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Frontrunning: May 19

Tyler Durden's picture




 
  • Qatar Bank: Deutsche Bank to raise $11 bln with help from Qatar (Reuters)
  • AstraZeneca rejects Pfizer's take-it-or-leave-it offer (Reuters)
  • China Home-Price Growth Slowdown Spreads as Sellers Discount (BBG)
  • The new face of NSA: Mike Rogers (Reuters)
  • Putin orders troops near Ukraine to return home (AP)
  • Wall of Worry Rebuilt as Nasdaq Rout Sends Cash to High (Nasdaq)
  • Bank of England's Mark Carney highlights housing market's risk to UK economy (Guardian)
  • Greek Selloff Shows Rush for Exit Recalling Crisis (BBG)
  • Anti-austerity Greek radicals ahead in Athens local election (AFP)
  • German Economy Will Grow at Slower Tempo, Says Bundesbank  (WSJ)
  • China, Europe drag world stocks lower; dollar slips (Reuters)
  • In Taking Crimea, Putin Gains a Sea of Fuel Reserves (NYT)
  • Gunmen loyal to ex-general storm Libyan parliament, demand suspension (Reuters)

Overnight Media Digest

WSJ

* AT&T Inc agreed to acquire DirecTV for $49 billion, a deal that would make it a major player in pay television and increase its clout with media companies at a time when video consumption is moving online. (http://r.reuters.com/jen49v)

* Citigroup Inc last year quietly ousted two top executives at its Banamex USA unit after regulators raised concerns about that bank's oversight of money transfers across the U.S.-Mexico border, according to people familiar with the matter. (http://r.reuters.com/men49v)

* Deutsche Bank AG plans to sell 8 billion euros ($10.96 billion) of new shares in a bid to quell concerns about its capital buffers in a challenging business and regulatory environment. (http://r.reuters.com/ten49v)

* Pfizer Inc said it made a final offer for AstraZeneca PLC valued at about $120 billion, after the British pharmaceutical company rebuffed its latest effort to enter takeover talks. New York-based Pfizer said its new offer increases the cash component of the proposed deal to 45 percent of the total price and values AstraZeneca shares at 55 pounds each. (http://r.reuters.com/cun49v)

* Google Inc is in talks about a possible acquisition of Twitch, a fast-growing, live-video-streaming service, according to two people familiar with the matter. The talks are at an early stage, and a deal is not imminent, the people said. (http://r.reuters.com/mun49v)

 

FT

U.S. drugmaker Pfizer said on Sunday it had raised its offer for AstraZeneca to 69 billion pounds ($116.12 billion), and vowed to would walk away if the British rival did not accept it.

Frankfurt-based Deutsche Bank launched plans to raise 8 billion euros ($11 billion) in new capital with the Qatari royal family a major new investor, in a bid by Germany's largest bank to end questions about its capital strength.

BT Group Plc plans to hire 1,600 engineers for installations and repair of its fibre networks across Britain in a bid to adhere to stricter targets for telephone and broadband lines.

Royal Bank of Scotland said on Sunday it is winding down its interest-rate trading business as capital and operating costs increase.

Swiss voters on Sunday rejected proposals to introduce the world's highest minimum wage, bringing relief to business leaders worried the measure would have hurt competitiveness and damaged the Swiss workplace. ($1 = 0.5942 British Pounds)

 

NYT

* AT&T Corp agreed on Sunday to buy satellite television operator DirecTV for $48.5 billion, trying to tilt the balance of power with media companies as the market for broadband internet and video shifts. With the acquisition, AT&T becomes the latest telecommunications giant seeking to establish an even greater reach. (http://r.reuters.com/qen49v)

* BlackBerry Ltd's partnership with Foxconn Technology Group, a major manufacturer of Apple Inc's iPhones and iPads, comes at a critical time for the Canadian firm. Although sales of the company's devices have plummeted globally in recent years, the revenue from the phone business remains vital as John Chen, BlackBerry's chief executive, tries to shift the organization's focus to services and software. (http://r.reuters.com/maq49v)

* Pfizer Inc has again raised its offer for AstraZeneca PLC, making what it said was a final effort to bring the giant British drug maker to the negotiating table. The latest offer, made Sunday evening, is worth about $119 billion. It comes after AstraZeneca's rejection of several private and public offers from Pfizer. (http://r.reuters.com/wen49v)

* Blackstone Group LP has agreed to sell five office properties in the Boston area for $2.1 billion, disposing of part of a sprawling real estate portfolio it bought before the financial crisis, a person briefed on the matter said on Sunday. (http://r.reuters.com/zen49v)

* Deutsche Bank, the largest German bank, said on Sunday that it would raise roughly $11 billion in new capital from existing shareholders and the royal family of Qatar, responding to regulatory pressure on banks to reduce risk. (http://r.reuters.com/dun49v)

 

Canada

THE GLOBE AND MAIL

* As work proceeded over the weekend to repair the costly, crumbling Champlain Bridge in Montreal, a vital commercial and commuter link, the politically radioactive issue of tolls to pay the replacement bill is expected to figure prominently in Quebec, leading into the next federal election in 2015. (http://r.reuters.com/jep49v)

* Britain's Prince Charles arrived in Nova Scotia with his wife, Camilla, for the beginning of a four-day tour on Sunday, and was promptly sworn into the Queen's Privy Council of Canada by the governor-general in a private ceremony at Government House in Halifax. (http://r.reuters.com/vep49v)

Reports in the business section:

* On Tuesday, Air Canada will launch a new marketing campaign and a major repositioning of the company's brand image. The goal: to increase the carrier's presence on the world stage, and accelerate its strategy of becoming a global player in air travel. (http://r.reuters.com/xep49v)

NATIONAL POST

* An internal Royal Canadian Mounted Police study found 322 incidents of corruption within the national police force over an 11-year period, including a dozen examples involving organized crime. (http://r.reuters.com/dup49v)

* The mountains of British Columbia cradle glaciers have scored the landscape over millennia, shaping the rugged West Coast. But they are in rapid retreat, and an American state-of-the-union report on climate change has singled out the rapid melt in British Columbia and Alaska as a major climate change issue. (http://r.reuters.com/fup49v)

FINANCIAL POST

* Early-stage financing is crucial for fostering innovative ventures and finding the next billion-dollar company. However, in Canada, nearly three-quarters of entrepreneurs say they struggle to find financing, a recent survey found. (http://r.reuters.com/pup49v)

 

Hong Kong

SOUTH CHINA MORNING POST

-- Beijing has imposed a surprise roadblock to financial reform by foreshadowing severe restrictions on international accountants, including those from Hong Kong, when auditing mainland companies listing overseas, increasing investor concern over whether their books are clean. (link.reuters.com/bym49v)

-- China Rongsheng Heavy Industries Group Holdings , one of the biggest shipbuilders in the country, signed a $1 billion contract with a European shipowner to build up to 36 bulk carriers within the next three years, thanks in part to a strong global shipping market. (link.reuters.com/cym49v)

-- Mainland banks, under rising pressure to protect their net interest margin, will be less than keen about heeding the central bank's call last week for speedy and cheaper mortgage loans, indicating more policy relaxation or deeper cuts in home prices are needed to curb the downward spiral in the property market. (link.reuters.com/fym49v)

THE STANDARD

-- Conservationists are calling on the MTR Corp to suspend construction of the Sha Tin-Central rail link after more ancient relics were found along the planned route in Kowloon City. (link.reuters.com/gym49v)

-- Last week's move to adjust the Double Stamp Duty failed to breathe new life into Hong Kong property market as the number of home sales done over the weekend did not change much from a week ago. (link.reuters.com/hym49v)

-- Pork prices in the mainland may have hit bottom and now are rebounding after officials met representatives of leading suppliers China Yurun Food parent Yurun Group and China Agri-ndustries' parent COFCO Group. (link.reuters.com/jym49v)

HONG KONG ECONOMIC JOURNAL

-- CGM Ming Co Ltd said it buy the entire Beijing Sino-Kazakh for $133 million. Beijing Sino-Kazakh holds a 49 percent partnership interest in Semizbay-U which is involved in mining and extraction of natural uranium in the Republic of Kazakhstan.

HONG KONG ECONOMIC TIMES

-- Gold miner Hengxing Gold Holding Co Ltd is set to raise about HK$460 million ($59.34 million) in an initial public offering in Hong Kong, with dealing in shares expected to begin on May 29.

Britain

The Telegraph

HEATHROW NOISE COMPLAINERS BEING 'FUSSY' CLAIMS BOARD MEMBER

(http://link.reuters.com/wem49v)

Qatar Airways chief executive Akbar Al Baker, who is also on the board of Heathrow, has said that European airports should open 24 hours a day if they want to compete with the emerging Gulf hubs in Dubai and Doha.

CO-OP CHIEF WARNS IT WILL TAKE FIVE YEARS TO STEADY THE MUTUAL

(http://link.reuters.com/xem49v)

The head of the troubled Co-operative Group has warned that it will take five years to stabilise the mutual even after members voted unanimously to support wholesale reform of its failed governance structure.

The Guardian

BT TO HIRE 1,600 STAFF AMID INTERNET CONNECTIONS CRITICISM

(http://link.reuters.com/zem49v)

BT Group Plc is hiring 1,600 engineers amid criticism from regulators over the speed at which new internet connections are installed and faults are repaired.

GLENCOREXSTRATA FACES QUESTIONS OVER DEALS MADE WITH FRIEND OF DRC LEADER

(http://link.reuters.com/cum49v)

Glencore Xstrata Plc, the world's largest commodities trader, enriched a friend of the Democratic Republic of the Congo's president by tens of millions of dollars while also giving him loans in excess of $500m (£298m), a report has claimed.

The Times

HSBC FINDS POLITICAL UNEXPLODED BOMB IN LONDON BRANCH

(http://link.reuters.com/dum49v)

Staff and customers at HSBC's Victoria Street London branch are expected to be told within days that it is being closed, as HSBC rushes to prevent a potentially explosive row with American regulators and jeopardising a landmark $1.9 billion (1.13 billion pounds) deferred prosecution deal agreed two years ago.

BRITAIN'S TOP RETAIL PROPERTY GROUPS EYE UP BLUEWATER STAKE

(http://link.reuters.com/fum49v)

Land Securities, British Land in partnership with Norges Bank, the sovereign wealth fund of Norway, Hammerson and Westfield Group, of Australia, are understood to be the final bidders to buy a stake in Bluewater Shopping Centre in Kent for about 600 million pound.

Sky News

CARNEY AGREES TO HELP TO HEAL BANKERS' IMAGE

(http://link.reuters.com/gum49v)

Mark Carney has agreed to chair a selection panel that will be responsible for identifying the inaugural chairman of the organisation, which insiders said would be called the Banking Standards Review Council (BSRC).

BRITAIN'S RICHEST 1,000 PEOPLE NOW WORTH 519 BLN STG

(http://link.reuters.com/hum49v)

The 1,000 richest people in Britain saw their wealth rise 15 percent last year to 519 billion pounds ($873.44 billion), latest figures have revealed. The Sunday Times' annual Rich List suggests the most well-off Britons now own the equivalent of a third of the country's gross domestic product (GDP).

 

 

Fly on The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS
No major domestic economic reports scheduled today.

ANALYST RESEARCH

Upgrades

Abbott (ABT) upgraded to Outperform from Neutral at Credit Suisse
Altera (ALTR) upgraded to Outperform from Sector Perform at RBC Capital
Beacon Roofing (BECN) upgraded to Buy from Neutral at Longbow
Broadcom (BRCM) upgraded to Outperform from Sector Perform at RBC Capital
Energy XXI (EXXI) upgraded to Strong Buy from Outperform at Raymond James
Fossil (FOSL) upgraded to Hold from Sell at Brean Capital
Frank's International (FI) upgraded to Buy from Neutral at Guggenheim
Fulton Financial (FULT) upgraded to Outperform from Market Perform at Keefe Bruyette
Gogo (GOGO) upgraded to Buy from Neutral at UBS
Legacy Reserves (LGCY) upgraded to Buy from Neutral at UBS
Matson (MATX) upgraded to Outperform from Market Perform at FBR Capital
Micron (MU) upgraded to Outperform from Sector Perform at RBC Capital
NVIDIA (NVDA) upgraded to Outperform from Sector Perform at RBC Capital
Reynolds American (RAI) upgraded to Outperform from Market Perform at Wells Fargo
Texas Instruments (TXN) upgraded to Outperform from Sector Perform at RBC Capital

Downgrades

ATK (ATK) downgraded to Neutral from Buy at Goldman
Altria Group (MO) downgraded to Market Perform from Outperform at Wells Fargo
American Realty (ARCP) downgraded to Neutral from Outperform at RW Baird
AstraZeneca (AZN) downgraded to Market Perform from Outperform at Leerink
CenturyLink (CTL) downgraded to Equal Weight from Overweight at Morgan Stanley
Ensco (ESV) downgraded to Hold from Buy at Jefferies
Genworth (GNW) downgraded to Underweight from Equal Weight at Morgan Stanley
Thermon Group (THR) downgraded to Hold from Buy at KeyBanc

Initiations

Deckers Outdoor (DECK) initiated with a Buy at Citigroup
Hi-Crush Partners (HCLP) initiated with a Buy at BofA/Merrill
LeMaitre (LMAT) initiated with a Buy at Brean Capital
Sabra Health Care (SBRA) initiated with a Neutral at BofA/Merrill
Sabra Health Care (SBRA) initiated with a Neutral at BofA/Merrill
Skechers (SKX) initiated with a Buy at Citigroup

COMPANY NEWS

AT&T (T) announced it will acquire DirecTV (DTV) in a stock-and-cash transaction for $95 per share
AT&T (T) will divest América Móvil (AMX) stake to aid in Latin America regulatory process (DTV)
AstraZeneca (AZN) rejected final takeover proposal from Pfizer (PFE), which was comprised of GBP24.76 in cash and 1.747 Pfizer shares per AstraZeneca share
Deutsche Bank (DB) announced a EUR8B capital raise, Qatar takes stake. The capital measures will increase the Common Equity Tier 1 ratio by approximately 230bps from 9.5% at the end of Q1 to 11.8% on a pro forma CRD4 fully-loaded basis
Johnson Controls (JCI) said it will create an automotive-interiors business JV with China partner
Google (GOOG) acquired Quest Visual, the company behind Word Lens

EARNINGS

AT&T (T) now sees FY14 EPS growth at low end of mid-single digit guidance
Avista (AVA) confirmed FY14 earnings guidance

NEWSPAPERS/WEBSITES

AT&T (T) will not have to pay break-up fee if DirecTV (DTV) deal fails, Reuters reports
Google's (GOOG) YouTube to acquire Twitch for $1B in cash, Variety says
Apple (AAPL), Google (GOOG) settle litigation over smartphone patents, Bloomberg reports
Facebook (FB) working on video app called Slingshot to go head-to-head with Snapchat, FT reports
Siemens (SI) could announce formal Alstom (ALSMY) offer this week, Reuters says (GE)
KKR (KKR) in advanced talks to buy Goodpack for at least $1B, WSJ reports
Cisco (CSCO) CEO sends Obama letter expressing concerns of NSA activity, Re/code says
Investors should show caution with Cisco's (CSCO) rebound, Barron's says
Pitney Bowes (PBI) could jump 60% in three years, Barron's says
Avon Products (AVP) shares look compelling, Barron's says
TD Ameritrade (AMTD) shares could rise 35%, Barron's says
Triumph Group (TGI) looks good, Barron's says

SYNDICATE

ARAMARK (ARMK) files to sell 20M shares of common stock for holders
Emerald Oil (EOX) files to sell 12.99M shares of common stock for holders
KKR (KKR) files to sell 5M common units representing limited partners
Kona Grill (KONA) files to sell 2.3M shares of common stock
Marrone Bio (MBII) files to sell $35M of common stock
Monmouth Real Estate (MNR) files to sell 7M shares of common stock

 

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Mon, 05/19/2014 - 07:36 | 4773004 firstdivision
firstdivision's picture

Someone is on a commodity buying spree this morning.

Mon, 05/19/2014 - 07:57 | 4773018 Headbanger
Headbanger's picture

Yeah, that's to be expected when a major war is looming.

Expect to see oil rip above $150/bbl soon with all this military tension.

Mon, 05/19/2014 - 07:40 | 4773007 ThisIsBob
ThisIsBob's picture

I see that China is moving troops to the border with Viet Nam.  Will the US, NATO and the EU throw another hissy fit?  I doubt it.

Mon, 05/19/2014 - 07:54 | 4773014 Headbanger
Headbanger's picture

Wonder what's going on now with the Chinese troops who were occupying territory disputed  by India maybe a year ago?

Mon, 05/19/2014 - 07:56 | 4773015 Urban Redneck
Urban Redneck's picture

CBGA was renewed/extended another 5 years.

Mon, 05/19/2014 - 08:01 | 4773020 gatorengineer
gatorengineer's picture

-- China Rongsheng Heavy Industries Group Holdings , one of the biggest shipbuilders in the country, signed a $1 billion contract with a European shipowner to build up to 36 bulk carriers within the next three years, thanks in part to a strong global shipping market. (link.reuters.com/cym49v)

 

Struggling reconciling that with this

 

http://www.dryships.com/pages/report.asp

Mon, 05/19/2014 - 11:12 | 4773701 Apply Force
Apply Force's picture

Maybe they are building arks.  Would seem to make more sense.

Mon, 05/19/2014 - 15:43 | 4774806 Mi Naem
Mi Naem's picture

Won't be another flood. 

The next one includes fire. 

Mon, 05/19/2014 - 08:19 | 4773063 Mi Naem
Mi Naem's picture

Monday morning comedy from the Reuters NSA link above (The new face of NSA: Mike Rogers (Reuters)):

"A POWERFUL MESSAGE

 Rogers faces big challenges. Morale among the NSA's tens of thousands of employees has taken a hit, and Rogers said many people in the agency found it both uncomfortable and perplexing to be under public scrutiny."

As they used to say on Seinfeld: ohw, that's a shame. 

Mon, 05/19/2014 - 10:13 | 4773418 Pee Wee
Pee Wee's picture

Tell the tens of thousands to go fuck themselves!! Those that feel "uncomfortable" after being totally derelict in their duties, and in the case of military employees, TREASON, can leave.

However, as an employer, tell them I won't hire them if ANY "intelligence" letters show up on a resume or application.  You unpatriotic fucks deserve the grave, not employment.

Go cry to mama Fascism lead by the unConstitutional you stupid fucks.  Quitting may save your lives.

Mon, 05/19/2014 - 08:25 | 4773081 NoWayJose
NoWayJose's picture

Nice to see a terrorist friendly state like Qatar buy into Deutsche Bank who is then using the money to expand into the United States. This will help with the ability of the CIA to channel money to the terrorists, it will make it even easier for DB to tap into free Fed money, and it will help laundering dirty Qatar money into clean money. A win for all?

Mon, 05/19/2014 - 08:34 | 4773099 Musashi Miyamoto
Musashi Miyamoto's picture

basically an advance in digital currency technology and cryptography using zk-SNARK (zero-knowledge succinct Non-interactive Arguments of Knowledge) to create a system enabling completely anonymous transactions. (unlike the current implementation of bitcoin which is clears all transactions on a public ledger)

Mon, 05/19/2014 - 10:36 | 4773386 Pee Wee
Pee Wee's picture
Admiral Rogers = Lipstick on a pig.

If anyone in the Fascist States of Corporate Welfare actually gave a pittance whatsoever about abolishing this nations totalitarian police surveillance state they could do the blatantly obvious, simple and just.  Get rid of the pig.

They won't because that would be the right thing to do.   Instead we ignore the obvious while states posture towards succession while yet another military "commander" can milk his pension and protect the status quo.  A REAL leader would recognize this instantly AND DO IT, not just talk about some nostalgic moment of youth.

Rogers is just another has-been, did-nothing in advance, fraud.   Unless a real leader shows up with an axe to the agencies head they are nothing but bullshit and new.  Book it, "no one can see it coming."

The ONLY way to deal with the NSA/CIA and who-knows what else is to burn them to the ground, not cowardly shuffle the deck into other agencies (like the war on terror), or change the name.   Doing so would reveal the truth which is "intelligence" is the root of corruption and Fascism itself in USA Gov Inc.   Has Goldman Sachs' NSA data center in UT been unplugged?  FUCK NO.

Every person touching this pig without an axe is in on the racket and will only protect it, the hell if they actually do something patriotic or Constitutional.  An actual leader would show up to work with the axe.  Rogers has some encouragment and zero else.

FUCK THE NSA AND FUCK EVERY TRAITOR IN IT FROM BRASS TO ASS.

Mon, 05/19/2014 - 11:30 | 4773773 no more banksters
no more banksters's picture

More info that automatization is about to replace nearly every human activity

http://failedevolution.blogspot.gr/2014/05/more-info-that-automatization...

Do NOT follow this link or you will be banned from the site!