HALISTER: Linde Says It’s Reviewing New Merger Proposal From Praxair (2)

Linde Says It’s Reviewing New Merger Proposal From Praxair (2)

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
LIN GR (Linde AG)
PX US (Praxair Inc)

People
Georg Denoke (Linde AG)
Jeremy Redenius (Sanford C Bernstein & Co Inc)
Matthew White (Praxair Inc)
Stephen Angel (Praxair Inc)
Thomas Wrigglesworth (Citigroup Inc)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: Stress Tests; RBS Fails, Caixa Sells NPLs

EU CREDIT DAILY: Stress Tests; RBS Fails, Caixa Sells NPLs

(Bloomberg) -- U.K. banks are in the market spotlight Wednesday as Bank of England releases latest stress test results for 7 major lenders. Data highlights extent of economic, house price and Brexit stability risk, Bloomberg strategist Simon Ballard writes.
  • Major 3Q earnings results now largely in, but devil is in the detail; ‘surprise’ data may be encouraging, but growth numbers remind of the need to maintain robust fundamental research as part of investment strategy
    • S&P 500 shows sales and earnings ‘surprises’ of +0.26% and +5.61% respectively; sales growth +2.14%, earnings growth +2.78%
    • European BE500 3Q sales and earnings surprises of +0.81% and +12.42%; but negative (-0.4%) sales growth, despite +16.47% earnings growth, may raise questions about future earnings growth potential
  • Bloomberg Barclays Eur-Agg Corporate index closed Tuesday at 126bps (flat); Bloomberg Barclays Eur HY index closed at 425bps (-3bps)
  • CDX IG closed Tuesday at 73.32 (-0.3bp); iTraxx Asia Ex Japan IG is currently -1.2bps at 125.81 and iTraxx Australia quoted -0.9bps at 108.94
NEWS
  • Corporate News
  • Britvic FY Profit In Line, Sees FY17 Ebita In Line With Ests.
  • Biffa 1H Revenue Up 8.6% to GBP446.7m, FY Expectations Unchanged
  • Greene King 1H Revenue Increases by 13.8%
  • Zoopla FY Rev. Beats Ests., ‘Comfortable’ With FY17 Forecasts
  • Aeroflot 9-Month Ebitda Surges 61% Y/y, Beating Estimates
  • Mitsubishi Motors Plans Pay Bump for Board to Move Past Scandal
  • Telekom Austria Buys Belarus Fixed-Line Operator Atlant Telecom
  • Financial News
  • RBS Fails Toughest-Ever BOE Stress Test, Bolsters Capital Plan
  • Barclays passes 2016 BoE stress test
  • Standard Chartered statement on BOE 2016 stress test results
  • CaixaBank Said in Talks to Sell NPL Portfolio: Confidencial
  • Sabadell Says ECB Requires Phased-In CET1 of 7.375%
  • Rating News
  • Fitch Affirms Amcor Limited at ‘BBB+’; Outlook Stable
  • China’s State Power Investment’s ratings unaffected by asset sale to Shanghai Electric Power: Moody’s
  • S&PGR Affirms Sociedad Concesionaria Rutas Del Pacifico Rtgs
  • S&PGR Affirms Housing NZ Corp Ratings; Otlk Stable
  • S&PGR Revises Otlk On SMBC Nikko Securities To Pos, Afms Rtgs
  • Other News
  • BOE Highlights Brexit Stability Threat as Global Risks Increase
  • French Banks Plan New Senior, Non-Preferred Debt Class: L’Agefi
ANALYST VIEWS
  • We’re closing out the month in uncertain fashion. It has been weak and volatile for most risk assets classes. Post U.S. election euphoria we’re into difficult territory again as we head into (the) crucial Italian referendum: creditmarketdaily.com
NEW ISSUES
  • AA Bond Co GBP700m 1/2022 Snr Sec UKT +225
  • Bouygues EU750m 6/2027 MS +80
  • Bpifrance EU500m 2.5% 5/2024 Tap FRTR +15
  • Ceska Telekomunikacni EU625m 5Y MS +135
  • Euroclear Investments EU600m 10Y MS +52
  • Great-West Lifeco EU500m 10Y MS +115
  • Klesia Prevoyance EU160m 10Y Tier 2 5.375%
  • Lanxess EU500m 60NC6.5 Hybrid 4.75%
  • Morgan Stanley EU1.25b 3Y FRN, EU1b 6Y Fixed
  • State of Brandenburg EU300m 5Y FRN 3mE -8
  • U.K. GBP2.25b 0.125% 11/2056 Linker UKTi +2bps
  • Vonovia Finance EU1b 8Y MS +95
  • European IG credit pipeline here and HY credit pipeline here
  • NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER1: China 7-Day Repo Tightness Should Ease Next Year: Goldman Sachs

China 7-Day Repo Tightness Should Ease Next Year: Goldman Sachs

(Bloomberg) -- China’s 7-day repo rate could dip at end-2017 if nation’s economic growth slows, which is likely to be the case toward end-2016 and in 1Q, according to Goldman Sachs.
  • PBOC may need to loosen underlying liquidity to shore up growth; a tapering of institutions’ repo borrowing could also drive rate lower
  • There’s risk to view of drop in repo rate if inflation surprises on upside vs base forecast of 2.1%/2.2% in 1Q/2Q
    • “A faster rise in inflation would leave the PBOC in a more difficult position to lower interest rates to buffer the expected growth slowdown,” economists including MK Tang write in Nov. 29 note
  • 7-day repo rate has edged up and become more volatile in recent weeks, signaling more hawkish PBOC policy of managing excess liquidity
    • Also reflects shift in structure of interbank repo market, with off-balance sheet vehicles quickly amassing leverage during bond market boom
  • Near-term, PBOC may keep underlying liquidity relatively tight, with occasional nudge higher to encourage deleveraging
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Mk Tang (Goldman Sachs & Co)

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UUID: 7947283

HALISTER1: MACRO VIEW: Momentum Rules in U.S. Power Vacuum

MACRO VIEW: Momentum Rules in U.S. Power Vacuum

(Bloomberg) -- Momentum-driven strategies have run the show through November and it’ll be a brave investor to bet against them ahead of the U.S. presidential inauguration on January 20.
  • Some asset moves since U.S. election day may look overextended, yet investors have an opportunity for policy extrapolation on a grand scale during this power vacuum
  • Treasury 10-year yields have jumped, partly on the possibility of increased fiscal spending in 2017 and beyond
  • When yields hit 2.41% last week, it marked a stunning 70bps rise from the low point on Nov. 9. But this is still well below a 50% retracement of the cyclical decline since 2007 at 3.32%; chart here
  • USD/JPY is up more than 7% in November, heading for its biggest monthly advance since 2009. Yet, one year ago USD/JPY was at 123.00 and nobody was talking about Trump as president; chart here
  • Similarly, the 5% gain for Japan’s Nikkei 225 in November still leaves it lower than a year ago
  • Gold’s decline this month has reached the 61.8% Fibonacci retracement of the past year’s range. But a year ago when 10-year Treasury yields were 2.21% vs 2.30% now, gold was below $1,100 an ounce; chart here
  • For investors who like to go with the flow, let the trend be your friend. There are still seven weeks until inauguration day.
  • NOTE: Mark Cranfield is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283