BOUYGUES

Buy EN FP post French Housing Minister Sylvia Pinel article in Le Figaro. French housing change. All options are on the table

• Government and the firms themselves still pushing for French telco consolidation. Price is the issue and they are pretty far away from each other. Will be a rocky road as shown by Bouy posturing yesterday but the bid will stay in them and some form of deal will eventually happen.
• What was more interesting for Bouy,CAC and French construction names was an article in Le Figaro from French Housing Minister Sylvia Pinel, do not hide.
• Mid-June, the government should announce measures to boost construction. Change in the tax on capital gains to encourage landowners to sell quickly? Simplification of standards to reduce construction costs? Reformatting the zero-interest loan ( PTZ ) which solvabilise the least affluent households in their housing project? “All these issues are on the table,” she says.
• French housing starts and construction is pretty much at the lows. This will be Frances form of QE and will stimulate the economy from the lenders but more importantly all companies exposed to construction.
• Our preferred play has been Schneider but we would also look at Vinci, Lafarge and Bouy on this pull back.
• Change is coming and it wont take much. Stay long our French preferred names Schneider and Credit Ag who have direct exposure here and we would also buy Bouygues anywhere from 31.50 -32.50