Frontrunning: January 8
- London Quantitative Hedge Funds Report Second Year of Losses (BBG)
- Berlusconi Forms Alliance in Comeback Bid (WSJ)
- Japan to Buy ESM Bonds Using FX Reserves to Help Weaken Yen (BBG)
- Japan Mulling BOJ Accord Linked to Employment, Mainichi Says (BBG)
- Samsung Expects Record Operating Profit (WSJ)
- Boeing 787 Dreamliner Fire Probed, Blaze Adds to Setbacks (BBG)
- BOJ's Shirai: Open to Firmer Inflation Target (WSJ)
- HSBC N.J. Client Admits Conspiracy in Offshore Tax Case (BBG)
- Lampert to Assume CEO Role at Sears (WSJ)
- Dutchman likely to head euro zone finance ministers (Reuters)
- Riksbank’s Jansson, Wickman-Parak Considered Bigger Rate Cut (BBG)
- Abe prepares fresh stimulus measures (FT)
- U.S. Set for Biggest State-Local Jobs Boost Since 2007 (BBG)
- Pakistan Seen Needing IMF Bailout as Rupee Drops Before Vote (BBG)
Overnight Media Summary
* U.S. President Barack Obama nominated former Senator Chuck Hagel to be his next defense secretary and White House counterterrorism adviser John Brennan to lead the Central Intelligence Agency.
* Bank of America reached an $11.6 billion settlement to end a dispute with Fannie Mae and joined nine other banks in agreeing to pay $8.5 billion to close a regulatory probe over foreclosure abuses, in Wall Street's latest effort to cure its mortgage headaches.
* U.S. aviation safety officials are probing an electrical fire that hit a three-week-old Boeing 787 Dreamliner just after passengers and crew had left a Japan Airlines flight at Boston's Logan International Airport.
* Chesapeake Energy Corp, a major natural-gas producer, said it would give shareholders the right to nominate some directors - a key governance concession - while slashing charitable and political spending and cutting overhead costs.
* In a sign that Netflix Inc's appetite for new content remains as healthy as ever, the video-streaming service struck a licensing deal with Time Warner Inc's Warner Bros, covering a series of fresh TV shows.
* U.S. private equity firm Cerberus Capital Management LP plans to sell most of its 58 percent stake in Japanese lender Aozora Bank Ltd, largely exiting from a volatile 10-year investment that highlights how tough it has been for funds to make continuing profits from the distressed banks bought after Japan's 1990s financial crisis.
Overview US BANKS TO PAY OUT $20 BLN OVER HOME LOANS US banks have agreed to pay out more than $20 billion in two settlements to resolve claims arising from the mortgage crisis.
WEB SAVES RETAILERS FROM A WET CHRISTMAS Online shopping saved retailers from a disastrous Christmas after the wet weather drove shoppers indoors over the festive period.
SLOWER PACE URGED ON RAIL FRANCHISES A government review will urge ministers to restrain the pace at which new rail franchises are agreed to prevent a repeat of the West Coast Mainline debacle.
ROTHSCHILD WINS SUPPORT OVER BUMI CLASH Financier Nat Rothschild has won support from an influential fund manager at Schroders for his bid to replace the board of coal miner Bumi
FEDEX REBUFFS UPS OVER TNT EXPRESS ASSETS FedEx has rebuffed informal approaches from rival United Parcel Service to buy a package of TNT Express assets.
ANGLO AMERICAN TO NAME CUTIFANI AS CHIEF Anglo American is this week set to name Mark Cutifani, chief executive of gold miner AngloGold Ashanti, as its new chief executive.
CO-OP LIFE SALE HANGS ON FSA MEETING UK regulators will meet this month to discuss whether to lift a hurdle to Royal London bid to acquire the life assurance operation of the Co-operative Group.
* Edward Lampert, the hedge-fund manager and Sears Holdings chairman who engineered the 2005 merger of Sears and Kmart, is taking over as chief executive of Sears Holdings because the current head, Louis D'Ambrosio, is departing.
* The board of AIG will meet on Wednesday to consider joining a $25 billion shareholder lawsuit against the U.S. government, court records show. The lawsuit claims that the rescue by the government deprived AIG's shareholders of tens of billions of dollars and took private property for public use without appropriate compensation.
* U.S. regulators on Monday reached an $8.5 billion settlement with 10 major lenders to resolve claims of foreclosure abuses, including the use of flawed paperwork and bungled loan modifications that may have led to wrongful evictions.
* Royal Bank of Canada has hired Mark Mahaney, the former Citigroup analyst who was dismissed after regulators discovered that he responded to a reporter's e-mail inquiry about the financial results of YouTube, a division of Google, without getting permission from the bank.
* Sony and BMG, onetime partners, are said to be teaming up again on a bid to buy - and then divide between themselves - some of the EMI-recorded music assets being sold by the Universal Music Group.
* Illumina Inc, the leading manufacturer of DNA sequencing machines, said on Monday it would buy the privately held Verinata Health for at least $350 million in cash to expand its push into the diagnostics business.
* Investment firm Weld North plans to expand Organic Avenue, a juice and raw foods purveyor with eight stores in the New York area, into cities like Los Angeles and Miami and gain distribution in grocery stores and other retail outlets.
THE GLOBE AND MAIL
* After 13 years of legal wrangling, the Métis people are poised to take a leap forward on Tuesday when a Federal Court judge rules in a fight over jurisdiction.
The court is expected to decide whether the federal government is responsible for negotiating with the Métis on issues ranging from health and education to land claims and tax exemptions.
* Oil-sands development is polluting Alberta lakes with rising levels of a toxic carcinogen, refuting long-standing claims that waterway pollution in the region is largely naturally occurring, a study has found.
Reports in the business section:
* Canadian planes are fuller than ever, as the major airlines show they have mastered the art of setting airfares just low enough to get passengers to pack most every flight.
The country's two biggest carriers, Air Canada and WestJet Airlines Ltd, reported record load factors for 2012, a signal that despite high levels of consumer debt, Canadian travellers and businesses are sanguine enough about the economic situation to book tickets.
* Invesco Ltd, the third largest shareholder of Postmedia Network Inc, has reduced its holdings in the newspaper company by 25 percent since July, a filing on Monday said.
* In 2004, Canadian border officials loaded Ashkan Forsat on a plane to Tehran, thinking they had finally rid themselves of the Iranian who had been holding up convenience stores almost from the moment he set foot in Canada.
Nine years later, Forsat is still in Canada, his rap sheet keeps getting longer, and immigration officials are still trying to figure out how to get rid of a man that Iran refuses to take back.
* The financial management at a northern Ontario's First Nations community has come under increasing scrutiny, following the publication of an audit showing a lack of documentation and questionable spending practices, including under the helm of the band's chief who has gained international attention for a hunger strike.
* With First Quantum Minerals Ltd expected to file its takeover circular imminently, the pressure will be on Inmet Mining Corp Chief Executive Jochen Tilk to explain why the $5.1-billion hostile offer for his company is inadequate.
Inmet shares have jumped nearly 40 percent since news of a bid surfaced in November, and are trading roughly in line with the offer price of $72 a share.
* Canada's two large railways, Canadian National Railway Co and Canadian Pacific Railway Ltd, outperformed their U.S. rivals in the fourth quarter although rail companies on both sides of the border were helped last year by a surge in traffic for petroleum products.
CHINA SECURITIES JOURNAL
-- The Shanghai Stock Exchange has encouraged Chinese listed companies to set their cash dividends proportion to not less than 30 percent.
-- Shanghai's relevant government departments are studying the feasibility of developing a free trade zone in its Pudong district that would likely start this year, sources told the paper.
SHANGHAI SECURITIES NEWS
-- China's Central Huijin Investment Co has increase its equity stake in Industrial and Commercial Bank of China by 207 million shares in the past five quarters.
CHINA DAILY (www.chinadaily.com.cn)
-- China's A-share market is expected to see 200 new listings in 2013 that could raise 130 billion yuan ($21 billion) to 150 billion yuan ($24 billion), fuelled by an improved capital market and better economy, PricewaterhouseCoopers said.
-- China's vegetable average price rose 4.5 percent to 4.17 yuan per kg in the first week of this year. Analysts expected China's inflation could rise in December due to an increase in vegetable prices.
Fly On The Wall 7:00 AM Market Snapshot
Celgene (CELG) upgraded to Outperform from Sector Perform at RBC Capital
Celgene (CELG) upgraded to Overweight from Neutral at Piper Jaffray
Dover (DOV) upgraded to Overweight from Equal Weight at Morgan Stanley
FMC Technologies (FTI) upgraded to Buy from Neutral at Sterne Agee
Joy Global (JOY) upgraded to Overweight from Neutral at Piper Jaffray
KKR & Co. (KKR) upgraded to Buy from Neutral at Goldman
Landstar System (LSTR) upgraded to Outperform from Market Perform at Wells Fargo
MKS Instruments (MKSI) upgraded to Buy from Neutral at BofA/Merrill
Manulife Financial (MFC) upgraded to Buy from Neutral at BofA/Merrill
Southwest (LUV) upgraded to Buy from Hold at Deutsche Bank
Superior Energy (SPN) upgraded to Outperform from Sector Perform at RBC Capital
Turkcell (TKC) upgraded to Overweight from Neutral at HSBC
Associated Banc-Corp (ASBC) downgraded to Hold from Buy at Deutsche Bank
AutoZone (AZO) downgraded to Underweight from Equal Weight at Morgan Stanley
Baker Hughes (BHI) downgraded to Neutral from Buy at Sterne Agee
Baker Hughes (BHI) downgraded to Sector Perform from Outperform at RBC Capital
Bridgepoint Education (BPI) downgraded to Equal Weight from Overweight at Barclays
CF Industries (CF) downgraded to Market Perform from Outperform at BMO Capital
EMC (EMC) downgraded to Market Perform from Outperform at William Blair
Emerson (EMR) downgraded to Equal Weight from Overweight at Morgan Stanley
EnergySolutions (ES) downgraded to Market Perform from Outperform at FBR Capital
FMC Technologies (FTI) downgraded to Sector Perform from Outperform at RBC Capital
Fusion-io (FIO) downgraded to Market Perform from Outperform at William Blair
Hittite Microwave (HITT) downgraded to Sell from Neutral at Goldman
ITT Educational (ESI) downgraded to Underweight from Equal Weight at Barclays
JetBlue (JBLU) downgraded to Hold from Buy at Deutsche Bank
Mylan (MYL) downgraded to Equal Weight from Overweight at Morgan Stanley
National Oilwell (NOV) downgraded to Sector Perform from Outperform at RBC Capital
Och-Ziff Capital (OZM) downgraded to Neutral from Buy at Goldman
Rockwell (ROK) downgraded to Underweight from Equal Weight at Morgan Stanley
Superior Energy (SPN) downgraded to Neutral from Buy at Sterne Agee
Tenaris (TS) downgraded to Equal Weight from Overweight at Barclays
ADT Corp. (ADT) initiated with a Buy at Stifel Nicolaus
CAI International (CAP) initiated with an Outperform at William Blair
Imperva (IMPV) initiated with a Market Perform at JMP Securities
MPLX (MPLX) initiated with a Market Perform at Wells Fargo
Parkway Properties (PKY) initiated with a Buy at BofA/Merrill
Silver Bay Realty Trust (SBY) initiated with an Outperform at JMP Securities
Stericycle (SRCL) initiated with an Equal Weight at Barclays
Validus (VR) initiated with an Overweight at Barclays
Sanofi (SNY) CEO would consider “bolt on acquisitions,” said 2013 will be a year to focus on R&D, CNBC reports
Barrick Gold (ABX) no longer in talks with China National Gold
KKR & Co. (KKR) invested $40M in United Envirotech
FDA designated GTx's (GTXI) enobosarm as Fast Track development program
Companies that beat consensus earnings expectations last night and today include:
Team, Inc. (TISI)
India proposed major curbs on the import of technology products ranging from laptops to Wi-Fi devices to computer-network equipment. The proposed regulations would create a "Buy India" mandate requiring a large percentage of tech goods sold in the country to be manufactured there, the Wall Street Journal reports
Japanese car companies (TM, NSANY, HMC) are regaining their confidence in the Chinese market, setting strong growth targets for 2013 after last year's sales were disrupted by cross-border tensions, the Wall Street Journal reports
Sharp Corp. (SHCAY) is considering new ways to shore up its finances but is not talking with Intel Corp. (INTC) now about any investment, according to a senior Sharp executive, Reuters reports
U.S. apartment vacancies dropped and rents climbed again in Q4, continuing a years-long trend that is likely to encourage more affluent renters to buy homes this year, according to real-estate research firm Reis Inc. (REIS), Reuters reports
GM (GM) will likely maintain its position in the U.S. after its market share fell to the lowest since 1924. GM may end this year with a 17.9% U.S. market share, in line with where it finished 2012, according to a survey of five analysts by Bloomberg
Japanese pension funds will more than double their gold holdings in the next two years as the new government pushes for a higher inflation target, Bloomberg reports
Calumet Specialty Products (CLMT) announces public offering of 5M common units
ConAgra (CAG) 8.067M share Spot Secondary priced at $29.75
Newcastle Investment (NCT) 50M share Secondary priced at $9.35
Solar Capital (SLRC) commences public offering of 6M shares of common stock
Summit Hotel Properties (INN) files to sell 13M shares of common stock
Tesoro Logistics (TLLP) announces public offering of 8.5M common units