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
13.06.2012 / 08:50
---------------------------------------------------------------------
- US has slowed again yet corporate sector keeps ticking
- China caught behind the curve but set to reaccelerate
- Euro-area muddling through between financial meltdown and moral hazard
Disappointing Chinese and US economic data as well as an escalation of the
Euro-area debt crisis around the Spanish banking sector has eroded all
remaining market confidence over the previous two weeks. Markets have
switched into outright risk-off mode, only to be interrupted by occasional
speculation that policy action is imminent. This pattern has not changed
this week despite Spain's decision to accept EU funds to recapitalize its
banks.
We remain optimistic that the global economy will stay on the recovery
track, but caution against hopes that the Euro area will soon take decisive
policy action to end the debt crisis. Muddling through is the only
politically feasible policy process between financial meltdown and moral
hazard problems. We believe this process will succeed and ultimately bring
the Euro area closer to a fiscal union. However, the process of muddling
through will also be long and vulnerable to periods of escalating tensions.
The next stress test will come this weekend when the citizens of Greece go
to the ballot for the second time in six weeks.
2010/2011 déjà-vu for the US
The weaker US economic data, most notably the May labor market report with
its downward revisions for the previous two months, has sparked fears of a
downturn and even recession as well as speculation that the Fed will have
to open the monetary floodgates for a third time. The play is likely to
follow the scripts of 2010 and 2011. Both times, the US economy proved
more resilient. In 2010, the Fed felt compelled to give the economy
another kick. Last year, it stayed cool. Ben Bernanke's testimony last
week suggests that the Fed is more confident in the economy than the
market. Thus, imminent policy action is unlikely unless economic
conditions deteriorate dramatically. To be sure, house-hold deleveraging
and fiscal consolidation create headwinds, which make the recovery slower
and more volatile. However, these forces have been in place for some time
and, yet, failed to derail the corporate recovery (ex construction and
finance), which is built on strong balance sheets and earnings performance.
China comes from behind
Like last year, the disappointing US data coincides with weaker Chinese
figures. Adding the trouble in Europe and it is not surprising that
markets fear again a global recession. Unlike most industrialized
economies, China's problem is not deleveraging. Structurally, China needs
to shift its economy over time more towards domestic consumption. Yet, the
imminent problem is managing the business cycle. Last year, China
struggled with inflation. The policy response was slow and authorities
were ultimately forced to tighten more than planned. Inflation is now
under control, yet at the price of lower growth. The authorities have
started to ease policy, but are again caught behind the curve. A grand
stimulus program à la 2008/09 is unlikely. Nevertheless, the authorities
will make sure that the political transition in autumn will not be
overshadowed by bad economic news. Despite micro-level horror stories, the
economy is in good shape to respond to the policy stimulus. The slowdown
has undermined profit growth, but margins have stayed strong, especially in
the private sector.
A long and volatile road to fiscal union
The Spanish bank recapitalization program is another step in the
Euro-area's muddling through process. Spain managed to get a banking-only
package without extra fiscal conditions. Germany managed to keep the
Spanish government responsible for the debt and implementing EU bank
restructuring conditions. Spain's reluctance to seek support was as much
pride as tactic. For the Euro group, the concern was to contain financial
contagion risks, especially prior to the Greek election. In hindsight, the
Spanish banking package may prove more important than markets currently
appreciate.
To outside observers, the Euro-area's crisis management seems frustratingly
slow and half-hearted. Yet, anything else is wishful thinking. The
positions, especially between France and Germany, are not yet close enough
for grand solutions. Germany is not opposed to fiscal and banking unions,
but demands checks and balances, especially the transfer of fiscal
sovereignty to Euro-area authorities. Asking German tax payers to transfer
funds without retaining some control is politically not feasible. This is
also recognized by Germany's opposition social democrats, who favor Euro
bonds. On the other hand, Germany is so committed to the Euro and the
periphery so dependent on Germany that acute stress is likely to lead to
step-by-step compromises. Critical in this long-lasting and volatile
process toward fiscal union is the role of the ECB. Indeed, it is
reassuring that the ECB has managed to keep interbank spreads stable
despite the surge in sovereign spreads.
Germany not immune yet resilient
The German economy is not immune from the crisis in the Euro area.
Nevertheless, it has proven to be more resilient than feared. First,
exporters are able to compensate weakness in Europe with stronger demand in
emerging markets. Second, the previous restructuring makes German
corporates more competitive and allows them to pay a dividend in form of
higher wages and employment. Third, Germany profits from the reversal in
monetary conditions: an undervalued Euro and negative real interest rates.
Construction should benefit the most from the favorable shift in financial
conditions. Housing supply already lags demand and conditions will tighten
further as more people come to Germany in search for work.
Disclaimer
This analysis was prepared by Bernhard Eschweiler, Senior Economic Advisor,
and was first published 13 June 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: 91 36
Neutral: 51 7
Avoid: 17 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, 13.06.2012
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
---------------------------------------------------------------------
13.06.2012 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
---------------------------------------------------------------------
173737 13.06.2012
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
13.06.2012 / 08:50
---------------------------------------------------------------------
- US has slowed again yet corporate sector keeps ticking
- China caught behind the curve but set to reaccelerate
- Euro-area muddling through between financial meltdown and moral hazard
Disappointing Chinese and US economic data as well as an escalation of the
Euro-area debt crisis around the Spanish banking sector has eroded all
remaining market confidence over the previous two weeks. Markets have
switched into outright risk-off mode, only to be interrupted by occasional
speculation that policy action is imminent. This pattern has not changed
this week despite Spain's decision to accept EU funds to recapitalize its
banks.
We remain optimistic that the global economy will stay on the recovery
track, but caution against hopes that the Euro area will soon take decisive
policy action to end the debt crisis. Muddling through is the only
politically feasible policy process between financial meltdown and moral
hazard problems. We believe this process will succeed and ultimately bring
the Euro area closer to a fiscal union. However, the process of muddling
through will also be long and vulnerable to periods of escalating tensions.
The next stress test will come this weekend when the citizens of Greece go
to the ballot for the second time in six weeks.
2010/2011 déjà-vu for the US
The weaker US economic data, most notably the May labor market report with
its downward revisions for the previous two months, has sparked fears of a
downturn and even recession as well as speculation that the Fed will have
to open the monetary floodgates for a third time. The play is likely to
follow the scripts of 2010 and 2011. Both times, the US economy proved
more resilient. In 2010, the Fed felt compelled to give the economy
another kick. Last year, it stayed cool. Ben Bernanke's testimony last
week suggests that the Fed is more confident in the economy than the
market. Thus, imminent policy action is unlikely unless economic
conditions deteriorate dramatically. To be sure, house-hold deleveraging
and fiscal consolidation create headwinds, which make the recovery slower
and more volatile. However, these forces have been in place for some time
and, yet, failed to derail the corporate recovery (ex construction and
finance), which is built on strong balance sheets and earnings performance.
China comes from behind
Like last year, the disappointing US data coincides with weaker Chinese
figures. Adding the trouble in Europe and it is not surprising that
markets fear again a global recession. Unlike most industrialized
economies, China's problem is not deleveraging. Structurally, China needs
to shift its economy over time more towards domestic consumption. Yet, the
imminent problem is managing the business cycle. Last year, China
struggled with inflation. The policy response was slow and authorities
were ultimately forced to tighten more than planned. Inflation is now
under control, yet at the price of lower growth. The authorities have
started to ease policy, but are again caught behind the curve. A grand
stimulus program à la 2008/09 is unlikely. Nevertheless, the authorities
will make sure that the political transition in autumn will not be
overshadowed by bad economic news. Despite micro-level horror stories, the
economy is in good shape to respond to the policy stimulus. The slowdown
has undermined profit growth, but margins have stayed strong, especially in
the private sector.
A long and volatile road to fiscal union
The Spanish bank recapitalization program is another step in the
Euro-area's muddling through process. Spain managed to get a banking-only
package without extra fiscal conditions. Germany managed to keep the
Spanish government responsible for the debt and implementing EU bank
restructuring conditions. Spain's reluctance to seek support was as much
pride as tactic. For the Euro group, the concern was to contain financial
contagion risks, especially prior to the Greek election. In hindsight, the
Spanish banking package may prove more important than markets currently
appreciate.
To outside observers, the Euro-area's crisis management seems frustratingly
slow and half-hearted. Yet, anything else is wishful thinking. The
positions, especially between France and Germany, are not yet close enough
for grand solutions. Germany is not opposed to fiscal and banking unions,
but demands checks and balances, especially the transfer of fiscal
sovereignty to Euro-area authorities. Asking German tax payers to transfer
funds without retaining some control is politically not feasible. This is
also recognized by Germany's opposition social democrats, who favor Euro
bonds. On the other hand, Germany is so committed to the Euro and the
periphery so dependent on Germany that acute stress is likely to lead to
step-by-step compromises. Critical in this long-lasting and volatile
process toward fiscal union is the role of the ECB. Indeed, it is
reassuring that the ECB has managed to keep interbank spreads stable
despite the surge in sovereign spreads.
Germany not immune yet resilient
The German economy is not immune from the crisis in the Euro area.
Nevertheless, it has proven to be more resilient than feared. First,
exporters are able to compensate weakness in Europe with stronger demand in
emerging markets. Second, the previous restructuring makes German
corporates more competitive and allows them to pay a dividend in form of
higher wages and employment. Third, Germany profits from the reversal in
monetary conditions: an undervalued Euro and negative real interest rates.
Construction should benefit the most from the favorable shift in financial
conditions. Housing supply already lags demand and conditions will tighten
further as more people come to Germany in search for work.
Disclaimer
This analysis was prepared by Bernhard Eschweiler, Senior Economic Advisor,
and was first published 13 June 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: 91 36
Neutral: 51 7
Avoid: 17 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, 13.06.2012
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
---------------------------------------------------------------------
13.06.2012 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
---------------------------------------------------------------------
173737 13.06.2012