Frontrunning: March 8
- Firms Send Record Cash Back to Investors (WSJ)
- And in totally opposite news, from the same source: Firms Race to Raise Cash (WSJ)
- China warns over fresh currency tensions (FT)
- Hollande faces pressure over jobs pledge (FT)
- Obama efforts renew ‘grand bargain’ hopes (FT)
- Shirakawa BOJ Expansion Gets No Respect as Stocks Cheer Exit (BBG)
- Japan’s Nakao Defends Easing as China’s Chen Expresses Concern (BBG)
- Boeing Had Considered Battery Fire Nearly Impossible, Report Says (WSJ)
- ECB Chief Plays Down Italy Fears (WSJ)
- China moves to make its markets credible (FT)
- Euro Group head says UK at risk of 'sterling crisis' (Telegraph)
Overnight Media Digest
* Activist investor Carl Icahn said he would push to replace Dell Inc's board and pursue "years of litigation" if the computer maker refused to accept his demand for a refinancing that would pay a hefty dividend to shareholders.
* Google Inc's Motorola Mobility hardware unit has begun laying off about 1,200 employees, or more than 10 percent of its headcount, according to a company email reviewed by The Wall Street Journal, as the smartphone maker continues trying to return to profitability.
* Upending a closely watched ritual in place since 1996, New York securities firm Goldman Sachs Group Inc told employees Thursday it now plans to promote a new crop of managing directors every two years, instead of each year.
* New York private equity firm KKR & Co LP has reached a deal to buy industrial-pumps manufacturer Gardner Denver Inc for $76 a share, valuing the company at roughly $3.74 billion, said a person familiar with the matter.
* The U.S. Federal Reserve served notice that the financial industry's health continues to improve, potentially clearing the way for large U.S. banks to funnel tens of billions of dollars to investors in increased dividend payments and share buybacks.
* European Central Bank President Mario Draghi played down fears that Italy's indecisive election could reignite Europe's debt crisis, saying financial markets have taken the election results in stride and that Italy's current political mess doesn't threaten its budget discipline.
* Pandora Media Inc posted a 54 percent jump in revenue as the internet radio company provided evidence that cost increases are slowing. It also announced its chief executive will be stepping down.
* Facebook Inc, hoping to keep users logged on longer as it faces competition from myriad new social apps, is tweaking its news feed again.
Federal Reserve stress tests showed Goldman Sachs as being one of the weaker financial institutions on Wall Street.
The European Central Bank said it would maintain an easy monetary policy stance as long as needed.
Pension funds are re-evaluating the size of their investments in the insurance sector after Aviva's move to cut its dividend 44 percent.
Barclays CEO Antony Jenkins has told investors that he wants to find a way for the bank to operate with as few as 100,000 staff.
BP warned that the cost of its court settlement with businesses and individuals affected by the 2010 Gulf of Mexico oil spill would significantly exceed $7.7 billion.
Nokia has cut its Chief Executive's annual pay package by half.
Ten executives have resigned from coal miner Bumi Resources' board in a possible bid to separate the Bakrie family-linked company from London-listed parent Bumi Plc .
THE GLOBE AND MAIL
* Alberta Premier Alison Redford has rolled out an austerity budget that halts spending growth, abandons many of her election promises and will return the province to a level of debt not seen for two decades.
* The Parti Quebecois government is cancelling an intensive English-language program in French elementary schools, fuelling the debate over the importance English should have in Quebec society.
* The Northwest Territories is about to take control of its own land, resources and water for the first time in its history, but former Premier Stephen Kakfwi says the transfer of power from Ottawa to Yellowknife could come at a cost to the environment and preservation of the land.
Reports in the business section:
* Bombardier Inc is taking a step toward a full-blown battle with aircraft giants Airbus SAS and Boeing Co, introducing a version of its new C Series plane that increases the number of seats to 160.
* The federal government issued new rules designed to help smaller players compete in the C$19 billion wireless telecom market, but the measures may not be enough to allow them to make substantial inroads against the industry's incumbents.
* Canadian Natural Resources Ltd is putting a quarter of its Montney natural gas assets up for sale or partnership, adding another big parcel of property in the British Columbia-Alberta region to the auction block.
* Opposition MPs who sit on a key House of Commons committee are poised to ask the government to turn over key financial documents in the run-up to the federal budget.
* Ottawa's plan to bolster the navy's fleet nudged toward the drawing board on Thursday after it signed a contract to design the next generation of Arctic offshore patrol ships.
* The federal government has quietly conceded that it made a "drafting error" in its oft-criticized refugee legislation passed last June and it appears a new law may be the only way to fix it. A "note" posted on Citizenship and Immigration's website just above an explanation about Canada's new Refugee Appeal Division suggests the new provision, which allows certain failed asylum claimants to seek a second opinion, came into force four months before it was supposed to.
* While Canadian smartphone maker BlackBerry said it plans less expensive devices for emerging markets like India, the company has no plans to get into the $50 to $60 price range to compete with lower-cost Asian rivals.
CHINA SECURITIES JOURNAL
- Local governments are considering how to implement the central government's latest guidance on new controls on home mortgages, with detailed local regulations subject to approval by the central bank. Cities experiencing fast home prices are likely to raise the down payment requirement for second homes to 70 percent and the mortgage interest rate to 1.3 times the benchmark.
- China Banking Regulatory Commission chairman Shang Fulin said the risk from excessive local government debt is under control. Debt outstanding from local government financing platforms has risen only 2 percent over the last year and currently stands at 9.3 trillion yuan ($1.50 trillion).
CHINA BUSINESS NEWS
- In an exclusive interview, Zhou Xiaochuan, governor of the People's Bank of China, defended China's aggressive credit-led stimulus in response to the 2008 financial crisis but admitted that, in retrospect, officials may have waited a little too long to begin exiting the stimulus once the recovery began.
SHANGHAI SECURITIES NEWS
- China has delayed commercial production of genetically modified rice and corn in response to public fears, scientists from the Ministry of Agriculture said.
SHANGHAI SECURITIES NEWS
- Jiang Yang, vice chairman of the China Securities Regulatory Commission, said the commission is researching rules to allow IPOs for domestic futures companies as well as to permit foreign investment in these companies.
- Qin Hong, a researcher from the Ministry of Housing and Urban-Rural Development and Jia Kang, a researcher with the Ministry of Finance, say new measures to enforce a capital gains tax on housing sales will be targeted at speculators, not ordinary owner-occupiers.
Fly on the Wall 7:00 AM Market Snapshot
Accuride (ACW) upgraded to Buy from Hold at BB&T
Con-way (CNW) upgraded to Buy from Hold at Deutsche Bank
Continental Resources (CLR) upgraded to Overweight from Neutral at JPMorgan
Delhaize Group (DEG) upgraded to Buy from Hold at Deutsche Bank
Heartland Payment (HPY) upgraded to Buy from Neutral at SunTrust
Identive Group (INVE) upgraded to Buy from Hold at C.K. Cooper
Lexington Realty (LXP) upgraded to Overweight from Equal Weight at Evercore
Memorial Production (MEMP) upgraded to Outperform from Market Perform at Wells Fargo
Navistar (NAV) upgraded to Overweight from Neutral at JPMorgan
Pandora (P) upgraded to Overweight from Neutral at Piper Jaffray
Phoenix New Media (FENG) upgraded to Buy from Hold at Deutsche Bank
Volcano (VOLC) upgraded to Outperform from Neutral at Credit Suisse
Yadkin Valley (YAVY) upgraded to Outperform from Market Perform at Raymond James
AVG Technologies (AVG) downgraded to Market Perform from Outperform at JMP Securities
Alexander & Baldwin (ALEX) downgraded to Equal Weight from Overweight at Evercore
New Mountain Finance (NMFC) downgraded to Hold from Buy at BB&T
Rockwell Automation (ROK) downgraded to Neutral from Outperform at Credit Suisse
Skullcandy (SKUL) downgraded to Underperform from Market Perform at Raymond James
Skullcandy (SKUL) downgraded to Underweight from Neutral at Piper Jaffray
Texas Roadhouse (TXRH) downgraded to Hold from Buy at KeyBanc
Tiffany (TIF) downgraded to Sell from Hold at Canaccord
Kemper (KMPR) initiated with a Market Perform at JMP Securities
Nelnet (NNI) initiated with a Buy at Compass Point
Norwegian Cruise Line (NCLH) initiated with a Buy at Citigroup
TiVo (TIVO) initiated with an Overweight at Piper Jaffray
UIL Holdings (UIL) initiated with a Hold at Deutsche Bank
Whirlpool (WHR) initiated with a Buy at BofA/Merrill
ZAIS Financial (ZFC) initiated with a Buy at Deutsche Bank
Fed said largest banks collectively in much stronger capital position
Sees only Ally Financial of banks tested with Tier 1 Common under 5% in worst case
KKR (KKR) reached deal to buy Gardner Denver (GDI) for $76 per share, DJ reports
Judge adjourns J.C. Penney (JCP), Macy's (M) Martha Stewart (MSO) case to April 8, CNBC reports. Judge wants them to go into mediation
Lionsgate (LGF), Universal (CMCSA), Disney (DIS), Warner Bros. (TWX) and Paramount (VIA) signed Digital Cinema Distribution Coalition agreements
Texas Instruments (TXN) said orders growing strongly quarter to date, building backlog
Quiksilver (ZQK) CEO: Revising our global organizational structure
Maxwell (MXWL) to restate financial results from FY11, FY12
Companies that beat consensus earnings expectations last night and today include:
Dolan Co. (DM), Chesapeake Utilities (CPK), BPZ Resources (BPZ), WuXi PharmaTech (WX), Pandora (P), Medifast (MED), Cooper Companies (COO)
Companies that missed consensus earnings expectations include:
H&R Block (HRB), Thor Industries (THO), Quiksilver (ZQK), Emergent BioSolutions (EBS)
Companies that matched consensus earnings expectations include:
Corcept Therapeutics (CORT)
- U.S. companies are showering investors with a record windfall in the form of dividends and share buybacks, helping to propel the stock market's rally. Companies in the S&P 500 index are expected to pay at least $300B in dividends in 2013, according to S&P Dow Jones Indices, the Wall Street Journal reports
- The prospects for Time Inc. (TWX) as an independent public company may not be too sunny. Its operating income has dropped by roughly half over the past five years, and analysts expect revenue and profit to keep falling this year as the industry struggles to regain advertising lost to the recession and the Web, the Wall Street Journal reports
- Bank of America (BAC) will seek more lending and cash management business with companies in Asia and elsewhere outside the U.S. says CEO Brian Moynihan, Reuters reports
- KKR (KKR), Carlyle Group (CG), Bain Capital and other private equity firms urged Japan's government to lower the role of state-backed funds, saying they could squeeze out opportunities for private capital and delay restructuring for troubled companies, Reuters reports
- Analysts at Standard & Poor’s (MHP), accused by the U.S. of misleading investors about the risks of mortgage bonds, were arguing the merits of their views on debt opinions, not committing fraud, says President Doug Peterson, Bloomberg reports
- Xstrata (XSRAY) CEO Mick Davis and CFO Trevor Reid may set up a privately backed mining fund after Glencore (GLNCY) takes over their company, sources say, Bloomberg reports
Apollo Residential Mortgage (AMTG) files to sell 6.8M shares of common stock
Arlington Asset Investment (AI) to offer 3M shares of Class A common stock
Atwood Oceanics (ATW) files automatic mixed securities shelf
BankUnited (BKU) 19.6M share Secondary priced at $25.25
Charter (CHTR) files to sell approximately 9.3M shares of common stock for holders
Del Frisco's (DFRG) 4.75M share Secondary priced at $17.00
Hercules Technology (HTGC) to offer 7M shares of common stock
NXP Semiconductors (NXPI) files to sell 25M shares of common stock for holders
Pharmacyclics (PCYC) commences offering of 2.2M shares of common stock
Pharmacyclics (PCYC) files automatic mixed securities shelf
Retail Properties of America (RPAI) announces $200M at the market offering of common
TherapeuticsMD (TXMD) files to sell $50M in common stock
Ventas (VTR) establishes $750M "at-the-market" offering of common stock
Icahn raises stake in Herbalife (HLF) to 15.55% from 13.6%
J.P. Morgan reports 11.1% passive stake in PBF Energy (PBF)
Lehman Brothers reports 11.5% passive stake in AvalonBay (AVB)
Lehman Brothers reports 9.57% passive stake in Equity Residential (EQR)
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