (SAB LN)/Diageo (DLG LN) – Billionaire Jorge Paulo Lemann is rumoured to be on the lookout for more deals following the recent Kraft/Heinz move with SAB Miller and Diageo believed to be potential targets. (Sunday Times)

Tesco (TSCO LN) – Co. has begun to sell land which was once earmarked for new supermarkets in an effort to raise cash to shore up their balance sheet. (Telegraph)

Marks & Spencer (MKS LN) – The Co. are expected to show a bounce back their clothing sales in its trading update this week after 14 consecutive quarters of declines. (Telegraph)

Standard Chartered (STAN LN) – ANZ’s CEO has indicated that a change in management at Standard Chartered may result in a possible tie up of the UK bank. (BBG)

OTHER UK COMPANIES

Quindell (QPP LN) – The Co. looks set to announce the sale of its professional services unit to Australian law firm Slater Gordon for GBP 624mln. (Telegraph)

Serco (SRP LN) – Co.’s shareholders vote on a rights issue today to ensure the Co. remains operational with the UK cabinet office during up contingency plans should the Co. fail to raise cash. (Sunday Times)

Inmarsat (ISAT LN) – Co. is in discussions regarding a collaboration with Facebook (FB) and Google (GOOG) on extending internet access. (Times)

Gulf Keystone (GKP LN) – Investors in the Co. want the Co. to start searching for a new chairman in return for GBP 30mln in fundraising. (Sky)
 

BROKER RECOMMENDATIONS (BBG/RTRS)

MARKS AND SPENCER (MKS LN) UPGRADED TO TOP PICK FROM OUTPERFORM AT RBC CAPITAL
WM MORRISON (MRW LN) DOWNGRADED TO NEUTRAL FROM BUY AT GOLDMANS

DAX

Bayer (BAYN GY) – According to Nikkei, Panasonic Healthcare is to make a USD 830mln offer for Co.’s blood glucose metre business. (Nikkei)

 

OTHER GERMAN COMPANIES

 

Sky Deutscheland (SKYD GY) – Co. CEO is said to plan a bid in the next auction of rights to show Bundesliga soccer matches. (RTRS)

 

BROKER RECOMMENDATIONS (BBG/RTRS)

 

N/A

CAC

LaFarge (LG FP) – Sources indicate that Holcim’s (HOLN VX) second-largest investor is to vote against the proposed merger with Co. (BBG)

OTHER FRENCH COMPANIES

Genfit (GNFT FP) – CEOP Jean-Francois Mouney said on CNBC that the Co. intends to join the NASDAQ in 2015 and will seek to raise money and find a partner for potential sale. (BBG)

 

BROKER RECOMMENDATIONS (BBG/RTRS)

ORANGE (ORA FP) UPGRADED TO BUY FROM OVERWEIGHT AT HSBC

PAN-EUROPE

Luxury Names – Hong Kong listed Prada posted a miss on their NY Net at EUR 450.7mln vs. Exp. EUR 468.1mln, FY EBITDA EUR 954.2mln vs. Prev. EUR 1.14bln, however analysts noted that the figures topped off a challenging year and shares in HK finished higher. (BBG)

Sabadell (SAB SM) – EUR 240mln of Co.’s developer loans have been acquired by PIMCO.

OMV (OMV AV) – Co. appointed Wintershall CEO Rainer Seele as their new CEO for 3 years starting July 1. (BBG)

 

Pirelli (PC IM) – Italian Industry Minister said the government will not intervene in ChemChina’s proposed takeover of the Co. (RTRS)

 

Yoox (YOOX IM) – Co. is in talks to buy Net-A-Porter (owned by Richemont) in a deal worth approx. GBP 1.3bln. Richemont is expected to take payment in Yoox shares, not cash. (Sunday Times)

World Duty Free (WDF IM) – Dufry (DUFN SW) is to buy a 50.1% stake in World Duty Free for EUR 1.3bln. (BBG)

 

 

Companies going ex-dividend: FTSE MIB: IBEX 35: Banco Bilbao Vizcaya Argentaria SA (EUR 0.13)
 

 

BROKER RECOMMENDATIONS (BBG/RTRS)

JERONIMO MARTINS (JMT PL) UPGRADED TO BUY FROM OVERWEIGHT AT HSBC

SMI

Novartis (NOVN VX) – Co. will ramp up its cancer immunotherapy joint venture with Aduro Biotech Alliance to launch a new research group. The Co. will payout USD 200mln to Aduro and an equity investment of USD 25mln. (RTRS)

Holcim (HOLN VX) – Sources indicate that Co.’s second-largest investor is to vote against the proposed merger with LaFarge (LG FP). Co. sells its 27.5% stake in Siam City Cement through private placement. (BBG)

Richemont (CFR VX) – Sources said Co.’s online fashion retailer Net-A-Porter and its rival firm Yoox (YOOX IM) have re-entered negotiations over a potential merger deal. (RTRS)

OTHER SWISS COMPANIES

Dufry (DUFN SW) – Co. is to buy a 50.1% stake in World Duty Free (WDF IM) for EUR 1.3bln. Co. forecasts a boost to EPS by double figures in 2nd year and gross profit improving by about EUR 40mln-50mln. Furthermore, shareholders are said to own 30% stake committed to cap expansion.  (BBG)

 

Companies paying dividend: SMI Mid-Cap: Schindler Holding AG (CHF 2.2)

SCANDINAVIA

FLSmidth (FLS DC) – Co. wins contract for supplies to Moroccan phosphate producer, said to be worth approximately EUR 30mln. (BBG)

 

 

Companies going ex-dividend: OMX Helsinki 25: Metso OYJ (EUR 1.05)

Companies paying dividend: OMX Stockholm 30: Nordea Bank AB (EUR 0.62) OMX Copenhagen 20: Nordea Bank AB (EUR 0.62) Tryg A/S (DKK 29) OMX Helsinki 25: Nordea Bank AB (EUR 0.62)

 

BROKER RECOMMENDATIONS (BBG/RTRS)

BOLIDEN (BOL SS) INITIATED NEW OVERWEIGHT AT BARCLAYS     

WARTSILA WRT1V FH) DOWNGRADED TO SELL FROM HOLD AT NORDEA

 

US

US indices closed in minor positive territory on Friday amid outperformance seen in the health care sector while energy names were among the laggards after a renewed slide in oil prices. Elsewhere, the NASDAQ-100 saw a late bid heading into the close supported by chip makers on speculation that Intel (+6.4%) has made a takeover bid for Altera (+28.5%). Finally, the DJIA finished up 0.19% at 17,712.66, the S&P 500 finished up 0.24% at 2,061.02 and the NASDAQ-100 finished up 0.41% at 4,332.86.

Best Performing Sectors in the S&P 500: Health Care (+0.74%), Consumer Staples (+0.56%), Utilities (+0.52%)

Worst Performing Sectors in the S&P 500: Energy (-0.74%), Financials (-0.12%), Materials (-0.07%)

 

Intel (INTC)/Altera (ALTR) – Intel is looking to buy smaller chipmaker, Altera, according to sources. (WSJ)

 

Mondelez (MDLZ) – Philadelphia cream cheese in Europe is weighing a USD 3bln auction of the brand. (Sunday Times)

 

China’s Sovereign Wealth Fund CIC is seeking to increase its investments in long term global assets, particularly in the US. (WSJ)

(RTRS/BBG)