Frontrunning: August 9
- JPMorgan Nears Settlement With SEC on London Whale Loss (BBG)
- Without even a wristslap: Iksil to face no U.S. charges in 'Whale' probe (Reuters)
- China’s Credit Expansion Slows as Li Curbs Shadow Banking (BBG)
- China slowdown shows signs of abating (FT), even as...
- Australia central bank Lowers Growth Outlook as Economy Transitions From Mining (BBG)
- SAC Business Plan Goes to Judge, Plan Would Allow Firm to Maintain Business Operations but Restrict Its Ability to Move Assets (WSJ)
- Another buyer of Herbalife? - Norway’s oil fund plans to turn active (FT)
- Mark Carney plays down scepticism over interest rate policy (FT)
- Orders Evaporate for Celebrity Perfumes (WSJ)
- India Adds to Cash-Supply Curbs as Rupee Volatility Climbs (BBG)
- Third Vote Said Held by BOE in Carney Guidance Debate (BBG)
- Brazil calls for IMF eurozone rescue programmes revision (FT)
- Italy Aims for More Budget Austerity (WSJ)
- Bernanke Successor Seen as No Obstacle to Tarullo Banking Rules (BBG)
Overnight Media Digest
* The terror plot that has temporarily shut down 19 U.S. diplomatic posts wasn't ordered by al Qaeda's leader Ayman al Zawahiri, but proposed by al Qaeda's Yemeni branch and approved by the global Qaeda chief, a senior U.S. official said Thursday in a more specific description of the plot's origin.
* J.C. Penney Co Inc is looking for a new chief executive to unseat interim CEO Myron Ullman, under pressure from investor William Ackman, who said a new chief needs to be found within 30 to 45 days. The department store chain's board blasted him for being "disruptive" and "counterproductive".
* Cities in the West and the Sunbelt, among the hardest hit during the real estate downturn, continue to lead the nation's housing recovery, posting double-digit gains in home prices that have outpaced even the most optimistic projections from a year ago. Among the 10 cities with the fastest year-over-year price growth, nine were in California, Florida or Nevada, states worst hit by the real estate bust.
* SAC Capital Advisors LP and prosecutors asked a federal judge to approve an agreement that would allow the hedge fund giant to maintain business operations but restrict its ability to move assets elsewhere while facing criminal insider trading charges, according to filings related to the case.
* China plans to move tens of millions to cities in a drive to boost domestic incomes and consumption, but some newly built cities such as Tieling New City are virtually ghost towns, luring few employers or residents.
* T-Mobile US Inc posted a quarterly loss but added 688,000 of the most-valuable wireless subscribers in the second quarter, a sign that Verizon Wireless and AT&T Inc may face tougher competition in the market they have long dominated.
* Shares of perfume makers tumbled Thursday, after Elizabeth Arden Inc said orders from one of its biggest retailer-customers, had been cut sharply in recent months. Executives at the company didn't name the retailer, but Wal-Mart Stores Inc is its biggest customer, according to Elizabeth Arden securities filings, accounting for about a fifth of its sales in North America.
* Container-shipping companies battled weak freight demand in the second quarter, as they continued to be burdened by capacity added in the teeth of a global economic slowdown. Shipping-rate increases beginning in July could provide a second-half boost, analysts said, though overcapacity is expected to persist for some time.
* The long-running patent war between smartphone giants Apple Inc and Samsung Electronics Co will be back in the spotlight on Friday with two legal developments that could help tip the balance. The companies will argue before a federal appeals court in Washington over whether a lower court erred last year when it allowed Samsung to continue selling more than two dozen products after a jury found they infringed Apple patents.
Norway's $760 billion sovereign wealth fund, the world's largest, has appointed a corporate governance advisory board in an attempt to be a more active investor.
Bank of England governor Mark Carney played down market scepticism that the Monetary Policy Committee will fail to keep interest rates on hold for another three years.
Energy-focused private equity firm Riverstone Holdings will float a new energy vehicle - Riverstone Energy - on the London Stock Exchange
China International Capital Corporation, one of China's top investment banks, is planning to go public and has commissioned an internal study to look into the possibility of listing, according to people familiar with the matter.
Global miner Rio Tinto scrapped plans to sell its loss-making Pacific Aluminium business in a sign of tough market conditions facing the miner, which is trying to offload underperforming assets during an industry downturn.
Russia's second-biggest mobile phone operator Megafon is buying next-generation service provider Scartel for $1.2 billion as it looks to extend its lead in the race to provide high-speed internet.
Britain's Serious Fraud Office admitted to an "accidental data loss" of 32,000 pages of data and 81 audio tapes linked to a bribery investigation involving Britain's biggest defence contractor, BAE Systems.
* Two weeks after Detroit declared bankruptcy, cities, counties and other local governments in Michigan are getting a cold shoulder in the municipal bond market. Borrowing costs are up around the state, in some cases drastically. On Thursday, Saginaw County became the latest casualty when it said it was delaying a $60 million bond sale planned for Friday.
* JPMorgan Chase & Co is close to a deal with regulators over whether it gave lowball estimates for trading losses despite evidence within the bank that the bet was spiraling out of control. The losses, which have now swelled to more than $6 billion, stemmed from outsize derivatives wagers made by traders at JPMorgan's chief investment office in London.
* BHP Billiton PLC, the world's largest mining company in a sector that is deeply out of favor with investors, is aggressively curtailing its spending in hopes of winning them over. Investors' central complaint is that big companies, during a period of high metals prices and strong profit from 2009 to 2011, spent too much money building mines instead of returning money to shareholders.
* Hervé Falciani is a professed whistle-blower, the Edward Snowden of banking, who has been hunted by Swiss investigators, jailed by Spaniards and claims to have been kidnapped by Israeli Mossad agents eager for a glimpse of the client data he stole while working for a major financial institution in Geneva. Once dismissed by many European authorities, he and other whistle-blowers are now being courted as the region's governments struggle to fill their coffers and to stem a populist uprising against tax evasion and corruption.
* On Friday the federal International Trade Commission is expected to say whether it will uphold a preliminary finding that Samsung Electronics Co Ltd mobile products violated a handful of Apple Inc's patents. A decision against Samsung by the commission could result in an import ban on some of the company's mobile devices. A decision for Apple would be its second major legal win against Samsung in less than a week.
* Carl Icahn is suing Dell's board over its latest decision to accept a higher buyout offer from Michael Dell in exchange for modifying the rules governing the vote for the deal. On Monday, a hearing will take place in the Delaware Court of Chancery on whether to expedite Icahn's suit.
* Britain's Serious Fraud Office faced renewed embarrassment on Thursday after it admitted it had lost thousands of documents linked to an investigation into the British aerospace giant BAE Systems PLC. The agency has been trying to rejuvenate its reputation under its new leader, David Green.
THE GLOBE AND MAIL
* The Quebec government says it can jump to the front of the line of the Montreal, Maine & Atlantic railway creditors seeking millions, to compensate the Lac-Megantic derailment victims and cover its cleanup bill. Quebec is counting on the environmental provisions of the federal Companies' Creditors Arrangement Act to get repaid by the Canadian subsidiary of MM&A, which listed C$48 million ($46.31 million) in liabilities but only C$18 million in assets in its bankruptcy filing. But legal experts aren't so sure if that recourse will be as far-reaching as the government suggested.
* A secluded beach on the northern tip of Vancouver Island has become the epicenter of a feud between a hippie-style counterculture movement and local residents concerned about protecting the environment. A Facebook event page, now deleted, showed more than 1,800 people were planning to attend the month-long "World Rainbow Gathering", where attendees would live off the land and pray for world peace.
Reports in the business section:
* Telus Corp Chief Executive Darren Entwistle launched his harshest attack yet on Ottawa's telecom policy, arguing that federal intervention in the wireless market has fueled such "consternation and confusion" that it is harming Canada's reputation as a good place for companies to invest.
* Imperial Oil Ltd and Exxon Mobil Corp have teamed up to buy a major Alberta oil sands property from ConocoPhillips for C$751 million, ending a drought of large deals for bitumen-rich lands that had persisted since the start of the year.
* Tim Hortons Inc Chief Executive Marc Caira, who took the top job at the iconic chain on July 2, says the coffee chain needs to speed up service, streamline offerings and develop new products, including healthier choices, to win over customers and disgruntled investors.
* An in-depth background check of Patrick Brazeau by senior officials in Prime Minister Stephen Harper's office either ignored or overlooked the conflicting addresses now at the heart of a Royal Canadian Mounted Police (RCMP) probe into the embattled senator's finances. A court filing by the lead investigator in a breach of trust probe revealed last week that the RCMP is looking into tax returns filed by the former high profile aboriginal leader.
* Prime Minister Stephen Harper's personal involvement in the Northern Gateway and Keystone pipelines may have come too late to be decisive. Neither looks a good bet to proceed right now, but he is determined to be an active and visible proponent of the Energy East project, even before it breaks ground on its new sections. While he is at pains to point out the project remains subject to a regulatory review, he gives off the sense that his government desperately needs a home run on a big economic project.
* Wireless incumbents BCE Inc and Telus Corp argue that if Verizon Communications Inc enters Canada, it should not piggyback on the cell towers that they have spent billions and decades to build. It is one of the so-called loopholes that the two companies are calling upon the federal government to close before the Sept. 17 spectrum auction sign-up deadline.
* Newfoundland and Labrador may be Canada's fastest growing province this year, but its stellar rise masks a dramatic decline in the oil sector. The province's three major offshore fields, Hibernia, Terra Nova and White Rose, are past their best and production from new fields is years away.
* The Canadian Radio-television and Telecommunications Commission (CRTC) on Thursday rejected the Sun News Network's bid to be carried on basic cable, casting fresh doubts on the future of the controversial upstart broadcaster. Sun says it will stay on the air while the CRTC reviews the way news channels are regulated in Canada.
SHANGHAI SECURITIES NEWS
-- China's futures and financial derivatives market is entering a key period of strategic development, according to the assistant chairman of China's securities regulator. Zhang Yujun from China Securities Regulatory Commission (CSRC) said this was a critical time for China to speed up the opening of the market and the innovation of new products.
-- In the wake of crackdowns on official spending, the budgets of 18 out of 30 provinces showed on Thursday that spending on travel, vehicles and receptions had fallen compared to last year.
-- The value of domestic and outbound deals in the China merger and acquisitions market reached record highs in the first half of 2013, according to Zero2IPO Group. Chairman Ni Zhengdong said that in the first six months of the year there were 359 domestic deals worth 40.3 billion yuan ($6.58 billion), with a further 27.6 billion yuan of outbound deals.
-- More than half of the 2,500 lakes and rivers tested by authorities in Shanghai between 2010 and 2012 were found to be heavily polluted, a further knock to China's troubled record on environmental issues.
-- In the first half of 2013, national tax auditors inspected 75,000 Chinese enterprises, covering revenues of 57.1 billion yuan ($9.33 billion). In total the department dealt with 46,000 tax evasion cases, according to figures released by the State Administration of Taxation.
Fly On The Wall 7:00 AM Market Snapshot
Accenture (ACN) upgraded to Outperform from Neutral at RW Baird
Aviva (AV) upgraded to Buy from Neutral at BofA/Merrill
BreitBurn Energy (BBEP) upgraded to Buy from Neutral at Citigroup
Bruker (BRKR) upgraded to Buy from Neutral at BofA/Merrill
Cisco (CSCO) upgraded to Neutral from Underweight at JPMorgan
Diana Shipping (DSX) upgraded to Neutral from Underweight at JPMorgan
Geron (GERN) upgraded to Overweight from Neutral at Piper Jaffray
HeartWare (HTWR) upgraded to Outperform from Neutral at Credit Suisse
IHS Inc. (IHS) upgraded to Buy from Hold at Deutsche Bank
Kimco Realty (KIM) upgraded to Buy from Neutral at BofA/Merrill
Noah Holdings (NOAH) upgraded to Outperform from Perform at Oppenheimer
Royal Gold (RGLD) upgraded to Outperform from Sector Perform at RBC Capital
St. Jude Medical (STJ) upgraded to Outperform from Market Perform at Wells Fargo
Thoratec (THOR) upgraded to Outperform from Neutral at Credit Suisse
Tim Hortons (THI) upgraded to Buy from Hold at Canaccord
BG Medicine (BGMD) downgraded to Neutral from Outperform at RW Baird
Cal Dive (DVR) downgraded to Market Perform from Outperform at Raymond James
Concho Resources (CXO) downgraded to Neutral from Buy at UBS
Corcept Therapeutics (CORT) downgraded to Neutral from Outperform at Credit Suisse
Crosstex Energy LP (XTEX) downgraded to Neutral from Outperform at Credit Suisse
DeVry (DV) downgraded to Neutral from Buy at Compass Point
Deere (DE) downgraded to Sell from Neutral at UBS
Fifth Street Finance (FSC) downgraded to Outperform from Strong Buy at Raymond James
LINN Energy (LINE) downgraded to Underperform from Perform at Oppenheimer
Leap Wireless (LEAP) downgraded to Underperform from Market Perform at Raymond James
MYR Group (MYRG) downgraded to Neutral from Buy at DA Davidson
Medical Properties (MPW) downgraded to Sector Perform at RBC Capital
Suburban Propane (SPH) downgraded to Underperform from Neutral at Credit Suisse
Tetra Tech (TTEK) downgraded to Neutral from Outperform at RW Baird
inContact (SAAS) downgraded to Hold from Buy at Benchmark Co.
Ixia (XXIA) initiated with a Buy at Jefferies
Take-Two (TTWO) initiated with a Buy at Benchmark Co.
America Movil (AMX) offered 2.40 euros per share for KPN (KKPNY)
KPN takes note of America Movil offer, will 'carefully consider'
Verizon (VZ) gained FDA clearance for remote health monitoring solution
Philip Morris USA (MO) said Federal Court denied class certification in 'Lights' case
GameStop (GME) offering upgrade credit towards Xbox One (MSFT) games
Companies that beat consensus earnings expectations last night and today include:
Magna (MGA), Great Plains Energy (GXP), Denison Mines (DNN), Willbros Group (WG), Onyx Pharmaceuticals (ONXX), Stifel Financial (SF), NVIDIA (NVDA), Air Lease (AL), priceline.com (PCLN), Lionsgate (LGF)
Companies that missed consensus earnings expectations include:
Tutor Perini (TPC), Arkansas Best (ABFS), Assured Guaranty (AGO), Edgen Group (EDG), Darling (DAR), CareFusion (CFN), Molycorp (MCP), Monster Beverage (MNST), Allscripts (MDRX)
Companies that matched consensus earnings expectations include:
AuRico Gold (AUQ), Carriage Services (CSV), Lender Processing (LPS), Envestnet (ENV)
- With bigger, multibillion-dollar deals few and far between of late, Berkshire Hathaway’s (BRK.A) Warren Buffett increasingly favors "bolt-on" acquisitions because they increase Berkshire's earnings and enable it to use its cash pile, which stood at $36B at the end of June, the Wall Street Journal reports
- Facebook (FB) has been planning for months to dive into the lucrative market for online video ads. The holdup: CEO Mark Zuckerberg doesn't want to annoy its 1.1B members. As soon as this fall, Facebook plans to launch a video-ad service that will show members 15-second-or-less clips on both smartphones and the Web, sources say, the Wall Street Journal reports
- BlackBerry (BBRY) is warming up to the possibility of going private, as the smartphone maker battles to revive its fortunes, sources say, Reuters reports
- Onyx Pharmaceuticals (ONXX) said its process of seeking a buyer for the company is "ongoing with multiple parties engaged." The cancer drugmaker rejected an unsolicited takeover offer from Amgen (AMGN) of $120 per share as being too low, and instead launched a process to sell itself, Reuters reports
- JPMorgan Chase (JPM) is negotiating final terms of a deal with the SEC to end a yearlong probe of derivatives bets that led to the bank’s biggest trading loss ever, sources say, Bloomberg reports
- A shortage of biofuel credits needed for gasoline sales in the U.S. may lead to an increase in exports of the fuel (VLO, XOM) from America in 2014, according to the International Energy Agency, Bloomberg reports
Frank's International (FI) 30M share IPO priced at $22.00
Norwegian Cruise Line (NCLH) 20M share Secondary priced at $29.75
QEP Midstream Partners (QEPM) 20M share IPO priced at $21.00
Quality Distribution (QLTY) 4.27M share Secondary priced at $8.60
Stock Building Supply (STCK) 7M share IPO priced at $14.00
Triangle Petroleum (TPLM) 15M share Secondary priced at $6.25
World Point Terminals (WPT) 8.75M share IPO priced at $20.00
- advertisements -
- advertisements -