Weekly markets perspectives 19 nov2012

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Weekly markets perspectives 19 nov2012

  1. 1. 2012 th, Weekly Markets19 n PerspectivesNovember For important disclosures, refer to the Disclosure Section, located at the end of this report.
  2. 2. Weekly SummaryEuro area Q3 2012 GDP declined for the second improvement in the labour market. Fed vice-chairquarter in a row, so an official technical recession Janet Yellen said that the Fed is considering tyingcan now be declared. Fed policy to inflation and unemployment targets.Risk assets were not helped by US fiscal cliffworries and escalating tensions in the Middle East. Portuguese output contracted by 0.8% q/q in Q3The S&P500 finished lower for the second 2012, following a 1.1% contraction in theconsecutive week. The index is now more than 7% previous quarter. Q3 2012 was the 8thoff its highs in mid-September. consecutive quarter of sequential output contraction. According to the Statistical Office ofObama met with the four top leaders of congress Portugal, the unemployment rate reached 15.8%at the White House last Friday in the first formal at the end of Q3 2012.fiscal cliff talks. They emerged from their meetingpromising they would reach a fiscal compromise The Q3 2012 reporting season is almost over. Inbefore Christmas. Are we closer to a solution on Portugal, Mota-Engil should disclose its results onthe fiscal cliff ? Wednesday, November 21st.The FOMC minutes showed committee members This weeks Eurogroup/ECOFIN (Nov 20th)were open to the idea of another round of QE, meeting should decide on the next steps forafter the conclusion of the maturity extension Greece in terms of a disbursement and debtprogram in order to achieve a substantial sustainability.
  3. 3. US Retail Sales show US CPI and PPI inflation remainweakness in October consistent with the Fed’s target• October’s retail sales suggest that US • The annual rate of CPI inflation rose to 2.2% last consumption has lost some momentum; month. Core inflation remained unchanged at• It could have been due to Hurricane Sandy or 2.0%, in line with the Fed’s target; due to the fiscal cliff; • The housing recovery is leading to a higher• After excluding sales of gasoline, autos and growth rate of housing costs, which account for building materials, underlying sales fell by 0.1% more than 30% of the CPI index (see chart); m/m, after a strong 0.9% m/m rise in • October’s headline producer price inflation September (see chart); reached 2.3% (down from 2.6% in September)• If Sandy is to blame, then sales should recover and core producer price inflation was 2.1% (2.3% in November. in September). 5% CPI Housing (% y/y) 4% Owners Equivalent Rent 3% 2% 2.1% 1% 0% -1% 2006 2008 2010 2012Source: US Census Bureau Source: Bureau of Labor Statistics
  4. 4. Euro-zone GDP declines for a second quarter• The first estimate of Euro area GDP for Q3 2012 • In France, the economy expanded 0.2% q/q in Q3 reported a contraction of 0.1%, after a 0.2% q/q 2012, after -0.1% q/q in Q2 2012, with contraction in Q2 2012 (see chart); consumption recovering;• The Euro-zone PMI and the German Ifo suggest • The Italian economy contracted by 0.2% q/q in that we should expect further contraction in Q4 Q3 2012. The last 5 quarters have come at -0.1%, 2012; -0.7%, -0.8%, -0.7% and now -0.2%. Is the worst• The German economy expanded 0.9% q/q in Q3 behind us in Italy? 2012, after 0.3% q/q in Q2 2012, helped by net • In Spain, Q3 2012 declined -0.3% q/q, after -0.4% trade. However, domestic contributions were q/q in Q2 2012. The breakdown confirms a weak mixed; domestic demand being partly offset by a strong• Q3 2012 GDP in the Netherlands contracted export performance. sharply by 1.1% q/q; Level of real GDP 104 104 Dec. 2007=100 102 102 Germany 100 100 98 98 96 Spain 96 94 94 Italy 92 92 2008 2009 2010 2011 2012 2013Source: Eurostat Source: Eurostat
  5. 5. The Portuguese recession … and the unemployment rategoes on… reaches a new record high• Portuguese output contracted by 0.8% q/q in Q3 • According to the Portuguese statistical office, 2012, following a 1.1% contraction in the previous the unemployment rate was 15.8% in Q3 2012. quarter. The Portuguese recession continues. Q3 This value is up 3.4% y/y and 0.8% q/q; 2012 was the 8th consecutive quarter of • The employed population fell by 4.1% y/y and sequential output contraction; by 0.7% q/q;• According to the Portuguese statistical office, real • The Labor force decreased by 0.3% y/y, but rose GDP registered a y/y change rate of -3.4% in Q3 by 0.2% q/q; 2012, after -3.2% in Q2 2012; • The participation rate of the working age• The domestic demand recorded a less negative population stood at 61.3%, unchanged y/y and contribution, reflecting a less expressive reduction up 0.1% q/q. of investment. However, the positive contribution of net trade decreased significantly. 18% Unemployment rate in Portugal 15.8% GDP (y/y quarterly change rate, %) 16% (% of workforce) 3% 14% 2% 12% 1% 10% 0% 8%-1% 6%-2% 4%-3% -3.4%-4% 2% -4.1%-5% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1998 2000 2002 2004 2006 2008 2010 2012Source: Statistical office of Portugal Source: Statistical office of Portugal
  6. 6. Spain: Transfer of assets to Portugal: TAP and ANA attractthe bad bank is getting closer bids• Spain intends to use European bailout funds to • The government shortlisted 5 offers (including pay for the majority stake the country plans to from companies such as Mota-Engil, Fraport take in the bad bank for problem loans; and Vinci) for the Portuguese airport operator• According to recent news, the vehicle (SAREB) is ANA, valuing the company between 12x and generating interest among foreign investors. The 13x its 2011 EBITDA (€199.8mn); government is expected to meet five investment • TAP, the Portuguese airline company, attracted banks today to search for private capital; only one bid (Synergy, which is controlled by a• The banks will transfer real estate linked assets Brazilian investor). 2011 Sales at TAP totaled (credit as well as foreclosed) with some limits in €2.44bn, but the company reported a net loss terms of size. The bad bank is to incorporate of €76.8mn. The airline’s financial debt amounts assets at a discount of 63.1% for foreclosed and to €1.23bn; 45.6% for credit, higher than the impairments • Portugal is auctioning the two companies to required under Oliver Wyman’s adverse scenario. raise cash under the bailout agreement with the IMF and the European Union. Source: Bank of Spain, Oliver Wyman and National Asset Management Agency
  7. 7. Japan to hold elections on Resilient domestic demand…Dec. 16th weakness in external demand• Prime Minister Noda announced his intention to • Malaysia´s economy expanded 3.6% q/q during dissolve the lower house. The LDP and its Q3 2012 (5.2% y/y vs. consensus 4.8% y/y). The coalition will probably gain the majority; strength of domestic demand has more than• The LDP has a strong stance to public investment. offset the weakness in external demand; But, how will the investment be financed? There • Hong Kong’s Q3 2012 GDP delivered a more seems to be no intention to increase fiscal deficit; modest expansion (2.4% q/q annualized), after• The pressure on the Bank of Japan is already a 0.4% q/q annualized contraction in the increasing. Shinzo Abe, the current leader of the previous quarter. Real GDP expanded 1.3% y/y LDP and probably the next Prime Minister, made (vs. consensus of 1.7%). The trade sector a speech on monetary policy, requiring more continued to be a drag in Q3, while domestic aggressive easing policies. demand held up better; A weaker JPY.... and higher stock prices • Singapore’s Q3 GDP fell 5.9% q/q annualized. 2.5% 2.0% 2.09% 1.88% Domestic demand oriented activities looks 1.5% 1.10% 1.15% resilient, but manufacturing and trade are being 1.0% affected by the weak global demand; 0.5% 0.01% 0.00% 0.01% • With slower demand growth in China and in the 0.0% -0.5% -0.15% -0.02% US, the resilience of domestic demand has been -1.0% decisive for these economies. -1.5% -1.12% 12-Nov 13-Nov 14-Nov 15-Nov 16-Nov Topix (Tokyo Stock Price Index) USDJPY exchange rate (Price of 1 USD in JPY)Source: Bloomberg
  8. 8. Eurogroup meeting inconclusive US: More QE on the way?• The Eurogroup decided to extend Greece’s • The minutes of the October 23-24 FOMC fiscal adjustment period by two years as meeting suggested that more Quantitative Easing requested by the Greek government; remains a strong possibility after the end of• A final decision on the disbursement of the Operation Twist (at the end of 2012): "Looking next aid tranche was postponed; ahead, a number of participants indicated that• The meeting has revealed disagreement additional asset purchases would likely be between the IMF and the Eurogroup. the appropriate next year after the conclusion of the disagreement seems to bear on the date at maturity extension program“; which the stock of debt can be brought back • The data-driven thresholds communication project to 120% of GDP (2020 for the IMF, 2022 for seems to be gaining momentum; the Eurogroup); • The Fed staff upgraded its real GDP growth• Greece issued 1 and 3-month treasury bills to expectation for 2013 reflecting "better-than- redeem €5bn bonds last Friday; expected incoming information for consumer Greece Debt-to-GDP Ratio spending, residential construction, and labour 2011 170.6% market conditions“. 12% US Unemployment Rate2012 Est. 176.7% 10%2013 Est. 188.3%2014 Est. 188.9% 8% 7.9%2015 Est. 184.2% 6% 2016 Est 174.7% 4% 160% 165% 170% 175% 180% 185% 190% 195% 2008 2009 2010 2011 2012 2013Source: European Commission Source: Bloomberg
  9. 9. Portugal: Last week’s results (I)Banco Espirito Santo (BES PL): Q3 2012 above Portugal Telecom (PTC PL): Good news from Brazilmarket expectations. Still our top pick in the • Oi reported Q3 2012 numbers. They showedPortuguese Banking Sector. improvement, both on the revenues and on the• BES reported a net profit of €65m for Q3 2012, earnings side. Net profit increased to R$315mn, well above consensus of €34m (Reuters), reflecting a revenue increase of 1.9% q/q; reflecting strong trading gains in the quarter. The • On the revenue side, we would underline: results were also helped by BES allowing its loan o the 1.9% q/q increase in Residential, due to coverage to fall; the RGUs increase and a lower churn rate;• The bank has reduced its ECB reliance to €9.8bn, - o a 3.4% q/q rise in Mobility, due to an 28% from June 2012; increase in the post-paid segment;• Provisions were up 71% y/y and 38% q/q and o a 3.1% q/q rise in Corporate sustained by reached €326m in Q3 2012. The ratio of credit at the offering of new products. risk as a proportion of the loan portfolio rose • Portugal Telecom will report th Q3 2012 from 7.91% to 9.30% over the quarter. consolidated results on November 30 . OI - Q3 2012 Earnings SummaryBES: Income Statement Summary Q3 2012 Q2 2012 Q3 2011 q/q y/y Q3 2012 Q2 2012 Q3 2011 q/q y/y Lines in Service 18,707 18,722 19,078 0% -2%Net Interest Income 299 313 331 -4% -10% Broadband Subs 5,556 5,332 4,776 4% 16%Fee Income 167 238 187 -30% -11% Mobile Subs 48,398 47,794 42,871 1% 13% Net Revenue 7,041 6,909 6,940 2% 1%Trading Income 235 83 -182 n.m. n.m. EBITDA 2,186 2,141 2,467 2% -11%Operating Income 675 653 528 3% 28% EBITDA Margin 31% 31% 36%Operating Costs -286 -288 -284 -1% 1% EBIT 860 857 1,100 0% -22%Impairments -326 -236 -191 38% 71% Net Interest Expense -554 -692 -302 -20% 83%Net Income 65 14 -18 n.m. n.m. Net Income 315 64 426 n.m. -26%Source: Company data Source: Company reports
  10. 10. Portugal: Last week’s results (II)Sonae (SON PL): Surprising results from the Retail Sonae Indústria (SONI PL): Macro Challengesdivision weigh on the company’s results• Net income fell on the 9M 2012 to €92m. The • Q3 2012 net loss increased €42m y/y to €51m, main reason was the non-existence of capital reflecting the European tough economic gains associated with the sale of assets by Sonae environment; RP; • Q3 2012 revenues in Europe fell 4.6% y/y. Total• Q3 2012 Turnover fell 1% y/y. On the positive turnover was down 6% to €312m; side, Sonae MC reported a growth of 0.8% y/y; • EBITDA margin continues to be under pressure• Q3 2012 EBITDA increased 0.6% y/y to €167mn. and fell 232bps to 6.41%; Once again, Sonae MC was a positive surprise • The Knowsley plant in the UK was closed, which with its margin increasing surprisingly 0.4%, even caused an impairment of €41m; considering the current competitive environment • The company stated its intention to sell more in the Portuguese retail sector. non-core assets, which may lead to new 0.60 Sonae Share Price (€) impairments. 0.552 0.55 Martifer (MAR PL) reported its 9M 2012 results. 0.50 Operating revenues decreased 4.9% y/y. EBITDA 0.45 reached €14.6m, with a margin of 4.3% (+5.6pp 0.40 y/y). Net loss was €33m, reflecting €11.3m of 0.35 provisions and impairments, and higher financial 0.30 costs. Metallic Construction and Solar order books Jan-12 Mar- 12 May-12 Jul-12 Sep-12 Nov-12 increased y/y to €380m and €230m respectively.Source: Bloomberg
  11. 11. S&P 500 Earnings Update: Q3 2012 as of November 16th, 2012• Q3 2012 earnings report is close to its end; • The decline in the bottom-up Q4 2012 EPS from• 476 companies have reported Q3 2012 results. September end is similar to the decline in Q3 72% of companies reporting have beaten 2012 EPS during Q2 2012 reporting; earnings estimates and 27% have missed. The • Bottom-up EPS consensus forecasts a 4% average EPS surprise has been 3.7%; increase in 2012 to $100, and a 14% increase in• Despite a tough macro environment, global 2013 to $114; slowdown, soft commodity prices and slow • The equity market is now focused on post capital markets, companies managed to keep election uncertainties, mainly the fiscal cliff margins high; resolution and the dividend tax rate.S&P 500 Q3 Earnings Summary as of November 16th , 2012 Number of companies Earnings Suprises Average Q3 Revenues Surprises Average Q3 Reported Total % of Cos Positive In-line Negative Surprise Positive In-line Negative SurpriseOil & Gas 41 41 100.0% 58.5% 0.0% 41.5% 2.2% 53.7% 0.0% 46.3% -0.2%Basic Materials 26 26 100.0% 50.0% 3.8% 46.2% -2.6% 26.9% 0.0% 73.1% -1.8%Industrials 71 75 94.7% 69.0% 2.8% 28.2% 3.0% 29.6% 0.0% 70.4% -1.0%Consumer Goods 53 58 91.4% 79.2% 0.0% 20.8% 6.1% 30.2% 0.0% 69.8% 0.4%Health Care 43 46 93.5% 86.0% 0.0% 14.0% 4.1% 34.9% 0.0% 65.1% -1.2%Consumer Services 67 74 90.5% 74.2% 3.0% 22.7% 1.8% 39.4% 1.5% 59.1% -0.7%Telecommunications 8 8 100.0% 50.0% 0.0% 50.0% 15.2% 50.0% 0.0% 50.0% -0.1%Utilities 32 32 100.0% 62.5% 0.0% 37.5% 2.5% 9.4% 0.0% 90.6% -8.6%Financials 85 85 100.0% 79.8% 0.0% 20.2% 7.5% 63.9% 0.0% 36.1% 4.2%Technology 50 54 92.6% 70.0% 0.0% 30.0% 0.4% 54.0% 0.0% 46.0% -0.6%S&P 500 476 499 95.4% 71.7% 1.1% 27.2% 3.7% 41.0% 0.2% 58.8% -0.3%Comparative Data (full earnings season)Q2 2012 71.5% 1.0% 27.5% 4.0% 41.4% 0.2% 58.4% 0.4%Source: Bloomberg
  12. 12. DJ Europe 600 Earnings Update: Q3 2012 as of November16th, 2012• 377 companies have reported Q3 2012 results. mainly due to Cyclicals; 51% of companies reporting have beaten • Revenues have softened over the course of earnings estimates and 47% have missed. The 2012. The disappointing macro data over the average EPS surprise has been 4.7%; course of the year has been felt at the top-line;• Companies have generally been guiding down • US Fiscal cliff and debt ceiling uncertainties are expectations, and analysts’ 2012 and 2013 adding to earnings concerns. earnings forecasts continue to be downgraded,DJ Europe 600 Q3 Earnings Summary as of November 16th , 2012 Number of companies Earnings Suprises Average Q3 Revenues Surprises Average Q3 Reported Total % of Cos Positive In-line Negative Surprise Positive In-line Negative SurpriseOil & Gas 22 24 91.7% 55.6% 0.0% 44.4% 9.5% 47.4% 0.0% 52.6% -2.6%Basic Materials 34 36 94.4% 51.9% 0.0% 48.1% -4.0% 52.9% 0.0% 47.1% 0.0%Industrials 74 76 97.4% 58.6% 0.0% 41.4% 1.0% 52.8% 0.0% 47.2% 0.7%Consumer Goods 48 49 98.0% 41.4% 0.0% 58.6% 4.4% 59.6% 0.0% 40.4% 2.5%Health Care 28 29 96.6% 52.0% 4.0% 44.0% 2.4% 39.3% 0.0% 60.7% -0.2%Consumer Services 33 36 91.7% 52.0% 4.0% 44.0% 20.1% 46.9% 3.1% 50.0% -0.8%Telecommunications 17 18 94.4% 78.6% 0.0% 21.4% 11.7% 41.2% 0.0% 58.8% -0.3%Utilities 18 18 100.0% 40.0% 0.0% 60.0% 7.9% 75.0% 0.0% 25.0% 6.3%Financials 84 95 88.4% 43.8% 4.7% 51.6% 1.4% 50.0% 0.0% 50.0% -0.2%Technology 19 20 95.0% 46.7% 0.0% 53.3% -12.7% 73.7% 0.0% 26.3% 1.1%DJ Europe 600 377 401 94.0% 51.2% 1.8% 47.0% 4.7% 52.8% 0.3% 46.9% 0.4%Source: Bloomberg
  13. 13. Last week’s market highlights• KPN (KPN NA) slid 13% last week to €4.03, the lowest KPN vs. European Telecom Sector 110 De c. 2011=100 price in 10 years. A new-entrant in the Dutch mobile 100 market is a well known negative catalyst. Moreover, 90 KPN German MTR cuts (effective December 1st) are expected 80 DJ Europe 600 70 to be a significant drag for E-Plus, KPN’s subsidiary in 60 Teleco m Sector Germany. Management has already indicated they would 50 40 operate above previous leverage ratios and even accept Dec- 11 Mar- 12 Jun-12 Sep-12 Dec- 12 Source: Bloomberg a lower credit rating to keep investing in its network. KPN 4 Bankia share price (€) is finalizing its business plan through 2015. Consensus 3 seems to fear a right issue, not just a dividend cut;• Bankia (BKIA SM)’s holders of junior and hybrid debt will 2 likely take a loss of up to 50% of the face value of their 1 1.01 securities, as a condition for the Spanish bank to receive 0 European aid. Negotiations are still ongoing; Jul-11 Sep-11 Nov-11 Ja n-12 Mar- 12 May-12 Jul-12 Sep-12 Nov-12 Source: Bloomberg• Microsoft (MSFT US) announced that Windows President Steven Sinofsky was leaving the company. Mr Sinofsky was brought over to run the Windows Division after the disappointing release of Windows Vista back in 2006. The news have been negatively viewed by the investment community, with the stock falling more than 7% during the week. Source: Company data
  14. 14. What we are watching this week: CALENDAR - Event Country Date Hour (GMT) Survey Prior• Final Q3 GDP data and its components NAHB Housing Market Index (Nov) US 19-Nov 15:00 41 41 for Germany are due Friday (Nov 23rd); Existing Home Sales (Nov) US 19-Nov 15:00 4.75M 4.75M• Advance November PMI data for the BOJ rate announcement Japan 20-Nov Not Available 0.10% 0.10% RBA MPC minutes Australia 20-Nov 00:30 Euro area, Germany and France should Housing Starts (Oct) US 20-Nov 13:30 Not Available Not Available 840K 872K be disclosed on Thursday (Nov 22th). Richmond Feds Lacker speaks on monetary policy in New York US 20-Nov 14:00 Not Available Not Available EU general affairs ministers prep budget summit Euro-Zone 20-Nov 09:00 German IFO data for November are due Eurogroup meeting on Greece in Brussels Euro-Zone 20-Nov 16:00 Not Available Not Available Not Available Not Available Friday (Nov 23rd); Fed Chairman Bernanke speaks at Economic Club in New York US 20-Nov Not Available Not Available Not Available• In the UK on Wednesday (Nov 21st), the Bank of England MPC Minutes UK 21-Nov 09:30 Not Available Not Available Initial Jobless Claims (for week to 17 Nov) US 21-Nov 13:30 400K 439K Bank of England releases the minutes of Continuing Claims (for week 17 Nov) US 21-Nov 13:30 3345K 3334K its November meeting; Markit US PMI Preliminary US 21-Nov 14:00 51.0 Not Available U. of Michigan Confidence (final; Nov) US 21-Nov 13:12 84.5 84.9• Hurricane Sandy is likely to continue Leading Indicators US 21-Nov 15:00 0.1% 0.6% distorting economic indicators in the HSBC Flash Manufacturing PMI China 22-Nov 01:45 Not Available 49.5 coming week, including housing starts Public holiday US 22-Nov Not Available Not Available Not Available PMI Manufacturing France 22-Nov 08:00 44.0 43.7 (Nov 20th) and jobless claims (Nov 21st); ECB General Council meeting (no rate announcement) Euro-Zone 22-Nov Not Available Not Available Not Available• The Fed chairman will speak on “The PMI Services France 22-Nov 08:00 45.0 44.6 PMI Manufacturing Germany 22-Nov 08:30 46.0 46.0 Economic Recovery and Economic PMI Services Germany 22-Nov 08:30 48.3 48.4 Policy” on Tuesday (Nov 20th). PMI Manufacturing (flash; Nov) Euro-Zone 22-Nov 09:00 45.6 45.4 PMI Services (flash; Nov) Euro-Zone 22-Nov 09:00 46.0 46.0 Weakness in US equity markets suggest Euro-Zone Consumer Confidence (flash; Nov) Euro-Zone 22-Nov 15:00 -25.9 -25.7 the Univ. of Michigan consumer GDP (final; y/y) Germany 23-Nov 07:00 0.4% Not Available sentiment index could reverse some of Public holiday Japan 23-Nov Not Available Not Available Not Available ECB President Draghi speaks at 22nd Frankfurt European Banking Congress Euro-Zone 23-Nov 09:00 Not Available Not Available its recent gains. IFO - Business Climate (Nov) Germany 23-Nov 09:00 99.5 100.0
  15. 15. Next Week Preview: Eurogroup meeting and Black FridayEurogroup meeting on Greece Let’s go to the shopping mall…• The Euro-zone Finance Ministers are to hold an • The first sales day after next week’s Thanksgiving extraordinary meeting on Tuesday, November holiday is usually considered to be a reliable 20th to try to bridge the difference within the barometer of sales during the whole holiday Troika (mainly regarding debt sustainability season; issues). They will also try to find a solution to • The growing popularity of “Cyber Monday” Greece’s additional funding needs; means that retail sales over this “long weekend”• Nonetheless, and according to Eurogroup are important; President Jean-Claude Juncker, the Finance • The whole holiday period accounts for an Ministers might have to meet again by the end of important share of many retailers’ total annual the month; sales. Will the treat of a fall in after-tax incomes• Various press reports suggested that the funding on January 1st (fiscal cliff driven) restrain sales needs could be covered via a cut in the interest over the holiday period? rates Greece pays on its loans or through a lengthening of loans maturities and issuance of T- bills;• The major issue that needs to be resolved is Greece’s debt sustainability. However, given the politically controversial decisions that would be involved, European politicians will probably continue kicking the Greek can down the road. Source: US Census Bureau
  16. 16. Next Week Preview: Portugal debt auction and Fiscal CliffPortugal will tap bond markets No fiscal cliff concerns thisthis week week… Really?• On November 21st, the Portuguese Treasury and • Last week ended on a hopeful note. Democratic Debt Management Agency is going to auction and Republican Congressional leaders met at the three Treasury Bill lines maturing on February White House with President Obama and 2013, May 2013 and May 2014, with an indicative emerged from their meeting promising they global range amount of €1,75bn to €2bn; would reach a fiscal compromise before• After this auction, the 2012 funding programme Christmas; will be completed. Therefore the auction • President Barack Obama and top lawmakers scheduled for December 19th will not be agreed on last Friday to work on a framework proceeded. for reforming the U.S. tax code and "entitlement" programs next year;CALENDAR - Event Country Date Hour (GMT) • Lawmakers have gone for the ThanksgivingTreasury Bills France 19-Nov 14:00 holiday on an upbeat note. However, it will still12M and 18M Treasury Bills Spain 20-Nov 9:30 probably be a bumpy road to reach an2017 Government Bonds (GPB4.5bn) United Kingdom 20-Nov 10:30 agreement;10Y Government Bonds (€4bn) Germany 21-Nov 10:30 • Meanwhile, the uncertainty may continue to3, 6 and 12M Treasury Bills Portugal 21-Nov 10:30 affect household and business spending overGovernment Bonds Spain 22-Nov 9:30 the next few weeks.Source: Bloomberg
  17. 17. Next Week Preview: Key corporate eventsKey corporate events in Europe Key corporate events in the US• With the reporting season almost over, the • In a shorter week than usual due to the biggest event next week in Europe could be Thanksgiving holiday, the highlight will probably Xstata’s EGM on Tuesday. Shareholders will vote be Hewlett-Packard. The company is scheduled on the merger of Glencore. to report on November 20th. HP guided down in Company Date Event Services last month. Moreover, there’s been CRH 19-Nov Capital Markets Day Subsea 7 19-Nov Q3 Results signs of PC softness. Intertek Group 19-Nov Trading Statement Mitie Group 19-Nov H1 Results Xstrata 20-Nov EGM Company Date Event Glencore 20-Nov EGM British Land 20-Nov Q2 Results Honeywell 19-Nov Defense and Space Investor Day Signet Group 20-Nov Q3 Results Easyjet 20-Nov FY Results Lowes (LOW) 19-Nov Earnings release ($0.35) OPAP 20-Nov Q3 Results Broacade Com (BRCD) 19-Nov Earnings release ($0.14) Compass Group 21-Nov FY Results 19-Nov Jonhson Matthey 21-Nov H1 Results Randstad 21-Nov Investor Day Hewlett-Packard (HPQ) 20-Nov Earnings release ($1.14) SABMiller 22-Nov H1 Results HJ Heinz (HNZ) 20-Nov Earnings release ($0.88) Experian Group 22-Nov Shareholders Meeting Campbell Soup (CPB) 20-Nov Earnings release ($0.85) Smiths Group 22-Nov Shareholders Meeting Halma 22-Nov H1 Results Best Buy (BBY) 20-Nov Earnings release ($0.12) Mothercare 22-Nov H1 Results Medtronic (MDT) 20-Nov Earnings release ($0.88) United Internet 22-Nov Q3 Results Galp 23-Nov Shareholders Meeting Deere & Co (DE) 21-Nov Earnings release ($1.88)
  18. 18. Charts we are watching• Mota-Engil, the Portuguese Construction and 2.0 Mota-Engil share price (€) Engineering group, will release its Q3 2012 earnings 1.8 on November 21st, after market close. In Portugal, 1.6 revenues should reflect the weak performance of the domestic construction market. However, 1.4 investors will probably focus on the performance of 1.2 1.295 the international division: Latin America, Central 1.0 Europe and, particularly, the African unit. The stock price increased more than 34% since the beginning 0.8 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 of 2012. Mota-Engil announced in its H1 2012 results Source: Bloomberg the new strategic plan, with ambitious goals for its 25% Ireland Government Bond Yields international units. 20%• Last week, Fitch has revised the Outlook on Ireland’s BBB+ sovereign rating to Stable. Ireland has made 15% progress towards consolidating its fiscal expenditure. it cut its deficit to 9.4% of GDP in 2011, from 12.6% 10% in 2010, and intends to achieve an 8.6% deficit ratio 5 yea rs this year. However, Irish growth is highly dependant 5% 3.4% on external demand. Slowing growth in its main 2 yea rs 2.0% 0% trading partners (the UK and the euro area) could hit Feb-11 May-11 Aug-11 Nov-11 Feb-12 May-12 Aug-12 Nov-12 GDP and hurt tax receipts. Source: Bloomberg
  19. 19. Disclosure SectionThis research report is based on information obtained from sources which we believe to be credible and reliable, but isnot guaranteed as to accuracy or completeness. All the information contained herein is based upon informationavailable to the public.The recipient of this report must make its own independent assessment and decisions regarding any securities orfinancial instruments mentioned herein.This report is not, and should not be construed as an offer or a solicitation to buy or sell any securities or relatedfinancial instruments. The investment discussed or recommended in this report may be unsuitable for investorsdepending on their specific investment objectives and financial position.The material in this research report is general information intended for recipients who understand the risks associatedwith investment. It does not take account of whether an investment, course of action, or associated risks are suitablefor the recipient.Investors should seek financial advice regarding the appropriateness of investing in any securities or investmentstrategies discussed or recommended in this research report and should understand that the statements regardingfuture prospects may not be realized. Investors may receive back less than initially invested. Past performance is not aguarantee for future performance.Fincor – Sociedade Corretora, S.A. accepts no liability of any type for any indirect or direct loss arising from the use ofthis research report.Recommendations and opinions expressed are our current opinions as of the date referred on this research report.Current recommendations or opinions are subject to change as they depend on the evolution of the company or maybecome outdated as a consequence of changes in the environment.Fincor - Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders.
  20. 20. Fincor – Sociedade Corretora, S.A.Rua Castilho, 44 4º Andar1250-071 LisboaPortugal

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