Frontrunning: May 20
- "May?" New Cold War May Emerge in Ukraine Crisis, Medvedev Says (BBG)
- Wristslaps will be fast and furious: EU Commission charges HSBC, JPMorgan, Credit Agricole with rigging (Reuters)
- Credit Suisse Rises as U.S. Guilty Plea Ends 3-Year Probe (BBG)
- After Martial Law Declaration, Thailand Waits for General's Next Move (WSJ)
- China property slowdown spells trouble for Asia bonds (FT)
- Russia Close to $400 Billion Gas Pipeline Deal in Pivot to China (BBG)
- Dimon-by-the-Sea Shows London Banking’s Engine of Growth (BBG)
- Modi Faces Greece-Sized Snag to Economic Revival (FT)
- U.K. Inflation Accelerates on Airfare Surge (BBG)
- Prosecutors Announce Charges Against Makers, Users of Blackshades Software (WSJ)
- Prices rising faster than wages again, ONS to warn (Telegraph)
- ECB Said to Weigh Fed-Style Meeting Schedule on Policy (BBG)
Overnight Media Digest
* Credit Suisse Group AG became the first financial institution in more than a decade to plead guilty to a crime Monday when the Swiss bank admitted it conspired to aid tax evasion and agreed to pay $2.6 billion to settle a long-running probe by the U.S. Justice Department.(http://r.reuters.com/kut49v)
* Federal prosecutors in New York on Monday announced charges against the creators of software called Blackshades that hackers around the world allegedly used to hijack hundreds of thousands of computers, allowing them to spy on victims through computer webcams and steal financial information. (http://r.reuters.com/nut49v)
* U.K.-based defense products maker Cobham PLC has reached a deal to buy Aeroflex Holding Corp, according to people familiar with the matter. Cobham has agreed to pay $10.50 a share in cash, said the people, or about $900 million. The price represents a 26 percent premium to where Aeroflex's shares closed on Monday. (http://r.reuters.com/put49v)
* Activist investor William Ackman sent an open letter Monday to Allergan Inc's board, claiming that the group failed in its duties when it rejected an unsolicited takeover bid from fellow pharmaceutical company Valeant Pharmaceuticals International Inc. (http://r.reuters.com/rut49v)
* Cisco Systems Inc unveiled two special-purpose desktop computers for videoconferencing, along with a new service enabling users of different devices and services to connect for online meetings. (http://r.reuters.com/sut49v)
* Chipotle Mexican Grill Inc is asking customers not to bring guns into stores after gun-rights activists carried rifles in one of its restaurants, making it the latest big consumer name to be drawn into the debate over firearms. (http://r.reuters.com/vut49v)
* Billionaire Donald Bren's Irvine Co has reached a deal to buy a 60-story Chicago tower for $850 million in what would be the city's highest price ever paid a square foot for an office building. (http://r.reuters.com/wut49v)
Europe banks are expected to face a clampdown on debt sales as regulators fear investors not aware of hazards of buying debt that is not protected by deposit guarantee schemes.
AstraZeneca Plc shareholders have been split on the company's rejection of Pfizer's final offer of 55 pounds a share, with some arguing that the management has betrayed its shareholders while others praising the board for believing in long-term prospects.
British insurer RSA Insurance Group Plc said on Monday it had reached agreement to sell its majority-owned Canadian brokerage business - Noraxis Capital Corp - to U.S. insurance brokerage Arthur J. Gallagher & Co for C$500 million ($460.60 million).
The London Stock Exchange Group Plc has emerged as the preferred bidder for asset management group Russell Investments according to people familiar with the discussions.
Mitie has won an eight-year contract to run immigration centres near Heathrow for the Home Office, making the FTSE-250 outsourcer responsible for a third of Ministry of Justice's immigration estate.
* As part of a deal announced on Monday, Credit Suisse met the demands of federal prosecutors, agreeing to one count of conspiring to aid tax evasion in a scheme that "spanned decades." Credit Suisse, which has a giant investment bank in New York and whose chief executive is an American, will also pay about $2.6 billion in penalties and hire an independent monitor for up to two years. (http://r.reuters.com/cut49v)
* Opponents of the consolidation in the telecommunications industry - including on Capitol Hill - latched onto the AT&T Inc and DirecTV deal, arguing that such rapid merging in the markets for cable television, high-speed Internet and telephone service should lead regulators to hit the brakes on all such deals. But while both sides declared that the latest deal helped their cause, antitrust experts said the truth was more murky. (http://r.reuters.com/qut49v)
* General Motors Co on Monday hired one of its former executives to manage public relations and help steer it through a safety crisis linked to 13 deaths. GM said that Tony Cervone, who spent a decade with the automaker before leaving in 2009 and who has worked with its current chief executive, Mary Barra, will join the company immediately as its senior vice president for global communications. (http://r.reuters.com/gut49v)
* The Obama administration's first transportation secretary is joining Meridiam, an investment concern focused on public infrastructure projects, the firm plans to announce on Tuesday. Meridiam is expected to say that it has hired the former cabinet official, Ray LaHood, as a senior adviser to the firm's North American operations. (http://r.reuters.com/hut49v)
* Target Corp's former chief executive received $13 million in compensation in his last year at the company's helm, down from $20 million the year before, according to regulatory documents filed on Monday. The company's filings indicated that the significant reduction in Gregg Steinhafel's pay package resulted from shareholders' complaints that Steinhafel made too much money relative to the company's performance. (http://r.reuters.com/tut49v)
CHINA SECURITIES JOURNAL
- China will embrace international cooperation in energy, with an improvement in supply capability and development in the downstream industries including pipeline construction, oil-gas storage and product sales to be expected, analysts said. The development follows the news that Russian President Vladimir Putin hopes to sign a multi-billion dollar gas agreement with China during a two-day visit that kicks off on Tuesday .
- The ongoing ownership reform of China's state-owned enterprises (SOEs) should not serve as a means for SOEs to offload bad assets, but as a way to attract profitable investment from private capital, an editorial said.
SHANGHAI SECURITIES NEWS
- China is going to systematically push forward its capital market reform process to achieve the long-term effect of reform, said chief securities regulator Xiao Gang.
- China has moved forward on upgrading its "third board" over-the-counter market by implementing a trade settlement system.
- The Shanghai Shipping Insurance Association has been granted permission by the China Insurance Regulatory Commission (CIRC) to be treated as an industry association instead of an individual company.
- China's army purchased more than 1,000 domestically manufactured Hongqi (Red Flag) H7 cars, following instructions issued by the military - approved by Xi Jinping and the Central Military Commission - in January that said the armed forces were required to buy domestic auto brands as part of the nationwide drive to cut waste.
- Shanghai will accelerate economic restructuring, deepen reforms and encourage innovation to sustain the city's status as a leader in China's growth and development, Shanghai Vice Mayor Tu Guangshao told a media briefing ahead of the Asian summit.
PRICES RISING FASTER THAN WAGES AGAIN, ONS TO WARN
Prices are rising faster than wages again, official figures could show on Tuesday, days after Mark Carney, the Bank of England governor, said that the cost of living crisis was over.
BANKING STANDARDS BODY TO BE SET UP
Sir Richard Lambert, who was asked to set up the Banking Standards Review Council (BSRC) by the chairmen of Britain's biggest banks, said the body would be a champion for better banking standards in the UK, even though it would not have powers to punish banks or individuals.
NEW RBS FINANCE DIRECTOR RECEIVES NEARLY 2 MLN STG IN SHARES ON FIRST DAY IN JOB
Royal Bank of Scotland has handed its new finance director, Ewen Stevenson, almost 2 million pounds in shares on his first day in the job at the bailed out bank.
CO-OP'S LONGEST-STANDING DIRECTOR RESIGNS AFTER REFORM VOTE
The Co-operative Group is facing further boardroom upheaval after the resignation of its longest-standing director, Ben Reid.
BORIS ATTACKS "UNTOLD MISERY" OF HEATHROW OPEN 24/7
A proposal to run Heathrow 24 hours a day would inflict "untold misery on more than a million" people, mayor of London Boris Johnson said.
SIX YEARS IN THE MAKING, NOW HBOS REPORT FACES FURTHER DELAY
The long-awaited report into the collapse of HBOS has been delayed again, with officials now resigned to publication not taking place before next year at the earliest, more than six years after the bank's costly demise.
LET MARKET DECIDE BIDS' FATE, WOODFORD URGES
Politicians should leave the fate of corporate takeover bids to boards and shareholders, a leading City fund manager Neil Woodford said on Monday as he backed AstraZeneca's rejection of Pfizer's 69.3 billion pound offer.
DALLAS-BASED HEDGE FUND BUYS CO-OP BANK STAKE
A Dallas-based hedge fund boss has snapped up a stake in the struggling Co-operative Bank. Hayman Capital Management is understood to be one of a group of City and Wall Street investors which were assigned shares in the Co-op Bank as part of a 400 million pound fundraising.
Fly On The Wall 7:00 AM Market Snapshot
No major domestic economic reports scheduled today.
Abraxas Petroleum (AXAS) upgraded to Buy from Hold at Canaccord
Acxiom (ACXM) upgraded to Outperform from Market Perform at Wells Fargo
Carnival (CCL) upgraded to Equal Weight from Underweight at Morgan Stanley
DealerTrack (TRAK) upgraded to Outperform from Neutral at Macquarie
Devon Energy (DVN) upgraded to Overweight from Equalweight at Barclays
Dow Chemical (DOW) upgraded to Outperform from Market Perform at Wells Fargo
Enerplus (ERF) upgraded to Buy from Neutral at BofA/Merrill
Invesco (IVZ) upgraded to Overweight from Neutral at JPMorgan
Oil States (OIS) upgraded to Outperform from Sector Perform at RBC Capital
Seaspan (SSW) upgraded to Overweight from Equalweight at Barclays
Ultra Petroleum (UPL) upgraded to Equalweight from Underweight at Barclays
Anadarko (APC) downgraded to Equalweight from Overweight at Barclays
Campbell Soup (CPB) downgraded to Underperform from Neutral at Credit Suisse
DirecTV (DTV) downgraded to Equal Weight from Overweight at Morgan Stanley
J.C. Penney (JCP) downgraded to Underperform from Market Perform at Wells Fargo
LifeLock (LOCK) downgraded to Neutral from Buy at Goldman
Molycorp (MCP) downgraded to Underweight from Equal Weight at Morgan Stanley
Onex (ONEXF) downgraded to Sector Performer from Outperformer at CIBC
Questcor (QCOR) downgraded to Neutral from Buy at Mizuho
Ryanair (RYAAY) downgraded to In-Line from Outperform at Imperial Capital
Ally Financial (ALLY) initiated with a Buy at Citigroup
Ally Financial (ALLY) initiated with a Hold at Deutsche Bank
Ally Financial (ALLY) initiated with a Neutral at Goldman
Ally Financial (ALLY) initiated with an Outperform at Keefe Bruyette
Ally Financial (ALLY) initiated with an Overweight at Barclays
Ally Financial (ALLY) initiated with an Overweight at JPMorgan
Ally Financial (ALLY) initiated with an Overweight at Morgan Stanley
Aruba Networks (ARUN) initiated with an Outperform at Imperial Capital
CyrusOne (CONE) initiated with a Buy at UBS
Dynagas LNG (DLNG) initiated with an Outperform at Clarkson Capital
Dynagas LNG (DLNG) initiated with an Outperform at Clarkson Capital
GasLog Partners (GLOP) initiated with an Outperform at Clarkson Capital
Lombard Medical (EVAR) initiated with an Overweight at Barclays
Lukoil (LUKOY) initiated with an Outperform at Credit Suisse
Navient (NAVI) initiated with a Buy at Janney Capital
Netflix (NFLX) initiated with a Buy at Topeka
WABCO (WBC) initiated with a Hold at Stifel
U.S. AG Holder: Credit Suisse (CS) to pay $2.6B, admits 'criminal wrongdoing'
EU says JPMorgan (JPM), Credit Agricole (CRARY) and HSBC (HSBC) may have breached antitrust rules
Merck (MRK), Endocyte (ECYT) withdrew CMA for vintafolide in Europe
Aeroflex (ARX) to be acquired by Cobham plc for approximately $1.46B
Sprint (S) to pay $7.5M to resolve Do-Not-Call investigation by FCC
Pfizer (PFE) confirmed its final proposal for AstraZeneca (AZN), comprising, for each AstraZeneca share, 1.747 shares in the combined entity and 2,476 pence in cash, representing an indicative value of GBP55.
Ophthotech (OPHT) entered into an ex-U.S. licensing and commercialization agreement with Novartis (NVS) for Ophthotech’s lead product candidate, Fovista
Clovis Oncology (CLVS) said the FDA granted Breakthrough Therapy designation for CO-1686
Companies that beat consensus earnings expectations last night and today include:
Home Depot (HD), E-House (EJ), Perfect World (PWRD), NeoPhotonics (NPTN)
Companies that missed consensus earnings expectations include:
Staples (SPLS), Donaldson (DCI), Phototronics (PLAB), CUI Global (CUI), Paragon Shipping (PRGN), Fibrocell Science (FCSC), Urban Outfitters (URBN)
Companies that matched consensus earnings expectations include:
h.h. gregg (HGG), Stage Stores (SSI), Tarena (TEDU)
JPMorgan (JPM) CEO Dimon says he's 'going nowhere,' WSJ reports
Microsoft (MSFT) to expand Surface lineup as tablet sales slow, WSJ reports
Pfizer (PFE) may be holding out hope of rekindling AstraZeneca (AZN) deal before the May 26 deadline, FT reports
Sources say Pfizer's (PFE) $117B AstraZeneca (AZN) pursuit likely to fail, Bloomberg says
Lockheed (LMT), Boeing (BA) venture says launch expenses less than thought, Reuters reports
Commerzbank (CRZBD) in talks to sell some assets to JPMorgan (JPM), Lone Star, WSJ reports
Intercept (ICPT) knew of abnormal cholesterol levels, The Street says
Source says BuzzFeed considering IPO, secondary share sale, Fortune reports
AcelRx (ACRX) files to sell 3.07M shares of common stock for holders
Chimerix (CMRX) announces offering of 6.2M shares of common stock
Graphic Packaging (GPK) offers 43.65M shares of common stock for holders
HCA Holdings (HCA) files to sell 15M shares of common stock for holders
Meridian Interstate Bancorp (EBSB) announces common stock offering
Orbitz (OWW) announces secondary common stock offering by holder
Physicians Realty Trust (DOC) files to sell 9.5M common shares of beneficial interest
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