Halister News

(Bloomberg) -- Economic growth, better earnings and lower risk across the world will support stocks even though valuations aren’t cheap, Citigroup strategists led by Jonathan Stubbs write in note.

• Notes Citi colleagues turned bearish on U.S. rates and on European credit earlier
• Citi recommends positioning for high bond yields; buy banks and autos, sell real estate and food and beverage stocks
  • BNP, UBS, Aviva, Renault, ArcelorMittal among dividend-paying stocks that will benefit
  • Diageo, Givaudan, Relx, SSE among stocks that should underperform
• Note: Strong Euro, Rising Pound Take Bite Out of Stoxx Index, Earnings
• Sept. 7: It’s a Good Time to Rebuild Positions in Riskier Assets: Pictet

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net Kasper Viita

(Bloomberg) -- Bund futures (RX1) technical levels in focus.

• Daily Trend Bias: Neutral to bullish
• Comment: Consolidation process extends into Tuesday with market treading toward its key trend support line at 162.43 (13-DMA), which should be monitored for potential bull reaction and fresh turn higher
  • Resistance: 162.74 (pivot); 162.89; 163.06; 163.24
  • Support: 162.43 (13-DMA); 162.24-22; 162.02 (21-DMA); 161.96
• NOTE: Roll-adjusted by difference in GFUT
• NOTE: Sejul Gokal is a FICC technical strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice

To contact the reporter on this story: Sejul Gokal in London at sgokal1@bloomberg.net To contact the editors responsible for this story: Ven Ram at vram1@bloomberg.net Scott Hamilton

--SHAJI MATHEW

(Bloomberg) -- Planned listing of Enerjisa Enerji and potential buybacks are catalysts for re-rating Sabanci Holding shares, Morgan Stanley analysts Muneeba Kayani and Nida Iqbal write in report dated Sept. 11.

• Sabanci Holding’s shares imply a negative value for Enerjisa, though Morgan Stanley’s new analysis suggests there is value in Enerjisa with visible Ebitda growth and low leverage
  • Says “new analysis of the dynamics in the distribution business (Enerjisa Enerji) suggests value of 5.8b liras (Sabanci stake) is reasonable
  • Negative value ascribed by the market for the unlisted assets seen as “too harsh”
• Free cash flow yield seen “compelling” at more than 20% and could support buybacks
• Upgrades Sabanci Holding to overweight from equalweight; PT raised to 13.10 liras vs 11.40 liras, implying ~25% gain from Monday’s close
• NOTE: Sabanci Holding shares rose 15% this year compared with 40% gain for Borsa Istanbul 100 Index

To contact the reporter on this story: Tugce Ozsoy in Istanbul at tozsoy1@bloomberg.net To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net John Viljoen

(Bloomberg) -- Here’s a roundup of Indian co. debt-rating changes.

• To get this story sent to your inbox real-time, run NI INRATINGS, click on Display & Edit, then Set Alert Delivery

DOWNGRADE

• Steel Authority of India
  • Bonds cut to AA from AA+ at Brickwork
  • Cites significant increase in debt

UPGRADES

• Aquent Impex
  • Long-term bank facilities raised to BBB- from BB+ at Crisil
  • Cites steady growth in revenues
• Bush Tea
  • LT bank facilities raised to BB- from B at Crisil
  • Cites growth in operating income
• Max Hypermarket
  • LT bank facilities raised to BB+ from BB at Crisil
  • Cites sustained improvement in operating performance
• Mumbai Waste Management
  • LT bank facilities raised to BBB+ from BBB at Care
  • Cites improved scale of operation
• Nipha Exports
  • LT bank facilities raised to BBB from BBB- at Crisil
  • Cites steady revenue, better operating profit margin
• PVR Spinning
  • LT bank facilities raised to BB+ from BB- at Crisil
  • Expects business risk profile to continue to improve over the medium term
• Ramky Enviro
  • LT bank facilities raised to BBB+ from BBB- at Care
  • Cites improved scale of operation
• Sanvi Spinning
  • LT bank facilities raised to BB from B+ at Care
  • Cites stabilization of operations
• Sidhivinayak Filaments
  • LT bank facilities raised to BBB- from BB+ at Crisil
  • Cites improved capital structure, better debt protection metrics

(Bloomberg) -- Demand for EM Asian bonds continues to be strong, with inflows surpassing 5-year highs in some markets, despite broad-based stock outflows, Rohit Garg, a strategist at Bank of America Merrill Lynch, writes in report.

• Pickup in positive economic surprises, inflation remaining subdued, expectations of more easing by India and Indonesia, and USD weakness supporting risk sentiment, he writes
• U.S. bank favors 15-yr Indonesian bonds, targeting 6.8% yield especially after recent rally in IDR
• Likes 6-yr India govt notes; INR may climb further against USD after USD/INR dropped below 64 last week
• Co. sees MYR rising to 4.1/USD in coming weeks as exporters may be rushing to sell USD after break of some critical levels; suggests investing in 7-yr to 10-yr bonds
  • MYR could be next to rally due in part to possibility of early elections, lower bond yields due to net negative bond issuance
• Co. sees THB underperforming after central bank increased offshore investment limit; also wary of chasing rally in CNH after PBOC move on forwards
• Co. also continues to like long JPY/KRW to position for the ongoing geopolitical tensions in the Korean peninsula
• READ: Record Inflows Just the Start for Asia’s Highest Yield Debt

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net To contact the editors responsible for this story: Tomoko Yamazaki at tyamazaki@bloomberg.net Andrew Janes

(Bloomberg) -- Brazilian police launched on Monday an operation involving possible money laundering by the agricultural arm of PDVSA through imports of agricultural equipment from Brazil, Reuters reports, citing unidentified authorities.

• Scheme has been under investigation for three years
  • Venezuela’s Tracto America bought agricultural equipment from Brazil’s America Trading, and sold to PDVSA at inflated prices, Reuters cites police
• Extra money was distributed to front companies, with some landed in accounts in Brazil but mostly abroad in Panama, U.S. and Switzerland among other countries
• Owner of Tracto America was arrested in Madrid with Interpol’s help and also under investigation in Venezuela for foreign exchange crimes and smuggling

To contact the reporter on this story: Chua Baizhen in Singapore at bchua14@bloomberg.net