Silvia Quandt & Cie. AG, Merchant & Investment Banking: In-between the lines - Bernhard Eschweiler
DGAP-News: Silvia Quandt & Cie. AG, Merchant & Investment Banking /
Schlagwort(e): Sonstiges/Sonstiges
Silvia Quandt & Cie. AG, Merchant & Investment Banking: In-between the
lines - Bernhard Eschweiler
13.01.2012 / 07:34
---------------------------------------------------------------------
- Euro debt crisis overshadows start into 2012 but something has changed
- Global growth and monetary policy conditions have improved
- Falling Euro-area inflation to give ECB room for more rate cuts
Financial markets started the New Year the same way they finished the Old
Year. The Euro-area debt crisis continues to dominate market sentiment.
Nevertheless, a few things have changed.
- First, political leaders, foremost Germany's Angela Merkel, no longer
let themselves be pushed by markets. They are comfortable that the
Euro system is not about to collapse and use the time to push for more
fiscal and structural reforms. Latest bond auctions show a positive
market response.
- Second, global leading indicators have improved toward year end.
Global business confidence is moving back into expansion mode, led by
the US. The Euro area remains the weak link, but is no longer in a
free fall.
- Third, monetary policy makers are doing more for growth. Most
prominent have been the rate cuts and liquidity injections by the ECB
at the end of last year. The ECB is now taking a break to watch the
impact, but will probably do more toward spring. The US Fed, although
under less pressure, is making sure that interest rate expectations
will stay low for a long time. In emerging markets, China is leading
the easing cycle. A second cut in reserve requirements is likely to
follow soon and new loans are already showing signs of revival.
To be sure, uncertainties will remain high. Tensions are likely to
increase as troubled Euro-area sovereigns try to refinance record sums of
maturing debt in the first quarter, while banks are struggling to find new
capital. Nevertheless, we feel encouraged by the policy and global
cyclical changes. Especially Germany should do better in this environment,
which is why we are sticking to our 1.5% growth forecast for 2012.
Domestic slack to push Euro-area inflation down
A key justification for the ECB rate cuts and liquidity injections late
last year is the view that the economic downturn in the Euro zone will have
disinflationary implications. The argument makes economic sense and shows
that the ECB under President Draghi has learned something from the
Bundesbank. Nevertheless, that forecast needs to turn into reality. If
not, the ECB will lose credibility, which would reduce its flexibility to
set policy on forward-looking growth and inflation projections.
Inflation is a lagging indicator. Nevertheless, with headline inflation
well above the target level, the ECB must have a lot of confidence in its
forecast. Thus, the decline in headline inflation to 2.8% in December from
3% in November was welcome news. Still, it is some way for inflation to
drop to the 2% target in 2012 and even below the target in 2013 as the ECB
central forecast implies. Favorable base effects - large price increases
early last year dropping out of the over-a-year-ago rate - will push
headline inflation further down in coming months.
The ECB expects external price pressures, especially from commodity
markets, to ease this year and help bring inflation lower. Indeed, global
inflation conditions have improved significantly, especially in emerging
markets, such as China. In our judgment, global inflation will drop from
around 5% in 2011 to below 4% in 2012. However, we are less optimistic
that commodity prices will soften much. Already, oil prices are responding
to signs of stronger economic activity. Especially a pick-up in China will
accelerate this trend.
Instead, we expect that the main contribution to disinflation in the Euro
zone will come from the slack in the domestic economy. Depending on the
estimates, Euro-area output is between 2% and 4% below potential. This is
also reflected in well below normal capacity utilization rates. Add to
this the prospect of further weakness and it becomes clear that economic
slack will increase. This is visible in unemployment and starts to
translate in falling unit labor cost, which will be the main source of
disinflation.
Finally, there is no risk for inflation from monetary developments despite
the massive expansion of the ECB balance sheet. Money supply growth eased
again toward year end and is close to previous lows. The same is true for
credit to companies and private households. The sluggish development of
monetary aggregates shows that the main task remains avoiding deflation and
not fighting inflation.
From the perfect storm to crosswinds
After a sequence of negative news that became a perfect storm in mid 2011,
financial markets are likely to be pushed between two opposing forces this
year. In our judgment, the Euro will not break, but the uncertainty over
its future will remain elevated through at least the first half of this
year. On the other hand, signs of further improvements in global economic
activity accompanied by
super easy monetary policy conditions in the major OECD economies and many
emerging markets will not pass financial markets unnoticed. The result
could be less synchronization between different financial markets. The US
is likely to do best, followed by some emerging markets, while the Euro
area is set to be held back. Within the Euro area, Germany has the chance
to outperform as it is fundamentally strongest and best positioned to
benefit from the positive global economic and policy developments. Besides
the Euro area slipping into bigger turmoil, the main risks are: fiscal
policy confusion in the US in the run-up to the presidential election,
slippage in one of the major emerging markets - China, India or Brazil -
and geopolitical tensions, possibly triggered by Iran, Syria or North
Korea.
Disclaimer
This analysis was prepared by Bernhard Eschweiler, Senior Economic Advisor,
and was first published 13 January 2012, Silvia Quandt Research GmbH,
Grüneburgweg 18, 60322 Frankfurt is responsible for its preparation. German
Regulatory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht
(BaFin), Graurheindorfer Str. 108, 53117 Bonn and Lurgiallee 12, 60439
Frankfurt.
Publication according to article 5 (4) no. 3 of the German Regulation
concerning the analysis of financial instruments (Finanzanalyseverordnung):
Number of recommendations Thereof recommendations for issuers to which
from Silvia Quandt Research investment banking services were provided
during
GmbH in 2012 the preceding twelve months
Buys: 105 35
Neutral: 37 6
Avoid: 9 0
Company disclosures
Article 34b of the German Securities Trading Act (Wertpapierhandelsgesetz)
in combination with the German regulation concerning the analysis of
financial instruments (Finanzanalyseverordnung) requires an enterprise
preparing a securities analysis to point out possible conflicts of interest
with respect to the company or companies that are the subject of the
analysis. A conflict of interest is presumed to exist, in particular, if an
enterprise preparing a security analysis:
(a) holds more than 5 % of the share capital of the company or companies
analysed;
(b) has lead managed or co-lead managed a public offering of the
securities of the company or companies in the previous 12 months;
(c) has provided investment banking services for the company or companies
analysed during the last 12 months for which a compensation has been or
will be paid;
(d) is serving as a liquidity provider for the company's securities by
issuing buy and sell orders;
(e) is party to an agreement with the company or companies that is the
subject of the analysis relating to the production of the recommendation;
(f) or the analyst covering the issue has other significant financial
interests with respect to the company or companies that are the subject of
this analysis, for example holding a seat on the company's boards.
In this respective analysis the following of the above-mentioned conflicts
of interests exist: none
Silvia Quandt Research GmbH, Silvia Quandt & Cie. AG, and its affiliated
companies regularly hold shares of the analysed company or companies in
their trading portfolios. The views expressed in this analysis reflect the
personal views of the analyst about the subject securities or issuers. No
part of the analyst's compensation was, is or will be directly or
indirectly tied to the specific recommendations or views expressed in this
analysis. It has not been determined in advance whether and at what
intervals this report will be updated.
Equity Recommendation Definitions Silvia Quandt Research GmbH analysts rate
the shares of the companies they cover on an absolute basis using a 6 -
12-month target price. 'Buys' assume an upside of more than 10% from the
current price during the following 6 - 12-months. These securities are
expected to out-perform their respective sector indices. Securities with an
expected negative absolute performance of more than 10% and an
under-performance to their respective sector index are rated 'avoids'.
Securities where the current share price is within a 10% range of the
sector performance are rated 'neutral'. Securities prices used in this
report are closing prices of the day before publication unless a different
date is stated. With regard to unlisted securities median market prices are
used based on various important broker sources (OTC-Market).
Disclaimer This publication has been prepared and published by Silvia
Quandt Research GmbH, a subsidiary of Silvia Quandt & Cie. AG. This
publication is intended solely for distribution to professional and
business customers of Silvia Quandt & Cie. AG. It is not intended to be
distributed to private investors or private customers. Any information in
this report is based on data obtained from publicly available information
and sources considered to be reliable, but no representations or guarantees
are made by Silvia Quandt Research GmbH with regard to the accuracy or
completeness of the data or information contained in this report. The
opinions and estimates contained herein constitute our best judgement at
this date and time, and are subject to change without notice. Prior to this
publication, the analysis has not been communicated to the analysed
companies and changed subsequently. This report is for information purposes
only; it is not intended to be and should not be construed as a
recommendation, offer or solicitation to acquire, or dispose of, any of the
securities mentioned in this report. In compliance with statutory and
regulatory provisions, Silvia Quandt & Cie. AG and Silvia Quandt Research
GmbH have set up effective organisational and administrative arrangements
to prevent and avoid possible conflicts of interests in preparing and
transmitting analyses. These include, in particular, inhouse information
barriers (Chinese walls). These information barriers apply to any
information which is not publicly available and to which any of Silvia
Quandt & Cie. AG and Silvia Quandt Research GmbH or its affiliates may have
access from a business relationship with the issuer. For statutory or
contractual reasons, this information may not be used in an analysis of the
securities and is therefore not included in this report. Silvia Quandt &
Cie. AG and Silvia Quandt Research GmbH, its affiliates and/or clients may
conduct or may have conducted transactions for their own account or for the
account of other parties with respect to the securities mentioned in this
report or related investments before the recipient has received this
report. Silvia Quandt & Cie. AG and Silvia Quandt Research GmbH or its
affiliates, its executives, managers and employees may hold shares or
positions, possibly even short sale positions, in securities mentioned in
this report or in related investments. Silvia Quandt & Cie. AG in
particular may provide banking or other advisory services to interested
parties. Neither Silvia Quandt Research GmbH, Silvia Quandt & Cie. AG or
its affiliates nor any of its officers, shareholders or employees accept
any liability for any direct or consequential loss arising from any use of
this publication or its contents. Copyright and database rights protection
exists in this publication and it may not be reproduced, distributed or
published by any person for any purpose without the prior express consent
of Silvia Quandt Research GmbH. All rights reserved. Any investments
referred to herein may involve significant risk, are not necessarily
available in all jurisdictions, may be illiquid and may not be suitable for
all investors. The value of, or income from, any investments referred to
herein may fluctuate and/or be affected by changes in exchange rates. Past
performance is not indicative of future results. Investors should make
their own investment decisions without relying on this publication. Only
investors with sufficient knowledge and experience in financial matters to
evaluate the merits and risks should consider an investment in any issuer
or market discussed herein and other persons should not take any action on
the basis of this publication.
Specific notices of possible conflicts of interest with respect to issuers
or securities forming the subject of this report according to US or English
law: None
This publication is issued in the United Kingdom only to persons described
in Articles 19, 47 and 49 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2001 and is not intended to be distributed,
directly or indirectly, to any other class of persons (including private
investors). Neither this publication nor any copy of it may be taken or
transmitted into the United States of America or distributed, directly or
indirectly, in the United States of America.
Frankfurt am Main, 12.01.2012
Silvia Quandt Research GmbH
Grüneburgweg 1860322 Frankfurt
Tel: + 49 69 95 92 90 93 -0
Fax: + 49 69 95 92 90 93 - 11
Ende der Corporate News
---------------------------------------------------------------------
13.01.2012 Veröffentlichung einer Corporate News/Finanznachricht,
übermittelt durch die DGAP - ein Unternehmen der EquityStory AG.
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber
verantwortlich.
Die DGAP Distributionsservices umfassen gesetzliche Meldepflichten,
Corporate News/Finanznachrichten und Pressemitteilungen.
Medienarchiv unter http://www.dgap-medientreff.de und
http://www.dgap.de
---------------------------------------------------------------------
152632 13.01.2012
DGAP-News: Silvia Quandt & Cie. AG, Merchant & Investment Banking /
Schlagwort(e): Sonstiges/Sonstiges
Silvia Quandt & Cie. AG, Merchant & Investment Banking: In-between the
lines - Bernhard Eschweiler
13.01.2012 / 07:34
---------------------------------------------------------------------
- Euro debt crisis overshadows start into 2012 but something has changed
- Global growth and monetary policy conditions have improved
- Falling Euro-area inflation to give ECB room for more rate cuts
Financial markets started the New Year the same way they finished the Old
Year. The Euro-area debt crisis continues to dominate market sentiment.
Nevertheless, a few things have changed.
- First, political leaders, foremost Germany's Angela Merkel, no longer
let themselves be pushed by markets. They are comfortable that the
Euro system is not about to collapse and use the time to push for more
fiscal and structural reforms. Latest bond auctions show a positive
market response.
- Second, global leading indicators have improved toward year end.
Global business confidence is moving back into expansion mode, led by
the US. The Euro area remains the weak link, but is no longer in a
free fall.
- Third, monetary policy makers are doing more for growth. Most
prominent have been the rate cuts and liquidity injections by the ECB
at the end of last year. The ECB is now taking a break to watch the
impact, but will probably do more toward spring. The US Fed, although
under less pressure, is making sure that interest rate expectations
will stay low for a long time. In emerging markets, China is leading
the easing cycle. A second cut in reserve requirements is likely to
follow soon and new loans are already showing signs of revival.
To be sure, uncertainties will remain high. Tensions are likely to
increase as troubled Euro-area sovereigns try to refinance record sums of
maturing debt in the first quarter, while banks are struggling to find new
capital. Nevertheless, we feel encouraged by the policy and global
cyclical changes. Especially Germany should do better in this environment,
which is why we are sticking to our 1.5% growth forecast for 2012.
Domestic slack to push Euro-area inflation down
A key justification for the ECB rate cuts and liquidity injections late
last year is the view that the economic downturn in the Euro zone will have
disinflationary implications. The argument makes economic sense and shows
that the ECB under President Draghi has learned something from the
Bundesbank. Nevertheless, that forecast needs to turn into reality. If
not, the ECB will lose credibility, which would reduce its flexibility to
set policy on forward-looking growth and inflation projections.
Inflation is a lagging indicator. Nevertheless, with headline inflation
well above the target level, the ECB must have a lot of confidence in its
forecast. Thus, the decline in headline inflation to 2.8% in December from
3% in November was welcome news. Still, it is some way for inflation to
drop to the 2% target in 2012 and even below the target in 2013 as the ECB
central forecast implies. Favorable base effects - large price increases
early last year dropping out of the over-a-year-ago rate - will push
headline inflation further down in coming months.
The ECB expects external price pressures, especially from commodity
markets, to ease this year and help bring inflation lower. Indeed, global
inflation conditions have improved significantly, especially in emerging
markets, such as China. In our judgment, global inflation will drop from
around 5% in 2011 to below 4% in 2012. However, we are less optimistic
that commodity prices will soften much. Already, oil prices are responding
to signs of stronger economic activity. Especially a pick-up in China will
accelerate this trend.
Instead, we expect that the main contribution to disinflation in the Euro
zone will come from the slack in the domestic economy. Depending on the
estimates, Euro-area output is between 2% and 4% below potential. This is
also reflected in well below normal capacity utilization rates. Add to
this the prospect of further weakness and it becomes clear that economic
slack will increase. This is visible in unemployment and starts to
translate in falling unit labor cost, which will be the main source of
disinflation.
Finally, there is no risk for inflation from monetary developments despite
the massive expansion of the ECB balance sheet. Money supply growth eased
again toward year end and is close to previous lows. The same is true for
credit to companies and private households. The sluggish development of
monetary aggregates shows that the main task remains avoiding deflation and
not fighting inflation.
From the perfect storm to crosswinds
After a sequence of negative news that became a perfect storm in mid 2011,
financial markets are likely to be pushed between two opposing forces this
year. In our judgment, the Euro will not break, but the uncertainty over
its future will remain elevated through at least the first half of this
year. On the other hand, signs of further improvements in global economic
activity accompanied by
super easy monetary policy conditions in the major OECD economies and many
emerging markets will not pass financial markets unnoticed. The result
could be less synchronization between different financial markets. The US
is likely to do best, followed by some emerging markets, while the Euro
area is set to be held back. Within the Euro area, Germany has the chance
to outperform as it is fundamentally strongest and best positioned to
benefit from the positive global economic and policy developments. Besides
the Euro area slipping into bigger turmoil, the main risks are: fiscal
policy confusion in the US in the run-up to the presidential election,
slippage in one of the major emerging markets - China, India or Brazil -
and geopolitical tensions, possibly triggered by Iran, Syria or North
Korea.
Disclaimer
This analysis was prepared by Bernhard Eschweiler, Senior Economic Advisor,
and was first published 13 January 2012, Silvia Quandt Research GmbH,
Grüneburgweg 18, 60322 Frankfurt is responsible for its preparation. German
Regulatory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht
(BaFin), Graurheindorfer Str. 108, 53117 Bonn and Lurgiallee 12, 60439
Frankfurt.
Publication according to article 5 (4) no. 3 of the German Regulation
concerning the analysis of financial instruments (Finanzanalyseverordnung):
Number of recommendations Thereof recommendations for issuers to which
from Silvia Quandt Research investment banking services were provided
during
GmbH in 2012 the preceding twelve months
Buys: 105 35
Neutral: 37 6
Avoid: 9 0
Company disclosures
Article 34b of the German Securities Trading Act (Wertpapierhandelsgesetz)
in combination with the German regulation concerning the analysis of
financial instruments (Finanzanalyseverordnung) requires an enterprise
preparing a securities analysis to point out possible conflicts of interest
with respect to the company or companies that are the subject of the
analysis. A conflict of interest is presumed to exist, in particular, if an
enterprise preparing a security analysis:
(a) holds more than 5 % of the share capital of the company or companies
analysed;
(b) has lead managed or co-lead managed a public offering of the
securities of the company or companies in the previous 12 months;
(c) has provided investment banking services for the company or companies
analysed during the last 12 months for which a compensation has been or
will be paid;
(d) is serving as a liquidity provider for the company's securities by
issuing buy and sell orders;
(e) is party to an agreement with the company or companies that is the
subject of the analysis relating to the production of the recommendation;
(f) or the analyst covering the issue has other significant financial
interests with respect to the company or companies that are the subject of
this analysis, for example holding a seat on the company's boards.
In this respective analysis the following of the above-mentioned conflicts
of interests exist: none
Silvia Quandt Research GmbH, Silvia Quandt & Cie. AG, and its affiliated
companies regularly hold shares of the analysed company or companies in
their trading portfolios. The views expressed in this analysis reflect the
personal views of the analyst about the subject securities or issuers. No
part of the analyst's compensation was, is or will be directly or
indirectly tied to the specific recommendations or views expressed in this
analysis. It has not been determined in advance whether and at what
intervals this report will be updated.
Equity Recommendation Definitions Silvia Quandt Research GmbH analysts rate
the shares of the companies they cover on an absolute basis using a 6 -
12-month target price. 'Buys' assume an upside of more than 10% from the
current price during the following 6 - 12-months. These securities are
expected to out-perform their respective sector indices. Securities with an
expected negative absolute performance of more than 10% and an
under-performance to their respective sector index are rated 'avoids'.
Securities where the current share price is within a 10% range of the
sector performance are rated 'neutral'. Securities prices used in this
report are closing prices of the day before publication unless a different
date is stated. With regard to unlisted securities median market prices are
used based on various important broker sources (OTC-Market).
Disclaimer This publication has been prepared and published by Silvia
Quandt Research GmbH, a subsidiary of Silvia Quandt & Cie. AG. This
publication is intended solely for distribution to professional and
business customers of Silvia Quandt & Cie. AG. It is not intended to be
distributed to private investors or private customers. Any information in
this report is based on data obtained from publicly available information
and sources considered to be reliable, but no representations or guarantees
are made by Silvia Quandt Research GmbH with regard to the accuracy or
completeness of the data or information contained in this report. The
opinions and estimates contained herein constitute our best judgement at
this date and time, and are subject to change without notice. Prior to this
publication, the analysis has not been communicated to the analysed
companies and changed subsequently. This report is for information purposes
only; it is not intended to be and should not be construed as a
recommendation, offer or solicitation to acquire, or dispose of, any of the
securities mentioned in this report. In compliance with statutory and
regulatory provisions, Silvia Quandt & Cie. AG and Silvia Quandt Research
GmbH have set up effective organisational and administrative arrangements
to prevent and avoid possible conflicts of interests in preparing and
transmitting analyses. These include, in particular, inhouse information
barriers (Chinese walls). These information barriers apply to any
information which is not publicly available and to which any of Silvia
Quandt & Cie. AG and Silvia Quandt Research GmbH or its affiliates may have
access from a business relationship with the issuer. For statutory or
contractual reasons, this information may not be used in an analysis of the
securities and is therefore not included in this report. Silvia Quandt &
Cie. AG and Silvia Quandt Research GmbH, its affiliates and/or clients may
conduct or may have conducted transactions for their own account or for the
account of other parties with respect to the securities mentioned in this
report or related investments before the recipient has received this
report. Silvia Quandt & Cie. AG and Silvia Quandt Research GmbH or its
affiliates, its executives, managers and employees may hold shares or
positions, possibly even short sale positions, in securities mentioned in
this report or in related investments. Silvia Quandt & Cie. AG in
particular may provide banking or other advisory services to interested
parties. Neither Silvia Quandt Research GmbH, Silvia Quandt & Cie. AG or
its affiliates nor any of its officers, shareholders or employees accept
any liability for any direct or consequential loss arising from any use of
this publication or its contents. Copyright and database rights protection
exists in this publication and it may not be reproduced, distributed or
published by any person for any purpose without the prior express consent
of Silvia Quandt Research GmbH. All rights reserved. Any investments
referred to herein may involve significant risk, are not necessarily
available in all jurisdictions, may be illiquid and may not be suitable for
all investors. The value of, or income from, any investments referred to
herein may fluctuate and/or be affected by changes in exchange rates. Past
performance is not indicative of future results. Investors should make
their own investment decisions without relying on this publication. Only
investors with sufficient knowledge and experience in financial matters to
evaluate the merits and risks should consider an investment in any issuer
or market discussed herein and other persons should not take any action on
the basis of this publication.
Specific notices of possible conflicts of interest with respect to issuers
or securities forming the subject of this report according to US or English
law: None
This publication is issued in the United Kingdom only to persons described
in Articles 19, 47 and 49 of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2001 and is not intended to be distributed,
directly or indirectly, to any other class of persons (including private
investors). Neither this publication nor any copy of it may be taken or
transmitted into the United States of America or distributed, directly or
indirectly, in the United States of America.
Frankfurt am Main, 12.01.2012
Silvia Quandt Research GmbH
Grüneburgweg 1860322 Frankfurt
Tel: + 49 69 95 92 90 93 -0
Fax: + 49 69 95 92 90 93 - 11
Ende der Corporate News
---------------------------------------------------------------------
13.01.2012 Veröffentlichung einer Corporate News/Finanznachricht,
übermittelt durch die DGAP - ein Unternehmen der EquityStory AG.
Für den Inhalt der Mitteilung ist der Emittent / Herausgeber
verantwortlich.
Die DGAP Distributionsservices umfassen gesetzliche Meldepflichten,
Corporate News/Finanznachrichten und Pressemitteilungen.
Medienarchiv unter http://www.dgap-medientreff.de und
http://www.dgap.de
---------------------------------------------------------------------
152632 13.01.2012