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Good morning,

European stock-index futures advanced, following the biggest weekly drop for the region’s equities since January, after Crimea voted to secede from Ukraine in a poll the European Union described as illegal. This is what’s happening today:

  • A total of 95.5% of voters opted to leave Ukraine to join Russia in yesterday’s poll, according to preliminary results. The EU said the referendum is illegal and illegitimate and its outcome will not be recognized.
  • Russian equities rallied for the first time in five days after Ukraine’s Crimea region voted to join Russia.
  • Vodafone the world’s second-largest wireless carrier, agreed to buy Spanish cable operator Grupo Corporativo Ono SA for €7.2 billion, including debt, to boost TV and broadband offerings.
  • L1 Energy, the investment vehicle of Russia’s fourth-richest man Mikhail Fridman, agreed to buy RWE AG’s Dea oil and gas unit, gaining assets in the U.K.,
  • Germany and the North Sea.
  • Unprecedented natural gas reserves in Europe, record global grain output and the threat of mutual economic calamity from oil sanctions are cushioning commodity prices even as the Ukraine-Russia conflict spurs a gold rally.

Blue Chip companies like Qualcomm and Intel are threatened by less known companies like Allwinner in the tablet market

Intel and Qualcomm, the two largest US chipmakers, are under threat in the fastest-growing part of the tablet market from companies like Allwinner Technology and Fuzhou Rockchip Electronics that are little known outside southern China. Allwinner, based in Zhuhai near the manufacturing center of Shenzhen, became the No. 2 tablet-processor maker behind Apple in 2012 as demand for cheaper tablets stoked sales of its low-cost chips. Qualcomm ranks third, while Intel comes in at No. 6, following Rockchip.

The Chinese chipmakers’ rapid rise has been fueled by their quick response to a shift in the tablet market toward budget machines, which are providing many consumers in emerging regions with their first access to the Internet on a larger screen. The young companies have jumped on that trend by providing the devices’ manufacturers many of them based around Shenzhen with low-cost components based on ARM Holdings designs, the same technology used by many of their more established rivals.

Stock to watch: Linde

Full-year operating profit rose 7.6% to €3.97 billion, compared with the around 4 billion euros that Linde forecast in October, when it reduced the prediction because of

the euro’s gains against the U.S. and Australian dollars, the U.K. pound and currencies in emerging markets. The company reiterated a target today of boosting profit to at least 5 billion euros by 2016, based on exchange rates at the end of 2012. If the unfavorable exchange rates at the end of 2013 continue to apply, management are forecasting that operating profit would be reduced by about €400 million.

Companies in Europe reporting today:

• Altice (ATC NA) TBA

• Linde (LIN GR) 7:30

• Hennes & Mauritz (HMB SS) Feb. sales

• Aeroports de Paris (ADP FP) Feb. traffic

Good day and happy trading!

Kristian Camenzuli