Good morning,

Markets are called to open flat this morning. This is what's happening today:

  • The preliminary reading of a Purchasing Managers’ Index in China was 51.7 in March, according to a statement from HSBC and Markit Economics today. That compares with the 50.4 final figure for February and the 50.8 median estimate in a Bloomberg News survey of 11 analysts. A reading higher than 50 indicates expansion;
  • The Topix Index reaching the highest since 2008, and yields on Japan’s 10-year notes fell to the lowest in almost a decade, on prospects the new central bank governor will announce more stimulus. China shares, the New Zealand dollar and metals rose;
  • Cyprus failed to agree on a loan deal with Russia so far;
  • Companies in Europe reporting results today include Ted Baker, Brenntag and Hennes & Mauritz

Russia and Cyprus failed to agree on a loan deal at talks on Wednesday which Nicosia hoped would help it though its financial crisis. Cypriot Finance Minister Michael Sarris said after talks with Russia's finance minister, Anton Siluanov, that he would stay on in Moscow for as long as is needed to try to secure an agreement. Cyprus has asked Russia for a five-year extension of a loan of 2.5 billion euros ($3.22 billion) that matures in 2016, as well as a reduction in the 4.5 percent rate of interest.

Cyprus has also asked Russia to loan it a further 5 billion euros, the Russian finance ministry says, but Moscow has not announced a decision on the request. President Nicos Anastasiades of Cyprus met advisers to draft a new plan to stave off financial collapse after lawmakers rejected a proposed bank deposit levy. The government’s alternative plan may include a new version of the deposit tax, according to an official who spoke after a meeting of the Cabinet yesterday and who asked not to be identified in line with government policy. The country’s central bank declared that lenders would remain shut for another two days, effectively barring Cypriots from their accounts until March 26 when they’re due to reopen after a national holiday on March 25.

The Standard & Poor’s 500 Index, the benchmark measure of U.S. equities, is approaching a record almost 5 1/2 years after peaking and two years after most stocks in the gauge fully recovered from the worst bear market since the 1930s. The index has climbed 130 percent since March 2009, adding $10 trillion to the value of American equity as it erased losses from the credit crisis. The majority of companies surpassed their previous highs by April 2011, according to data compiled by Bloomberg. The S&P 500 Equal Weighted Index, which counts each company in the index equally instead of by their market value, increased 192 percent from the bottom. Unlike past bull markets, where a single industry dominated, all groups have improved in this rally as the U.S. economy recovers. The breadth of the rebound can be seen in the S&P 500’s weightings, where none of the 10 industry measures represents more than 18 percent of the index. In 2000, technology companies made up 35 percent of the gauge, and in 2006, financial stocks accounted for 22 percent.

Stock to watch – Brenntag (Price $113.85, Price Target $133.6)

Deutsche Bank Research – Brenntag is the leader in full-line chemical distribution, offering over 10,000 industrial and specialty chemicals to 160,000+ customers in around 70 countries. The company operates in a highly fragmented industry and as the largest player, has a size and scale advantage over its competitors, which are mainly mom and pop operators. We also expect Brenntag to continue to benefit from the long term trend to outsourcing in 3rd party chemical distribution. In addition to these attractive organic drivers, Brenntag has the ability to play a part in industry consolidation and with upside potential we rate the stock a BUY.

For further information on Brenntag or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli