Deutsche Bank Markets Research Europe Periodical Date 25 October 2012 The Week Ahead Paul Reynolds (44) 20 754-76539 29th October - 2nd November, 2012 [email protected] Mairead Smith (44) 20 754-71054 [email protected] Adjustment in Euroland: Progress Report Considerable progress in reducing external and internal imbalances has been made in the crisis-stricken countries of the euro area. Regarding external Table Of Contents adjustment, all countries have been able to reduce their current account Global Highlights of the Week Page 03 deficits substantially. With the exception of Italy and Greece, this has been (22nd - 26th October 2012) achieved by both a reduction of imports and increase in exports. In Italy, Company Diary (29th Oct-2nd Page 04 imports and unit labour costs have continued to increase, suggesting that at Nov 2012) least until recently external adjustment has relied less on a contraction of Company Diary (5th - 9th Page 06 November 2012) domestic demand than in the other countries. In Greece exports have fallen Previews and the decline in unit labour costs has not fully reflected the deterioration in European Valuation by Sector Page 60 the labour market, pointing to continuous problems on the supply side of the and Country economy. Key Economic Forecasts Page 61 Financial Forecasts Page 63 Regarding internal imbalances, countries have also made considerable progress in reducing fiscal deficits. However, with the exception of Italy, countries seem still to be a few years away from the point where public debt ratios are likely to peak before turning down. While, on balance, adjustment has progressed fairly well, economic growth has disappointed. With the exception of Ireland, the GIIPS countries seem to remain mired in recession. There is some hope, however, that the process of de-leveraging will slow soon in Italy. This could allow a positive credit impulse to support domestic demand. Unfortunately, owing to the delay in the restructuring and recapitalisation of troubled savings banks, Spain may continue to suffer from a negative credit impulse and hence prolonged recession for some more time. Still mostly in recession Source: Haver Analytics, DB Global Market Research ________________________________________________________________________________________________________________ Deutsche Bank AG/London All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 072/04/2012. 25 October 2012 The Week Ahead Previews Alcatel-Lucent Assa Abloy Bayer AG BBVA BG Group BP BT Group PLC Christian Hansen Clariant Continental Danske Bank ENI Erste Group Bank Fiat Galp Energia GEA GlaxoSmithKline Hugo Boss Imperial Tobacco Linde NEXT Nokian Tyres Novo Nordisk Prosegur Royal Dutch Shell plc Sanoma Swedish Match TDC TomTom Total SA UCB YIT Corporation Page 2 Deutsche Bank AG/London 25 October 2012 The Week Ahead Global Highlights of the Week (22nd – 26th October 2012) Asset Allocation - Binky Chadha Investor Positioning and Flows: Overweight Positions Pared https://ger.db.com/csa/pubdoc/bmzbclve09bqh4b US Equity Insights – David Bianco Banks bail-out 3Q EPS https://ger.db.com/csa/pubdoc/du0rq80w2fnaem7 US Equity Insights – David Bianco Poor 3Q EPS, but not a disaster: Now is a fair S&P 500 entry point https://ger.db.com/csa/pubdoc/b4f8hj520b03dc3 US Equity Insights – David Bianco US tax affects S&P 500 global growth https://ger.db.com/csa/pubdoc/grwxp8ftctprhvy Focus Europe - Mark Wall Agreeing to disagree https://ger.db.com/csa/pubdoc/ei27n7mnfgg3ay9 Early Weekend Reid - Jim Reid DB Macro Research Highlights https://ger.db.com/csa/pubdoc/43i1544arzymllq Rates & Credit Research – Francis Yared Rates & Credit Weekly https://ger.db.com/csa/pubdoc/5a8ycyok68acbbw Weekly Fund Flows – Lars Slomka US equity funds losing ground during the reporting season https://ger.db.com/csa/pubdoc/1t9tgypbz7ppiew Made in Germany – Lars Slomka Style-based investing: Tactically o/w "Value" but prefer "Growth" mid-term https://ger.db.com/csa/pubdoc/rbqro827v6kqcu Consensus Earnings Trends – Lars Slomka Q3 reporting to guide earnings downgrade momentum https://ger.db.com/csa/pubdoc/7y6h5rt3uw4v6fm CROCI Views - October 2012 – Doug Walters Pension Liability Digest - Vol. 1, Issue 3 https://ger.db.com/csa/pubdoc/33ywf6x1zza1les Global Strategy Flash - Dominic Konstam Weekly Cross Asset Views https://ger.db.com/csa/pubdoc/8v8xwl0m0hnwdve Deutsche Bank AG/London Page 3 25 October 2012 The Week Ahead Company Diary (29th October – 2nd November 2012) Figure 1: 29th October – 2nd November 2012 (Prices as of 24 October 2012) (Cont’d on next Page…) Country Company Results Time Currency Closing Price Rating Ticker Monday 29 October Belgium UCB * Q3 Trading Update 0700CET EUR 44.16 Hold UCB.BR Germany Deutsche Boerse Q3 - EUR 41.24 Buy DB1Gn.DE Germany GEA * Q3 0730CET EUR 24.29 Hold G1AG.DE Germany Linde * Q3 0730CET EUR 126.95 Buy LING.DE Italy CIR Q3 - EUR 0.90 Hold CIRX.MI Italy Intesa SanPaolo EGM 0930CET EUR 1.29 Buy ISP.MI Netherlands TNT Express Q3 0800CET EUR 8.29 NR TNTE.AS Portugal Galp Energia * Q3 0830 CET EUR 12.70 Hold GALP.LS Sweden Assa Abloy * Q3 0800CET SEK 216.30 Hold ASSAb.ST Tuesday 30 October Austria Erste Group Bank * Q3 0730CET EUR 18.47 Hold ERST.VI Denmark Danske Bank * Q3 0800CET DKK 101.70 Hold DANSKE.CO Finland Nokian Tyres * Q3 0800EET EUR 29.45 Hold NRE1V.HE Finland YIT Corporation * Q3 0800EET EUR 15.09 Hold YTY1V.HE France Steria Q3 Sales 0730CET EUR 10.75 Hold TERI.PA Germany Bayer AG * Q3 0730CET EUR 66.24 Buy BAYGn.DE Germany Hugo Boss * Q3 0730CET 70.94 Buy BOSSn.DE Germany MAN Q3 - EUR 77.95 Buy MANG.DE Germany Metro Group Q3 0715CET EUR 21.30 Hold MEOG.DE Germany Software AG Q3 0700CET EUR 30.85 Buy SOWG.DE Greece National Bank of Greece EGM 1100CET EUR 2.41 NR NBGr.AT Italy ENI * Q3 0745 CET EUR 17.49 Buy ENI.MI Italy Fiat * Q3 - EUR 4.23 Hold FIA.MI Luxembourg Aperam Q3 1740CET EUR 12.20 Buy APAM.AS Netherlands TomTom * Q3 0730CET EUR 3.97 Sell TOM2.AS Spain Banesto Q3 0800CET EUR 2.86 Hold BTO.MC Spain Ferrovial Q3 1700CET EUR 10.68 Buy FER.MC Sweden Swedish Match * Q3 0815CET SEK 260.70 Sell SWMA.ST Switzerland Straumann Q3 0700CET CHF 109.70 Hold STMN.S Switzerland UBS Q3 0700CET CHF 12.35 Hold UBSN.VX UK BP * Q3 0700UK GBp 435.00 Buy BP.L UK Imperial Tobacco * FY 0700UK GBp 2296.00 Buy IMT.L UK Redefine International Prelims 0700UK GBp 31.50 Buy RDI.L UK Stagecoach H1 - GBp 272.70 Buy SGC.L UK Standard Chartered Trading Update 0700UK GBp 1486.50 Hold STAN.L Wednesday 31 October Belgium Anheuser-Busch InBev Q3 0700CET EUR 67.48 NR ABI.BR Denmark Christian Hansen * FY 0800CET DKK 170.30 Hold CHRH.CO Denmark Novo Nordisk * Q3 0800CET DKK 950.50 Buy NOVOb.CO Finland Cramo Q3 & Analyst Mtg 0800EET EUR 8.07 Sell CRA1V.HE Finland Sanoma * Q3 0830EET EUR 7.16 Hold SAA1V.HE France Air France-KLM Q3 0715CET EUR 5.95 Sell AIRF.PA Source: Deutsche Bank *Preview available for this week Page 4 Deutsche Bank AG/London 25 October 2012 The Week Ahead Figure 1: 29th October – 2nd November 2012 (Prices as of 24 October 2012) Country Company Results Time Currency Closing Price Rating Ticker Wednesday 31 October France GDF Suez Q3 0700CET EUR 17.96 Hold GSZ.PA France Rexel Q3 0700CET EUR 15.79 Buy RXL.PA France Total SA * Q3 0800CET EUR 40.00 Buy TOTF.PA Germany Continental * Q3 0830CET EUR 75.81 Hold CONG.DE Germany Deutsche Lufthansa AG Q3 0730CET EUR 11.07 Buy LHAG.DE Germany Fresenius Q3 0700CET EUR 95.44 Hold FREG.DE Germany Fresenius Medical Care Q3 0700CET EUR 58.15 Buy FMEG.DE Germany Vossloh Q3 0900CET EUR 75.81 Hold VOSG.DE Ireland Kerry Group Q3 0800CET EUR 40.15 Hold KYGa.I Italy Fiat Industrial S.p.A. Q3 - EUR 8.04 Hold FI.MI Luxembourg ArcelorMittal Q3 0700CET EUR 12.36 Hold ISPA.AS Spain Antena 3 Q3 1700CET EUR 3.18 Sell A3TV.MC Spain BBVA * Q3 - EUR 6.66 Buy BBVA.MC Spain Grifols Q3 0830CET EUR 25.35 Hold GRLS.MC Spain Prosegur * Q3 - EUR 3.81 Hold PSG.MC Sweden Lundin Petroleum Q3 0700CET SEK 157.80 Hold LUPE.ST Switzerland Clariant * Q3 0700CET CHF 11.10 Hold CLN.VX Switzerland Lonza Q3 0700CET CHF 47.77 Hold LONN.VX UK Aegis Q3 Trading Update 0700UK GBp 235.70 Hold AEGS.L UK Barclays Q3 0700UK GBp 244.40 Buy BARC.L UK Dialog Semiconductor Q3 - EUR 16.33 Hold DLGS.DE UK GlaxoSmithKline * Q3 0700UK GBp 1428.00 Hold GSK.L UK Mondi Interims 0700UK GBp 670.00 Buy MNDI.L UK NEXT * Q3 0700UK GBp 3600.00 Buy NXT.L UK Phoenix Group Holdings Q3 Trading Update 0700UK GBp 510.00 Hold PHNX.L UK St James's Place Q3 Trading Update 0700UK GBp 392.10 Hold SJP.L UK Standard Life Q3 Trading Update 0700UK GBp 294.30 Hold SL.L Thursday 1 November Denmark TDC * Q3 0800CET DKK 40.12 Hold TDC.CO UK BG Group * Q3 0700UK GBp 1317.50 Buy BG.L UK BSkyB Q1 & AGM 0700UK GBp 719.00 Buy BSY.L UK BT Group PLC * Q2 0700UK GBp 217.30 Hold BT.L UK Legal & General Q3 Interims 0700UK GBp 133.20 Buy LGEN.L UK Lloyds Banking Group Interims 0700UK GBp 40.45 Buy LLOY.L UK Royal Dutch Shell plc * Q3 0700UK GBp 2120.00 Buy RDSa.L UK Smith & Nephew Q3 0700UK GBp 648.00 Hold SN.L Friday