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
Silvia Quandt & Cie. AG, Merchant & Investment Banking: In-between the
lines - Bernhard Eschweiler
15.05.2012 / 14:12
---------------------------------------------------------------------
- Euro area woes remain key market concern: watch Greek bank deposits
- But global expansion stays on track
- German growth to bounce in Q2 after stronger-than-expected Q1 results
Persistent stress and uncertainty in the Euro area continue to weigh on
financial markets. As we go to press, no new government has been formed in
Greece and negotiations between France and Germany about the fiscal pact
and a new growth pact have yet to start. The risk of Greece leaving the
Euro has increased, yet a radically new European policy approach is
unlikely. Germany will probably agree to a stretching of fiscal targets
and some additional growth measures without dropping the principal ideas of
the fiscal and structural reform agenda. A positive surprise was today's
better-than-expected German Q1 GDP data, which rounded up last week's
strong March figures. More broadly, there are positive signs that the
global expansion will stay on track.
Heading for Delphi or straight for the door?
Predicting developments in Greece from the distance feels impossible and
even those closer struggle. Never-theless, markets are right to put a
higher probability on Greece leaving the Euro. We believe Greece will be
better off staying in the Euro, but the political developments make this
difficult. Greece may be able to get some small concessions from its
Euro-area partners, yet the threat of default is losing its punch -
although the collateral damage will probably be bigger than some like to
believe. Whoever will be in charge could decide to leave the Euro or
provoke a stand-off with the Euro-area partners, that ends with Greece
defaulting. Both outcomes assume that politicians call the shots. The
reality may be different.
Financial markets have by now limited leverage to force a decision in
Greece. The people of Greece, on the other hand, do. So far, Greek
residents have withdrawn more than EUR60 billion of deposits from local
banks. The resulting funding gap was bridged through ECB liquidity
operations. Despite the bleeding, more than 150 billion
Euro-denominated deposits from residents still sit with Greek banks.
People will probably rush to withdraw their remaining deposits if they see
an increased risk of Greece leaving the Euro. That in turn would force the
banks to seek more central bank funding.
Whether the ECB will continue to provide the extra funding is not clear.
The ECB will make that decision in close consultation with the Euro group
and the IMF, yet the argument not to throw more good money after bad will
weigh heavily when everyone is running for the door. A simple trick to
turn off funding would be to tighten collateral standards. We still
believe that the majority of Greeks sees the value of staying in the Euro,
but watch those deposits and the ECB in case we are wrong.
Pact terminology
Euro-area policymakers are unlikely to drop Greece easily, but even French
president Hollande lacks the domestic support to go out of his way. More
important for policymakers is to protect the rest of the Euro area and get
their economies growing again. This is to be achieved through the 'growth
pact', which is to supplement the 'fiscal pact'. Even German chancellor
Merkel is talking about the need to promote growth. The ideas, however,
are very different. France and some others hope to boost growth through
extra spending, mostly on infrastructure. Germany and its allies view
structural reforms, such as in the labor market, as key. Recent election
results have given the 'socialist' approach more popular support, but
German chancellor Merkel is not without allies. In fact, more governments
still seem to support her (notably Spain, Portugal, Italy and Ireland).
The result is likely to be a fudge, which allows both sides to claim they
prevailed. France will probably accept the fiscal pact, if Germany agrees
to a growth pact and the stretching of the deficit reduction targets.
Germany, on the other hand, will probably accept additional spending
through the EU structural funds and the European Investment Bank, if the
structural reform targets remain in place. To make this all work, more
funds will be needed. German resistance to Eurobonds still seems strong.
Less strong is the resistance to the introduction of a financial
transaction tax.
Maintaining and reviving growth
Important for the outcome in Europe is the global growth backdrop. In the
middle of last year, markets feared that global growth could collapse.
That would have been a disaster for Europe. Fortunately, it has not
happened for reasons we have pointed out before. Nevertheless, global
growth is not automatically assured. Markets have been worried over the
recent moderation in the US and further softness in China. Last week's
jobless and consumer confidence figures for April suggest that the US
economy remains on expansion course. This was also supported by stronger
exports. The Chinese data, on the other hand, was disappointing. In
response, the central bank cut the reserve requirement. It now seems the
Chinese authorities have fallen behind the curve. That they will catch up
just like they did with inflation last year, however, still is the most
likely outcome.
Germany on track for 1.5% growth in 2012
Good economic news also came from Germany. First-quarter real GDP growth
was much stronger than expected (2% q/q annualized vs. 0.4% consensus).
March output, trade and order figures last week exceeded expectations as
well.
- The surge in March output was exaggerated by weather effects in
construction (payback for February cold-related weakness), yet
manufacturing was strong as well. Importantly, the March surge creates
a strong base for the second quarter. March output was 23% annualized
above the Q1 average.
- The biggest boost came from construction, but exports were also doing
well. Exports increased 11% annualized in Q1 and March was 14%
annualized above the Q1 average.
- The outlook is also improving as seen in the order data. March orders
were 22% annualized above the Q1 average. Foreign orders were up 35%
despite orders from the Euro area down 13%.
The latest figures are consistent with the more optimistic sentiment
reflected in the Ifo index and support our view that Germany could reach 3%
annualized growth in the second quarter. With that reacceleration overall
2012 growth should reach at least 1.5%, which has been our forecast since
November last year, even if the economy slows again in the second half.
Disclaimer
This analysis was prepared by Bernhard Eschweiler, Senior Economic Advisor,
and was first published 15 May 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: 94 34
Neutral: 54 6
Avoid: 11 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, 15.05.2012
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
---------------------------------------------------------------------
15.05.2012 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
---------------------------------------------------------------------
170033 15.05.2012
DGAP-News: Silvia Quandt & Cie. AG, Merchant & Investment Banking /
Schlagwort(e): Sonstiges
Silvia Quandt & Cie. AG, Merchant & Investment Banking: In-between the
lines - Bernhard Eschweiler
15.05.2012 / 14:12
---------------------------------------------------------------------
- Euro area woes remain key market concern: watch Greek bank deposits
- But global expansion stays on track
- German growth to bounce in Q2 after stronger-than-expected Q1 results
Persistent stress and uncertainty in the Euro area continue to weigh on
financial markets. As we go to press, no new government has been formed in
Greece and negotiations between France and Germany about the fiscal pact
and a new growth pact have yet to start. The risk of Greece leaving the
Euro has increased, yet a radically new European policy approach is
unlikely. Germany will probably agree to a stretching of fiscal targets
and some additional growth measures without dropping the principal ideas of
the fiscal and structural reform agenda. A positive surprise was today's
better-than-expected German Q1 GDP data, which rounded up last week's
strong March figures. More broadly, there are positive signs that the
global expansion will stay on track.
Heading for Delphi or straight for the door?
Predicting developments in Greece from the distance feels impossible and
even those closer struggle. Never-theless, markets are right to put a
higher probability on Greece leaving the Euro. We believe Greece will be
better off staying in the Euro, but the political developments make this
difficult. Greece may be able to get some small concessions from its
Euro-area partners, yet the threat of default is losing its punch -
although the collateral damage will probably be bigger than some like to
believe. Whoever will be in charge could decide to leave the Euro or
provoke a stand-off with the Euro-area partners, that ends with Greece
defaulting. Both outcomes assume that politicians call the shots. The
reality may be different.
Financial markets have by now limited leverage to force a decision in
Greece. The people of Greece, on the other hand, do. So far, Greek
residents have withdrawn more than EUR60 billion of deposits from local
banks. The resulting funding gap was bridged through ECB liquidity
operations. Despite the bleeding, more than 150 billion
Euro-denominated deposits from residents still sit with Greek banks.
People will probably rush to withdraw their remaining deposits if they see
an increased risk of Greece leaving the Euro. That in turn would force the
banks to seek more central bank funding.
Whether the ECB will continue to provide the extra funding is not clear.
The ECB will make that decision in close consultation with the Euro group
and the IMF, yet the argument not to throw more good money after bad will
weigh heavily when everyone is running for the door. A simple trick to
turn off funding would be to tighten collateral standards. We still
believe that the majority of Greeks sees the value of staying in the Euro,
but watch those deposits and the ECB in case we are wrong.
Pact terminology
Euro-area policymakers are unlikely to drop Greece easily, but even French
president Hollande lacks the domestic support to go out of his way. More
important for policymakers is to protect the rest of the Euro area and get
their economies growing again. This is to be achieved through the 'growth
pact', which is to supplement the 'fiscal pact'. Even German chancellor
Merkel is talking about the need to promote growth. The ideas, however,
are very different. France and some others hope to boost growth through
extra spending, mostly on infrastructure. Germany and its allies view
structural reforms, such as in the labor market, as key. Recent election
results have given the 'socialist' approach more popular support, but
German chancellor Merkel is not without allies. In fact, more governments
still seem to support her (notably Spain, Portugal, Italy and Ireland).
The result is likely to be a fudge, which allows both sides to claim they
prevailed. France will probably accept the fiscal pact, if Germany agrees
to a growth pact and the stretching of the deficit reduction targets.
Germany, on the other hand, will probably accept additional spending
through the EU structural funds and the European Investment Bank, if the
structural reform targets remain in place. To make this all work, more
funds will be needed. German resistance to Eurobonds still seems strong.
Less strong is the resistance to the introduction of a financial
transaction tax.
Maintaining and reviving growth
Important for the outcome in Europe is the global growth backdrop. In the
middle of last year, markets feared that global growth could collapse.
That would have been a disaster for Europe. Fortunately, it has not
happened for reasons we have pointed out before. Nevertheless, global
growth is not automatically assured. Markets have been worried over the
recent moderation in the US and further softness in China. Last week's
jobless and consumer confidence figures for April suggest that the US
economy remains on expansion course. This was also supported by stronger
exports. The Chinese data, on the other hand, was disappointing. In
response, the central bank cut the reserve requirement. It now seems the
Chinese authorities have fallen behind the curve. That they will catch up
just like they did with inflation last year, however, still is the most
likely outcome.
Germany on track for 1.5% growth in 2012
Good economic news also came from Germany. First-quarter real GDP growth
was much stronger than expected (2% q/q annualized vs. 0.4% consensus).
March output, trade and order figures last week exceeded expectations as
well.
- The surge in March output was exaggerated by weather effects in
construction (payback for February cold-related weakness), yet
manufacturing was strong as well. Importantly, the March surge creates
a strong base for the second quarter. March output was 23% annualized
above the Q1 average.
- The biggest boost came from construction, but exports were also doing
well. Exports increased 11% annualized in Q1 and March was 14%
annualized above the Q1 average.
- The outlook is also improving as seen in the order data. March orders
were 22% annualized above the Q1 average. Foreign orders were up 35%
despite orders from the Euro area down 13%.
The latest figures are consistent with the more optimistic sentiment
reflected in the Ifo index and support our view that Germany could reach 3%
annualized growth in the second quarter. With that reacceleration overall
2012 growth should reach at least 1.5%, which has been our forecast since
November last year, even if the economy slows again in the second half.
Disclaimer
This analysis was prepared by Bernhard Eschweiler, Senior Economic Advisor,
and was first published 15 May 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: 94 34
Neutral: 54 6
Avoid: 11 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, 15.05.2012
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
---------------------------------------------------------------------
15.05.2012 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
---------------------------------------------------------------------
170033 15.05.2012