Credit Suisse Rating Changes

In a research report published today, Credit Suisse changed its rating on a number of companies. Galp Energia SGPS (GALP) was upgraded to Outperfrom from Neutral. In the report Credit Suisse states, "We upgrade Galp to an Outperform (from Neutral) with an unchanged TP of Eu16.4/share. We remind investors of the material near-term catalysts and advise to buy into the run-up of these following recent declines in the share price. Galp provides upside to our risked NAV, but additionally and importantly we see material NAV accretion from its near-term catalysts. Specifically, the announcement on the valuation for Galp Brazil could lead to an upside of 21-39% from current levels, and this update is expected within the next two months, we believe. Reportedly there is considerable interest in the Galp Brazil portfolio, which suggests to us that the process is becoming increasingly competitive and this is clearly increasing the chances for an attractive valuation. Also there are further catalysts to remind investors of." MITIE Group (MTO) was upgraded to Neutral from Underperform. At the same time, its target price was raised to 240.00p from 213.53p. The report states, "Upgrade to neutral on the back of MITIE's improved organic growth performance in H2 last year and our more constructive view on the outlook for the outsourcing market in the UK. Additional drivers include better than expected margins and a focus on organic growth rather than acquisitions." Commercial International Bank (COMI) was upgraded to Outperform from Underperform. In the report, Credit Suisse states, "Share price fell 35% YTD, in line with Q1 results (down 37%), implying the market has mostly priced-in the impact of the political unrest. Moving forward, although we expect increasing pressure on asset quality (NPL formation to start two quarters ahead, we modelled 3.4% by end of the year), there are several reasons why we would enter the stock at current levels: 1) Coverage ratio at 148% of NPL giving some cushion, 2) surprisingly in Q1, loans grew by 3.4% qoq and deposits grew 3.0% qoq resulting in a L/D ratio of 55.5%, thus maintaining strong liquidity and balance sheet growth, 3) Fee income to rebound (although not to the pre-revolution levels), 4) Economic aid to Egypt is starting (yesterday, the World Bank announced 4.5$bn in loans over 24 months). We expect IMF, GCC countries, and foreign allies to contribute as well, albeit the question is whether this would happen before or after some improvement in the political process (parliamentary and/or presidential elections)."