Frontrunning: March 22
- Cyprus targets big depositors in bank plan (FT)
- Merkel Vents Anger at Cyprus Over Bailout Plan as Deadline Looms (BBG)
- Russia rebuffs Cyprus, EU awaits bailout "Plan B" (Reuters)
- Russia Rejects Cyprus Bid for Financial Rescue as Deadline Looms (BBG)
- Cyprus unveils shake-up as the clock ticks (FT)
- Remember Italy? Italy’s stalemate unnerves investors (FT)
- Credit Suisse CEO pay jump to fuel banker bonus debate (Reuters)
- Kuroda Rebuts Reflation Naysayers as BOJ Action Looms (BBG)
- Fund Manager Says 'Whale' Trade Was a Bet (WSJ)
- House averts government shutdown, backs Ryan budget (Reuters)
- Hong Kong Homes Face 20% Price Drop as Banks Raise Rates (BBG)
Overnight Media Digest
* Cyprus, in an 11th-hour bid to unlock international aid, reopen the nation's banking system and preserve membership in the euro, readied a plan that would restructure its second-largest lender and enforce unprecedented restrictions on financial transactions.
* Blackstone Group LP and General Electric Co's lending arm have discussed jointly pursuing Dell Inc's financial-services business, people familiar with the matter said.
* Silicon Valley powerhouse Oracle Corp is being challenged anew by small, more focused companies, eroding its core software business at the edges.
* U.S. regulators on Thursday warned about the dangers lurking in the booming market for loans to struggling companies, acting to combat concerns over emerging bubbles in parts of the financial sector.
* The United States is applying money-laundering rules to "virtual currencies," amid growing concern that new forms of cash bought on the internet are being used to fund illicit activities.
* Rengan Rajaratnam, the younger brother of former hedge-fund titan Raj Rajaratnam, was indicted for alleged insider trading.
* FedEx Corp disclosed plans on Thursday to buy up to 30 Boeing Co 757 passenger jets from United Airlines and convert them to carry cargo as part of the freight carrier's fleet renewal strategy.
* Planned furloughs of air-traffic controllers that could cause major disruptions in air travel are sparking a dispute between the Federal Aviation Administration and airlines over how much discretion the agency has in making its sequester cuts.
* Julius Genachowski, chairman of the Federal Communications Commission, is set to announce on Friday that he will step down after four years on the job that included a successful challenge to AT&T Inc's proposed merger with T-Mobile USA, people familiar with the matter said.
Cyprus announced the plans on Thursday to overhaul its banking system and levy on big depositors as EU lawmakers threatened to withdraw crucial support if the government failed to agree on the terms of a bailout.
Russian state oil company Rosneft closed its deal to buy TNK-BP for $55 billion to become a bigger oil producer than Exxon Mobil.
AstraZeneca will shed around a tenth of its workforce by 2016 in an effort to return the struggling drugmaker to growth.
Standard Chartered bowed to pressure from the U.S. regulators and retracted its statement regarding the bank's breaches on Iran sanctions.
Hermes International, the maker of silk scarves and Birkin bags, went on the offensive against its larger luxury goods rival LVMH to trim down stake in the company.
Hewlett-Packard Co raised its quarterly dividend by 10 percent, amid shareholder displeasure over the company's $11 billion acquisition of British software firm Autonomy Plc.
Former French President Nicolas Sarkozy was placed under formal investigation on Thursday in a 2007 party funding case involving L'Oreal heiress Liliane Bettencourt.
Scotland will hold an independence referendum next year to decide if its five million people should end a 300-year-old union and leave the United Kingdom.
* Private equity firm Blackstone Group LP is weighing whether to make an offer for all or part of Dell Inc as a Friday deadline looms, people briefed on the matter said. But some people close to Blackstone are skeptical that any offer will materialize.
* BP Plc, the British oil company, said it had completed the sale of its 50 percent stake in the Russian affiliate TNK-BP. In a series of transactions, BP will receive about $12.5 billion in cash and will own 19.75 percent of Rosneft, the largest Russian oil company.
* As the European Central Bank threatened to shut off crucial financing for banks in Cyprus without a rapid accord on an international bailout, members of Parliament put off a vote on Thursday on yet another revamped formula. The vote was rescheduled for Friday.
* Faced with weaker returns, some big investors have been pushing private equity firms to lower fees or make other concessions.
* European Union regulators are examining the contracts Apple Inc strikes with cellphone carriers that sell its iPhone for possible antitrust violations after several carriers complained that the deals throttled competition.
* Lululemon Athletica is expected to take a hit of around $60 million in lost sales as it is recalling yoga pants made with a fabric known as Luon that are overly transparent, which make up about 17 percent of all the Canada-based retailer's women's bottoms.
* Numerous U.S. wind-energy projects which were stalled at the end of 2012 are picking up, as Congressional action on a critical incentive has spurred developers to resume efforts.
* Federal prosecutors on Thursday said that Rengan Rajaratnam was a pawn in elder brother Raj Rajaratnam's vast insider-trading conspiracy, announcing charges against him nearly two years after his brother's conviction.
THE GLOBE AND MAIL
* For 45 years, the Canadian International Development Agency has been synonymous with Canada's efforts to alleviate poverty and respond to disasters abroad. That brand - as Canada and the world know it, at least - is no longer.
The Conservative government announced on Thursday that CIDA, once a standalone agency, will be absorbed into the Department of Foreign Affairs and International Trade.
* Quebec is accusing the federal government of attacking the province with a budget that threatens to sabotage its economy.
Reports in the business section:
* The Cypriot financial crisis is dangerously close to a boiling point as depositors scramble to withdraw cash amid a warning from European monetary authorities that they will pull emergency funding from the country's banks if a bailout deal is not struck by Monday.
* Lululemon Athletica Inc is backing away from its initial statement that its costly pants gaffe was the mistake solely of its suppliers. On Thursday, Christine Day, Chief Executive of Lululemon, said her company may have been at fault because of a possible design shift or some other reason.
* The private security contractor who bodyguarded Saadi Gaddafi during the 2011 Libyan revolution was to be deported to Australia on Thursday night after he was deemed complicit in crimes against humanity.
* The Canadian Conservative government says it is continuing along a narrow fiscal path on the way to balancing its books within the next two years. But weaker revenue - hampered by recently discounted Canadian oil prices - and a stumbling post-recession rebound have not made that job any easier.
* Canadian Finance Minister Jim Flaherty may be cracking down on banks offering low rates to consumers, but his own government seems to be looking for the cheapest debt it can find.
CHINA BUSINESS NEWS
-- China will bar brokerages from marketing wealth management products that sell to more than 200 individual investors, starting June 1.
SHANGHAI SECURITIES NEWS
-- China has approved setting up of the National Radio and Television Network Company, in a move that will accelerate the integration of TV and Internet.
-- More than 20,000 college students in Wuhan have taken high-interest loans to buy fancy electronic products, mostly Apple devices, according to an official of Home Credit China.
-- Around 50,000 people die of tuberculosis every year in China, with about 1 million new cases reported annually, according to a health official.
Fly On The Wall 7:00 AM Market Snapshot
American Public (APEI) upgraded to Outperform from Market Perform at Wells Fargo
DSW (DSW) upgraded to Outperform from Neutral at Credit Suisse
Family Dollar (FDO) upgraded to Buy from Hold at Deutsche Bank
Ignite Restaurant (IRG) upgraded to Buy from Hold at KeyBanc
Met-Pro (MPR) upgraded to Buy from Hold at Brean Capital
Ryder (R) upgraded to Strong Buy from Outperform at Raymond James
Texas Capital (TCBI) upgraded to Outperform from Market Perform at Keefe Bruyette
Cross Country Healthcare (CCRN) downgraded to Hold from Buy at Cantor
Evercore Partners (EVR) downgraded to Market Perform from Outperform at JMP Securities
Family Dollar (FDO) downgraded to Neutral from Buy at Citigroup
Informatica (INFA) downgraded to Neutral from Buy at Nomura
Kohl's (KSS) downgraded to Sell from Hold at Deutsche Bank
People's United (PBCT) downgraded to Market Perform from Outperform at Keefe Bruyette
Vanguard Health (VHS) downgraded to Market Perform from Outperform at Leerink
Beam Inc. (BEAM) initiated with a Hold at Stifel
Brown Forman (BF.B) initiated with a Buy at Stifel
Diageo (DEO) initiated with a Buy at Stifel
Insmed (INSM) initiated with a Buy at Canaccord
LinkedIn (LNKD) initiated with a Sector Perform at RBC Capital
USG (USG) initiated with a Buy at SunTrust
Yelp (YELP) initiated with a Sector Perform at RBC Capital
Zillow (Z) initiated with an Outperform at RBC Capital
Zynga (ZNGA) initiated with an Underperform at CLSA
BP (BP) to buy back $8B of shares following completion of TNK-BP deal
Nike (NKE): More work to do to capture China's long term growth potential
Priceline.com (PCLN) announced new long term agreement with United Airlines (UAL)
salesforce.com (CRM) announced four-for-one stock split
Verizon (VZ) updated Verizon Messages to sync with PC, phone, and tablet (GOOG, AAPL)
Zynga (ZNGA) will introduce new version of Zynga.com next week
Wausau Paper (WPP) to divest specialty paper business
Communications Workers of America failed to ratify agreement covering AT&T West (T) wireline employees
Companies that beat consensus earnings expectations last night and today include:
Jaguar Mining (JAG), Silver Wheaton (SLW), Nike (NKE), rue21 (RUE), Alimera Sciences (ALIM), New York & Co. (NWY)
Companies that missed consensus earnings expectations include:
Kythera (KYTH), Micron (MU)
Companies that matched consensus earnings expectations include:
TIBCO (TIBX), Wet Seal (WTSL)
- Oracle (ORCL) remains a dominant force in technology with $32.7B in revenue and database and applications software used by corporations to manage their finances and procurement. But today its business is being eroded at the edges by smaller, more focused companies offering newer technology, the Wall Street Journal reports
- Growing demand and tight supplies have pushed up plywood prices by 45% in the past year, and U.S. producers (BCC, HD, LOW) are scrambling to get back up to speed after cutting output during the housing bust, the Wall Street Journal reports
- Russia turned down Cyprus appeals for aid, leaving it to strike a bailout deal with the European Union before Tuesday or face the collapse of its financial system, Reuters reports
- Apple (AAPL), Google (GOOG) and Amazon (AMZN) are maneuvering for position in the online music business and looking at ways to make streaming profitable, despite the fact that pioneer Pandora (P) has never made a profit, Reuters reports
- Gold traders are becoming more bullish as concern increases that a worsening of Europe's debt crisis will spur demand for a protection of wealth at a time when nations from the U.S. to Japan are signaling more stimulus, Bloomberg reports
- As Swiss bank UBS (UBS) cuts some 10,000 jobs, it’s planning to expand in Turkey as the nation’s economic growth boosts demand for assets, Bloomberg reports
Arbor Realty (ABR) commences offering of 5.625M shares of common stock
Emerald Oil (EOX) files to sell 1.165M shares for holders
Fiesta Restaurant Group (FRGI) 2.9M share Secondary priced at $24.25
Five Oaks (OAKS) 4.033M share IPO priced at $15.00
Graphic Packaging (GPK) 28M share Secondary priced at $7.00
Marin Software (MRIN) 7.5M share IPO priced at $14.00
West Corporation (WSTC) 21.275M share IPO priced at $20.00
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