Barclays Share News (BARC)

* European shares stay afloat * STOXX set for weekly loss * Eurex experiences delays * Takeover bid boosts NEX Group LONDON, March 16 (Reuters) - Welcome to the home for real-time coverage of European equitymarkets brought to you by Reuters stocks reporters and anchored today by Kit Rees. Reach her onMessenger to share your thoughts on market moves: rm://kit.rees.thomsonreuters.com@reuters.net GOING STOCK PICKING? CONSIDER A STOP IN BELGIUM (1511 GMT) That's what Berenberg told investors gathered in London to meet with executives of mid-capfirms listed on the Belgian stock market, which may be harbouring some hidden gems. "While Belgium is already well-known for its chocolate, beers and (now) its nationalfootball team, its stock exchange has often been overlooked by investors and internationalinvestment banks," Berenberg writes in a note. Of the 18 firms that attended the event, Berenberg covers 10. Of these 8 have outperformedthe broader STOXX index over the past 12 months as you can see in the chart below. "Barco remains our top pick in Belgium, with upside potential on margin expansionand cinema projector replacement not yet priced in... investors appreciated the opportunity tomeet with high-quality management teams (ie Kinepolis and Sioen), companiesexposed to structurally growing markets (ie Melexis, Econocom and Fagron) and companies with self-help measures (ie Recticel and Agfa Gevaert)," Berenberg said. (Danilo Masoni) **** TECH KEEPS ON RISING, BUT WATCH EPS GROWTH (1446 GMT) Carrying on from our earlier post, Morgan Stanley's strategists have also voiced concernsabout European tech's continual outperformance, which they say is "extreme" given the trendtowards slowing earnings growth. MS' strategists point out that 80 percent of MSCI ACWI's IT index have outperformed over thelast month, the highest breadth reading since 2003. "Amid all this euphoria we'd encourage investors to keep a close eye on EPS trends as thelatest burst of price outperformance has not been accompanied by EPS outperformance," say MorganStanley's equity strategists. If you look at this chart of a global IT index, it looks like it's still full steam ahead,having surpassed levels previously seen during the dotcom bubble: (Kit Rees) ***** HERE'S ANOTHER "PEAK GROWTH" TRADE: UTILITIES (1340 GMT) There's a growing feeling among economists that we've left the golden age of the #Euroboomand, as PMI momentum fades, reached "peak growth". This has already proved to be a valuablesource of inspiration for equity strategists as you can see here and here. UniCredit just made its own contribution on this theme and published a research note makingthe case that the phase of accelerating economic growth may be behind us and that now could bethe time to look into defensive sectors and, among them, utilities. "In the past, such an environment has opened a time slot during which the precedingoutperformance of industrials comes to an end and defensives gradually become more attractiveagain," equity strategist Christian Stocker believes. "Against this background, we have taken the positive news of further and forward-lookingrestructuring in the German electricity market (see) to upgrade the Europeanutilities sector to overweight," he said, adding that the likes of E.ON or RWE could prove useful hedges in the event of a trade war. At the opposite end, Unicredit has downgraded tech, the best performing sector year to date,from overweight to neutral as the bank believes "the main driver of this outperformance,earnings estimates, are showing the first signs of a slowdown." Looking back over the past three months (see the chart below), going long utilities andreducing exposure to tech can seem counter-intuitive: (Julien Ponthus) ***** "WE HAD TO GATHER OUR COURAGE" - BUYING BACK INTO INVERSE VIX (1330 GMT) After the high-profile implosion of Credit Suisse's inverse VIX exchange-traded notein February, buying similar products shorting the VIX might seem to be the last thing investorswould consider. But Agilis Investment Management, a relatively new asset management outfit based in London,took a small position in the ProShares inverse VIX ETF the day after the volatilityblow-out. "We had to gather our courage before doing it," Clark Fenton, CIO of Agilis, told us. "Webought it on the day after, and then added to it a couple of days later." The ProShares ETF crashed from $100 to $11 on Feb 6 as it inversely tracked theratcheting-up in volatility. But it's gained 10 percent since, as VIX levels returned to normal. "More of our portfolio profits from volatility - so it's a complement to the rest of ourportfolio," says Fenton, emphasising the position is only small. ProShares specialises in exotic inverse and leveraged ETFs, so it also may be less likely toliquidate one of its products as Credit Suisse was forced to do in the turmoil. (Helen Reid) ***** EARLY AFTERNOON SNAPSHOT: MINERS KEEP STOXX AFLOAT (1313 GMT) Turmoil in Washington is keeping markets watchful with U.S. futures pointing to a flat openand the pan-European STOXX 600 trading just above parity. While fresh dealmaking is providing support, gains in basic resources stocks are the maindriver at the sectoral level, as a retreat in the dollar, linked to political uncertaintyin the U.S., is driving metal prices up. Here is how European indexes stand before Wall Street opens: (Danilo Masoni) ***** ETFs: FEBRUARY SELL-OFF MADE U.S. INVESTORS RUN, EUROPEANS ASK FOR MORE (1211 GMT) Europeans and American investors could not have had a more opposite reaction to the Februarysell-off when it comes to equity ETFs, Amundi data shows. "Despite a correction early in the month, the European equity ETF market held up well inFebruary, gaining 5.2 billion euros", the French asset manager reported, noting that "during thesame period, however, this asset class suffered 12.4 billion euros of withdrawals stateside". One other interesting fact is that the sell-off didn't discourage Europeans from puttingtheir money in U.S. stocks. "While US investors substantially divested from their domestic market (-17.9 billion euros),their European peers continued to increase their exposure to U.S. equities (+2 billion), as wellas the Eurozone (+1.9 billion)".Here are their stats: (Julien Ponthus) ***** PLAYING THE "PMI FADE" (1137 GMT) Deutsche Bank's equity strategists have a few ideas on how. One of these is them going underweight European small caps versus large caps, saying thatsmall caps have been "a key beneficiary of the strong rebound in Euro area growth momentum." But now that DB expects Euro area PMIs to fade to 55 by the end of the year, they see smallcaps underperforming by around 5 percent by the middle of Q2. See DB's chart below which showstheir prediction that Euro area PMI momentum will eventually turn negative. They are still underweight European value versus growth, as they expect value to continue tounderperform growth. DB recently downgraded banks to underweight and remain overweight food and beverages. Theyacknowledge that a rise in bond yields would be a risk to their call. (Kit Rees) ***** A NEW REGIME? CORRELATIONS AND THE VIX (1053 GMT) Man Group analysts reckon both stock correlations and the volatility index indicate we maybe heading into a new market regime. "Both implied volatility and implied correlations have reached a 'new normal' since themini-panic of early February this year," they write in their weekly "views from the floor". "Although both have retreated from the highs, the trading pattern so far seems to suggest weare in a new regime." As you can see below, S&P 500 correlations and the VIX do seem a lot morejittery since the early February sell-off. "Correlations have been very very unstable," says Clark Fenton, CIO at Agilis InvestmentManagement. But correlations remain very low - a characteristic which many say is good for stock-pickersseeking alpha and, crucially, seeking to differentiate themselves from passive index-trackingfunds. "Last year was as good a year as it has been for a long time, for stock pickers. Not muchvolatility but a lot of divergence in stocks," says Fenton, adding, however: "Lower correlationsshould allow active to separate more from passive, but it doesn't guarantee success." (Helen Reid) ***** SIX EUROPEAN BANKS NEED TO RAISE THEIR GAME WHILE THEY CAN (1033 GMT) "Not all major banks are firing on all cylinders," S&P analysts assess in a research notewhere they argue that a "cadre of major banks continues to lag the improvement of their closestpeers". Barclays, Commerzbank, Credit Suisse, Deutsche Bank DBKGn.DE>,RBS and Standard Chartered are identified as having "yet to optimize theirbusiness and operating models to ensure sufficient and sustainable profitability". Now is the ideal time to do so, S&P also says, noting that the European economic recoverywill not last forever. While 2017 was a cornerstone for the recovery of the European banking sector, a decade afterthe start of the financial crisis, 2018 will be the moment of truth for banking laggards. "By the end of 2018, we expect that for many of these banks it will be clearer whether theirmanagement teams are able to close the gap on their nearest competitors, or else have to returnto the drawing board." Here is a chart showing how these banks trail their peers in terms of profitability: (Julien Ponthus) ***** OPENING SNAPSHOT: NEX GROUP SHOOTS UP IN LACKLUSTRE MARKET (0813 GMT) In otherwise calm markets with the STOXX trading flat, Nex Group shares are shooting up 35percent after it said CME had made a preliminary takeover offer. Results are also causing some big moves under the surface, with Altice up 5.3 percent afterits earnings report while Berkeley Group loses 5 percent. If this morning's lacklustre open spells a weaker trading day, it's likely the STOXX willend the week in the red. (Helen Reid) ***** WHAT'S ON THE RADAR FOR THE EUROPEAN OPEN (0752 GMT) In a week which has been dominated by the goings-on in the Trump administration, trade warworries and geopolitical tensions, European shares are set to end the week with a slight loss. UK and French stocks futures are pointing to a negative open today, but DAX and Euro stoxxfutures have failed to open as Eurex is currently experiencing delays. Delays aside, a number of stocks are expected to see some big moves today. It’s going to bethe first day of trading for Siemens’ Healthineers, which one trading desk sees rising 16percent. While it’s fairly quiet on the results front traders see Altice’s shares falling, pointingto disappointing guidance. Elsewhere the M&A machine grinds on with Britain’s NEX Group saying that it has received apreliminary takeover approach from U.S.-based exchange operator CME Group, a move which aims tocreate a cross-border trading powerhouse. NEX’s shares are seen jumping as much as 25 percent. (Helen Reid) ***** EUROPEAN CORPORATE NEWS HEADLINE ROUND-UP (0738 GMT) Nex Group shares are seen jumping as much as 25 percent at the open after U.S.exchange operator CME made a preliminary takeover offer. Here are some of today's corporateheadlines to keep an eye on: Exchange operator CME in talks with Britain's NEX on possible takeover UK builder Berkeley says it can't boost volumes beyond current plans Old Mutual sells Latam businesses to Singapore's CMIG Intl Elliott asks to replace Telecom Italia board members, including Vivendi CEO British outsourcer Mitie sees higher costs from turnaround programme Lufthansa, Ryanair to drive Frankfurt airport passenger growth this year Drahi's debt-ridden telecoms group Altice seeing some recovery in France UK's Wetherspoon sees higher cost, slower sales growth ahead (Helen Reid) ***** CORRECTED - EUROPEAN STOCKS FUTURES OPEN LOWER, EUREX FACES DELAYS (NOT EURONEXT)(0721 GMT) While FTSE and CAC futures have opened lower, DAX and Eurostoxx futures have failed to openwith Eurex saying that the trading system is experiencing serious issues. The Eurex T7 system isexperiencing technical issues. German bund futures also failed to open. We are monitoring the situation and will keep you updated. Here is a shortened futures snapshot: (Kit Rees) ***** EUROPEAN EARNINGS: SLIM PICKINGS (0652 GMT) In the UK Mitie Group's full year update will be of interest given the issues theoutsourcing industry has had this year, but apart from that, it's looking like a quiet one onthe results front today. But it's the broader prospect of earnings growth in Europe which has analysts at CreditSuisse's wealth management division remaining positive on the region's equities. "Although the stronger EUR is a risk, we believe that, of all the regions, Eurozonecompanies are best positioned to meet or even beat their earnings growth expectations in future.We expect domestically focused companies to do particularly well," Credit Suisse wealthmanagement analysts said in a note this morning. Here are the European companies set to give updates today: TIV.CO Q4 2017 Tivoli A/S Earnings Release SZGG.DE Full Year 2017 Salzgitter AG Earnings Release BC8G.DE Full Year 2017 Bechtle AG Earnings Release E7SG.DE Q4 2017 Accentro Real Estate AG Earnings Release OCI.AS Full Year 2017 Oci NV Earnings Release BKGH.L Berkeley Group Holdings PLC Trading Statement Release JDW.L Half Year 2018 J D Wetherspoon PLC Earnings Release INVP.L Investec PLC Pre-Close Briefing FRAG.DE Full Year 2017 Fraport AG Frankfurt Airport Services Worldwide Earnings Release MQH.ST Q2 2018 MQ Holding AB Earnings Release SMPV.VI Full Year 2017 Semperit Ag Holding Earnings Release MTO.L Full Year 2018 Mitie Group PLC Pre-close Trading Statement Release (Kit Rees) ***** MORNING CALL: HESITANT START SEEN FOR EUROPEAN SHARES (0629 GMT) Good morning. European shares are seen opening in a narrow range this morning, according tofinancial spreadbetters, following on from yesterday's positive session. Spreadbetters were calling Britain's FTSE 100 index 7 points lower, France's CAC 5 pointslower and Germany's DAX 7 points higher, so a range of 0.1 percent either way. Overnight Asian shares lost ground, however, after reports of further chaos in the Trumpadministration. Wall Street's S&P 500 closed lower for a fourth day in a row. Elsewhere this morning the focus will also be on final inflation figures for the euro zone,due at 1000 GMT. (Kit Rees) (Reporting by Danilo Masoni, Helen Reid, Kit Rees and Julien Ponthus)