Halister News

(Bloomberg) -- Nomura raises BAIC Motor Corp. to buy from reduce and lifts price target 93% on better-than-expected profit margins at Beijing-Benz, while noting the proposed A-share issue should alleviate concerns of domestic brand losses draining cash flow.

• 2018-2019 net profit ests. raised by 9%-5% to reflect higher Benz profits, though 2017 est. cut by 13% on larger domestic brand losses, analyst Benjamin Lo writes in note
• Sees a normalization of BAIC’s earnings from trough this year, underpinning rating upgrade
• PT of HK$11.60 is second-highest among analysts tracked by Bloomberg
• BAIC rises as much as 2.5% Monday to HK$9.29 before paring gains to 0.1%

To contact Bloomberg News staff for this story: Ryan Lovdahl in Shanghai at rlovdahl@bloomberg.net To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net Will Davies

(Bloomberg) -- The Treasury is likely to increase 2Y auction by $2b, 10Y and 30Y auctions by $1b starting in November to fund increasing deficits and Fed portfolio runoff, SocGen strategists led by Subadra Rajappa say in Oct. 26 note.

• Issuance increases are likely to focus on the front end, however it’s possible Treasury will announce “a modest increase in back- end issuance that is not currently anticipated by the market” at the Nov. 1 refunding announcement
• Rising borrowing needs may eventually lead Treasury to reintroduce 20Y tenor or an ultra- long, however that’s unlikely for November
• SocGen projects gross issuance of $2.4t and net issuance of $556b in calendar 2018 (not including SOMA add-ons), with any increased long-end issuance likely to pressure term premiums
• In the meantime, they continue to expect UST 10Y to find “significant support” in the 2.5%-2.6% range

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net Boris Korby

(Bloomberg) -- While UST 10Y yield “can sell off a bit further” if John Taylor or Kevin Warsh gets tapped for Fed chair, “we remain long duration” via 5y5y real rates and plan to initiate long nominal 10Y in model portfolio if yield reaches year-end target of 2.50%, TD strategists led by Priya Misra say in note.

• Market “is much too optimistic on odds of tax reform”
• TD reinitiates 5s30s flatteners ahead of Nov. 1 refunding announcement, on expectation increases in Treasury supply to fund Fed portfolio runoff will be concentrated in front end

To contact the reporter on this story: Elizabeth Stanton in New York at estanton@bloomberg.net To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net Vivien Lou Chen