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EUROPEAN EQUITY OPENING HEADLINES INCLUDING: Anglo American is to take a GBP 2.5bln hit on a troubled Brazilian mining project

January 21 2013, 8:30am
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Asia

As the Bank of Japan starts its two-day policy board meeting, the Nikkei 225 has suffered from touted profit taking after the index on Friday posted its best gain since March 22nd 2011. Elsewhere in China, Shanghai Composite pared earlier losses and trades in minor positive territory, with Travel & Leisure sector outperforming ahead of Chinese New Year. Finally, the ASX 200 closed the session higher by 0.11%, led higher by Technology and Utilities sectors. (RANsquawk)

Best Performing Sectors in the Nikkei 225: Oil & Gas (1.57%), Utilities (-0.09%), Technology (-0.87%)

Best Performing Stocks in the Nikkei 225: Marui Group (+5.92%), Sony (+3.31%), Showa Shell (+2.77%)

Worst Performing Sectors in the Nikkei 225: Consumer Services (-2.25%), Industrials (-1.91%), Basic Materials (-1.53%)

Worst Performing Stocks in the Nikkei 225: Toyo Seikan (-4.56%), FANUC (-3.88%), Fuji Heavy Industry (-3.84%)

FTSE

BP – Co. may be forced to reconsider further gas exploration in North Africa as a result of the hostage crisis in Algeria, according to unnamed industry sources. (Independent) Elsewhere, thousands of individuals and businesses that sued the Co. for the 2010 oil spill have appealed against a judge’s ruling of approval of a USD 7.8bln class-action settlement. (Newswires)

Rio Tinto - Moody's says no ratings impact on the company following their USD 14bln impairment announcement. (Newswires) Incoming CEO Sam Walsh is expected to look for surplus cash to be returned via bigger dividends or a share buyback. (Australian Financial Review) In other news, Co.'s shareholders have called for a strategy review report. (Sunday Express)

Diageo - A move on Friday by India market regulator SEBI to tweak the country's takeover code may help the Co. go ahead with its USD 2.1bln open offer acquisition of United Spirits. (Business Standard)

Anglo American – Co. is to take a GBP 2.5bln hit on a troubled Brazilian mining project, Minas Rio. (Sunday Times)

Pearson – Co. says FT will report good revenue growth for full year in spite of close Q4 caused by weaker advertising sales. Co. expects 2012 operating profit of approx. GBP 935mln and adjusted earnings of approx. GBP 0.84 per share with a cash conversion of close to 90%.(Newswires) In other news, The Economist is considering a bid to buy back the FT’s GBP 300mln stake in the magazine, according to insiders. (Sunday Times)

RBS – The bank is poised to break up its ‘casino’ bank as it braces itself for a GBP 500mln Libor fine. John Hourican, the head of the investment bank division, is expected to leave within the next fortnight with his empire being split into a markets business and an international banking arm. (Sunday Times)

Imperial Tobacco - Co. faces investor revolt over bonus revamp. The proposals could allow the board to change the amount directors, including chief executive Alison Cooper, get in share options and awards without recourse to investors. One source indicated that investors are hoping to reach a resolution ahead of the company's annual general meeting (AGM) on January 30. (Telegraph)

AstraZeneca - The new CEO of the co. plans to bolster UK research and development in an attempt to build a "dramatically different pipeline" by 2016, according to people close to the business. (Telegraph)

UK Banks - The cost of compensating businesses for the mis-selling of complex derivative products is to double to more than GBP 1.5bln across the UK's major banks. (Telegraph)

DAX

Siemens – Advisers will recommend to Co. shareholders to vote against the re-election of Josef Ackermann to Co.’s supervisory board. (Welt am Sonntag)

BASF - Co. gets 97% level of acceptances in its takeover offer for Pronova. Says got more than required 90% level of Pronova acceptances. (Newswires)

Daimler – CEO Zetsche said Asia and the US will mainly contribute to Co.’s future growth and said must fix China operations to catch up with BMW and Audi. (Welt am Sonntag)

Deutsche Telekom - Co. has begun talks with buyers and advisers about the sale of Germany's largest cars-to-real estate internet portal, which could raise about EUR 1.5bln. (FT-more)

OTHER GERMAN COMPANIES

Porsche – Co. CEO’s contract has been extended to 2014. (Automobilwoche)

CAC

Carrefour - Co. has decided not to divest Turkish operations. (HaberTurk)

Credit Agricole - Co. seeks to make between EUR 150mln and EUR 200mln of savings by 2015 according to unnamed sources. However, so far the bank has declined to comment. (L'Agefi)

Renault - Co. is moving from a production of 12 vehicles per employee per year in 2012 to 17 in 2016. This will save Co. EUR 400mln and avoid plant closures but at the cost of 7,500 jobs. (Le Monde)

STMicroelectronics/Ericsson - JP Morgan Chase & Co. has been hired to explore options including a sale of ST-Ericsson according to people familiar with the matter. (WSJ)

Pan-European

Santander – The bank is examining a GBP 2bln bid for Clydesdale and Yorkshire banks, which is owned by National Australia Bank, in a bid to expand its British coverage. CEO Botin has declined to comment. (Sunday Times) Co. may also begin UK listing process within 3 months according to CEO Ana Patricia Botin.

European Banks - ECB’s Weidmann has said it is wrong to assign the direct supervision of large European banks to the ECB. (Helsingin Sanomat) 

Finmeccanica - Co. confirms their 2012 targets and are on track to deliver financial targets. Co. add that they are committed to deliver on their disposal and restructuring plan. (Newswires) 

PostNL - Co.'s investor Lutetia says in a letter to the Co. that it is undervalued and wants an "open" discussion about strategy that hsoudl create value. (Het Financieele Dagblad)

SMI

Credit Suisse – Co. are to raise fees for wealthy clients, with fees becoming effective in April. Co. have declined to comment. (SonntagsZeitung)

Richemont - Co. says Q3 total sales were EUR 2.862bln vs. Exp. EUR 2.89bln. Says Q3 sales up 5% at constant exchange rates vs. Exp. 7.6%. Co. says solid growth in the Americas but lower growth in other regions. (Newswires)

Scandinavian

Ericsson/STMicroelectronics - JP Morgan Chase & Co. has been hired to explore options including a sale of ST-Ericsson according to people familiar with the matter. (WSJ)

Nokia - Co. is considering selling up to EUR 750mln of debt to market. Co. says would use proceeds to boost finances. (Newswires)

Novozymes - Co. Q4 net DKK 493mln vs. Exp. DKK 427mln. Q4 revenue DKK 2.81bln vs. Exp. DKK 2.79bln. Co. proposes dividend of DKK 2.20 per share vs. Exp. 2.10 per share. (Newswires)

Nobia - Co. says Q4 operating profit seen at SK 195mln vs Exp. SK 150mln. Co. says impairment charge of SK 500mln attributable to Hygena in France. (Newswires)

Broker Recommendations

DIAGEO CUT TO NEUTRAL FROM BUY AT UBS

ADMIRAL RAISED TO CONVICTION BUY VS NEUTRAL AT GOLDMAN

HENDERSON RAISED TO BUY VS NEUTRAL AT CITI

BRITISH LAND CUT TO NEUTRAL VS BUY AT ESPIRITO SANTO

IAG CUT TO NEUTRAL VS BUY AT CITI

EADS ADDED TO UBS’S EUROPEAN KEY CALLS LIST

CARREFOUR ADDED TO CREDIT SUISSE’S FOCUS LIST

HEIDELBERGCEMENT CUT TO REDUCE FROM NEUTRAL AT NATIXIS

SWISS RE CUT TO NEUTRAL VS BUY AT UBS

HOLCIM RAISED TO NEUTRAL FROM REDUCE AT NATIXIS

HENNES & MAURITZ RAISED TO BUY VS SELL AT SEB

US

US equities settled mixed at the close on Friday. The Dow was the outperformer among its peers seeing gains of 0.19%, the S&P 500 saw gains of 0.06% while the Nasdaq the laggard was down 0.26% being weighed upon by poor Intel earnings which in turn affected several other Tech stocks. Unsurprisingly Technology was the worst performing sector in the S&P 500 down 0.50% led by Advanced Micro Devices who fell 10.18% and Intel down 6.96%, Industrials was the outperformer amongst the sectors up 1.06% led by GE who reported positively earlier today. Conversely Life Technologies were the best performing stock in the S&P 500 seeing gains of 10.51% after hiring Deutsche Bank as advisers for a possible takeover and experiencing several possible broker moves throughout trade. Other gainers include Morgan Stanley, State Street and Schlumberger all reporting a beat in earnings pre-market. The recovery in stock indices was supported by the news that the House of Representatives will consider a bill to raise the US debt ceiling enough to allow the country to pay its bills for another three months. Finally, the DJIA finished up 0.40% at 13649.70 the S&P 500 finished up 0.34% at 1485.96 and the NASDAQ 100 finished down 0.14% at 2743.24. 

Best Performing Sectors in the S&P 500: Industrials (+0.96%), Oil & Gas (+0.89%), Utilities (+0.81%)

Worst Performing Sectors in the S&P 500: Technology (-0.36%), Financials (+0.10%), Consumer Goods (+0.22%)

Dell – Co. could be taken private in a USD 22bln deal this week as the mounting crisis in the PC market forces the Co. to switch from making computers to providing IT services. (Observer)

Apple - Sharp's production of iPad panels have nearly halted. (Newswires)

Boeing - Moody's said that the grounding of the 787 Dreamliner is credit negative for Boeing. Also, India's Minister of Civil Aviation said that Boeing is liable to pay compensation due to the 787 grounding. (Newswires)

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