Frontrunning: January 26
- BOJ Should Be Allowed $643 Billion Fund to Buy Foreign Bonds, Iwata Says (Bloomberg)
- Banks Hoarding ECB Cash May Double Company Defaults (Bloomberg)
- China Police Open Fire on Tibetans as Protests Spread (Bloomberg)
- Sarkozy Presidential Rival Hollande Would Lower Retirement Age, Lift Taxes (Bloomberg)
- IMF takes tougher stance over Greek debt (FT)
- Iran threatens to act first on EU embargo (FT)
- PM says ‘no complacency’ on economy (FT)
- George Soros: How to pull Italy and Spain back from the edge (FT)
- Japan's NEC to slash 10,000 jobs (Reuters)
- Obama Planning Corporate Tax Overhaul (Bloomberg)
- French police arrest PIP implant boss Mas (Reuters)
* With its $6 billion hostile offer for Illumina Inc , Swiss drug-giant Roche Holding AG is making an expensive and risky bet that genetic mapping will soon be common practice in doctors offices and hospitals.
* U.K. regulators fined Greenlight Capital and owner David Einhorn a total of $11.2 million for alleged insider trading in shares of Punch Taverns.
* Bank of America Corp plans to give investment bankers more of their year-end bonuses in stock, in Wall Street's latest wallet-squeezing response to a wrenching year.
* Former HealthSouth Corp chairman Richard Scrushy could be released from prison and enter a halfway house within the next month after an Alabama judge on Wednesday reduced his sentence for a 2006 bribery conviction by one year, said Mr. Scrushy's lawyer.
* Federal Reserve officials said they expect to keep short-term interest rates near zero for almost three more years and signaled they could restart a controversial bond-buying program in yet another campaign to rev up the disappointing economic recovery.
* Hasso Plattner, who 20 years ago designed a computer program that supercharged SAP AG's growth, has been pursuing another breakthrough that could determine the software giant's fate.
Now SAP's chairman, the 68-year-old engineer is trying to take advantage of cheaper memory chips in servers to speed up complex business calculations and allow companies to do in seconds what currently can take hours or days. The aim is to allow executives to quickly access and analyze business data even on hand-held devices.
* Large public pension plans are pouring more money into private-equity funds, deepening ties between government workers and an industry currently under the harsh glare of U.S. presidential politics.
* The sharp drop in natural-gas prices has thrown a wrench into the plans of Chesapeake Energy Corp, the country's second-largest gas producer. But that might not be the biggest challenge it faces. Chesapeake must also complete a slew of asset sales to continue with its business plans
EINHORN AND GREENLIGHT FINED BY UK FINANCIAL REGULATOR
David Einhorn, one of the world's highest profile hedge fund managers, and his firm, Greenlight Capital, have been fined 7.2 million pounds ($11.22 million) by UK regulators for trading before a 2009 equity fundraising by Punch Taverns. http://link.reuters.com/pyd36s
EX-LLOYDS CHIEF JOINS UK ADVISORY FIRM
Eric Daniels, former chief executive of Lloyds Banking Group and one of the most high-profile figures in the financial crisis, is joining a little-known advisory firm. http://link.reuters.com/faf36s
IRAN THREATENS TO ACT FIRST ON EU EMBARGO
Iran has threatened to pre-empt a European embargo on its oil by halting its exports to the region immediately, a move that could hit economically weak southern European countries. http://link.reuters.com/def36s
NORWEGIAN CARRIER PLACES HUGE ORDER IN RECOVERY BET
Norwegian Air Shuttle plans to buy 222 new aircraft worth $21.1 billion from Boeing and Airbus in a move that heralds its ambition to become one of Europe's leading low-cost airlines. http://link.reuters.com/mef36s
PEACOCKS STORES INTEREST DISCOUNTERS AND SUPERMARKETS
Discount retailers and supermarkets are eyeing Peacocks' 563-store portfolio in case administrators fail to find a buyer for all or part of the distressed value fashion chain. http://link.reuters.com/nef36s
CONOCO TO CUT U.S. GAS OUTPUT
ConocoPhillips, the third-largest U.S. oil and gas group by market capitalisation, has said it plans to cut its North American gas production this year as it shifts to more profitable oil reserves, becoming the latest group to announce output reductions after gas prices fell to a 10-year low. http://link.reuters.com/pef36s
SAP BULLISH AS IT BRUSHES OFF SLOWDOWN
SAP has shrugged off Europe's economic slowdown as the world's biggest business software maker by sales indicated it may raise its 2015 sales goal after achieving record annual profits and setting double-digit growth targets for this year. http://link.reuters.com/qef36s
UK'S CAMERON BACKED ON EU COURT OVERHAUL
David Cameron's calls for an overhaul of the European Court of Human Rights to reduce its judges' interference with the decisions of national governments have received firm backing from the head of the Council of Europe. http://link.reuters.com/ref36s
* The prominent money manager David Einhorn and his hedge fund, Greenlight Capital, were fined about $11 million by Britain's financial regulator on Wednesday for using confidential information to trade in the stock of a British pub chain.
* The Federal Reserve said it was not likely to raise interest rates until the end of 2014, adding 18 months to the expected duration of its response to the slump.
* After a haltingly poor performance in the middle of last year, Netflix reported fourth-quarter earnings on Wednesday that exceeded analysts' expectations and a subscriber uptick that surpassed its own outlook.
The company posted total revenue of $875.6 million, up 47 percent from the quarter last year. As the company invested in content rights and spent more to gain new subscribers, its profit, $40.7 million, or 73 cents a share, was down nearly 14 percent from the quarter last year, when its profit was $47.1 million, or 87 cents a share.
* A new federal task force looking into fraud related to the housing crisis will begin by looking at big banks and investment firms on Wall Street.
* Ron Johnson, J.C. Penney's chief executive, said the company would adopt a three-tiered pricing structure and cut down on promotions.
* European banks have been busy. Financial institutions on the Continent have raised at least 40.7 billion euros, or $52.8 billion, in new capital as of the fourth quarter of last year, according to estimates by Citigroup.
The effort is part of policy makers' push to increase banks' core Tier 1 ratios, a measure of a firm's ability to weather financial shocks, to 9 percent by June.
* Hedge funds that loaded up on Greek bonds in the last month - betting on a quick gain - are now scrambling to sell those holdings, fearful that European policy makers will force them to take a deep and binding haircut on the debt.
But walking away from the trade may not be that easy. While the money managers had little problem snapping up the bonds from European banks eager to sell, the pool of potential buyers is drying up.
European Economic Highlights:
- UK CBI Reported Sales -22 – lower than expected. Consensus -6. Previous 9.
- Sweden Consumer Confidence -1.3 – higher than expected. Consensus -7.0. Previous -7.4.
- Sweden Manufacturing Confidence s.a. -14 – lower than expected. Consensus -11. Previous -11.
- Sweden Economic Tendency Survey 91.4 – lower than expected. Consensus 93.0. Previous 92.8. Revised 92.9.
- Sweden PPI -0.2% m/m -2.1% y/y – higher than expected. Consensus -0.4% m/m -2.3% y/y. Previous 0.8% m/m 0.3% y/y.
- Sweden Trade Balance 2.8B – lower than expected. Consensus 6.5B. Previous 3.5B. Revised 3.8B.
- Sweden Unemployment Rate 7.1% - higher than expected. Consensus 7.0%. Previous 6.7%.
- Italy Consumer Confidence Ind. Sa 91.6 – lower than expected. Consensus 92.0. Previous 91.6.
- Italy Hourly Wages 0.0% m/m 1.4% y/y. Previous 0.0% m/m 1.5% y/y.
- Ireland PPI 0.5% m/m 2.4% y/y. Previous 0.9% m/m 1.9% y/y.
- Germany GFK Consumer Confidence Survey 5.9 – higher than expected. Consensus 5.6. Previous 5.6. Revised 5.7.
- France Consumer Confidence Indicator 81 – higher than expected. Consensus 80. Previous 80.
- France Business Survey Overall Demand -12 – lower than expected. Previous 2. Revised 1.
- Denmark Unemployment Rate s.a. 4.0% - lower than expected. Consensus 4.3%. Previous 4.2%. Revised 4.1%.
- Denmark Unemployment Rate Gross Rate 6.1% - lower than expected. Consensus 6.3%. Previous 6.2%. Revised 6.1%.
- Russia Gold & Forex Reserve USD 499.7B. Previous 497.1B.