Morning @ Cantor
Morning @ Cantor 6/11
Today’s Stories From Cantor Fitzgerald
Sal Catrini (908) 517-5067
EARLY US LANDSCAPE****
· US Stock Futures , SPs up 1..China data, good Spain sentiment, BP help
· Risk is mixed: Copper is up 2%, Spot gold was down $16 yesterday…this morning, spot gold is up $4, crude dn 50c, Rates flattish
· 3-month: Dollar: 0.537% vs prior 0.536%
· Europe stocku p over 1% - extends gains to near hgihs…. Oil spill stocks, EU banks gain today
· EUR near 1 week high, up over 1.21
· ECB's Draghi commented that markets were beginning to understand that the euro was here to stay and not possible to go back
· BP bounces more than 8% …BP says may cut divvie – WSJ..BP Well Leak Estimate Doubled by U.S. Science Group
· Italy Bond auction OK: Sold total of €7B in three tranches (as expected)
· Santander up 6% today…Spain banks lead … Spain's Economic Minister denied that his country had requested aid from the EU.
o The EU Banking sector is also getting a lift from a Moody's reports in which the agency reports it has done its own stress test of European banks and says it believes that most European banks would be able to absorb losses stemming from their exposure to Greece, Portugal, Ireland, and Spain without requiring capital increases, even under what they qualify as a severe stress scenario – FT
· Asian Markets: Nikkei +1.70%; Hang Seng +1.22%; Shanghai Composite +0.29%
· China overheating? China inflation: CPI in line, PPI hot, May new loans came in at more than expected
o Chinese inflation has exceeded the 3 per cent target set by the government for the year
o softer than expected industrial production
o Consumer prices rose 3.1 percent in the year to May compared with a 2.8 percent annual rise in April, confirming a Reuters report from Wednesday and exceeding the official year-average target of 3 percent.
o However, a spokesman for the National Bureau of Statistics, which released the data on Friday, said price pressures were easing and expressed confidence that Beijing should be able to hit its inflation goal.
· China: both 3-month and 9-month bond auctions failed to sell in entirety as investors demanded higher yield to meet the rising inflationary expectations. TTN
· China v US: Treasury Secretary Timothy Geithner indicated on Thursday that U.S. patience on China's currency policy was wearing thin and a key lawmaker warned that he would move soon on legislation that would penalize Chinese goods.
o Geithner Says China’s Yuan Peg Hurts Global Recovery
o Graham Says China Yuan Measure Has ‘Huge’ Support in Congress - BBG
§ U.S. Senator Lindsey Graham said legislation aimed at getting China to raise the value of its currency has “huge” support in Congress, and President Barack Obama “runs the risk” of being overridden if he vetoes it.
o Chinese export data fuels renewed yuan backlash – FT
o Beijing likely won't dust off its plans to let the yuan rise against the greenback
· Japan PM warns of Greece-style crisis -- This is Money
· Japan PM Warns of Default if Debt Not Fixed
o New Japanese Prime Minister Naoto Kan, seeking to lay the groundwork for a future sales tax rise, warned on Friday that the country risked defaulting on its borrowing if it failed to rein in its massive public debt. CNBC
· European banking shares indicate a Greek debt default may be just a matter of time, Bloomberg
· Spain's economy ministry said on Friday it had not made a request for economic aid from the European Union, after a newspaper report that the EU was preparing to activate a package in case Madrid asked for it. CNBC
· Germany's Bundesbank revised Germany's 2010 GDP forecast higher to 1.9% from its 1.6% prior view
· FX: Central Banks May Buy Aussie, Loonie to Diversify, UBS (per BBG)
· Taiwan Outlook Revised to Stable From Negative by S&P
· Data
o China May new yuan loans CNY639.4B vs survey CNY600.0B. May industrial production +16.5% y/y vs +17.0% survey. May CPI +3.1% y/y vs +3.0% survey. May PPI +7.1% y/y vs +6.8% survey. May M2 +21.0%, matching expectations
o UK manufacturing data showed unexpected weakness in April
o U.K. MAY PRODUCER PRICES RISE 0.3%; MEDIAN FORECAST 0.5% GAIN
o UK Apr Industrial Production (0.4%) m/m vs consensus 0.4%.
o UK Apr Manufacturing Production +3.4% y/y vs consensus +3.8%.
o UK) Apr Manufacturing Production M/M: -0.4% v 0.5%e
o India Factory Output Grows 17.6%, More Than Analysts’ Forecast
· M&A:
o WEN Trian says that it was approached by third party regarding interest in acquisition of Wendy’s/Arby’s Group
· BP Weighs Cutting Quarterly Dividend – BP
o BP is considering deferring or reducing its second-quarter dividend to help quell the political uproar, as the U.S. raised its estimate of the oil gushing out of the company's crippled well in the Gulf of Mexico.
· BP fallout: UK’s Cameron set to discuss spill with Obama this weekend…
· UK business backlash vs Obama: RSA chairman warns President Obama over BP attacks
o Reuters) - The chairman of RSA Insurance Group Plc has written an open letter to U.S. President Barack Obama describing his comments towards BP Plc and its chief executive as "prejudicial and personal."
o "We can all agree that the first and absolute priority is to stem the leak. Perhaps the second one is to ensure the reputation of the presidency outside the US is seen as objective, balanced, able and capable of taking the heat when under pressure," he added.
· GS: Goldman’s Cohn Sees No Sign of Resolution to SEC Case – BBG
o Goldman Sachs Group Inc. President Gary Cohn said he sees no signs of a resolution to the Securities and Exchange Commission’s fraud claims against the firm.
o “There’s no indications of anything at this point,” Cohn told reporters at a conference in Montreal today.
· GS: Goldman Settlement Tab: $10B-20B? TheStreet.com
o Fears that the cost of a Goldman Sachs settlement would be significantly higher than analysts have been projecting rattled the stock Thursday.
o a $15 billion settlement could knock $27 a share off of Goldman's stock.
o http://www.thestreet.com/story/10780898/1/goldman-settlement-tab-10b-20b.html?puc=_tscrss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tsc%2Ffeeds%2Frss%2Flatest-stories+%28TheStreet.com+Latest+Headlines%29&utm_content=Google+Reader
· GS: Goldman Sachs' superstar CFO David Viniar has been quietly considering making an exit from the firm where he's spent his entire career, NYP
o Viniar, a three-decade Goldman veteran, considered one of the brightest financial minds on Wall Street, told a handful of close associates as recently as last year about his desire to retire -- but then quickly put those plans on the back burner when Wall Street's most profitable firm ran into turbulence.
o Read more: http://www.nypost.com/p/news/business/viniar_stays_put_BXDm10vueD6Sapd158SdDP?CMP=OTC-rss&FEEDNAME=#ixzz0qXCxNlng
· NSM National Semiconductor guides better… NSM traded up 1.5% after hours
· Dell Says Its CEO, SEC in Settlement Talks Over Intel
· Cyber security : ARST +8.4% (earnings)
· Novartis is also a key gainer after the FDA Advisory Panel gave endorsement for new MS drug Gilenia last night with relative limited monitoring requirements
· Deutsche Bank Bloomberg) -- Deutsche Bank AG, Germany’s biggest bank, said it’s not concerned about its Taunus Corp. holding subsidiary after reports the U.S. unit may require capital because of stricter regulations.
· Financial reform: Democrats Spar Over Derivatives Rules
o It wasn't clear how the division would be addressed. Democrats cannot afford to lose votes because of disagreement on substantive issues, given that few Republicans are expected to vote for the measure.
o Democrats are trying to move the bill toward passage quickly, and it could be signed into law in the next few weeks. Senior Republicans acknowledged they probably didn't have the votes to stop the bill.
o derivatives-trading : “In my view, banks were never intended to perform these activities in the first place,” said Mrs. Lincoln, who on Tuesday narrowly won a hard-fought Democratic primary in Arkansas. NYT
o http://online.wsj.com/article/SB10001424052748703627704575299063089949260.html?mod=WSJ_newsreel_us
· Financial reform: Fed’s Hoenig Supports Lincoln’s Proposal on Swaps - BBG
o The Federal Reserve’s longest- serving policy maker, Thomas Hoenig, backed a proposal by Senator Blanche Lincoln barring commercial banks from swaps trading.
· Financial reform: Congress Starts to Merge Financial Reform Bills
· Financial reform: MasterCard Inc.’s Ajay Banga, who takes over next month as head of the payments network, said Congress probably will adopt some of the proposed rules for debit and credit cards in its financial industry overhaul.
· Senate’s Reid Seeks Extension of Homebuyer Tax Credit Deadline
· Senator to Probe U.S. Spending at For-Profit Colleges Bloomberg) -- Senator Tom Harkin, chairman of the Health, Education, Labor and Pensions Committee, said he plans to hold hearings to examine the surge in federal grants and loans flowing to for-profit colleges in the U.S.
o The committee will probe the “rapid growth of federal investment” in the industry and “the corresponding opportunities and risks for students and taxpayers,” per Harkin, an Iowa Democrat
o The hearings are scheduled to begin June 24 in Washington
· Miners: Resource stocks rose in Australia as people read a report saying the government will weaken its proposed 40% tax on miners – BHP Billiton (BHP.AU) added 3% and Rio Tinto (RIO.AU) put on 2%. But over the day, Prime Minister Kevin Rudd said the tax is “about right” at its currently proposed rate. SA
· BHP to Renew Iron-Ore Price Push in Threat to Steelmaker Profit – BBG
o BHP Billiton Ltd., the world’s largest mining company, may use last month’s 16 percent decline in iron-ore prices to persuade steelmaking clients to pay cash instead of contract-based prices from the next quarter.
· Shares in the timber company surged - Gunns upgrades earnings guidance - Business Spectator
· Inflation, Demand pos : K+S raising prices for second time this year – DJ:
o continues to see good demand in Europe. Raises granulated potash prices by €8 to €305/tonne, effective 15-june
o This is the second time that the company raised prices this year. Remained positive on demand in Europe.
· Inflation: (Reuters) - Workers at a lock factory in south China that supplies Honda Motor challenged managers on Friday, demanding higher pay and freedom to form independent unions, banned in the export powerhouse.
· JNJ Johnson & Johnson may face subpoenas for being "uncooperative" with Congressional investigation – NYT
·
Nelson
Mandela’s 13-year-old great granddaughter was killed in a car crash today as
she drove home from South Africa’s World Cup concert.
- Economics:
- Fed Bank of Philadelphia President Plosser speaks on the economic outlook to the Blair County Chamber of Commerce at 08.20 ET
- May Retail Sales at 08.30 ET
- Jun prelim U. of Michigan Confidence at 09.55 ET
- Apr Business Inventories at 10.00 ET
- Fed Bank of Minneapolis President Kocherlakota speaks on entrepreneurship and the economy at the Annual Recognition Luncheon hosted by the Metropolitan Economic Development Assoc at 12.00 ET
- Apr Business Inventories at 15.00 ET
- Earnings:
- There are no major companies due to report this session
- World Cup starts in South Africa!!!
TODAY’S BIG STORIES
· Equity Wrap:
o seeing a lot of people trading short term, hit and run and moving on to other things, that is the hedgy world and it has been good for a week or so but it’s become too easy, which makes that strategy dangerous. These last few weeks I’ve seen people getting hurt on both sides with a few trying to catch up for the month of may. We had all the bullish bullet points out such as we had yesterday with data out of china on exports better, as well as soothing comments out of the Chinese pension trust and EU, Bill Gross saying he’s buying us debt again, and that to some key technical’s being taken out and some real money in the latter part of the day, not just the short covering that we saw initially.
o Technically, we finally took out that 63.35 200 day moving average on the IWM, QQQQ we also took out the 44.85 level which was 200 day and yet, . we pushed through resistance and face our next ceiling @ 1098/1102 gap, then 1105/1107 recent high / 200 dma if we go higher.
o Internally buy and sell names were about even, the breadth of the market had almost 6 ½ advancing issues for every 1 declining.
o (Billy Clark and team)
· Treasury’s Wrap:
o With a sense of calmness in the global landscape as Chinese imports/exports were better than expected, the Euro was stronger, Australian employment strong, New Zealand raising rates and global equities all significantly well bid, the safe heaven US Treasury market was under pressure from the overnight hours on. The Treasury market's cheapening throughout the morning allowed for what appeared to be a relatively fair 30 year bond auction with the$13Bln coming at 4.182% through by a small .2bps, participation was strong with indirects purchasing 36% and directs 20%, bid to cover was 2.87. Post auction, as equities and the Euro continued to rally and the auction supply was in weaker hands than many has expected the market continued to come under severe pressure closing near its intraday lows at 3PM. Benchmark yields across the curve were higher by ~5-14bps with the belly underperforming.
o In our macro view we maintain our view for lower UST yields as the global uncertainty, growth pressure and rate outlook will continue to find investors preferring safety. Market sentiment certainty does not agree today but a run through 3.00% on the 10Y and 4.00% on the 30Y is certainly not a reach.
o Primary Dealer
· Investment grade Wrap:
· Industrials/Energy/Utes – Salemo
o Once again the gulf names remain the focus with BP following through on overnight buying to finish up 2-3pts but went out off its tights while RIG and APC were up 4-5pts led by the lowest dollar long paper to finish at its tights for the day. Still seeing real money either selling or sitting on the sidelines in my GOM paper, Richie was active as well in the front end.
o Away from the gulf, spreads were mixed despite equities up 273 and the IG14 5+ tighter. Some of the higher quality recent deals were the exception and the lone names tighter (ABT, SO,…). Energy away from the GOM were some of the wider trading names as even RDSALN, XTO (soon to be XOM), and APA were all softer, as were higher beta names from KFT to DOW, out 3-5bps.
o Volumes remain sporadic with the GOM constantly taking accounts off their desk for meetings and distracting them from other business, as it has also taken away from the new issue calendar which had been talked to be large this month, with just $2.1BN across five names today.
· Industrials/TMT – Duncan
o Spreads were mixed at best despite stocks up 273. Focus remains on Gulf names, all my trades today were with the street or Mkt
o Axess. DISCA and TWC 20s were the most active in TMT, both closing roughly unchanged. If a rallying stock market and higher yields from treasury selloff didn't bring in meaningful buyers, we are probably still in a "sell into strength" environment.
· Bank/Finance – Goodman
o STOCKS UP +273, SPREADS OUT 5-10. SAW MUCH BETTER 2 WAY FLOW TODAY THAN WE HAVE SEEN ALL WEEK.
o CONTINUE TO BE ACTIVE IN THE 5YR BANK SPACE
o GOLDMAN STOCK CLOSED DOWN 3 POINTS AFTER BEING DOWN AS MUCH AS 5. SPREADS HOWEVER DID NOT UNDERPERFORM IN THE NAME AS THE GS 6 20 ARE GOING OUT275-270
o INSURANCE CONTINUES TO HAVE A TOUGH TIME IN HERE
· Hybrids – Schneider
§ One of the most head scratching days that I’ve seen in the space in a long time. The intraday price swings were huge. But none more wild than USB 6.189 which traded as high as 73 ½ and as low as 70 5/8. Despite the strong rally in the equity markets, we saw little carry over into the hybrid space. Actually, many of the higher beta bonds like C 8.30, WFC 5.80, JPM 7.90 and BAC 8s were actually lower on the day.
§ The big news today was the $350mm tender announced for the PGR 6.70 ($1bn deal) at $95 (early tender date). PGR 6.70 traded at $91 early in the week (so not a huge premium). Speculation was that this was driven by the upcoming Moody’s review of the sector. Will be interesting to see if other ins cos follow suit.
· BABs – Orlando
§ THE SPREADS CONTINUE TO LEAK WIDER ON MOST NAMES WITH VERY LITTLE LIQUIDITY..WE HAD A +280 BUYER OF LONG CA BONDS YESTERDAY...CUSTOMER BOT SIZE AT THAT LEVEL..WITH THE SPOTTY INQUIRY AND CONTINUED HEADLINE RISK THE MARKET CONTINUES TO TRADE BY APPOINTMENT..
· CMBS DAILY RECAP
o A confusing day in CMBS. Spreads were unchanged while corps and the stock mkt were much bettter- IG -5bps and HY CDS +$1pt
o Moody's: US CMBS loan delinquencies climb to 7.50%
o GEORDIE WALKER
· U.S. Firms Build Up Record Cash Piles - WSJ
o The Federal Reserve reported Thursday that nonfinancial companies had socked away $1.84 trillion in cash and other liquid assets as of the end of March, up 26% from a year earlier and the largest-ever increase in records going back to 1952. Cash made up about 7% of all company assets, including factories and financial investments, the highest level since 1963.
· Fed Watch: Fed reports balance sheet assets of $2.33T on Wednesday, ($4.7B) w/w and +$281.2B y/y
o Holdings of US Treasury securities were $776.9B on 9-Jun, +$19M w/w and +$148.2B y/y.
o Holdings of mortgage-backed securities were $1.1T on 9-Jun, +$61M w/w and +$686.3B y/y.
o Holdings of federal agency debt securities were $166.7B on 9-Jun, unch. w/w and +$80.3B y/y
· China injects $24.3B into financial system to boost liquidity
o China's central bank pumped $24.3 billion into its financial system this week, moving to counter a quickly tightening money supply. The People's Bank of China executed the money injection through the use of repurchase agreements and bill issuance. It marked the third consecutive week of net injections by the central bank. Xinhuanet.com (China) (10 Jun.)
· Deflation Fears Stir in Developed Economies WSJ
o The fears are most pronounced in Europe, where policy makers are under pressure to reduce large budget deficits now, before durable recoveries emerge. A combination of spending cuts and tax increases could weigh on economic growth and feed into deflation, which is a broad decline in consumer prices
· Money flows: AMG data reports equity fund outflows of ($2.8B) in w/e 9-Jun vs inflows of $2.7B in w/e 2-Jun
· Money flows: estimate that in June through Wednesday, June 9, U.S. equity funds and global equity funds lost only $1.4 billion (0.03% of assets) and $1.3 billion (0.1% of assets), respectively, even though both fund types posted sizeable losses. Also, leveraged long U.S. equity ETFs issued 6.4% of assets in the past week, while leveraged short U.S. equity ETFs redeemed 1.0% of assets in the past week. TRIMTABS
· Stock Trading: The U.S. Securities and Exchange Commission’s plan to impose halts on some stocks that swing more than 10 percent starting today may be followed by more measures to slow down trading. BBG
· Stock Trading: SEC eyes confluence of events as flash crash cause Reuters
o U.S. regulators will most likely find that a confluence of events caused the unprecedented stock market "flash crash" in early May, Securities and Exchange Commission Chairman Mary Schapiro said on Thursday.
· Stock Trading: Thursday, the SEC approved a mechanism to temporarily pause trading in single stocks when markets are plunging uncontrollably. The stock-specific circuit breakers, being adopted this month, will halt trading for five minutes in any S&P 500 share if it falls more than 10 percent in five minutes.
o Schapiro said she was anxious to expand the stock-specific mechanism to other stocks and to a number of exchange-traded funds, which were hit harder than ordinary stocks in the brief market freefall.
o Schapiro said she hopes to update the current market-wide circuit breaker before the end of the year. It was not triggered May 6.
· Stock Trading: Market Makers Need Liquidity Mandate, Goldman Sachs Cohn Says
o Bloomberg) -- Firms that are registered to make markets in equities should have an obligation to provide bid and ask quotations on exchanges “no matter what the underlying volume is,” said Goldman Sachs Group Inc. President Gary Cohn.
· Hedge Funds: Hedge funds try new way to avoid big redemptions - MW
o Many hedge funds are adopting a new way to avoid a repeat of the massive redemptions
o So-called investor-level gates are popping up all over the $2 trillion industry, replacing more traditional fund-level gates, according to investors.
· private-equity PE battle bill for billion NY Post
o For months, the private-equity industry has fought hard to reduce a proposed $18 billion tax hike -- but their efforts may be falling short, a source said.
o Senate Finance Committee Chair Max Baucus, the main focus of industry lobbying, is more interested in getting the overall Tax Extenders Bill through Congress than he is at pleasing the PE industry, a well-placed source said.
· U.S. Moves to Support Iran's Dissidents - WSJ
o The U.S. has accelerated its effort to provide dissidents in Iran with computer hardware and software to evade government censors—in a shift that some activists say is insufficient.
· U.S. Nears Racial Milestone - WSJ
o Whites Are on Verge of Becoming a Minority Among Newborns in Long-Expected Shift
o The Census reported Thursday that nonwhite minorities accounted for 48.6% of the children born in the U.S. between July 2008 and July 2009, gaining ground from 46.8% two years earlier. The trajectory suggests that minority births will soon eclipse births of whites of European ancestry.
· US vs Mexico: After Teen's Death, Is an Intifadeh Coming to the U.S.-Mexican Border? from TIME.com
o Could the killing of a Mexican teen who threw rocks at U.S. border cops be a bad omen?
o http://www.time.com/time/nation/article/0,8599,1995965,00.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+time%2Fnation+%28TIME%3A+Top+Nation+Stories%29&utm_content=Google+Reader
· climate change: Senate Democrats Worry About Securing 60 Votes on Climate Bill - Roll Call
o Senate Democratic leaders and chairmen emerged from a meeting on climate change Thursday with no decisions on how or whether to move forward with legislation this summer, with some saying there is little appetite among even the chairmen with jurisdiction over the issue to take on the politically dicey topic this year.
· climate change: G20 leaders may discuss climate change: PM
o http://www.cbc.ca/politics/story/2010/06/10/g20-summit-climate-change.html
· US states: Chaos, Anarchy To Reign If Paterson Shuts Down NY
o Monday Could Be Doomsday If Budget Deal Can't Be Reached
o Shutdown Would Mean Closing Of State Parks, DMV, Courts, N.Y. Lottery
o http://wcbstv.com/politics/nys.goverment.shutdown.2.1745114.html
· US states: Cash-poor NY state may issue IOUs like California
o http://www.businessspectator.com.au/bs.nsf/Article/Cash-poor-NY-state-may-issue-IOUs-like-California-6ATUC?opendocument&src=rss
· US states: New Jersey’s revenue was $267 million short of projections in the 11 months through May, the state treasurer said in a press release
· US states: -- California’s revenue in May exceeded Governor Arnold Schwarzenegger’s estimate by $592 million, or 9.8 percent, according to state Controller John Chiang.
o Personal-income taxes contributed to most of the increase, beating forecasts by about $392 million, Chiang said today in a statement. Compared with May 2009, receipts rose 25 percent. “May revenues may have been positive, but their small climb represents only 3 percent of the state’s budget deficit,”
· GOP tests 2012 theme vs. Obama – The Hill
o Republican presidential contenders appear to have found a 2012 campaign theme: They’re spreading the word that President Barack Obama lacks enough real-world experience for the job, and that his response to the Gulf oil spill proves it.
·
COMPANY NEWS WITH MACRO IMPLICATIONS
· Stocks mentioned on CNBC's Mad Money with Jim Cramer - TheStreet.com
o + DLM, BBD, ITUB, CPL, GFA, ABV, ARUN, AKAM, PG and BAC
o - FMX and LINE
· CHMP Champion Industries reports Q2 EPS
· ENERGY
- XIDE +5.5% (HON agreement)
o BP Weighs Cutting Quarterly Dividend – BP
§ BP is considering deferring or reducing its second-quarter dividend to help quell the political uproar, as the U.S. raised its estimate of the oil gushing out of the company's crippled well in the Gulf of Mexico.
o BP fallout: UK’s Cameron set to discuss spill with Obama this weekend…
o UK business backlash vs Obama: RSA chairman warns President Obama over BP attacks
§ Reuters) - The chairman of RSA Insurance Group Plc has written an open letter to U.S. President Barack Obama describing his comments towards BP Plc and its chief executive as "prejudicial and personal."
§ "We can all agree that the first and absolute priority is to stem the leak. Perhaps the second one is to ensure the reputation of the presidency outside the US is seen as objective, balanced, able and capable of taking the heat when under pressure," he added.
§ BP Atlantis Oil Platform Should Operate During Probe, U.S. Says
§
§ SLB Schlumberger announced the effect on its US operations following the recently announced six-month MMS moratorium on GoM drilling operations
§ BRNC Bronco Drilling reports May drilling results
§ SPN Superior Energy Services estimates impact of Gulf of Mexico drilling moratorium on its operations
§ BP BP considers cutting Q2 dividend; oil spill now estimated to be 20-40K bbl/day - WSJ
· UTILITIES
o NFG National Fuel Gas announces management changes; effective 1-Jul
o Massachusetts Department of Public Utilities suspends rule mandating utilities to make long-term deals to buy renewable energy instate - Boston Globe
· INDUSTRIALS
o HRLY Herley Industries reports Q3 EPS
o TOD Todd Shipyards reports Q4 EPS
o Caterpillar, Navistar near $586 mln China truck tie Reuters
· TRANSPORTS
o AMR AMR Corp reiterates intent to evaluate a possible divestiture of American Eagle
o PAC Pacific Airport Group reports May traffic +39%
Tech/media/ telecom sectors
NSM- better Q and upped guidance. The Q upside was driven by strong customer demand, lean inventories, and texas fab consolidation. Bookings were strong in the Q. Mgmtstated orders were the strongest in March and April and died down a bit in May. Handset and Industrials are expected to provide the upside to guidance in Q3.
FNSR- solid Q4 and strong Q1 guidance. Strength in the Q was driven mostly by the company’s ROADM offering. FNSR Q1 could see good upside in Q1 in the optical components segment. Management cautioned that investors should not expect another pop in LAN/SAN in F1Q11
DELL, INTC: Dell Says Its CEO, SEC in Settlement Talks Over Intel. The settlement would “involve alleged violations of negligence-based fraud provisions of the federal securitieslaws, as well as other non-fraud based provisions,” – BBG http://www.businessweek.com/news/2010-06-10/dell-says-its-ceo-sec-in-settlement-talks-over-intel-update3-.html
AUO: AU Optronics Is Indicted in U.S. in Price-Fixing Investigation- BBG
http://www.bloomberg.com/apps/news?pid=20601127&sid=ago3bSlYO0GA
AUO AU Optronics says Department of Justice action will not have material adverse effect on operations- SA
AUO: AU Optronics, six executives indicted for LCD price fixing- Reuters
http://www.reuters.com/article/idUSN1025146020100611
Advertising: WSJ discusses possible effects of shift to mobile advertising
Solar: German parliament to debate solar subsidy cuts on 16-Jun- SA
AAPL: FBI Investigates iPad Security Breach- TheStreet.com
http://www.thestreet.com/story/10780903/1/fbi-investigates-ipad-security-breach.html
Fujitsu, Toshiba in Mobile Merger Talks- WSJ
Games: Videogame Makers Seek to Recharge Industry- WSJ
Online Search: May Search Numbers Out! Yahoo And Bing "Gain" Share Again Thanks To Slideshow Gimmicks http://www.businessinsider.com/may-search-numbers-out-yahoo-and-bing-gain-share-again-thanks-to-slideshow-gimmicks-2010-6
GOOG: Google Seeks Beijing License- WSJ
GOOG: Application for Mapping Service Comes After Flap OverWeb-Search Censorship- WSJ
IT: U.S. industry eyes win in IT trade case versus EU- Reuters
http://www.reuters.com/article/idUSTRE65965720100610
LGF: Cuban: I'll tender shares to Icahn- NYPOST
DIS Guilds Said to Tell Disney of Concerns on Miramax Talks- NYT
M&A: Smart grid startups on M&A radar- Reuters
VMW in Talks to Acquire EngineYard- Reuters
Vivo: PT says Vivo JV can go on if Telefonica bid fails- Rueters
Videocon in talks with Korea's SK Telecom for offloading 26% stake- Economic Times
AMT sued for $100M over purchase of Indian telecommunications tower assets - Economic Times
QCOM wins broadband in four circles in India - CNBC-TV18
NBC Finishes Upfront Sales- Mediaweek
http://www.mediaweek.com/mw/content_display/news/upfronts/e3i2b61a0dd47969d0f0f4dd465f6964b87
Solar: Solar-grade wafer makers to raise wafer prices in 3Q10- Digitimes
Semi Equip: Semiconductor equipment spending to grow 113% in 2010- Gartner
China labor salary hikes will not have long term affects on profits, says MSI chairman- Digitimes
Semis: Semiconductor market to grow 28.6% in 2010- WSTS
Foxconn May revenues up 6% sequentially thanks mainly to strong demand in the consumer electronics market.
Acer sees over 30% growth in May revenues- Digitimes
DELL Dell announces delay in filing 10-Q for fQ1 (Apr)
DELL revises results to reflect potential legal issues. Reduced op income, net income, and EPS estimates for the coming Q.
INFA Informatica maintained outperform at Oppenheimer
SNPS Synopsys acquires high-level synthesis technology from Synfora
Miners/ steel sectors etc
· RPM RPM's Performance Coatings group acquires Norwegian flooring coatings business
· Miners: Resource stocks rose in Australia as people read a report saying the government will weaken its proposed 40% tax on miners – BHP Billiton (BHP.AU) added 3% and Rio Tinto (RIO.AU) put on 2%. But over the day, Prime Minister Kevin Rudd said the tax is “about right” at its currently proposed rate. SA
· BHP to Renew Iron-Ore Price Push in Threat to Steelmaker Profit – BBG
o BHP Billiton Ltd., the world’s largest mining company, may use last month’s 16 percent decline in iron-ore prices to persuade steelmaking clients to pay cash instead of contract-based prices from the next quarter.
· K+S raising prices for second time this year – DJ:
o continues to see good demand in Europe. Raises granulated potash prices by €8 to €305/tonne, effective 15-june
Autos sector:
· US Treasury says GM IPO will not take place before Q4; GM will determine the underwriters while Treasury will determine underwriters' fees
· Chrysler plans to revise terms, conditions for suppliers - Automotive News
o Chrysler Group is developing revised terms and conditions for supplier contracts that it expects to unveil in July, Dan Knott, Chrysler's senior vice president of purchasing and supplier quality, said today.
o http://www.autonews.com/apps/pbcs.dll/article?AID=/20100610/OEM01/100619982/1178
· (Reuters) - Workers at a lock factory in south China that supplies Honda Motor challenged managers on Friday, demanding higher pay and freedom to form independent unions, banned in the export powerhouse.
· Bloomberg) -- Kurt McNeil, U.S. vice president of sales and service for General Motors Co.'s Cadillac brand, talked with Bloomberg's
Financials:
· JPM FT discusses potential risks to JPMorgan Chase's reputation in South Korea
· ART Artio Global Advisors reports May AUM of $50.3B vs $56.3B as of 30-Apr
· WPC W.P. Carey increases quarterly cash distribution by 0.4% to $0.506 from $0.50; payable 15-Jul; record 30-Jun.GS: Goldman’s Cohn Sees No Sign of Resolution to SEC Case – BBG
o Goldman Sachs Group Inc. President Gary Cohn said he sees no signs of a resolution to the Securities and Exchange Commission’s fraud claims against the firm.
o “There’s no indications of anything at this point,” Cohn told reporters at a conference in Montreal today.
· GS: Goldman Settlement Tab: $10B-20B? TheStreet.com
o Fears that the cost of a Goldman Sachs settlement would be significantly higher than analysts have been projecting rattled the stock Thursday.
o a $15 billion settlement could knock $27 a share off of Goldman's stock.
o http://www.thestreet.com/story/10780898/1/goldman-settlement-tab-10b-20b.html?puc=_tscrss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tsc%2Ffeeds%2Frss%2Flatest-stories+%28TheStreet.com+Latest+Headlines%29&utm_content=Google+Reader
· GS: Goldman Sachs' superstar CFO David Viniar has been quietly considering making an exit from the firm where he's spent his entire career, NYP
o Viniar, a three-decade Goldman veteran, considered one of the brightest financial minds on Wall Street, told a handful of close associates as recently as last year about his desire to retire -- but then quickly put those plans on the back burner when Wall Street's most profitable firm ran into turbulence.
o Read more: http://www.nypost.com/p/news/business/viniar_stays_put_BXDm10vueD6Sapd158SdDP?CMP=OTC-rss&FEEDNAME=#ixzz0qXCxNlng
· Deutsche Bank Bloomberg) -- Deutsche Bank AG, Germany’s biggest bank, said it’s not concerned about its Taunus Corp. holding subsidiary after reports the U.S. unit may require capital because of stricter regulations.
· Financial reform: Democrats Spar Over Derivatives Rules
o It wasn't clear how the division would be addressed. Democrats cannot afford to lose votes because of disagreement on substantive issues, given that few Republicans are expected to vote for the measure.
o Democrats are trying to move the bill toward passage quickly, and it could be signed into law in the next few weeks. Senior Republicans acknowledged they probably didn't have the votes to stop the bill.
o derivatives-trading : “In my view, banks were never intended to perform these activities in the first place,” said Mrs. Lincoln, who on Tuesday narrowly won a hard-fought Democratic primary in Arkansas. NYT
o http://online.wsj.com/article/SB10001424052748703627704575299063089949260.html?mod=WSJ_newsreel_us
· Financial reform: Fed’s Hoenig Supports Lincoln’s Proposal on Swaps - BBG
o The Federal Reserve’s longest- serving policy maker, Thomas Hoenig, backed a proposal by Senator Blanche Lincoln barring commercial banks from swaps trading.
· Financial reform: Congress Starts to Merge Financial Reform Bills
· Financial reform: MasterCard Inc.’s Ajay Banga, who takes over next month as head of the payments network, said Congress probably will adopt some of the proposed rules for debit and credit cards in its financial industry overhaul.
· Senate’s Reid Seeks Extension of Homebuyer Tax Credit Deadline
· The EU Banking sector is getting a lift from a Moody's reports in which the agency reports it has done its own stress test of European banks and says it believes that most European banks would be able to absorb losses stemming from their exposure to Greece, Portugal, Ireland, and Spain without requiring capital increases, even under what they qualify as a severe stress scenario – SA
· Lawmakers stake out positions on reform bill
o Lawmakers have started working on the final version of legislation to overhaul financial regulations, and while they did not propose new restrictions on the banking industry, they expressed support for provisions that would hit banks' bottom lines. On Tuesday, the congressional committee will discuss credit rating agencies, hedge funds and supervisory agencies. Rep. Barney Frank, D-Mass., said limits to debit card fees, a stronger "Volcker rule" and over-the-counter derivatives rules probably will be included in the final version of the bill. Reuters (10 Jun.) , MarketWatch (10 Jun.) , The New York Times (free registration) (10 Jun.) , The Hill/On The Money blog (10 Jun.)
· Consolidation of Spain's banking industry gains momentum
o A couple of Spain's larger regional banks said they are negotiating a combination with other lenders in a deal that would form the third-largest financial institution in the country. The announcement signals that consolidation in Spain's troubled banking industry is picking up steam. Dozens of Spain's cajas have said they are in merger talks. The Wall Street Journal (11 Jun.)
· Irked Investors Target Merrill
o When Merrill Lynch & Co. raced ahead of its rivals to become the king of collateralized-debt obligations last decade, pensions and hedge funds weren't its only targets. The Wall Street firm also used its vaunted network of financial advisers to pitch the risky investment pools to Main Street.
o Some of these individual investors now say they weren't sophisticated enough, despite their relative wealth, to understand the dangers.
o http://online.wsj.com/article/SB10001424052748703627704575299111742983330.html?mod=WSJ_newsreel_business
· Spanish Banks Discuss Merger
o The consolidation of Spain's regional banks picked up speed as Bancaja and Caja Madrid said they were in talks on a deal with several other banks.WSJ
· UBS: Reuters) - Oswald Gruebel, chief executive of UBSL, said he was confident there will be a deal between Switzerland and the United States over tax data.
Real Estate
· REITS
o CMO Capstead Mortgage declares quarterly dividend of $0.36 per share ; payable 20-Jul; record 30-Jun.
· ESC Emeritus Corp files $150M mixed securities shelf
·
Interest
rates on 30-year fixed-rate mortgages fell this week to their lowest level this year and were
just barely above their all-time low, Freddie Mac reported Thursday.
· Subprime Delinquencies See ‘Positive Shift,’ RBS Says (BBG)
o The proportion of U.S. homeowners turning delinquent on mortgages backing the securities that roiled the global financial system has tumbled in the past three months, even after accounting for a typical seasonal improvement, according to RBS Securities
o Of borrowers with subprime loans in 2007-issued bonds who had never missed payments, an average of 2.6 percent fell behind each month, a drop from 3.7 percent in February, representing a 15 percent decline after seasonal adjustments
· Extend Home Closing Deadline For Tax Credit: Senator Reid
o Senate Majority leader Harry Reid (D-Nev.) is offering an amendment to the American Jobs and Closing Tax Loopholes Act of 2010, to extend the closing deadline to September 30th
o http://www.cnbc.com/id/37622791
· House Passes Bill Allowing FHA to Raise Premiums - from American Banker
o The House overwhelmingly approved a bill Thursday aimed at helping the Federal Housing Administration rebuild its capital reserves. The bill, which passed 406 to
· commercial real estate (CRE) From The Daily Capitalist
o Fitch reported today the commercial real estate (CRE) values continue to decline giving rise to greater loan losses on CRE. On the average throughout 2009, lenders recovered 43 cents on the dollar on distressed loans. They see the loss rate only going up.
o The average loss severity rate or the ratio of realized loss to liquidation balance for U.S. commercial mortgaged-backed securities (CMBS) loans resolved with losses in 2009 was 57% compared to the 43% rate in 2008, according to new data from Fitch Ratings. Those losses outpace the cumulative historical average of 37.2%.
o "Loss severities are expected to remain above the current cumulative average through 2011," said Fitch managing director Mary MacNeill. "Assets liquidated in the current economic environment will be those not likely to see cash flow improvement from an extension or modification."
· Tishman Speyer Pays Debt on D.C. Buildings, Avoiding Auction - BBG
o Tishman Speyer Properties LP and its partners paid off $600 million in debt on a group of Washington- area office buildings, averting a foreclosure auction that had been scheduled for next week
o A partnership led by the New York-based property company put $700 million of new capital into the holdings, Tishman Speyer said in a statement yesterday. The investors included SITQ Inc., a unit of Canadian pension fund manager Caisse de Depot et Placement du Quebec.
o Tishman Speyer, which bought the 28 buildings from Blackstone Group LP near the peak of the commercial real estate market in 2006, stopped making interest payments on the debt last July, according to Standard & Poor’s. The recapitalization enables the property owners to hold onto prime assets in one of the country’s best-performing office markets.
Consumer sector:
· MCZ +24.4% (earnings)
· WEN +13.5% (Trian files 13D/A regarding approach by 3rd party interested in WEN acquisition)
· Toys R Us reports Q1 revenue of $2.61B vs year ago $2.48B
o the company filed its $800M IPO through Goldman, JPM, BofA Merrill, Credit Suisse, Deutche, Citi and Wells Fargo on 28-May
· KR United Food and Commercial Workers Local 876 reaches tentative agreement with Kroger
· CNK Barron's Weekday Trader is positive on Cinemark Holdings
· UNFI, STKL United Natural Foods and SunOpta extend deadline for asset purchase to 19-Jun from 5-Jun
· XIDE, HON Exide Technologies enters new licensing agreement with Honeywell (HON) Consumer Products Group
· WEN Trian says that it was approached by third party regarding interest in acquisition of Wendy’s/Arby’s Group
· FO, STZ Citi initiates FO, STZ ; Constellation Brands initiated buy; Fortune Brands initiated sell
· NAVI NaviSite reports Q3 EPS
· DUCK Duckwall-ALCO Stores reports Q1 EPS
· LULU Globe and Mail looks at Lululemon's use of social media
· BORN China New Borun 5.7M-share IPO priced at $7/ADS through Piper
· EXPR Express, Inc. reports Q1 EPS
GAMING LODGING & LEISURE
· PENN Penn National Gaming moves up opening of Hollywood Casino Perryville to 30-Sep-10
· HEALTHCARE
· Novartis is also a key gainer after the FDA Advisory Panel gave endorsement for new MS drug Gilenia last night with relative limited monitoring requirements
· CBST Cubist Pharmaceuticals to oppose Teva’s (TEVA) attempt to add inequitable conduct defense in patent infringement action
· BLTI Biolase Technology granted Canadian approval to sell iLase Personal Dental
· problems in drug manufacturing – WSJ
§ The short article focuses on problems at
§ Genzyme (GENZ)'s Johnson & Johnson (JNJ), Merck (MRK), and GlaxoSmithKline (GSK.LN), Pfizer (PFE) mentiones
o GILD Gilead Sciences announces notification of ANDA filing for Ranexa
o CRVL Corvel announces expanded buyback program
o OMI Owens & Minor enters into new credit agreement
o XOMA XOMA to Host conference call to present initial results from XOMA 052 clinical trial
o ESC Emeritus Corp files $150M mixed securities shelf
o WAG Walgreens downgraded to market weight from overweight at Thomas Weisel Partners; target cut to $30 from $45. The firm cites the outlook for sales growth & the potential end to the CVS relationship.
o PFE Bristol-Myers and Pfizer have agreed to stop the Phase 3 AVERROES clinical trial of apixaban in patients with atrial fibrillation
o JNJ, GENZ, MRK, GSK, PFE WSJ looks at problems in drug manufacturing
o BAYZF Bayer AG confirms forecasts for its MaterialScience unit -- wires
o AZN, GSK Barclays Capital upgrades AstraZeneca upgraded to overweight from equal-weight; GlaxoSmithKline upgraded to overweight from equal-weight
o CTIC Cell Therapeutics reports new data on Pixuvri (pixantrone dimaleate)
o JNJ Johnson & Johnson may face subpoenas for being "uncooperative" with Congressional investigation - NYT
o APCVZ APP Pharmaceuticals to immediately begin marketing Oxaliplatin Injection (liquid) in US
o GSK Study by FDA researcher concludes diabetics taking Avandia face health risks - FT
o GE General Electric looks to apply management techniques to its healthcare business - FT
o UNIS Unilife names R. Richard Wieland II CFO; replacing Dan Calvert
From our EU/London desk
· financials:
· The Banking sector is getting a lift from a Moody's reports in which the agency reports it has done its own stress test of European banks and says it believes that most European banks would be able to absorb losses stemming from their exposure to Greece, Portugal, Ireland, and Spain without requiring capital increases, even under what they qualify as a severe stress scenario – SA
· Brit Insurance +20.85% Rejects $1 Billion Apollo Offer
· SABADELL +3.58% SAYS IT MAY MERGE WITH GUIPUZCOANO
· Erste Group Bank +0.25% Upgraded to ‘Buy’ From ‘Neutral’ at UBS
· Swiss Re +1.25% Sees Chile Claims of $630 Million, Up From $500 Million
TODAY’S EVENTS
CONFERENCES
Friday June 11:
o C5 CEE Private Equity Conference - Jun 10, 2010 - Jun 11, 2010
o California Equity Research California Investor Conference - Jun 11, 2010
o Exane BNP European Seminar
· SYT
o Goldman Sachs Financials Services Conference
· BBVA , BILBAO_CHILE , HBC , HBCUSA , NDA.ST
o Incisive Media Family Office Investment Summit - Jun 11, 2010
o InterShow: The Traders Expo Los Angeles - Jun 09, 2010 - Jun 12, 2010
o Jefferies Global Life Sciences Conference - Jun 08, 2010 - Jun 11, 2010
· 8AM: SONO
· 8:30AM: CRTX , IVC
· 9AM: ISPH
· 9:30AM: BRKR
· 10AM: FSCGF.PK , NPSP
· 10:30AM: INHX , MYRX
· 11AM: LCAV
· 11:30AM: IDRA
· 12:15PM: NGSX
· 12:45PM: CALP
· 1:15PM: GNMSF.PK
o JPMorgan Capital Goods Sector Conference - Jun 10, 2010 - Jun 11, 2010
· MXTOF.PK
o JPMorgan China Conference - Jun 09, 2010 - Jun 11, 2010
· 12AM: CHDX , MR
o Platts European Renewable Energy Conference - Jun 10, 2010 - Jun 11, 2010
o RBC Capital Markets Canadian REIT Investor Sessions - Jun 08, 2010 - Jun 11, 2010
o REITWeek: NAREIT's Investor Forum - Jun 09, 2010 - Jun 11, 2010
· 9:15AM: CYS
o Richmond Events, Inc. Financial Industry Strategy Forum - Jun 10, 2010 - Jun 12, 2010
o Terrapinn Private Equity World Latin America Conference - Jun 09, 2010 - Jun 11, 201
o Thomas Weisel Partners Energy Conference - Jun 10, 2010 - Jun 11, 2010
o Wall Street Analyst Forum Conference - Jun 11, 2010
· 9:05AM: ANGN
· 10:35AM: PCCC
· NOA
o Windhover Information Inc IN3 East - Jun 09, 2010 - Jun 11, 2010
COMPANY MEETINGS/OTHER DAILY EVENTS
· Friday June 11:
o Shareholder meetings
§ ABTG, BPAX, EME, TAXI, TGE, UACL, WTT, ACAD, CHK, RVP, VGR, ARNA, RAE, ALSK, DIVX, INET
o Washington Mutual shareholders seek bankruptcy court approval to hold a long overdue meeting, where they'll have a chance to oust the board. DJ
ECONOMICS
· Friday June 11:
o 0955 U of Michigan Confidence Index
o 1000 Business Inventories
EARNINGS
o Materials
· Friday June 11: UEC
o Industrials/Homebuilders
· Friday June 11: HRLY, PBSO, TOD, TRCI
o Consumer/Retail/Education
· Friday June 11: BNHN, DUCK, FUQI, DLM, CHBT, PAS
o Financials
· Friday June 11: FCEC
o Tech/Telecom
· Friday June 11: EGMI
o Healthcare
· Friday June 11: TAROF, KAD
o Real Estate:
· Friday June 11: AMRR, MAYS
o Energy
INVESTMENT BANKING WRAP
M&A
· WEN Wendy's/Arby's attracts inquiry over deal – Peltz- Reuters
o Wendy's/Arby's Group Inc (WEN.N) Chairman Nelson Peltz said an unnamed party expressed interest in a potential deal involving the fast-food company, sending the company's shares up nearly 12 percent after hours
o Peltz said in a securities filing on Thursday he is considering an "oral inquiry from a third party expressing interest on a preliminary basis" in a potential deal that could include his participation
o http://www.reuters.com/article/idUSN1025400720100610
· LGF: Cuban: I'll tender shares to Icahn- NYPOST
o Carl Icahn's bid to gain control of Lionsgate gained new momentum yesterday
o Billionaire Mark Cuban said he would tender his holding in the movie studio to Icahn for $7 a share. The intent to sell gives the activist investor new fuel for his bid to control the Tinseltown studio behind such hits as "Precious" and "Mad Men."
· DIS Guilds Said to Tell Disney of Concerns on Miramax Talks- NYT
o Representatives of Hollywood’s principal guilds have told the Walt Disney Company that they have serious concerns about the possible sale of its Miramax Films unit to an investor group organized by David Bergstein
o Representatives of Hollywood’s principal guilds have told the Walt Disney Company that they have serious concerns about the possible sale of its Miramax Films unit to an investor group organized by David Bergstein
· Smart grid startups on M&A radar- Reuters
o Technology giants and conglomerates looking to expand into new growth markets are hunting for expertise and technology in the smart grid area, as power utilities move to upgrade the massive but aging electricity supply system
o http://www.reuters.com/article/idUSTRE65954L20100610
· AIG: AXA's Asian tangle ties its hands on AIA opportunity- Reuters
o Since Prudential (PRU.L) announced last week that it would walk away from a $35.5-billion deal to buy AIG's American International Assurance (AIA), the market has expected the American insurer to list or sell parts of its subsidiary.
o This presents AXA with a rare opportunity to buy into a distressed competitor in a down market. But analysts fear AXA is ill-placed to put itself in the running
o http://www.reuters.com/article/idUSTRE6592TS20100610
· Prudential Shareholders Leave CEO Out of Key Talks- London times
o Prudential Plc institutional shareholders are excluding Chief Executive Officer Tidjane Thiam from discussions to debate his fate
o Shareholders that the newspaper did not identify have asked for meetings with Chairman Harvey McGrath, or the senior independent director
· Guy Hands, C Citigroup and the fight for EMI- Reuters
o One of the best ways to get inside the head of British private equity boss Guy Hands is to study what gift he gives for Christmas. For years, Hands has sent friends and business associates a book he has recently read along with a letter discussing the work. The gift is designed to be both thoughtful and thought provoking
o http://www.reuters.com/article/idUSLDE6591MS20100611
· Abbey Road studios -- recording history- Reuters
o One of EMI's most famous properties is not a musician or a band but the Abbey Road recording studios, immortalised by the 1969 Beatles album of the same name. Last February, sources said that EMI might sell the studios and that property developers were eyeing it for luxury apartments
o http://www.reuters.com/article/idUSLDE6581ZG20100611
· EMI’s Guy Hands…overview-Reuters
o http://www.reuters.com/article/idUSLDE65821620100611
· JCI: bid for VSTNQ Visteon based on limited information- Reuters
o Johnson Controls Inc (JCI.N) made an unsolicited $1.25 billion cash bid for most of Visteon Corp's (VSTNQ.PK) assets on limited information and believes the bankrupt auto parts maker probably has more value than could be gleaned from public documents
o http://www.reuters.com/article/idUSN1024109220100610
· Merger Won't End Obstacles Facing UAUA United, CAL Continental- WSJ
o The merger of UAL Corp.'s United Airlines and Continental Airlines Inc. won't be a panacea, and the combined carrier must continue to innovate and evolve if it hopes to become financially sustainable, UAL Chief Executive Glenn Tilton said Thursday
· UAUA UAL, CAL Continental putting together management team- Reuters
o United Airlines and Continental Airlines (CAL.N) were busy assembling a management team for what will be the world's largest carrier once their merger is official, the chief executive of United's parent UAL Corp (UAUA.O) said on Thursday
o http://www.reuters.com/article/idUSN1023328420100610
· TPG to buy Vertafore from rivals for $1.4 bln- Reuters
o Private equity firm TPG Capital [TPG.UL] agreed on Thursday to buy Vertafore, which provides software and services to the insurance sector, from rivals Hellman & Friedman and JMI Equity for a total of $1.4 billion
o http://www.reuters.com/article/idUSN1024817320100610
· VMW VMware in Talks to Acquire EngineYard- Reuters
o VMware is back on the hunt for new startups as it looks to further raise its profile in the platform-as-a-service market. Sources tell me its latest target is EngineYard, the Ruby on Rails cloud provider that’s raised $37 million from the likes of AMZN Amazon, Benchmark, DAG Ventures and Bay Partners
o VMware has been buying startups such as Zimbra, SpringSource and others as it works to transition from providing a hypervisor to offering higher-value services
· Tishman injects $700 million to save DC portfolio- Reuters
o Property owner Tishman Speyer said on Thursday it led a $700 million injection into its protfolio of Washington-area office buildings, fighting off a foreclosure attempt by Brookfield Properties Corp (BPO.TO).
o http://www.reuters.com/article/idUSN1025601220100610
· Colombian bank says no reply on GE unit offer- Reuters
o Colombia's Banco de Bogota BBO.CN said it had received no response by a Thursday deadline on its offer to buy GE's (GE.N) Central American bank unit, but would continue to look for opportunities to expand.
o http://www.reuters.com/article/idUSN1022663820100610
· PEP PepsiCo cancels tender for Thai bottler Serm Suk
o PepsiCo and Thai partner Strategic Beverages (Thailand) have cancelled a tender offer to buy all the shares in Thailand's Serm Suk PCL SSC.BK they did not already own
o http://www.reuters.com/article/idUSWNAS886020100611
· CAT Caterpillar, NAV Navistar near $586 mln China truck tie- Reuters
o Caterpillar Inc (CAT.N) and Navistar International Corp (NAV.N) are finalising a 4 billion yuan ($586 million) truck and engine manufacturing tie-up with China's Jianghuai Automobile (600418.SS), a source with direct knowledge of the deal said on Friday
o http://www.reuters.com/article/idUSTOE65905R20100611
· MS M.Stanley says subsidiary buys Parkway shares- Reuters
o UK-based FrontPoint Management LLP, a unit of Morgan Stanley (MS.N), has bought 75,000 shares of Parkway Holdings (PARM.SI), Asia's biggest listed hospital operator, for S$3.83 a share for an investment client, the bank said in an exchange filing.
o http://www.reuters.com/article/idUSSGE65A04G20100611
· PT says Vivo JV can go on if Telefonica bid fails- Rueters
o Portugal Telecom (PTC.LS) said on Thursday that its joint venture with Spain's Telefonica (TEF.MC) that controls Brazil's Vivo (VIVO4.SA) will not be compromised if the Spanish company's bid to buy Vivo is rejected.
o http://www.reuters.com/article/idUSLDE6592GV20100610
· Videocon in talks with Korea's SK Telecom for offloading 26% stake- Economic Times
o Videocon Telecommunications has started talks with Korea’s Sun Kyung (SK) Telecom to sell a 26% stake, the latest attempt by it to bring in a foreign partner for its fledgling mobile phone services
o Videocon Telecommunications has also been linked to a buyout by Mukesh Ambani’s Reliance Industries, whose board is believed to have recently authorised its re-entry into the telecoms space following the peace deal between the Ambani brothers
· RPM RPM's Performance Coatings group acquires Norwegian flooring coatings business- for $11M- SA
· SNPS Synopsys buys some assets of private chip technology co- reuters
o Chip-design software maker Synopsys Inc (SNPS.O) said it acquired technology, engineering resources and other assets of Synfora Inc for an undisclosed amount, to strengthen its presence in system-level design
o Synfora makes programming language synthesis tools used to design systems-on-chips, or SoCs, which have almost all components of an electronic system in a single integrated chip
o http://www.reuters.com/article/idUSSGE6590KZ20100610
· Fujitsu and Toshiba in mobile merger talks- Reuters
o Fujitsu and Toshiba are in talks to merge their mobile phone businesses, two sources said, in a move that would create Japan's No. 2 cellphone maker in a rapidly shrinking market.
o The deal would allow the two electronics makers to share the heavy cost of developing phones in the technologically advanced market and analysts expect more consolidation
o http://www.reuters.com/article/idUSTRE6594S020100611
· Brit Insurance rejects Apollo takeover approach- Reuters
o London-listed Brit Insurance (BRE.L) has rejected a takeover approach from U.S. buyout group Apollo APOLO.UL that valued the insurer at more than 570 million pounds
o Citing people close to the situation, the FT said Apollo had made an indicative offer of 10 pounds a share to Brit's board on Monday and was considering whether to raise its offer
o http://www.reuters.com/article/idUSTRE65A08R20100611
· AMR AMR Corp reiterates intent to evaluate a possible divestiture of AEO American Eagle- SA
· Sanofi in I-T net, told to pay Rs 650 cr over Shantha buy- Economic Times
o Close on the heels of Vodafone-Essar contesting a tax case in the Bombay High Court, tax sleuths have snared another multi-national company for tax evasion. This time, French pharma firm Sanofi Aventis, that acquired India’s Shantha Biotech last year, has been asked to pay Rs 650 crore as capital gains tax to the Indian government
o http://economictimes.indiatimes.com/articleshow/6034770.cms
· Banco de Sabadell confirms studying merger with Guipuzcoano- DJ
o Banco de Sabadell SA (SAB.MC) said Friday it is studying a takeover of Banco Guipuzcoano SA (GUI.MC) as Spain's banking sector rapidly consolidates following the collapse of a decade-long housing boom.
· Brit Insurance rejects buy-out approach- FT
o Brit Insurance, the Lloyd’s of London insurer, has rejected a £10-a-share indicative takeover offer from US private equity group Apollo that values the sponsor of the England cricket team at more than £570m.
o Apollo, which was founded by Leon Black, made the offer to Brit’s board on Monday, according to people close to the situation. The private equity group was last night considering whether to return with a higher offer,
o http://www.ft.com/cms/s/0/fe29b046-74c7-11df-aed7-00144feabdc0.html
· Bancaja, Caja Madrid Confirm Merger Talks- WSJ
o Spanish savings bank Bancaja Thursday confirmed it's in talks to merge with bigger peer Caja Madrid and five other lenders, in a deal that if successful would create the biggest savings bank in Spain by assets
o http://online.wsj.com/article/BT-CO-20100610-707885.html?mod=WSJ_World_MIDDLEHeadlinesEurope
· GSK GlaxoSmithKline Buys Laboratorios Phoenix For $253M Cash- WSJ
o "This is an important step forward in our strategy to grow our business in Latin America; a key group of emerging markets for GSK", said Abbas Hussain, President Emerging Markets
o . "By acquiring Phoenix, we will rapidly expand our presence in the fast growing Argentine market. In addition, Phoenix's broad portfolio and rich pipeline of branded generics will enable us to bring more medicines of value to patients in Argentina,"
o http://online.wsj.com/article/BT-CO-20100610-709061.html?mod=WSJ_Deals_LEFTLatestHeadlines
$ RAISING
IPOs
· More U.S. companies to IPO in Canada- Blobe Investor
o Look for more U.S. names trading on the Toronto market as companies that are "pre-Nasdaq size" turn to Canada to raise capital by going public, predict lawyers from Torys as part of the firm's mid-year report on capital markets.
o Torys argues that Canada is attractive for companies in the $50-million to $500-million range and those in the energy, metals and mining, clean technology or technology sectors.
· Treasury says GM to determine timing of public stock offering- Star tribune
o General Motors not the government, will determine when the automaker will conduct a public stock offering at the heart of the company's revival, the Obama administration said Thursday
o The Treasury Department said in a statement that it expects to sell some of its 61 percent stake in GM when the automaker goes public. The initial public offering could happen as early as October
· Treasury Will Set Fees for Banks on GM’s IPO, Retain Veto Power- BBG
o General Motors, 61 percent owned by the U.S., will choose the lead bankers for its initial public offering while the Treasury Department will retain veto power over the selection and determine the fees paid to underwriters
o GM’s selection will be “subject to Treasury’s agreement that the selection is reasonable,” the government said yesterday in the statement
· Standard Chartered Advances in Mumbai Trading Debut- BBG
o Standard Chartered Plc rose 0.9 percent in its Mumbai trading debut after the U.K. lender that makes at least three quarters of its profit in Asia raised $540 million in what may be its most profitable market this year.
o Standard Chartered, the first company to issue Indian depository receipts, aims to use the public listing to reach more corporate clients in the world’s second-fastest growing economy
· CBOE Owners Seek 166% Gain Charging IPO Buyers Highest Premium- BBG
o CBOE Holdings Inc.’s $339 million initial public offering may give its owners a 166 percent profit as they sell stock at a higher valuation than any of the world’s biggest securities exchanges.
o The operator of the largest options exchange will offer shares at $27 to $29 each next week, according to regulatory filings and data compiled by Bloomberg. The IPO would almost triple the average value of a member’s stake in the Chicago- based company
PRICINGS
o Initial Offerings
o China New Borun prices its 5.73M share IPO below the range of $12-14:
o Secondary Offerings
o ARR Armour Residential REIT 7M share secondary expected to price 6/8 via Ladenburg Thalman and Macquarie
o ULTA Ulta Salon Cosmetics & Fragrance 9.8m share secondary expected to price 6/8
NEWS
· Real Estate: ESC Emeritus Corp files $150M mixed securities shelf:
***All eco data from Bloomberg and DJ
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