Frontrunning: March 31
- US, Russia talks fail to end Ukraine deadlock (AP)
- Russian forces 'gradually withdrawing' from Ukraine border (AFP)
- Turkish PM Erdogan tells enemies they will pay price after poll (Reuters)
- And Goldman arrives: Credit markets open to Argentina for first time in years (Reuters)
- Regulators Twice Failed to Open GM Probes (WSJ)
- Bad loan writedowns soar at China banks (FT)
- Investors Breathe Life Into European Banks' Bad Loans (WSJ)
- Euro zone inflation drops to lowest since 2009 (Reuters)
- Yellowstone National Park rattled by largest earthquake in 34 years (Reuters)
- Biggest ETF Flow From U.S. Debt Since ’10 Signals Rate Rise (BBG) - or just more confused algorithms
- Swiss Antitrust Regulator Probes Eight Banks Over FX-Rigging (BBG)
- Deutsche Bank Said to Mull Forgoing IPO Amid China Probes (BBG)
Overnight Media Digest
* Congressional investigators looking into why General Motors Co took nearly a decade to recall vehicles with faulty ignition switches said on Sunday that federal regulators twice declined to open formal probes into complaints about the cars and that GM rejected a proposed fix for the problem in 2005 because it would have taken too long and cost too much. (http://r.reuters.com/tys97v)
* Royal Bank of Scotland Group PLC is close to appointing a Credit Suisse investment banker as its next chief financial officer. The appointment of Ewen Stevenson, who advised on the bailout of the 81 percent government-owned RBS, still needs to be approved by UK regulator Prudential Regulation Authority, according to a person familiar with the matter. (http://r.reuters.com/get97v)
* Caterpillar Inc, a maker of construction and mining equipment, on Tuesday will become the latest blue chip hauled before the Senate's Permanent Subcommittee on Investigations to explain strategies designed to shrink tax bills. Caterpillar officials are preparing to defend a corporate restructuring in the late 1990s that helped the company reduce U.S. taxes, particularly on sales of parts to foreign customers. (http://r.reuters.com/xys97v)
* The Food and Drug Administration's efforts to speed approvals of drugs to fight antibiotic-resistant bacteria will be front and center on Monday as the agency considers two new antibiotics with possible advantages. The FDA's methods to advance new antibiotics so far haven't generally led to great new drugs, and there has been considerable debate over attempts to speed the approval process. (http://r.reuters.com/hat97v)
* Alibaba Group Holding Ltd <IPO-ALIB.N> said Monday it agreed to pay $692 million to take a roughly 35 percent stake in Chinese department store operator Intime Retail (Group) Co in a bid to link more closely e-commerce and shopping at bricks-and-mortar retail stores. (http://r.reuters.com/mat97v)
* Blucora Inc is preparing an all-cash bid for Brookstone Inc that would challenge Spencer Sprit Holdings Inc's offer, which includes $120 million in cash and the assumption of Brookstone debt, among other things, according to people familiar with the matter. Spencer earlier offered to serve as the lead bidder at an auction for Brookstone, which is preparing to file for bankruptcy protection in the coming days. (http://r.reuters.com/pat97v)
* British entrepreneur Clive Cowdery plans to spend as much as $2 billion of investors' money in the United States over the next several years trying to replicate his success in scooping up life insurers in the UK. (http://r.reuters.com/tat97v)
* Jury selection is scheduled to begin Monday in the Securities and Exchange Commission's civil trial against entrepreneur Sam Wyly and his deceased brother, Charles. In a 78-page complaint filed in July 2010, the agency accused the Wylys of using a web of offshore trusts to conceal more than $750 million of stock sales in companies on whose boards they sat. (http://r.reuters.com/wat97v)
* In a renewed effort to lure a bigger share of the advertising dollars that now flow to major TV networks, YouTube has told marketers it will offer audience guarantees to advertisers that make advance commitments, according to people familiar with the matter. (http://r.reuters.com/zat97v)
* The U.S. Supreme Court is wading into a messy debate over when software deserves a patent - an issue that is important to big technology companies such as Microsoft Corp and Google Inc yet has so far flummoxed the federal judiciary. The high court will hear oral arguments Monday in an appeal brought by Alice Corp, whose patents on a computer program to reduce risk in financial transactions were ruled invalid by lower courts. (http://r.reuters.com/fet97v)
Outgoing chairman of Lloyds Banking Group, Sir Win Bischoff, calls for informal banking regulation opposed to the rule-book style of regulation followed by regulators.
UK's financial services sector is set to add up to 26,000 jobs in the year to June according to an industry survey by the CBI employers' group and PriceWaterHouseCoopers.
The Libyan Investment Authority has accused France's second-biggest bank Societe Generale of funnelling bribes worth tens of millions of dollars to associates of Saif al-Islam, the son of former Libyan leader Muammar Gaddafi.
Glencore Xstrata Plc has reached a preliminary deal for a $1 billion contract for access to railway and port facilities with Mauritania as part of its plans to expand into iron ore mining.
The London-listed telecom giant Vodafone has acquired an e-money licence to expand in Europe, with plans to launch M-Pesa in Romania, after the success of its mobile payment system in sub-Saharan Africa.
* Federal regulators decided not to open an inquiry on the ignitions of General Motors Co's Chevrolet Cobalts and other cars even after their own investigators reported in 2007 that they knew of four fatal crashes, 29 complaints and 14 other reports that showed the problem disabled air bags, according to a memo released by a House sub-committee on Sunday. (http://link.reuters.com/fat97v)
* China's Alibaba Group Holding Limited <IPO-ALIB.N>, one of the world's biggest e-commerce companies, said it would invest 5.37 billion Hong Kong dollars ($692.3 million), for a stake of as much as 35 percent in Intime Retail Group, which operates 36 department stores and shopping centers across China.(http://link.reuters.com/kat97v)
* Vince McMahon and his company, World Wrestling Entertainment, have positioned themselves on the cutting edge of Internet television with the WWE Network, a new subscription-only streaming video service. Shares of the WWE, a publicly traded company based in Stamford, Connecticut, have more than tripled over the last year with the introduction of the subscription network and takeover rumors. (http://link.reuters.com/nat97v)
* Officially, it's Apple Inc versus Samsung Electronics Co Ltd in another tech patent face-off in a San Jose courtroom this week. But there is another company with a lot at stake in the case - Google Inc. In a lawsuit, Apple is seeking about $2 billion in damages from Samsung for selling phones and tablets that Apple says violate five of its mobile software patents. Samsung, meanwhile, says Apple violated two of its patents. (http://link.reuters.com/sat97v)
* Some companies housed in specific low-income areas of San Francisco receive breaks on taxes if they perform tasks that help improve their neighborhoods. (http://link.reuters.com/jet97v)
* U.S. Secretary of State John Kerry and his Russian counterpart agreed on Sunday that a political solution was needed for Ukraine and said they planned to continue discussing ways to de-escalate the crisis over the country's future and Russia's annexation of Crimea. But neither side claimed a breakthrough, and Russia did not commit to pulling back the more than 40,000 troops the United States says are massed near Ukraine's border. (http://link.reuters.com/ket97v)
THE GLOBE AND MAIL
* Ontario Premier Kathleen Wynne is challenging Progressive Conservative Leader Tim Hudak to either back up his "false" and "defamatory" allegations that she oversaw the purging of government documents or face legal action. (http://r.reuters.com/jyt97v)
* Dimitri Soudas, Prime Minister Stephen Harper's choice as the Conservative Party's executive director, has been pushed out after four months on the job. The move that follows an uproar over a local nomination race involving the departed staffer's spouse. (http://r.reuters.com/qav97v)
Reports in the business section:
* Almost two-thirds of Canadian executives say the country is too dependent on resource industries such as mining, oil and gas and needs to become more diversified to inject better balance into the economy. (http://r.reuters.com/cyt97v)
* Sunshine Oilsands Ltd, largely backed by state-owned Chinese enterprises and Asian retail investors, faces 71 lawsuits seeking a total of $94-million for unpaid bills as the company struggles to raise the money it needs to restart development of its stalled northern Alberta project. (http://r.reuters.com/rav97v)
* Health Council of Canada issued a report saying the 2004 health care "fix for a generation" was nothing of the sort. On the contrary, it reported, the $41-billion deal negotiated between Paul Martin's Liberal government and the provinces raised expectations beyond reality and failed to keep pace with societal shifts - everything from aging to economics - and their impact on access to care. (http://r.reuters.com/xyt97v)
* Canada's largest medical regulator would bar doctors from accepting almost any gift from a pharmaceutical company under a proposed new ethics policy, part of a growing movement to reform the intimate and controversial relationship between industry and physicians. (http://r.reuters.com/zyt97v)
* Canadians could soon be warming up to an improving economy. Both Canada and the United States are coming out of severe winter storms that disrupted output, sales and hiring. The weather factor already accounted for weaker growth in both countries at the end of 2013, and the harsh climate limited activity in the first months of this year, as well, before the impact began to recede. Economists are already seeing that pattern emerging. (http://r.reuters.com/mav97v)
* Prime Minister Stephen Harper, fresh from a trip to Europe where he talked up Canada's energy export potential, is scheduled to meet Monday with a delegation from British Columbia headed by Premier Christy Clark for an update on liquefied natural gas plans on the West Coast. (http://r.reuters.com/pav97v)
CHINA SECURITIES JOURNAL
-- A study of 1,731 Chinese fund firms showed they made a collective profit of 168.7 billion yuan ($27.16 billion) in 2013, up 36.5 percent from a year earlier, according to data from TX Investment Consulting. Mixed funds showed strong growth, while debt-based and capital guarantee funds slipped.
SHANGHAI SECURITIES NEWS
-- The Chinese government's real estate policy has shifted focus from curbing the rapid rise in house prices to helping the poor buy homes, according to Xu Shanda, former deputy head of China's tax bureau.
-- Baoshan Iron & Steel Co Ltd has launched a stock incentive plan that will award 47.5 million shares to its managers and some employees, part of a wider reform of China's state-owned enterprises.
-- The biggest non-life insurance joint venture in China - between French insurer Axa SA and China's Tian Ping Auto Insurance - officially opened for business on Monday.
-- China's government is seeking measures to tackle a rising divorce rate. The country sees nearly 10,000 marriages break up every day, according to the social affairs unit at the Ministry of Civil Affairs. More than 3 million people sought divorce in 2012, a 133 percent increased against 2003.
-- China's big five banks posted a combined net profit of 862.8 billion yuan ($138.89 billion) in 2013, an average yearly growth rate of 11 percent, analysts told the paper. Profit growth at the five banks is likely to slow to under 10 percent this year, they added.
INSURERS URGE OSBORNE TO REBUKE HEAD OF REGULATOR
The Chancellor is under pressure to carpet Martin Wheatley, the boss of the Financial Conduct Authority as it launches a review today of 30 million insurance policies and their potential "unfairness".
INVESTOR GIANT WARNS BANKS ON PAY ARRANGEMENTS AHEAD OF EU BONUS CAP
The Association of British Insurers is to issue an "amber top" alert ahead of the annual meetings of Britain's biggest banks warning its members to examine closely the new pay arrangements put in place by the lenders.
WONGA CHAIRMAN TO STEP DOWN AS FCA PREPARES TO REIN IN PAYDAY LENDERS
The multi-millionaire figurehead of the controversial payday lending industry is to stand down from his job as chairman of Wonga as a new City regulator prepares to impose tougher rules.
NETWORK RAIL FAILS TO MEET PUNCTUALITY TARGETS AND FACES A RECORD 70 MLN STG FINE
Network Rail has admitted it has failed to meet its punctuality targets, as it braces for a record fine of up to 70 million pounds.
ROYAL MAIL FACING BACKLASH OVER "LOST £1 BLN" FROM SELL-OFF
The National Audit Office will publish this week its findings on last autumn's £3.3 billion sell-off by the Government. Ministers, investment bankers and senior civil servants are bracing themselves for government auditors' verdict on the flotation of Royal Mail, which appears to have lost taxpayers in excess of £1 billion.
FEARS RAISED OVER "DEAL" FOR HOUSE OF FRASER
A potential buyout of House of Fraser by a Chinese conglomerate has raised concerns that shareholders are not getting the best of a deal brokered by the company's chairman.
UNDER-FIRE FCA SEEKS BUDGET HIKE FROM CITY
The City regulator will set out plans for an inflation-busting increase in its budget this week, just days after sparking fury from insurers over the launch of a probe into some industry practices.
RBS RAIDS SWISS GIANT FOR NEW FINANCE CHIEF
The taxpayer-backed Royal Bank of Scotland is close to luring one of the architects of its 45.5 billion pounds taxpayer bail-out to become its new finance chief. Ewen Stevenson, who works for Credit Suisse, is in advanced negotiations about joining RBS at a critical time for the bank
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled today include:
Chicago PMI business barometer index for March at 9:45--consensus 59.0
Affiliated Managers (AMG) upgraded to Buy from Neutral at Citigroup
Banco Santander (SAN) upgraded to Hold from Sell at Deutsche Bank
Big Lots (BIG) upgraded to Buy from Hold at KeyBanc
Builders FirstSource (BLDR) upgraded to Buy from Hold at Deutsche Bank
C.H. Robinson (CHRW) upgraded to Market Perform from Underperform at FBR Capital
DTE Energy (DTE) upgraded to Buy from Hold at KeyBanc
Delhaize (DEG) upgraded to Overweight from Neutral at JPMorgan
Echo Global (ECHO) upgraded to Outperform from Market Perform at FBR Capital
Edison International (EIX) upgraded to Buy from Neutral at UBS
Heartland Express (HTLD) upgraded to Buy from Neutral at Longbow
ING U.S. (VOYA) upgraded to Buy from Neutral at Goldman
Knight Transportation (KNX) upgraded to Buy from Neutral at Longbow
Medley Capital (MCC) upgraded to Outperform from Neutral at Credit Suisse
Men's Wearhouse (MW) upgraded to Buy from Neutral at Mizuho
SINA (SINA) upgraded to Outperform from Sector Perform at Pacific Crest
Travelers (TRV) upgraded to Neutral from Sell at Guggenheim
Vipshop (VIPS) upgraded to Buy from Neutral at Goldman
BlackBerry (BBRY) downgraded to Underperform from Neutral at Credit Suisse
BlackBerry (BBRY) downgraded to Underweight from Equal Weight at Evercore
CNOOC (CEO) downgraded to Neutral from Buy at UBS
Mack-Cali Realty (CLI) downgraded to Underweight from Equalweight at Barclays
MagnaChip (MX) downgraded to Sell from Neutral at UBS
MannKind (MNKD) downgraded to Underweight from Neutral at Piper Jaffray
Medley Capital (MCC) downgraded to Market Perform from Outperform at Wells Fargo
PGT, Inc. (PGTI) downgraded to Hold from Buy at Deutsche Bank
RenaissanceRe (RNR) downgraded to Underperform from Neutral at BofA/Merrill
American Eagle Energy (AMZG) initiated with a Buy at Canaccord
FBR & Co. (FBRC) initiated with an Outperform at Barrington
KapStone (KS) initiated with an Overweight at Barclays
MercadoLibre (MELI) initiated with a Sell at Citigroup
ONEOK Partners (OKS) initiated with a Neutral at UBS
ONEOK (OKE) initiated with a Neutral at UBS
Targa Resources Partners (NGLS) initiated with a Buy at UBS
Targa Resources (TRGP) initiated with a Neutral at UBS
TriplePoint Venture (tpvg) initiated with a Neutral at Credit Suisse
William Lyon Homes (WLH) reinstated with a Neutral at Credit Suisse
Medtronic (MDT) said it will discontinue SYMPLICITY HTN-4 trial, said further clinical investigation on SYMPLICITY HTN-3 is warranted
Medtronic's (MDT) said CoreValve shows superior results to surgical valve replacement
Trustwave disputed plaintiffs' allegations related to Target (TGT) data breach
Turkish court overturned ruling that restricts viewing of Twitter (TWTR) account
Third Point urged Sotheby's (BID) stockholders to vote for Third Point board nominees
Novartis (NVS) said its PARADIGM-HF trial of LCZ696 met efficacy, primary endpoints
Sally Beauty (SBH) said security breach may have affected more than earlier estimated
Companies that beat consensus earnings expectations last night and today include:
Cal-Maine Foods (CALM)
Companies that missed consensus earnings expectations include:
UTi Worldwide (UTIW), InterOil (IOC), Century Casinos (CNTY)
Citigroup (C) could reach close to $60 by FY15, Barron's says
VeriFone (PAY) could rally another 15%, Barron's reports
Coca-Cola's (KO) management underperforms, Barron's says
Exact Sciences (EXAS) could rise 50%, Barron's says
Tesla's (TSLA) Gigafactory looks too ambitious, Barron's reports
Swiss regulator probing banks (UBS, CS, JPM, JBAXY, BCS, C, RBS) on possible forex manipulation, WSJ reports
Citigroup's (C) stress test hit by audit lapses, FT reports
Delphi (DLPH) says GM (GM) approved ignition switches below specifications, Reuters reports
Libya fund accuses Societe Generale (SCGLY) of paying $58M in bribes, WSJ reports
RBS (RBS) close to appointing Credit Suisse (CS) banker as its next CFO, WSJ says
General Motors (GM) adds 971,000 vehicles to global recall, Bloomberg says
Deutsche Bank (DB) considering forgoing China General Nuclear Power Group's IPO amid China probes, Bloomberg reports
Aeterna Zentaris (AEZS) files to sell $50M of common stock 'at-the-market'
GasLog (GLOG) files to sell 39.46M shares of common stock for holders
HD Supply (HDS) files to sell 30M shares of common stock for holders
Houghton Mifflin (HMHC) files to sell 114.44M shares for holders
Pzena Investment (PZN) files to sell 39.14M shares of Class A common stock for holders
Triangle Petroleum (TPLM) files to sell 40.04M shares for holders
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