Frontrunning: December 27
- Millions of Tons of Metals Stashed in Shadow Warehouses (WSJ)
- Moguls Rent South Dakota Addresses to Dodge Taxes Forever (BBG)
- Fastest Japan Inflation Since ’08 Stokes Wage Pressure (BBG)
- Thai crisis deepens as army chief hints at intervention (Reuters)
- Anti-Assad Lebanese ex-minister killed in Beirut bomb (Reuters)
- Foreigners Unload Turkey Bonds as Probe Tarnishes Erdogan Growth (BBG)
- Small ISS Change Shakes Up Boards: Tweak to Influential Shareholder Adviser's Recommendations Has Directors Rethinking Proposals (WSJ)
- Japan’s Nishimura Calls for Quick Corporate Tax Cut to Under 30% (BBG)
- Volkswagen Poised to Beat General Motors in China Sales (BBG)
- Japan's Abe bets U.S. alliance, ratings can weather shrine visit (Reuters)
- Audi Plans $30.3 Billion in Investments to Challenge BMW (BBG)
- Textron Combats Jet Slump With Buyout of Beechcraft (BBG)
Overnight Media Digest
* Banks, hedge funds and commodity merchants are stashing tens of millions of tons of aluminum, copper, nickel and zinc in a hidden system of warehouses that span the globe. These facilities are known to some in the industry as "shadow warehouses" because they are unregulated and don't disclose their holdings.
* Treasury bond prices fell Thursday, pushing the yield on 10-year notes to 3 percent, a threshold that may signal a new baseline for higher interest rates.
* Textron Inc agreed to pay $1.4 billion to acquire Beechcraft Corp, a deal that would combine the small U.S. plane maker into an industrial conglomerate that also produces Cessna planes and Bell helicopters.
* McDonald's Corp has pulled the plug on its "McResource" website, an informational and budget-assistance website for employees that has become a target of derision from a group seeking higher pay for hourly workers.
* Wireless venture LightSquared Inc is seeking to exit bankruptcy-court protection with backing from private-equity firms Fortress Investment Group and Melody Capital Advisors LLC.
* Royal Dutch Shell PLC on Thursday said that it has renewed an option to buy the site of a proposed $2 billion ethylene plant in western Pennsylvania.
* Wall Street made millions of dollars taking Chinese banks public during the boom years when the economy was riding high and the country's lenders were reaping big profits. Those same investment banks are raking in fees again, but this time by helping China's financial system raise capital as it grapples with bad debts and thin capital bases.
* Starting in 2014, Institutional Shareholder Services Inc (ISS) is changing guidelines to recommend ousting directors who don't implement a shareholder proposal that got a majority of the votes cast at the 2013 meeting. Previously, ISS recommended "no" votes on directors only if the proposal received a majority of all the shares outstanding. ISS is a proxy advisory firm, in which hedge funds, mutual funds that own shares of multiple companies pay it to advise and often vote their shares regarding shareholder votes.
* Toshiba Corp , one of Japan's biggest diversified electronics companies, is aiming to buy a majority stake in U.K. nuclear consortium NuGeneration Ltd as it looks to foreign demand after interest at home waned following a nuclear accident in 2011.
* The Turkish owner of Godiva chocolates, Yildiz Holding AS, is bulking up in the confection business with a $221 million deal to acquire DeMet's Candy Co, the U.S. maker of Flipz chocolate pretzels and Turtles covered nut clusters. DeMet's is owned by Brynwood Partners, a Connecticut buyout firm known for plucking consumer brands from larger companies.
David Cameron's new wave of 24 enterprise zones is falling far short of the government's target for job creation, with officials braced for them to deliver as little as 11 percent of their original 2015 target.
Gatwick airport is facing the threat of having to pay airlines a rebate after thousands of passengers were left stranded by a power outage caused by storms that battered the UK over Christmas.
Turkish Prime Minister Recep Tayyip Erdogan was fighting for his political survival on Thursday, as a court-led corruption investigation looked set to spread from government ministers to members of his own family.
German pharmaceutical group Merck is seeking a partnership with an Iranian manufacturer to produce medicines in the country, in a sign that Western companies are putting their faith in President Hassan Rouhani's reformist drive and an easing of international sanctions.
Siemens will start printing spare parts for gas turbines next month, becoming one of the first global industrial manufacturers to routinely produce metal products using the innovative 3D technology.
Amazon may have embraced the robotics revolution with the promise of drones making deliveries to your door, but Rolls-Royce has taken it another step and is predicting the first drone cargo ship will enter service in the next decade.
* Laptop maker Lenovo Group Ltd, which is also the second-largest smartphone brand in China after Samsung Electronics Co Ltd, wants to build on that success and begin pushing into the United States and other wealthy markets in 2014.
* With the next budget deadline just weeks away, top lawmakers said this week that they had made significant progress negotiating a huge government-wide spending bill that gives the once mighty congressional Appropriations Committees an opportunity to reassert control over the flow of federal dollars.
* The states of Massachusetts and Vermont that hired CGI Federal, an American unit of the Canadian-based CGI Group Inc , to build their online marketplaces for health insurance under the Affordable Care Act are threatening to withhold millions of dollars in payments to the company and even seek refunds following many problems and delays.
* Some lucky fliers capitalized on a computer error on Thursday to buy inexpensive flights on Delta Air Lines Inc . A spokesman for the Atlanta-based airline said the problem had been fixed, but that "Delta will honor any fares purchased at the incorrect price."
* The Financial Industry Regulatory Authority, a private corporation that acts as a self-regulatory organization, on Thursday said that it fined Barclays Capital $3.75 million over its failure to properly retain records.
THE GLOBE AND MAIL
* Toronto Hydro Corp is rejecting the idea of burying power lines to avoid a repeat of widespread electricity outages triggered by an ice storm this week, saying the approach is too expensive and would leave the grid vulnerable to other problems.
* The search for a 22-year-old British backpacker who went missing in Vancouver on Nov. 25 has resumed. North Shore Rescue says crews have gone out on a helicopter above North Vancouver's Grouse Mountain and Lynn Headwater to capture some air photos and search for Tom Billings' whereabouts.
Reports in the business section:
* Investors in the Empire State Building have filed a lawsuit accusing the real estate magnates who took it public of short-changing them $300 million by refusing to sell the iconic skyscraper at a premium price. Peter Malkin and his son Anthony had put the landmark building and 17 other properties into Empire State Realty Trust Inc and took it public in October.
* Five days after a major ice storm crippled energy grids across Eastern Canada, less than 50,000 people remained without power in Toronto on Boxing Day as work crews began arduous, door-to-door repairs.
* Fearing it may lose sensitive information on First Nations peoples, the Department of Aboriginal Affairs decided earlier this year to ban the use of USB keys to transport data, then realized instituting the new rule without an alternate plan was doomed to fail.
* More than 100 High River residents could have their properties seized for reduced compensation if they refuse an offer from the Alberta province to buy their flood-hit land.
* Sizable Boxing Day lineups outside big chain stores across the country on Thursday suggest online shopping has yet to kill the Door Crasher special. Despite some online Boxing Week sales that began on Christmas eve, shoppers lined up in the early morning darkness for the doors to open at 6 a.m. at stores such as Future Shop and Target Corp.
- Thursday's visit by Japanese Prime Minister Shinzo Abe to the Yasukuni Shrine that symbolizes Tokyo's wartime aggression reflects rising rightist forces in Japan and implies that militarism has strong ability to survive in the Japanese society, a commentary by this newspaper, the mouthpiece of the ruling Chinese Communist Party, said.
- China aims to create 10 million new job opportunities in 2014 compared with a forecast of 13 million this year.
CHINA SECURITIES JOURNAL
- Combined land sales income in China's four first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen reached 501.4 billion yuan ($82.6 billion) this year, up 150 percent from 2012, due in part to rising land prices.
- China is likely to kick off reforms of its announced state-owned enterprises (SOEs) by corporate restructuring, which is likely to lead to a reduction of the number of SOEs next year.
- Analysts believe traditional enthusiasm of Chinese investors for new shares will mean heated trading in listing debutants when stock initial public offerings (IPOs) resume in January after a suspension of more than one year to support the sagging domestic stock market.
- China's new media continues to be dominated by high-profiled users in 2013 despite an official campaign against online rumourmongers, according to a report by the Chinese Academy of Social Sciences.
- About 70 percent of China's state-owned companies will see their year-end bonuses paid to their staff members rise this year from last year, according to a survey by leading staffing firm Career International.
NATIONAL BUSINESS DAILY
- Zhejiang Ke'er Group Co Ltd aims to become the first Chinese textile firm to build a plant in the United States with a planned investment of $218 million.
SHANGHAI SECURITIES NEWS
- The Shanghai Stock Exchange issues its first guidelines for information disclosure by different industries, targeting property, coal and petroleum sectors.
- Rising costs of fund-raising are hindering the government's plan of expand a pilot programme to securitise corporate assets.
CHINA BUSINESS NEWS
- China's fiscal spending was slower than expected in the first 11 months of this year due in part to a government campaign to fight official corruption, implying that the country may not be able to fulfil its target of fiscal deficit of 1.2 trillion yuan for the year.
INTERNATIONAL SHOPPERS BOOST BRITISH SALES ON BOXING DAY
Shoppers from around the world helped boost sales on British high streets on Thursday, with large numbers of Qataris, Chinese and Russians seen opening their pocketbooks - overall spending four times as much as people from the UK.
BRITAIN ON COURSE TO BECOME STRONG MAN OF EUROPE
Britain will overtake France as the world's fifth-largest economy within five years and is on course to leapfrog Germany to become the largest economy in Europe by 2030, according to a leading think-tank.
TUC LEADER SEES OPPORTUNITY FOR UNIONS TO REBUILD MEMBERSHIP
The head of the Trades Union Congress has warned that the Grangemouth industrial dispute was a "wake-up call" for the trade union movement and has urged labour bosses to team up with politicians and civic groups next year to boost private-sector membership.
FRENCH UNEMPLOYMENT RISES TO 3.29M
François Hollande is struggling to keep an election pledge and cut the number of jobless as manufacturing falters and a possible recession looms.
'SANTA TAX' FINANCE CHIEF SET TO BE SACKED FROM DEBENHAMS
Debenhams is set to part company with its finance director amid growing criticism of his performance.
CHRISTMAS SHOPPERS FAIL TO STOP THE BIG DECLINE
Reports of the death of the High Street proved to be exaggerated as Boxing Day shoppers spent a projected 2.6 billion pounds on Thursday, but beneath the fairy lights and tinsel the malaise goes on.
FCA RACKS UP RECORD 472 MLN POUNDS IN FINES IN FIRST YEAR
City watchdogs have racked up a record 472.3 million pounds in fines in 2013, with less than a week left in the year. The total in the first year of the Financial Conduct Authority represents a 51 percent increase over the 311.6 million pounds imposed in 2012, the last full year of the Financial Services Authority, which was also a record.
Fly On The Wall 7:00 AM Market Snapshot
FirstEnergy (FE) upgraded to Outperform from Market Perform at Wells Fargo
Westlake Chemical (WLK) upgraded to Positive from Neutral at Susquehanna
Twitter (TWTR) downgraded to Underperform from Neutral at Macquarie
Textron (TXT) to acquire Beechcraft for $1.4B in cash
LDK Solar (LDK) entered confidentiality agreements with note holders
Netflix (NFLX) users in U.S., Canada, Latin America reported outage issues
Perfect World (PWRD) sold Chinese online reading business to Baidu (BIDU) unit
ANI Pharmaceuticals (ANIP) acquired 31 generic drug products from Teva (TEVA)
- Twitter (TWTR) shares have nearly tripled since their IPO last month, including an almost 5% gain on Thursday, making the microblogging site's IPO one of the best performing this year. The company now has a $39.9B market capitalization, the Wall Street Journal reports
- A little-noticed change in the way an influential shareholder adviser makes its up-or-down recommendations on director elections may have some companies rethinking their responses to investor proposals. Starting in 2014, Institutional Shareholder Services is changing its guidelines to recommend ousting directors who don't implement a shareholder proposal that got a majority of the votes cast at the 2013 meeting, the Wall Street Journal reports
- UPS (UPS) scrambled on Thursday to deliver packages that had failed to arrive in time for Christmas as the number one U.S. ground delivery service sought to limit the fallout from the delays. That could encourage eCommerce companies, like Amazon (AMZN), to spread their shipping contracts across more companies to lower risk, Reuters reports
- GM (GM) and its China joint venture partner SAIC Motor Corp. will recall close to 1.5M vehicles due to potential safety issues in one of the biggest recalls in the world's biggest autos market, Reuters reports
- Apple (AAPL) is again seeking to ban sales in the U.S. of Samsung Electronics (SSNLF) products that were at issue in the companies’ first patent trial in California and are now no longer on the market, Bloomberg reports
- Chinese mobile phone makers asked China’s Ministry of Commerce to make sure Microsoft’s (MSFT) $7.5B bid to take over Nokia’s (NOK) handset business doesn’t result in higher patent fees on wireless technology, sources say, Bloomberg reports
Ampio (AMPE) files to sell 1.5M shares of common stock for holders
Adage Capital reports 5.07% passive stake in HeartWare (HTWR)
Gabelli reports 5.37% stake in Lawson Products (LAWS)
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