HALISTER: Porsche SE Seeks Investments Beyond VW Despite Dwindling Cash

Porsche SE Seeks Investments Beyond VW Despite Dwindling Cash

Alert: HALISTER
Source: BN (Bloomberg News)

Tickers
VOW GR (Volkswagen AG)
996066Z US (Sterling Equities Inc)
PAH3 GR (Porsche Automobil Holding SE)

People
Albrecht Bamler (Porsche Automobil Holding SE)
Hans Dieter Beckmann (Volkswagen AG)
Hans Poetsch (Porsche Automobil Holding SE)
Matthias Mueller (Volkswagen AG)

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UUID: 7947283

HALISTER1: Lower Bund Yields Favor Steeper 10s30s Spanish Curve: SG

Lower Bund Yields Favor Steeper 10s30s Spanish Curve: SG

(Bloomberg) -- Further rally in bunds should favor a steeper 10s30s in SPGBs given the inverse correlation, Societe Generale strategist Marc-Henri Thoumin writes in client note.
  • Long SPGB April 2026 vs SPGB Oct. 2046 at 62bp in ASW; target 69bp, stop 57bp
  • 2044 SPGB/BTP spread has tightened by 12bp since March 21 making 30y SPGBs somewhat rich in relative terms
  • Recent performance also shows 30Y SPGBs have outperformed shorter-dated sectors of late
  • Expect issuance at the very long end to remain intense, at least as long as EUR yields remain close to recent lows
    • Demand for very long issuance is less supportive than last year but issuers are reportedly still prompt to extend the average life of debt further
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Marc-Henri Thoumin (Societe Generale SA)

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UUID: 7947283

HALISTER1: Global Equities Cut to Underweight, EM Up to Overweight: Citi

Global Equities Cut to Underweight, EM Up to Overweight: Citi

(Bloomberg) -- Citi global asset allocation strategists including Jeremy Hale cut global equities to slightly underweight from neutral, on the back of a downgrade to U.S. and European stocks, according to note.
  • Within overall DM underweight, Japan remains at neutral
  • EM stocks upgraded “across the board” to overweight
  • In credit, U.S. IG raised to a bigger overweight, U.S. HY kept at slight overweight
    • European credit remains at slight underweight; EM external back to neutral
  • Citi recommends being overweight government bonds markets, “especially the high yielding ones”
    • Downgrades German government bonds to slightly underweight
    • EM local remains at slightly overweight
  • “The reflation wave has seen commodity prices rally strongly, global equities rally back toward 4Q highs, yields rise on risk free bonds and credit spreads tighten, at least in developed markets”: Citi
  • NOTES
    • Earlier: European Banks Raised to Overweight After De- Rating: Citi
    • April 28: U.S. Individual Investor Bears Rise to Highest in Near 2 Months
    • April 26: U.S. Earnings Season Shows Biggest Drop in EPS Since 2009: JPM
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jeremy Hale (Citigroup Inc)

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UUID: 7947283

HALISTER1: Yields Have Risen Enough, Buy EUR 3m10Y Risk Reversals: BNP

Yields Have Risen Enough, Buy EUR 3m10Y Risk Reversals: BNP

(Bloomberg) -- Rise in yields has already gone far enough, recommend long EUR 10Y via 3-month expiry risk reversals, BNP strategists including Patrick Jacq write in a client note.
  • Sell 0.84% (14bps OTM) 3m10Y payer vs buying 0.57% (12bps OTM) receiver at zero cost
  • Preliminary German inflation data suggest further falls in euro area, central banks remain dovish, supply/demand dynamics remain supportive given ECB, BOJ QE
  • Bund correction close to its end, 10Y yields above 0.35% seen as overshooting; prepare to re-enter long 10Y bund outright in mid-30bp area
  • Stopped out of OAT 5s15s flattener, look to re-enter once bullish tone resumes
  • Spain has outperformed Italy, despite parties failing to form a govt; supply/demand favored SPGBs over BTPs in April, but this will reverse in May
    • Enter SPGB/BTP 10Y wideners at 6bps, target 20bps, stop -2bps
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
2539Z GR (European Central Bank)

People
Patrick Jacq (BNP Paribas SA)

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UUID: 7947283

HALISTER1: EU CREDIT DAILY: Earnings Surprise vs Growth; Danske, RBS, KPN

EU CREDIT DAILY: Earnings Surprise vs Growth; Danske, RBS, KPN

(Bloomberg) -- Resilient secondary credit-mkt price action, as well as an unnerved primary mkt, in the wake of BOJ disappointment this week has been a clear reflection of the structural bid for yield and spread product, Bloomberg strategist Simon Ballard writes.
  • Asian equities lower overnight in wake of weak U.S. 1Q GDP; may trigger some profit taking/widening risk in EUR credit space this morning
    • Sentiment remains fragile and susceptible to gyrations in global rates, credit-quality outlooks
  • Positive corporate earnings headlines buoy risk appetite, but given low level of expectations may hide true underlying challenges facing credit metrics
    • Difference between positive ‘surprise’ and negative sales/earnings growth in U.S. and European credit in 1Q16 highlights need for robust credit research/investment strategy
  • Risk Appetite Model strength perhaps driven more by earnings ‘surprise’ than ‘growth’
  • CDX IG closed +1.8bps at 76.42 in overnight session; iTraxx Asia Ex Japan IG is currently +0.1bps at 140.78
NEWS
  • Corporate News
  • Sanofi Profit Shows Little Growth Amid Bid for Medivation
  • BASF First-Quarter Profit Beats Estimates on Auto, Personal Care
  • AstraZeneca Earnings Fall as Recent Acquisitions Push Up Costs
  • Puma 1Q Adjusted Sales Rise 7.3%, Confirms 2016 Forecast
  • IAG 1Q Profit Beats Estimate, Reiterates FY View
  • SES 1Q Rev., Ebitda In Line With Ests.; Takes Control of O3b
  • KPN Earnings Trail Estimates Weighed Down by Enterprise Segment
  • Linde Quarterly Profit Beats Estimates amid Oil, Gas Slowdown
  • Eni 1Q Adj. Net Loss EU479m Misses Est. for Loss EU12.3m
  • Rexel 1Q Sales, Adj. Ebita Below Last Year; Maintains FY Targets
  • Telefonica 1Q Oibda EU3.4b; Est. EU3.4b
  • Anheuser-Busch to Sell More SABMiller Assets to Win EU Approval
  • Financial News
  • Danske Beats Estimates as Bank Weathers Negative Rates
  • RBS Posts Larger Net Loss on Dividend Payment to Government
  • Bankia 1Q Net Misses Estimate; CET1 Fully-Loaded 12.52%
  • Credit Rating News
  • S&P Affirms Woodside ’BBB+’ Rating; Outlook Remains Negative
  • S&P Affirms Vietnam Ratings At ’BB-/B’ With Stable Outlook
  • Other News
  • Pimco Favors Top-of-Pyramid Bonds as China Lets Zombies Default
  • Spanish Banks Circle Capital-Hungry Portuguese Lenders
ANALYST VIEWS
  • New deals continue to perform on the break and there is little or no repricing of secondaries. Corporate bond spreads have been grinding steadily tighter without any fuss and new deals are being taken down with aplomb: creditmarketdaily.com
NEW ISSUES
  • Alimentation Couche-Tard EU750m 10Y MS +125
  • Banco De Sabadell EU500m 10Y Tier 2 at 5.625%
  • Bankinter EU200m PNC5 AT1 Notes 8.625%
  • Bank Gospodarstwa Krajowego EU500m 10Y MS +120
  • Belfius Bank EU500m 10Y Tier 2 MS +255
  • Belgium EU3b 7Y, EU3b 50Y Bonds
  • Kering EU500m 10Y MS +67
  • Nationwide Building Society GBP500m 10Y UKT +138
  • European IG credit pipeline here and HY credit pipeline here
  • Issuers exposed to S-T rollover and interest-rate reset risk 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.
  • NOTE: EU CREDIT DAILY won’t be published on Monday (May 2) due to the U.K. Bank Holiday. Publication will resume May 3.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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UUID: 7947283

HALISTER: IAG 1Q Profit Beats Estimate, Reiterates FY View

IAG 1Q Profit Beats Estimate, Reiterates FY View

(Bloomberg) -- IAG 1Q operating profit EU155m, est. EU139m.
  • Revenue EU5.1b, est EU4.97b
  • Passenger unit revenue for the quarter down 3.5 per cent
  • Non-fuel unit costs for the quarter up 1.3 per cent
  • Outlook: Revenue trends in quarter two have been affected by the aftermath of the Brussels terrorist attacks, as well as some softness in underlying premium demand; still expects to generate an absolute FY operating profit increase similar to 2015.
  • Statement
  • Preview Link
  • Call 9am U.K. 44 20 3427 0503 pin 7809654
Alert: HALISTER
Source: BFW (Bloomberg First Word)

Tickers
IAG LN (International Consolidated Airlines Group SA)

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UUID: 7947283