Morning @ Cantor
Morning @ Cantor 6/24
Today’s Stories From Cantor Fitzgerald
Sal Catrini (908) 517-5067
EARLY US LANDSCAPE****
· US Stock Futures, SPs dn 6, Treasuries bid, short end getting attention..Gold and crude tick dn ; LEN reports mixed, orders weigh on sentiment ;
o Dollar higher but off highs at 7am et , EUR off lows even as peripheral widen, Concerns about greek default weigh on EUR today
· Early optimism overnight on Leadership change in Australia, plus Taiwan Central Bank feels confident in the global recovery and raises interest rates unexpectedly..gives way to gloom as European peripherals continued to widen throughout the morning… spot gold was lower in the session showing everythings being sold in front of G20
· Geo- politics also weighs today…Mkt worries over a last weekend's report of an American fleet passing through the Suez Canal, triggering fears that the United States and Israel were preparing for an attack on Iran, with Egypt's cooperation. An Israeli press article today that IAF helicopters were recently unloaded complemented that weekend speculation – TTN
· Asian Markets: Nikkei +0.05%; Hang Seng (0.59%); Shanghai Composite (0.12%)
· EU stocks trades dn 1% , just off lows at 7am et…equities moved into negative territory as declines in commodity prices started to weigh on resource companies
o Metals and mining companies gave up gains after having risen on hopes Australia's new Prime Minister would compromise on proposed taxes on resource companies. Banks are also lower on ongoing sovereign credit concern
· Greece Sovereign Bond Risk Rises to Record, Default Swaps Show.. rose 27 basis points to a record 959; Greek banks fall;
· Concerns about greek default weigh on EUR today – BBG
· LUXEMBOURG'S FRIEDEN SAYS GREECE WILL NOT DEFAULT – BBG
o FRIEDEN: AUSTERITY MEASURES WON'T LEAD TO EURO-AREA DOUBLE DIP
· Greek Politics Close To Breaking Point Over Demanded Reforms – WSJ blog
o http://blogs.wsj.com/source/2010/06/24/greek-politics-close-to-breaking-point-over-demanded-reforms/
· Trichet Explains Why Soros Is Wrong About the Euro
o The currency has kept its value from its debut and has guaranteed price stability, he said. "A currency that guarantees such stable prices, it's of value in the eyes of domestic and international investors," Trichet said.
o http://www.cnbc.com/id/37890644
· Germany Defends Austerity Measures Ahead of G20 – CNBC, WSJ links
o Merkel Rejects U.S. Call to Spend
o In an interview, the German chancellor rebuffed Obama's call for Germans to aid the global recovery by spending more and relying less on exports, even as she warned that Europe's own financial crisis is far from over.
· Reuters) - Budget austerity plans will not drag the euro zone economy into stagnation, European Central Bank President Jean-Claude Trichet was quoted on Thursday as saying
· Danes Say No to Euro in Record Numbers, Danske Bank Poll Shows - BBG
· Soros Says the Euro is a Flawed Construct – CNBC
· ECB's Trichet commented in an Italian newspaper interview that the ECB was evaluating Italy's budget and believed Italy is going in the right direction – TTN
· Fitch commented that it did not anticipate further downgrades for Spain at this point. Spanish bank stress tests supported market confidence
· Fitch commented that there have been no massive deterioration in Greece since April but again stressed that the country needed 'very significant' fiscal consolidation in 2011-12 period
o France strikes to protest higher retirement age – BBG
· Belarus.. Russia's Gazprom resumed gas supplies having received outstanding payments in full - TTN
· China vs US simmers over FX before G20
o The yuan held near the strongest level since 1993 Thursday
§ The People’s Bank of China set its reference rate for yuan trading at 6.81 per dollar, little changed from yesterday’s fixing and the closing spot rate
o President Barack Obama and Chinese President Hu Jintao will hold their sixth bilateral meeting before the summit of the Group of 20 nations in Canada - BBG
o US Lawmakers Renew Focus on China after Yuan Stalls
§ Reuters) - Senators said on Wednesday they were unmoved by China's steps to partly free the yuan and vowed to push forward legislation to punish a Chinese currency misalignment they say distorts trade and steals jobs.
o Yuan can become alternative to $US - businessspectator
§ China's yuan could rapidly become an internationally used currency and serve as an alternative to the US dollar in central bank reserves, the Asian Development Bank has said in a report.
§ "The renminbi has yet to become an international currency. It could become one much more quickly than many anticipate," the ADB said in a joint study with Columbia University's the Earth Institute.
o China will not alter the composition of its official currency holdings in the wake of its decision to let the yuan resume moving more freely, Li Yang, a former central bank adviser, said.
o China PBoC's adviser Li Daokui commented that the Yuan currency could rise 3% against the USDr by end of 2010 if euro stabilized. He added that Yuan reform had limited impact on interest rate decisions - TTN
· Fitch bashes china backs
o China Bank Debt Repackaging Raises Risk of Crisis, Fitch
o might lead to another financial crisis, Fitch Ratings Ltd. said.
· China could end up with European-style debt crisis, auditor warns
o China faces a growing risk from its huge local government debt and could soon find itself in a fiscal crisis similar to the one in the eurozone, China's chief auditor warned. "The scale is large, and the burden is quite heavy," Liu Jiayi, director of the National Audit Office, said in his annual report. China Daily (Beijing) (24 Jun.)
· WORLD FACES `MORE ECONOMIC PROBLEMS,' INVESTOR JIM ROGERS SAYS
· G-20 draft communique says there's "no room for complacency"
o The world faces the risk of crippling long-term growth as unemployment remains unacceptably high, according to a draft communique from the Group of 20, prepared for this week's Toronto meeting. "There is no room for complacency," according to the document, which describes the global economic recovery as "uneven and fragile." Financial Post (Canada)/Reuters (23 Jun.) , The Globe and Mail (Toronto) (23 Jun.) , CBC.ca (Canada) (23 Jun.)
· Data
o Taiwan hikes rates unexpectedly
§ Bloomberg) -- Taiwan’s central bank unexpectedly raised its benchmark interest rate for the first time since 2008 after the economy expanded by the most in more than 30 years.
o Euro Zone Apr Industrial New orders M/M: 0.9% v 1.6%e;
o France May Consumer Spending +0.7% m/m vs consensus +0.4%
o Japan May exports +32.1% y/y vs survey +36.5%. May imports +33.4% vs survey +34.2%.
· Money Raising:
o IPO Pick-Up Lifts Economy – WSJ link
§ With more Silicon Valley start-ups going public this year than in the past several years, the activity is starting to ripple out across the region's initial-public-offering ecosystem.
§ Investment bankers, lawyers, consultants and financial printers that make up Silicon Valley's IPO machine are all reporting a surge in business. Some are hiring again for the first time in more than a year
o GM Said to Prepare IPO Plan With Treasury Selling 20% - BBG
· M&A:
o HAS: Hasbro in Early Talks on Buyout – WSJ link
§ Private-equity firm Providence Equity Partners has held preliminary talks with Hasbro, one of the world's largest toymakers, to take the company private in a leveraged buyout.
§ a deal for a company the size of Hasbro would likely require at least 40% equity contribution, these people said. Recent leveraged buyouts have seen about a 30% equity contribution
o HAS: talks between Providence Equity Partners, Hasbro collapsed last week - NYT DealBook
o LGF Lions Gate talking to Metro Goldwyn Mayer about a merger - Los Angeles Times
o Private-equity deals have bounced back in the first half of the year as the markets recovered and banks reopened their lending spigots. But still, most of this year's private-equity buyouts have been relatively small, ranging between $1 billion and $4 billion. WSJ
o PXD Pioneer Natural to sell 45% interest in Eagle Ford Shale play to Reliance Industries (RIL.IN) for $1.15B
o Abu Dhabi’s Aabar Buys 4.99% of Italy’s Unicredit, CEO Says - BBG
· Tribune Bankruptcy Hung Up by Squabbles – WSJ link
· Appliance Rebates See Mixed Demand – WSJ link
o States have paid out less than half the money set aside for rebates on energy-efficient household appliances, disappointing retailers and manufacturers.
· BP stories:
o BP Bond Offering Hits a Snag – CNBC link
§ BP's expected bond offering has hit some snags, but the embattled oil company still hopes to sell $5 billion or more of corporate debt as early as next week
o BP Says Cap Reinstalled on Leaking Oil Well in Gulf of Mexico
o BP WSJ notes that it is a good time for BP to sell assets
o The Media Campaign Begins: BP Is Now Too Big To Fail – ZH link
o BP’s Demise Would Threaten U.S. Energy Security, Industry, Jobs - BBG
o (NYT) BP Is Pursuing Alaska Drilling Some Call Risky
o House Votes to Give Subpoena Power to Panel on BP Oil Spill
o Ken Feinberg to resign as pay czar this summer – WSJ
§ will focus on administrating BP's oil-spill escrow fund
· Homebuilders. LEN reports mixed, orders weigh on sentiment
· MINERS BHP Billiton Ltd. and Rio Tinto Group led gains in Australian mining companies as Julia Gillard said she will start negotiations on the government’s proposed profit tax after ousting Kevin Rudd as prime minister. BHP, the world’s biggest mining company, climbed 1.3 percent to A$39.65 at the 4:10 p.m. close of trade in Sydney.Rio gained 1.7 percent, Fortescue Metals Group Ltd. rose 2.5 percent and Macarthur Coal Ltd. advanced 6.4 percent. BBG
·
· MINERS...WSJ SKEPTICAL ...Rudd's Downfall Hasn't Locked Victory For Miners
· MINERS New Australian Prime Minister Julia Gillard says resource super profits tax needs to be negotiated - BBG
· Banks: Citi latest to downs bank est..GS, MS, JPM
· Banks: Bank executives were panicking last night over a proposed fix to Title II of financial reform literally penciled in at the last minute.
o The fear is that that the proposed change to the orderly liquidation authority could leave banks on the hook for a possible wind-down of Fannie Mae and Freddie Mac that could cost as much as $400 billion
o http://dyn.politico.com/members/forums/thread.cfm?catid=18&subcatid=59&threadid=4193713
· Consumer earnings disappointing overnight
o BBBY: -5.7% very strong Q1 across all items. Guidance looks to be a little shaky thoughm and could signal slowing trends in the near future.
o NKE: -2.3% Q looked solid on all metrics, but rising costs and forex headwinds kept the results muted. Wage inflation in Asia is also a concern for GMs in the future. The World Cup seems to be having a positive effect. Future orders were strong in the Q, which could help offset short term margin concerns. Guidance looks somewhat conservative as NKE calls for FY11 to be up hih single digits.
o DRI: disappointing Q4 and comps tracking below. Guidance for FY11 looks strong on good top line growth, and stronger margins. Olive Garden was a big negative posting SSS -1.5% vs expectations of +1.4%
o MLHR -6.9% Big miss in Q4. profits fell amid slower sales and higher restructuring costs. A 4Q acquisition should bolster the company’s future product line. Orders began to pick up late in the Q which could be a sign of better things to come.
· Ford Americas Chief Says Auto Market ‘Flat-lined’ - BBG
· Tech positive: TSMC and UMC see orders increase for 3Q10 – DigiTimes
o some major clients, including Qualcomm, Integrated Memory Logic (iML), Microsoft and Silicon Image, increase their orders
o http://www.digitimes.com/news/a20100624PD209.html
· Tech neg: PAYX: -3.3% slight Q4 beat, but guidance falls short
· GOOGLE Wins Copyright Ruling...BBG etc…
o JUDGE: YouTube Didn't Infringe VIACOM...
· For-profit colleges : Apollo Group (APOL): The owner of the for-profit University of Phoenix had a securities-fraud damages award of as much as $277.5 million reinstated against it after the trial judge had tossed it out.
· For-profit colleges : Bloomberg) -- For-profit colleges need tougher oversight and regulation, according to a report from a Democratic Senate committee chairman that questions the industry’s advertising spending, tuition costs and reliance on taxpayer money.
· Micro Focus (MCRO.LN) is down sharply after reporting
· Siemens CEO tells press he is confident of record profits this year; to unveil new ROC targets in Nov
· Lehman Brothers Pays Its Bankruptcy Advisers $830.6 Million - BBG
· Financial reform to wrap up finally??
o financial rules nearly complete, lawmakers have waited until the final, frantic hours to sort out the most controversial provisions in the bill
o Democrats aim for final bill by Thursday night
o As Reform Talks Enter Final Day, Volcker Rule Likely to Get Tougher - American Banker link
o Volcker: Senators Prepare A Citigroup-Sized Hole In Volcker Rule – CNBC
§ Senate negotiators are expected to offer changes today to the financial reform bill that would soften the Volcker rule. On Capitol Hill there is widespread speculation that the Senate negotiators will propose language that would allow banks to invest a small amount of their capital in their internal hedge funds or proprietary trading desks.
§ Exactly how much capital the banks would be able to commit to their hedge funds and proprietary trading under such a change is not clear. Early reports indicate there may be support on Capitol Hill to allow banks to put 2% of their capital into hedge funds they sponsor or prop trading. Bank lobbyists have been pushing for a higher number, perhaps up to 5% — a level which would allow many banks to escape the Volcker rule altogether.
§ http://www.cnbc.com/id/37879514
o Derivatives: Democratic leaders pressured Sen. Blanche Lincoln (D-Ark.) Wednesday to scale back a proposal that would force big banks to spin off their derivatives businesses, highlighting a conflict that has the potential to crack Democratic support behind the massive regulatory reform bill
§ The issue is expected to be in the spotlight Thursday as the House and Senate seek to reconcile their versions of the bill
§ http://www.washingtonpost.com/wp-dyn/content/article/2010/06/23/AR2010062305352.html?wprss=rss_business
· Obama Approval Rating Slips to 45%: NBC-WSJ Poll
o For the first time, more people disapprove of Mr. Obama's job performance than approve. And 57% of voters would prefer to elect a new person to Congress than re-elect their local representatives, the highest share in 18 years.
· Jobs Bill news:
o Bill to extend jobless benefits stalls in Senate as talks collapse – WP link
§ Senate Democrats were ready to throw in the towel late Wednesday on a months-long effort to deliver fresh aid to states and extend benefits to unemployed workers, saying Republicans had rejected their latest offer to pare down the size and cost of the package.
o Senate Democrats push jobs tax compromise - Reuters link
§ In an effort to break a stalemate over a package of unemployment aid and business tax breaks, Senate Democrats on Wednesday offered a compromise that would pare proposed aid to cash-strapped states
· Canada police make explosives arrest before G8/G20 - Reuters link
o Police said on Wednesday they have charged a Toronto man with possession of explosives as security tightens in the run-up to the G8 and G20 summits of world leaders in Canada later this week.
· Economics:
o May Durable Goods, Initial Jobless Claims at 08:30 ET
o Natural Gas Inventories at 10:30 ET
o Treasury Auctions in 7-yr notes at 13:00 ET
· Earnings:
o Reporting before the bell: CAG, DFS, LEN, MKC
o Reporting after the close: HRB, ORCL, RIMM
· President Barack Obama will use Russian President Dmitry Medvedev’s visit to Washington today to advance plans for Russia’s entry into the World Trade Organization as the countries seek broader ties - BBG
· Auction today 1PM : $30B in 7 year notes today
TODAY’S BIG STORIES
· Equity Wrap:
o Trading remained light albeit uneventful following the disappointing new home sales numbers and this afternoon’s FOMC announcement - which was no shocker, and by day’s end we flattened out. We were lower most of the day, the energy space continued its selloff, the Fed has said that financial conditions have become less supportive of economic growth - the central bank cited what it called "developments abroad" eluding to the mess in Europe.
o Barring some major news or developments (and as long as the World Cup is televised) we can expect to see low volume and volatility – at least until earnings are in full swing once again.
o GE, CVX and MSFT were all lower down 1.5% or more after the FOMC said “financial conditions have become less supportive of economic growth on balance”, ADBE closed down 7.25% after a rev forecast that may miss estimates.
o Internally buy and sell names were about even, giving the edge to the sellers, the breadth of the market had 1 ¼ declining issues for every 1 advancing.
o Technically we broke through 1090 support earlier, but managed to come back by the close, we catch support @ 1085 which is the 50% Fibonacci retracement between recent 1130 high and 1040 low, then 1075 (which is also Fibonacci 38.2%) if we go lower – 1111 is now the 200 DMA if we manage higher.
o Asian markets were weaker with the Nikkei off 1.87% and Shanghai off 0.87%. Europe tried to do better, rallying from a 1% deficit intraday, only to fall back as fresh worries surfaced concerning sovereign debt. France fared worst, off 1.7%, as French debt fell over rating concerns. Greek bonds widened to 772 bps over German Bunds, the widest spread since May. Portuguese bonds also widened (to 303 bps), as did Spain’s (189 bps). S&P futures started stronger, up about 5 points, only to give up these gains in the face of European worries. The decline intensified with the announcement of New Home Sales (off 33% to 300k annualized, the lowest on record). From top to bottom, the drop was nearly 20 S&P points, creating what would be the intraday low at 1080.20, at 10:04 am. A fitful recovery/ consolidation ensued as traders settled in to await the Fed announcement on rates. After the announcement there was a brief (5 minute) attempt to revisit the highs. Sellers quickly emerged, capping the rally; S&P’s ultimately closed off about 3 points, well above the day’s lows, but down nonetheless.
o Despite the weak housing data, the XHB actually rallied (up 1.2%), snapping a six day losing streak, led higher by KBH (up 4.4%) and LEN (up 3.8%). As for other market sectors, the weakest two were energy and utilities (off 1.1% and 1% respectively); telecom was strongest (up 0.6%). The balance of the trading week should prove interesting as traders prepare for the Russell rebalancing, while also squaring up positions in front of this weekend’s G20 meeting.
o (Billy Clark and team)
· Treasury’s Wrap:
o A quiet overnight session found Treasuries well bid from the get go in the New York trading session. The initial rally was led by the front end of the curve with real money buying the main beneficiary. Another set of poor housing data (new home sales 300K vs. 410K expected, down 32.7% MoM expectations for down 18.7) once again send Treasuries for the races. A small backup in the late morning quickly dissipated as the $38Bln 5 year auction neared with all signs pointing to another stellar auction such as the case was for yesterday's $40Bln 2 year notes. The market tone, however, did not tell the true story as today’s 5 year tailed by a whopping 4.1bps, the largest tail since July 2009. Stats were extremely poor with indirects purchasing 34.6% the lowest percentage since April 2009 and directs 10.7% the lowest percentage since January. The large non-primary dealer participation that many had anticipated did not materialize, potentially already stepping in or waiting for tomorrows 7 year which will give a more attractive yield.
o The market held in extremely well post auction given the large dealer takedown (55%) especially with aan extremely poor setup by the street. The FOMC release was as expected leaving rates at 0-.25% reinterring rates will stay low for an exceptionally low for a extended period, inflation is likely to be subdued and financial conditions are less supportive of growth. Treasuries once again caught a bid post release with the market finishing near its intraday highs, yields lower by ~4-6bps with the curve modestly changed. $30Bln 7 year notes remain on the auction calendar for thurs
o Primary Dealer
· Investment grade Wrap:
o After a busy week and change flows were a little lighter today. The World Cup distracted for much of the morning with England and the US advancing, the US in thrilling fashion in the 91st minute as they finally had a goal that wasn't disallowed by a referee. Stocks unchanged, swap spreads wider, Euro wrapped around $1.23, and the VIX unch'd wrapped around 27. Buyers continue to be selective because they can be although we continue to see a few more long buyers coming in as of late trading ADM, AET, and AMGN among others as well as buyers inside 5% of long MDT, MMM, and a few others. All in all more buy interest continues to be of intermediate paper. 2018 is all over the place as we traded HON 18s and MCD 18s the past two days in the +25-20 context and ADM wrapped around +40 despite ADM being better rated and 10MM+ PH 18s traded +55-50 off a bwic yesterday. Just two new issues today with $800MM from Grupo Bimbo in EM and $400MM from Jeffries. Without a major global event should be more of the same from now through the fourth of July weekend as we slowly grind tighter. The GOM was lower .5-2pts in lighter volume.
o MICHAEL SALEMO
· CMBS DAILY RECAP
o We were fairly slow today especially once the soccer started. $209mm in BWICs with no real theme besides some '03 lcfs. No AM/AJ lists though. Still like AMs given the recent '07 duper and AM CMBX rallies. GG10s finally under performed widening 10bps while better '07 dupers were unchanged. Seeing a couple seasoned credit lists for tomorrow.
o GEORDIE WALKER
· Credit Markets stories
o Mortgage Bond Prices Rise to ‘Insane’ Records - BBG
§ Mortgage securities with U.S.-backed guarantees are trading at record high prices on speculation homeowner refinancing will fail to accelerate and as supply of the bonds remains limited.
§ The average price of $5.2 trillion of bonds guaranteed by government-supported Fannie Mae and Freddie Mac or federal agency Ginnie Mae climbed to 106.3 cents on the dollar yesterday, according to Bank of America Merrill Lynch’s Mortgage Master Index. That’s up from 104.2 cents on March 31, when the Federal Reserve ended its program purchasing $1.25 trillion of the debt
o COLUMBIA SUSSEX, RECKSON LOANS MOVED ON IMMINENT DEFAULT: FITCH
o structured finance: Fitch Ratings has revised its practice globally for assigning and maintaining structured finance ratings on 'interest only' securities (IOs) as well as prepayment certificates. The revised practice affects a variety of security types including those commonly referred to as Class Xs, Class IOs, Class Rs, Class Ps, and MERCs.
§ This change is reflective of Fitch's ongoing effort to promote consistency and transparency with regard to its structured finance ratings
o Catastrophe Bonds Slump as Hurricane Forecasts Spook Buyers
§ Bloomberg) --Catastrophe bonds, used by investors to bet against natural disasters, have slumped the most since 2008 as forecasters predict a busier-than-usual Atlantic hurricane season
§ The Swiss Re Cat Bond Price Return Index fell 0.6 percent on June 18, the biggest drop in 20 months for the benchmark, which prices every Friday. The index has declined five straight weeks and is at the lowest since October
o CLOs: Alcentra Says Most Managers in $100 Billion CLO Market May Fail - BBG
§ More than 80 percent of the collateralized loan obligation managers in Europe may not survive after raising no new funds since 2008, according to David Forbes-Nixon, chairman of Alcentra Group Ltd., Europe’s largest CLO manager
§ “Over the next 12 months there should be significant consolidation,” Forbes-Nixon said in an interview in London.
§ There will probably be only 10 to 12 survivors in Europe, out of 60. If you haven’t got at least $3 billion under management, you don’t have a viable business.”
· Macro Hedge Funds Add $2.5 Billion as Global Trades Proliferate - BBG
o Hedge funds that bet on economic trends are attracting cash at almost double last year’s pace as they seek to profit from events such as Europe’s sovereign debt crisis and China’s decision to let the yuan trade more freely.
· Private equity firms today sit atop an estimated $500 billion.
o But the deal makers are desperate to find deals worth doing, and the clock is ticking. NYT
o Given the prices being paid for companies, investors’ returns over the life of the fund are likely to drop into the low to mid-teens, said Hugh H. MacArthur, head of global private equity at the consulting firm Bain & Company
o http://www.nytimes.com/2010/06/24/business/24private.html?ref=business
· Fortress Investment Group said late Wednesday that it won't pay a quarterly dividend again. The hedge fund and private-equity firm decided to keep capital in the second quarter for potential future investment opportunities and for working capital purposes, according to a statement. Fortress shares fell 4.4% to $3.49 on Wednesday, leaving them down 22% so far this year. BBG
· BlackRock ETFs Face SEC Hurdle in Push for $7.5 Trillion Market - BBG
o Plans by BlackRock Inc. and Vanguard Group Inc. for a new type of exchange-traded fund to challenge actively managed mutual funds may run into opposition from the U.S. Securities and Exchange Commission
o The firms are seeking approval for actively run ETFs -- where managers select holdings -- that would keep some of their assets undisclosed, allowing them to compete better for the $7.5 trillion managed by stock and bond pickers. Unlike mutual funds, which reveal holdings every quarter, ETFs are currently required to disclose assets daily, inviting rivals to copy trades and making it harder for firms to enlist top managers, said Thomas Graves, an analyst with Standard & Poor’s in New York
o “This is more than simply working out the details of a complex product,” said Andrew Donohue, head of the SEC’s investment-management arm, in an interview from Washington
o “I’m concerned that the lack of transparency will disrupt the process that keeps a fund’s per-share net asset value and share price closely aligned.”
· Bloomberg Plans Big Immigration Push - WSJ link
o Mayor Bloomberg will launch a coalition of mayors and business leaders to advocate for an overhaul of the nation's immigration policy.
· Unmanned drone to border area WP link
o Napolitano announces plan to deploy UAV to Texas as part of stepped-up surveillance of Mexico
· A prosecutor says a Pakistani court has convicted five Virginia men on terror charges and sentenced each to at least 10 years in prison, the Associated Press
· Christie May Not Have Votes to Pass New Jersey Budget – BBG
o Bloomberg) -- Two Republicans in the New Jersey Assembly plan to vote against Governor Chris Christie’s $29.4 billion budget, which may leave his party unable to pass the spending plan by the July 1 start of the fiscal year
· MEXICO Violence spreads to tourist spots - WP link
o Many times, the victims in Mexico's drug war simply disappear. Just a few miles outside this quaint tourist town filled with silver jewelry shops, Mexican authorities discovered where some ended up.
COMPANY NEWS WITH MACRO IMPLICATIONS
INDEX Changes:
· QEP QEP Resources to replace Questar (STR) in S&P 500 index after the close June 30
• Questar is spinning off QEP Resources to its shareholders in a transaction expected to be completed on or about that date. The post-spin parent company, Questar Resources (STR), will replace Federal Signal Corp. (FSS) in the S&P MidCap 400 index, and Federal Signal will replace Magnetek (MAG) in the S&P SmallCap 600 index.
ENERGY
· Theolia launches a €60.5M capital increase
· EU to propose aid to coal industry for another 12 years – Reuters
· BP Plc is set to partner with U.S. rival Chevron Corp to bid for a South China Sea exploration block, the Wall Street Journal
· Venezuela to nationalise US oil rigs – FT link
o Rafael Ramirez, oil minister, says the 11 drilling rigs belonging to Helmerich and Payne are being nationalised to bring them back into production
· BP stories:
o BP Bond Offering Hits a Snag – CNBC link
§ BP's expected bond offering has hit some snags, but the embattled oil company still hopes to sell $5 billion or more of corporate debt as early as next week
o BP Says Cap Reinstalled on Leaking Oil Well in Gulf of Mexico
o BP WSJ notes that it is a good time for BP to sell assets
o The Media Campaign Begins: BP Is Now Too Big To Fail – ZH link
o BP’s Demise Would Threaten U.S. Energy Security, Industry, Jobs - BBG
o House Votes to Give Subpoena Power to Panel on BP Oil Spill
o Ken Feinberg to resign as pay czar this summer – WSJ
§ will focus on administrating BP's oil-spill escrow fund
o BP NY Times discusses concerns over the Liberty BP drilling operation in Alaska
§ http://www.nytimes.com/2010/06/24/us/24rig.html?ref=todayspaper&pagewanted=all
o BP WSJ notes that it is a good time for BP to sell assets
o BP provided an update on LMPR cap containment operations
· SunPower to supply 20 MW more of high-efficiency solar photovoltaic panels for solar power installations on Casino Group properties in France
· Eaga says CFO Ian McLeod will step down at the October AGM and will be succeeded by finance and investor relations director Giles Sharp
· Petrofac says operations performing in-line with expectations
· Centrica added to Analyst Focus List at JPMorgan
· Royal Bank of Scotland initiates EDPR.PL, EEN.FP, IBR.SM all at a buy
· EdF Energies Nouvelles starts construction on three solar photovoltaic projects in Canada totalling 36MW
· Takeda Pharmaceutical rose on saying it plans to establish a subsidiary in South Korea- BBG
· China Life Insurance and Ping An Life went up on news that China’s insurance premiums were up 36% in January-May- SA
· CHC China Hydroelectric Corp initiated buy at Global Hunter Securities
· NR Newpark Resources initiated buy at Global Hunter Securities
· SU Suncor Energy agrees to sell non-core Bearberry and Ricinus assets in Alberta
UTILITIES
· Pennon Group unit Viridor Waste Management acquires Reconomy Recycling Solutions for £23.8M in cash on a debt free basis
· BG Group says New well confirms Tupi potential, Santos Basin in Brazil
· Endesa upgraded to buy from neutral at UBS
Tech/media/ telecom sectors
· CCO Clear Channel Outdoor says Mark Mays will transition from CEO to chairman
· PAYX: -3.3% slight Q4 beat, but guidance falls short. Top line growth helped to drive the beat with checks per client up y/y. management indicated that key indicators remain stable, and noted sequential improvements in checks per client and client retention; there were no comments made on the pricing environment. Conference Call today 1030AM: Dial In: 888-566-1827 (passcode: Paychex).
· DELL: guides FY11 in line ahead of analyst day. A refresh in commercial and public PCs are expected to be positive drivers. Just the fact that DELL provided financial guidance (first time since 2006) is a positive sign for business trends. DELL hedges on euro concerns weaken throughout the year, so Forex headwinds could drag on future earnings
· AMZN Why Amazon Should Give Away Kindle Free- All Things Digital
· http://voices.allthingsd.com/20100624/why-amazon-should-give-away-kindle-free/?mod=ATD_rss
· AMZN experts launch private-cloud start-up- CNET
· AAPL: Some early iPhone 4 shipments have defective screens, missing bars- AppleInsider
· AAPL: Strong channel demand reportedly causing tight component supply for Apple- Digitimes
· AAPL: WSJ notes the inroads Apple's iPhone is making in the corporate space
• http://online.wsj.com/article/SB10001424052748703900004575324973251396764.html?mod=ITP_marketplace_0
· HPQ: Confirms Melodeo Deal- TechCrunch
· LGF: Lions Gate talking to MGM about possible merger of lions- LATimes
· VMW: springs into frameworks with imminent acquisitions- The Register
· CGS: Shaw amends Canwest TV purchase to pay shareholders- Reuters
· EBAY acquires barcode scanning app for iPhone- ZDNET
· PFWD: shareholders OK sale to ORCL Oracle- SF Business Times
· AUO: will spend NT$73B to build solar-cell plants in Taiwan- SA
· Semis: Taiwan Semiconductor, United Micro see higher orders for Q3 – DigiTimes
• http://www.digitimes.com/news/a20100624PD209.html
· Semis: China IC self-sufficiency rate to reach 33.4% in 2013, says Information Network- Digitimes
· NTDOY: to use developers for 3D titles for its 3DS portable game system - Nikkei
· GOOG Google/YouTube wins copyright infingement case against Viacom- Business Insider
· Smartphones: More than 55 million smartphone shipped in 1Q10- ABI Research
· LCDs: Large-size LCD panel prices may rebound in August, say makers- Digitimes
INDUSTRIALS/ HOMEBUILDERS
· Wacker Neuson and CAT Caterpillar form alliance for mini hydraulic excavators
· Kuka upgraded to hold from reduce at Equinet
· Segro delist from NYSE euronext paris
· Carillion wins £306M PPP project for Forensic Services and Coroner's Complex in Toronto
· BAA forecasts adjusted EBITDA of £946M for 2010 based on forecast passenger traffic for the year of 85.2M
· Siemens CEO tells press he is confident of record profits this year; to unveil new ROC targets in Nov
· Siemens downgraded to market perform from outperform at Bernstein
· QEP QEP Resources to replace Questar (STR) in S&P 500 index after the close June 30
TRANSPORTS
· Air France targeting 4,390 staff departures by 2013 - La Tribune
MINERS/STEEL etc
· MINERS BHP Billiton Ltd. and Rio Tinto Group led gains in Australian mining companies as Julia Gillard said she will start negotiations on the government’s proposed profit tax after ousting Kevin Rudd as prime minister. BHP, the world’s biggest mining company, climbed 1.3 percent to A$39.65 at the 4:10 p.m. close of trade in Sydney.Rio gained 1.7 percent, Fortescue Metals Group Ltd. rose 2.5 percent and Macarthur Coal Ltd. advanced 6.4 percent. BBG
·
· MINERS...WSJ SKEPTICAL ...Rudd's Downfall Hasn't Locked Victory For Miners
· MINERS New Australian Prime Minister Julia Gillard says resource super profits tax needs to be negotiated - BBG
·
· AMN Ameron reports better Q2
· DS Smith reports better
· Yule Catto & Company expects H1 underlying pre-tax profit to be substantially ahead of last year
· BASF upgraded to buy from neutral at Nomura Securities
· WEstern Australia approves Posco, Hancock Prospecting to build 300km iron-ore railway – Reuters
o http://af.reuters.com/article/metalsNews/idAFSYU01011720100624
· Goldman Sachs upgrades EMEA Steel sector, EVR.LI; downgrades POG.LN, PMTL.LI
· PXD Pioneer Natural to sell 45% interest in Eagle Ford Shale play to Reliance Industries (RIL.IN) for $1.15B
· New Australian Prime Minister Julia Gillard says resource super profits tax needs to be negotiated- the Australian
· Tata Steel looking for strategic partner to take up to 50% of Tata Refractories - Economic Times
· Posco drops acquisition plan- Globe & Mail
· Australian Prime Minister Kevin Rudd has stepped down- The Australian
Autos sector:
· GM Said to Prepare IPO Plan With Treasury Selling 20% - BBG
o would reduce the Treasury Department’s stake to less than 50 percent from 61 percent now
o A registration statement may be filed in August, aiming for a November stock sale
· GM plans for financing unit could hurt Ally repayment WP link
o A General Motors proposal to develop its own auto-financing business has put the U.S. government in the middle of a multi-billion-dollar tug of war between two bailed-out companies in which the Treasury holds a majority stake.
· Ford Americas Chief Says Auto Market ‘Flat-lined’ - BBG
o Ford Motor Co., introducing six new models this year, faces a “flat-lined” U.S. auto market because consumers are reluctant to make big purchases, Mark Fields, the company’s president of the Americas sd
o “The consumer is feeling a bit better, but not enough to go out and go back to the old ways of spending,” Fields told analysts in a presentation that was webcast from Dearborn, Michigan. “It gives us pause because of the tight labor market and the overall situation in the credit markets.”
· Tata Motors board to meet 28-Jun to consider means of raising long-term funds - Economic Times
· Toyota to Restart Guangzhou Plant Next Week After Vendor Strike – BBG
· BMW Group's plant utilization is "good to very good" – Handelsblatt
· F Ford to invest $450M in new factory in Thailand – WSJ
o http://online.wsj.com/article/SB10001424052748703900004575324543469898582.html
· Tata Motors board to meet 28-Jun to consider means of raising long-term funds - Economic Times
· Honda Motor JV in China expected to start back up today- Nikkei
o http://e.nikkei.com/e/ac/TNKS/Nni20100624D23JFA17.htm
:
FINANCIALS
· Banks: Citi latest to downs bank est..GS, MS, JPM
· Banks: Bank executives were panicking last night over a proposed fix to Title II of financial reform literally penciled in at the last minute.
o The fear is that that the proposed change to the orderly liquidation authority could leave banks on the hook for a possible wind-down of Fannie Mae and Freddie Mac that could cost as much as $400 billion
o http://dyn.politico.com/members/forums/thread.cfm?catid=18&subcatid=59&threadid=4193713
· Lehman Brothers Pays Its Bankruptcy Advisers $830.6 Million - BBG
· Financial reform to wrap up finally??
o financial rules nearly complete, lawmakers have waited until the final, frantic hours to sort out the most controversial provisions in the bill
o Democrats aim for final bill by Thursday night
o As Reform Talks Enter Final Day, Volcker Rule Likely to Get Tougher - American Banker link
o Volcker: Senators Prepare A Citigroup-Sized Hole In Volcker Rule – CNBC
§ Senate negotiators are expected to offer changes today to the financial reform bill that would soften the Volcker rule. On Capitol Hill there is widespread speculation that the Senate negotiators will propose language that would allow banks to invest a small amount of their capital in their internal hedge funds or proprietary trading desks.
§ Exactly how much capital the banks would be able to commit to their hedge funds and proprietary trading under such a change is not clear. Early reports indicate there may be support on Capitol Hill to allow banks to put 2% of their capital into hedge funds they sponsor or prop trading. Bank lobbyists have been pushing for a higher number, perhaps up to 5% — a level which would allow many banks to escape the Volcker rule altogether.
§ http://www.cnbc.com/id/37879514
o Derivatives: Democratic leaders pressured Sen. Blanche Lincoln (D-Ark.) Wednesday to scale back a proposal that would force big banks to spin off their derivatives businesses, highlighting a conflict that has the potential to crack Democratic support behind the massive regulatory reform bill
§ The issue is expected to be in the spotlight Thursday as the House and Senate seek to reconcile their versions of the bill
§ http://www.washingtonpost.com/wp-dyn/content/article/2010/06/23/AR2010062305352.html?wprss=rss_business
· Fannie Set to Penalize Defaulters WSJ link
· AIG Changes Pay Plan for Stars WSJ link
· Credit Suisse Shuffles Management WSJ link
o CREDIT SUISSE NAMES VARVEL CEO OF INVESTMENT BANK
o Ken Feinberg to resign as pay czar this summer - WSJ
§ http://online.wsj.com/article/SB10001424052748704629804575325403291487296.html?mod=googlenews_wsj
o Deutsche Börse says capital position sound, sees no significant increase in capital requirements- PR
o Hannover Re reiterates guidance for 2010 – Reuters
o Resolution says will finance the acquisition of AXA's UK-Life insurance operations through a £2.06B rights offer
o Kungsleden sells commercial property for approx SEK 133M (SEK 49.30)
o Credit Suisse names Paul Varvel CEO of Investment Bank
o Woori Finance files applications to make up--to-$240M capital infusion in Hanmi Financial
o CPF Central Pacific Financial names John Dean executive chairman
o ING Group selling 3.1% stake in Kotak Mahindra Bank (KMB.IN) to raise up to $173M - Live Mint
§ http://www.livemint.com/2010/06/23190000/ING-to-sell-stake-in-Kotak-Mah.html
o Barron's Weekday Trader is positive on BEN Franklin Resources
o RJF Raymond James reports May AUM $234.6B vs. $246.2B m/m and $193.8B y/y
o CYS Cypress Sharpridge plans to offer 8M shares in an underwritten public offering through Barclays
· Real Estate:
o LEN reports mixed, orders weigh on sentiment
o Janney Capital downgrades HD, LOW
o Obama needs to 'employ' new housing credit NY Post
§ The housing market is cratering and unless the administration can increase employment or new subsidies, a double dip in home prices may lie ahead. Economists painted that dire picture yesterday following the surprise collapse of new home sales
o Performing Mortgages Climbed in 1Q - American Banker link
§ The share of performing mortgages increased slightly during the 1Q for the first time since March 2009, although loan performance was still down from a year earlier
o Fannie Set to Penalize Defaulters - WSJ link
§ Fannie Mae said it would "lock out" borrowers from getting a new loan for seven years if they chose to default on a mortgage they could afford to pay
o AIA's Baker Sees `Upturn' in U.S. Commercial Real Estate
§ Bloomberg) -- Kermit Baker, chief economist at the American Institute of Architects, talks about the outlook for the U.S. commercial real estate market.
o Manhattan’s $10 Million Apartment Market Offers No Bargain Buys
§ Manhattan’s super-luxury apartments, those sold for $10 million or more, outperformed the rest of the city’s housing market in the first quarter. The median price of the most expensive cooperatives and condominiums climbed 6.4 percent from a year earlier, compared with an 11 percent drop across all price ranges, according to an analysis of data provided to Bloomberg News by New York-based appraiser Miller Samuel Inc.
o Banks: We're hiring so we can make more home loans
§ from Economic news - CNNMoney.com
§ Several banks are gearing up to do a whole lot more mortgage lending in the future
o Travelodge not for sale for now - London Times
§ Travelodge executive chairman Grant Hearn tells the Times that Dubai International Capital will not sell the chain before the hotel market recovers, which could be the end of 2011. He also warns that competition issues might prevent Whitbread (WTB.LN)'s purchasing Travelodge. The comments are in reaction to Whitbread CEO Alan Parker's declaration of interest in Travelodge yesterday.
CONSUMER
· BBBY: -5.7% very strong Q1 across all items. Guidance looks to be a little shaky thoughm and could signal slowing trends in the near future.
· NKE: -2.3% Q looked solid on all metrics, but rising costs and forex headwinds kept the results muted. Wage inflation in Asia is also a concern for GMs in the future. The World Cup seems to be having a positive effect. Future orders were strong in the Q, which could help offset short term margin concerns. Guidance looks somewhat conservative as NKE calls for FY11 to be up hih single digits.
· DRI: disappointing Q4 and comps tracking below. Guidance for FY11 looks strong on good top line growth, and stronger margins. Olive Garden was a big negative posting SSS -1.5% vs expectations of +1.4%
· MLHR -6.9% Big miss in Q4. profits fell amid slower sales and higher restructuring costs. A 4Q acquisition should bolster the company’s future product line. Orders began to pick up late in the Q which could be a sign of better things to come.
· PERY Perry Ellis files $200M mixed shelf; also registers $30M in stock for holders
· Janney Capital downgrades HD, LOW
· H&M reports slightly better Q2
· GPS Gap to open four doors, ecommerce operation in China this year – FT
o http://www.ft.com/cms/s/0/09bf2304-7f0a-11df-84a3-00144feabdc0.html
· ARO, CTRN, JCG, PSUN, ROST, TJX and ZUMZ upgraded, AEO downgraded at Oppenheimer
· BBBY Bed Bath & Beyond; better Q, says Q2 guidance of low single digits assumes comps in mid single digits
· APOL Apollo Group confirms earlier report of Court of Appeals reversing Lower Court ruling in securites lawsuit
· DRI Darden Restaurants reports Q4 results slightly worse; increases dividend
· Denso Corp plant in Guangzhou re-opens after strike – Nikkei
o http://e.nikkei.com/e/ac/tnks/Nni20100624D24SS131.htm
· Adidas downgraded to reduce from hold at Kepler
· HAS Providence Equity Partners in preliminary discussions to take Hasbro private – WSJ
o http://online.wsj.com/article/SB10001424052748703900004575325631443478508.html
· HAS Talks between Providence Equity Partners, Hasbro collapsed last week - NYT DealBook
o http://dealbook.blogs.nytimes.com/2010/06/23/providence-in-talks-to-buy-hasbro-not-so-fast/
· SWK WSJ mentions Stanley Black & Decker positively
o http://online.wsj.com/article/SB10001424052748704629804575325163550430720.html?mod=djemheard_t
· NKE Nike mostly in line Q; says that FX and input cost inflation will put significant pressure on reported top- and bottom-line results for F11
· Nicandro Durante to bceome CEO of British American Tobacco (
· Heineken upgraded to neutral from underweight at JPMorgan
· McBride expects to report operating profits in line with its expectations
GAMING, LODGING, & LEISURE
· Travelodge not for sale for now - London Times
o http://www.thetimes.co.uk/tto/business/industries/leisure/article2570487.ece
· Compagnie des Alpes seeking €100M via capital increase
· Club Mediterranee upgraded to neutral from underweight at HSBC
HEALTHCARE
· PFWD Phase Forward shareholders vote in favor of sale to Oracle - San Francisco Business Times
· Oxford BioMedica enters collaboration to evaluate TroVaxÒ in a Phase I/II study in mesothelioma
· MediGene reports additional phase II results of EndoTAG-1 for the treatment of triple receptor-negative breast cancer
· Teva Pharmaceutical initiated buy at Societe Generale
· Celesio initiated hold at Royal Bank of Scotland
· MRK Merck to expand business in South Africa
· Ascendis Pharma for sale in Denmark – WSJ
· GSK GlaxoSmithKline in advanced talks with distributor to sell Lucozade in US - London Times
o http://www.thetimes.co.uk/tto/business/industries/consumer/article2571045.ece
· PFE Pfizer announced the suspension of the osteoarthritis clinical program for tanezumab following FDA request
· BHZN BioHorizons files $100M IPO through Piper Jaffray and Jefferies
· KNSY Kensey Nash announces that its board has approved a new stock repurchase program
· WPI Watson Pharmaceuticals receives tentative FDA approval for Fentanyl Buccal tablets
From our EU/London desk
· Oils
· Petrofac (-2.4%). Trading statement from Petrofac, see trading performance inline and an increase in FY order backlog.
· Miners
· Julia Gillard replaces Kevin Rudd as Australian Prime Minister overnight. She claims to want to call a 'truce' with the mining firms regarding the proposed super-tax and enter genuine talks. There is no commitment to scrappage of the tax though.
·
· AIR FRANCE-KLM to cut 4,390 jobs- S&P
· Interpublic CEO rules out merger with PUBLICIS- S&P
· SANOFI-AVENTIS: May be interested in Ascendis –- S&P
· RHEINMETALL bullish about 3Q10 auto business- S&P
· AHOLD plays the waiting game in US M&A- S&P
· DAIMLER bullish on trucks- S&P- S&P
· H&M 2Q PTP in line- S&P
· DS SMITH: FY sales drop, but volumes are increasing- S&P
· DSG INTERNATIONAL: FY numbers in line with consensus- S&P
· GO-AHEAD: FY numbers to meet expectations- S&P
· MCBRIDE forecasts FY profits in line - S&P
· PETROFAC: sees strong growth, in line with expectations- S&P
· RESOLUTION confirms GBP2.75bn deal to buy AXA's UK Life - S&P
TODAY’S EVENTS
CONFERENCES
Thursday June 24:
o Adam Smith Conferences Energy Efficiency International Forum - Jun 22, 2010 - Jun 24, 2010
o Advantix Russia & CIS Mining Investment Symposium - Jun 24, 2010
o AVCJ Private Equity & Venture Forum - USA - Jun 24, 2010
o Bank of America Merrill Lynch: The New Deal—BofA Merrill Lynch HK/China Property Corporate Day & Pearl River Delta Property Tour - Jun 24, 2010 - Jun 25, 2010
· AGPYF.PK , KWGPF.PK , RNHEF.PK
o BANK URALSIB International Conference "The Russian Bond Market: New Era" - Jun 24, 2010 - Jun 25, 2010
o China Decision Makers Consultancy (CDMC) China Luxury Summit - Jun 24, 2010 - Jun 25, 2010
o CIES - The Food Business Forum Global Summit - Jun 23, 2010 - Jun 25, 2010
o Credit Suisse Group China Investment Conference - Jun 23, 2010 - Jun 25, 2010
o Credit Suisse Group European Financials West Coast Conference - Jun 24, 2010 - Jun 25, 2010
· MUV2.F
o Credit Suisse Group Gaming Conference
· CODEF.PK , RANKF.PK
o Deutsche Bank Industrials Conference - Jun 23, 2010 - Jun 24, 2010
· 9AM: BMS , BZH , CBE , WBC
· 9:40AM: ATR , MTH , RA , WCN
· 10:20AM: CHRW , GEF , IR.OTC , RSG
· 11AM: CNW , CW , PTV
· 11:40AM: CTTAY , KDN , OI , Owens-Illinois, Inc , TOL
· 12:20PM: FCX , GFF , HOT.F , MTW , YRCW
· 1PM: CLF , DG.PA , GWR , TKR
· 2:45PM: ACI , ATAC , GRM , ZBRA
· 3:25PM: GE , GG , GLT , MLM
· 4:05PM: HOV , RBC , RKT , X
· 4:45PM: ACS.MC , BGC , ITT , TCK
· 5:25PM: SSCCQ.PK
o EBD Group ChinaBio Partnering Forum - Jun 23, 2010 - Jun 24, 2010
o Ethical Corporation Global Anti-Corruption Summit - Jun 23, 2010 - Jun 24, 2010
o FirstEnergy Capital Corporation Canadian Energy Services & Infrastructure Conference - Jun 24, 2010
o Government Technology Tennessee Digital Government Summit - Jun 24, 2010
o Incisive Media AVCJ Private Equity & Venture Forum - USA - Jun 24, 2010
o Incisive Media Senate Summer Investment Conference - Jun 22, 2010 - Jun 26, 2010
o Informa plc's IIR Covered Bonds Forum - Jun 24, 2010 - Jun 25, 2010
o Institute for International Research Roaming World Congress - Jun 21, 2010 - Jun 24, 2010
o Institutional Investor UK Defined Contribution Forum - Jun 23, 2010 - Jun 24, 2010
o International Quality & Productivity Center 7th Timberland Investment Summit - Jun 23, 2010 - Jun 25, 2010
o International Quality & Productivity Center Military Healthcare Convention and Conference - Jun 23, 2010 - Jun 25, 2010
o Ipierian INC. Conference Gordon Research Conference - Jun 20, 2010 - Jun 25, 2010
o JCTEA Japan Cable TV and Telecommunications Show - Jun 23, 2010 - Jun 25, 2010
· 3AM: 751800.T , KDDIF.PK
o Marine Money Magazine Annual Marine Money Week - Jun 22, 2010 - Jun 24, 2010
o Morningstar, Inc. Advisor User Forum - Jun 23, 2010 - Jun 24, 2010
o Morningstar, Inc. Investment Conference - Jun 23, 2010 - Jun 25, 2010
o Nasdaq London Investor Conference
· 10AM: AVGO
o New York Society of Security Analysts Annual Turkish Investment Conference - Jun 24, 2010
o Platts Annual Bunker and Residual Fuel Oil Conference - Jun 23, 2010 - Jun 24, 2010
o Platts Annual Private Power in Central America Conference - Jun 24, 2010 - Jun 25, 2010
o TechConnect World Conference - Jun 21, 2010 - Jun 25, 2010
o Terrapinn Agriculture Outlook Europe Conference - Jun 23, 2010 - Jun 25, 2010
o Terrapinn Real Estate Investment World Asia Conference - Jun 21, 2010 - Jun 24, 2010
o Terrapinn World National Oil Companies Congress - Jun 21, 2010 - Jun 24, 2010
o The Center for Business Intelligence Annual Commercial Contracts and Chargeback Management for Manufacturers and Wholesalers Conference - Jun 23, 2010 - Jun 24, 2010
o The Center for Business Intelligence Annual Product Complaints for Bio/Pharmaceuticals and Medical Devices Conference - Jun 23, 2010 - Jun 25, 2010
o The Center for Business Intelligence Summit on Managed Care Marketing Strategies - Jun 23, 2010 - Jun 24, 2010
o The McCloskey Group Coal USA Conference - Jun 24, 2010 - Jun 25, 2010
o Wells Fargo Securities Healthcare Conference - Jun 23, 2010 - Jun 24, 2010
· 8AM: BSX , MNKD , WLP
· 8:30AM: HNT , SMA
· 9AM: ATEC , RMD
· 10:15AM: SUNH
· 10:45AM: BMTI , MAKO , SYK
· 11:15AM: HMA
· 1PM: PRXL , WMGI
· 1:30PM: COO
· 2PM: CCRN , DNDN
· 2:30PM: BMRN , IMMU , VRTX
COMPANY MEETINGS/OTHER DAILY EVENTS
· Thursday June 24:
o Shareholder Meetings
§ ABVT, ARIA, CT, IDSY, SVU, VVTV, BBY, BBI, CVCO, HOS, INWK, KR, LHCG, MASC, SCS, GES, ABTL, AXST, REXX, RSO, SMSI, YHOO, SMTC, PANL, NGAS, HOLI
o PM Investor Day 2
o DELL analyst meeting
o ADSK Analyst Meeting
o LGND analyst Day
o Bauer AG Annual Meeting
o Infineon Technologies Analyst Meeting
ECONOMICS
· Thursday June 24:
o 0830 Durable Goods
o 0830 Jobless Claims
o 1000 DJ-BTMU Economic Barometer
o 1030 EIA Natural Gas Inventories
o 1100 Kansas City Fed Manufacturing Index
o 1630 Foreign Central Bank Holdings
o 1630 Fed Discount Window Borrowings
o 1630 Money Supply
EARNINGS
o Industrials/Homebuilders
· Thursday June 24: LEN, AVAV, RBN
o Consumer/Retail/Education
· Thursday June 24: FINL, MLHR, CKR, CAG, MKC, HRB
o Financials
· Thursday June 24: DFS
o Tech/Telecom
· Thursday June 24: CAN, FSII, ORCL, SNX, TIBX
o Healthcare
· Thursday June 24: DFS
o Media
· Thursday June 24: XSEL
INVESTMENT BANKING WRAP
M&A
· LGF Lions Gate talking to MGM about possible merger of lions- LATimes
o Lions Gate Entertainment, the embattled studio under siege from dissident investor Carl Icahn, has been holding merger discussions with the management of Metro Goldwyn Mayer
o The talks, if successful, could result in a powerful independent studio with a library of thousands of movies and television shows that would be run by Lions Gate’s mgmt team.
· Providence Equity in talks with HAS Hasbro-WSJ
o Providence Equity Partners is in preliminary talks with toy maker Hasbro Inc (HAS.N) to take the company private in a leveraged buyout
o The parties involved are proceeding slowly because of the uncertainty surrounding the markets, the report said.
o http://www.reuters.com/article/idUSN2326231120100624
· On Wall Street, So Much Cash, So Little Time- Dealbook
o Private equity firms, where corporate takeovers are planned and plotted, today sit atop an estimated $500 billion. But the deal makers are desperate to find deals worth doing, and the clock is ticking.
o Critics contend that leveraged buyouts can saddle takeover targets with dangerous levels of debt. But unlike indebted homeowners, highly leveraged companies under the care of private equity have so far dodged the big bust many have predicted
o http://www.nytimes.com/2010/06/24/business/24private.html?ref=todayspaper
· Private equity firms focus on small U.S. banks- Reuters
o Struggling banks were supposed to be a bonanza for private equity firms. But buyout shops have found themselves forced to turn to smaller banks for investment opportunities, as many of the biggest lenders can now raise capital from the public markets instead, or sell out to stronger competitors.
o "There really aren't a lot of very big banks out there that are likely to need significant capital that cannot access the public markets,"
o http://www.reuters.com/article/idUSN2323189720100623
· VMW Mware springs into frameworks with imminent acquisitions- The Register
o VMware is committed to buying more software companies specializing in frameworks to provide application portability – and to keep up with coders.
o On Wednesday, company chief executive and president Paul Maritz promised "you will see us expand our repertoire over the next few quarters."
o http://www.theregister.co.uk/2010/06/24/vmware_frameworks_acquisitions_spring/
· Shaw amends CGS Canwest TV purchase to pay shareholders- Reuters
o Shaw Communications won court approval for its C$2 billion purchase of Canwest Global's (CGS.V) broadcast arm after it agreed to provide C$11 million to shareholders who had complained of being shut out of the deal
o The amended agreement, approved by Ontario Superior Court Judge Sarah Peppal, followed last-ditch negotiations that began early Tuesday and ran late into the night before resuming on Wednesday.
o http://www.reuters.com/article/idUSN2322977920100623
· SU Suncor sells Alberta gas properties to Taqa- Reuters
o Suncor Energy Inc (SU.TO) said on Wednesday it will sell Alberta natural gas properties to Abu Dhabi National Energy for C$285 million ($274 million) as Canada's biggest oil company culled more assets after its 2009 takeover of Petro-Canada.
o The sale to the Abu Dhabi company, commonly known as Taqa, is slated to close in the latter part of the third quarter, Suncor said.
o http://www.reuters.com/article/idUSN2325213820100623
· BP, CVX Chevron target China deep water block-WSJ
o The move signals rival firms are still willing to partner with BP in deep water projects in spite of the company's failure to stop a Gulf of Mexico oil well leak that is threatening to pollute the U.S. Gulf coast
o Chevron will have a 60 percent stake in the block and act as operator, with BP holding the remaining interest
o http://www.reuters.com/article/idUSSGE65N07520100624
· BP's Oil Spill Needn't Spark a Fire Sale- WSJ
o If you have to flog $10b in upstream oil and gas assets, this isn't a bad time. Demand is buoyant. Oil is above $75/barrel. Global energy consumption is rising after last year's rare dip
o BP says only noncore assets are for sale. Likely among them: A 1.4% stake in Russian group Rosneft, worth about $1 billion, and 60% of Argentina's Pan American Energy, valued at $9 billion by Merrill Lynch.
o http://online.wsj.com/article/SB10001424052748704629804575324240793726932.html
· PXD Pioneer Natural Resources Announces $1.15 Billion Eagle Ford Shale Joint Venture with Reliance Industries- Financial Post
o Pioneer Natural Resources today announced the Company signed a joint venture agreement with a wholly-owned U.S. subsidiary of Reliance Industries Limited (“Reliance”). Under the agreement, Pioneer will sell a 45% interest in approximately 212,000 net acres leased by the Company in the highly prospective Eagle Ford Shale play for a total price of $1.15 billion
· POSCO drops plan to acquire Zaporizhstal- BBG
o Reportedly, ArcelorMittal and OAO Severstal are also in the race to acquire Zaporizhstal.
· EBAY eBay acquires barcode scanning app for iPhone- ZDNET
o EBay said Thursday that it will acquire RedLaser, a barcode scanning application for the iPhone and related assets from Occipital
o EBay didn’t disclose terms of the deal, but the move signals that the company is looking to get a little more mobile and acquire the technology it needs to be a bigger app player
o http://www.zdnet.com/blog/btl/ebay-acquires-barcode-scanning-app-for-iphone/36235
· Woori, BX Blackstone in stake sale talks- Reuters
o South Korea's Woori Finance Holdings was in discussions with U.S. private equity house Blackstone Group (BX.N) over the acquisition of a stake in the state-owned Korean bank
o The government, which holds a 57 percent stake in Woori worth around $6 billion, plans to announce a detailed sales plan for the country's No.3 banking group in coming weeks
o http://www.reuters.com/article/idUSTOE65N05N20100624
· PFWD Phase Forward shareholders OK sale to ORCL Oracle- SF Business Times
o Waltham, Mass.-based Phase Forward held a meeting to vote on the issue on Tuesday.
· HPQ Goes NuTsie For Melodeo, Pays $30 Million For Music Streaming Service- TechCrunch
o HP is preparing for a major showdown with Apple. After snapping up the beleaguered Palm for $1.2 billion, Hewlett-Packard has purchased Melodeo, a Lala competitor, for roughly $30 to $35 million, according to a source familiar with the deal.
o The acquisition, which was signed this month, may seem inconsequential for a behemoth like HP, but it represents a major shift in strategy for the laptop-maker
· ING to sell stake in Kotak Mahindra Bank- Live Mint
o Dutch financial services group ING is selling its entire 3.1% stake in India’s Kotak Mahindra Bank to raise up to $173 million
o The shares would be sold at Rs730 to Rs750 each, said the source, who refused to be named as he was not authorised to speak to the media
o http://www.livemint.com/2010/06/23190000/ING-to-sell-stake-in-Kotak-Mah.html
· Abu Dhabi’s Aabar Buys 4.99% of UniCredit, CEO Says- BBG
o Aabar’s stake in UniCredit, Italy’s biggest bank, is valued at about 1.84 billion euros ($2.3 billion), based on yesterday’s closing price
o It makes the company the lender’s second-largest shareholder after Mediobanca SpA, and ahead of a foundation that owns 4.98 percent, according to regulatory filings this month
· Tata Steel to sell stake in Tata Refractories- Economic Times
o Tata Steel has appointed Enam to look for a refractory player to sell up to 50% stake in the company, Tata Refractories, in which Tata Steel owns 71.2% stake. Tata Refractories is valued at around Rs 800 crore..
o Tata Steel is in talks with many international players for the deal. Ace Refractories, bought by France based Imerys is also said to be in talks for the stake buy
· Europe’s Antitrust Chief Shows Leniency on Fines- dealbook
o European antitrust regulators have long prided themselves on their toughness when it comes to cartel busting, throwing the book — and increasingly heavy fines — at violators
o Seventeen makers of toilets, bathtubs and sinks were fined a total of 622.3 million euros ($767 million) on Wednesday for fixing prices over a period of 12 years, but Mr. Almunia lowered penalties on five of them to avoid pushing them into bankruptcy
o http://dealbook.blogs.nytimes.com/2010/06/24/europes-antitrust-chief-shows-leniency-on-fines/
· Telefónica off loads 8% of Portugal Telecom- FT
o Telefónica has sold most of its stake in Portugal Telecom because of fears it would not be allowed to vote on its own offer to buy the Portuguese telecoms company out of their Brazilian mobile phone joint venture.
o Portugal Telecom shareholders vote on Telefónica’s offer next Wednesday.
o http://www.ft.com/cms/s/0/5047c3e8-7ec5-11df-ac9b-00144feabdc0.html
· CFW Cano Petroleum shareholders approve merger with Resaca
· Ascendis Pharma Is on the Block- WSJ
o The auction has drawn interest from a handful of health-care heavyweights such as Sanofi-Aventis and Amgen.
o Lazard is running the sales process for closely held Ascendis. Indicative bids ranging from roughly $350 million to $450 million have been received
· Raymond exits home retail biz in consolidation move- Reuters
o Textiles and apparels maker Raymond Ltd has closed its home retail business after two years of operations as part of a consolidation move
o "The segment was not doing well at all, since it was not working the way the company had anticipated it to work, they closed it down,"
o http://in.reuters.com/article/idINIndia-49596120100624
· Hitachi Eyeing Infrastructure-Related Acquisitions- DJ
o The president of Hitachi said Thursday he is looking at making acquisitions in IT services, electric power, railway systems, water and elevator businesses, as the Japanese technology giant pins its hopes for growth on what it calls "social innovation" businesses.
· Resolution Buys AXA's UK Life Operations For GBP2.75B- WSJ
o U.K. consolidation vehicle Resolution and French insurer AXA agreed a GBP2.75b deal for Resolution to buy some of AXA's U.K. life operations, reinforcing Resolution's aim to build a dominant U.K. life insurer through the merger of several companies and giving AXA extra cash to pursue growth in other areas
o http://online.wsj.com/article/BT-CO-20100624-702533.html
· AREA Buys Stake in Ronson’s City of London Residential Tower- BBG
o AREA Property Partners, the New York-based investment firm formerly known as Apollo Real Estate Advisors, will help U.K. investor Gerald Ronson finance the biggest residential development in the City of London in 30 years
$ RAISING
IPOs
· IPO Pick-Up Lifts Economy – WSJ link
· With more Silicon Valley start-ups going public this year than in the past several years, the activity is starting to ripple out across the region's initial-public-offering ecosystem.
· Investment bankers, lawyers, consultants and financial printers that make up Silicon Valley's IPO machine are all reporting a surge in business. Some are hiring again for the first time in more than a year
· AgBank Hong Kong IPO to raise up to US$11.4 billion- Reuters
o The bank, which will kick off a formal marketing roadshow on Thursday, set a proposed price range of HK$2.88-HK$3.48 per share for the Hong Kong portion of its offering
o The offering will be a dual Hong Kong and Shanghai listing. AgBank will offer 25.4 billion shares in Hong Kong and 22.2 billion shares in Shanghai, representing 8 percent and 7 percent of its enlarged share capital, respectively
o http://www.reuters.com/article/idUSTRE65M2ML20100623
· BHZN BioHorizons files $100M IPO through Piper Jaffray and Jefferies
· GM readies IPO filing, in auto loan talks- Reuters
o General Motors Co GM.UL plans to file plans as soon as next week for a public offering of stock that could raise up to $20 billion in one of the largest U.S. IPOs ever
o In addition, GM is in talks with JPMorgan Chase (JPM.N) and Wells Fargo (WFC.N) on deals aimed at providing improved access to consumers for auto loans at its U.S. dealerships
· GM Said to Prepare IPO Plan With Treasury Selling 20% - BBG
o http://www.reuters.com/article/idUSTRE65M5L220100624
PRICINGS
· Initial Offerings
o FN Fabrinet 8.5M share IPO expected to price wk of 6/21 via MS and DB: Price Talk $12-14
· Secondary Offerings
o BANR Banner Corp 8.5M share secondary expected to price wk of 5/21 via DA Davidson
o FXCB Fox Chase Bancorp 10.3 million shares expected to price Thursday via Stifel Nicolaus & Co.
o HPP Hudson Pacific Properties 12.8M share secondary priced at $17 via BofA, Barclays, and Morgan Stanley
NEWS
· Tribune bankruptcy slowed by examiner request- Reuters
o A court-appointed examiner has requested more time to investigate the Tribune Co leveraged buyout that some blame for its bankruptcy, likely delaying its stay in Chapter 11
o Kenneth Klee, a law professor and partner of the Los Angeles law firm of Klee, Tuchin, Bogdanoff & Stern, said he needs about two more weeks to interview witnesses and review documents to prepare his report.
o http://www.reuters.com/article/idUSTRE65M4JH20100623
· Compagnie des Alpes seeking €100M via capital increase
· Tata Motors set to mop up Rs 2,500 cr to trim debt pile- Economic Times
o Tata Motors will consider ways of raising equity or foreign currency convertible bonds (FCCBs) on Monday as India’s largest truck and bus maker steps up efforts to pare debt and improve its debt-equity ratio
o The Mumbai-based owner of Indica and Jaguar on Wednesday said its board will meet on Monday to consider raising long-term funds. It did not disclose the end use of the money.
· Resolution says will finance the acquisition of AXA's UK-Life insurance operations through a £2.06B rights offer
· Weinsteins End Debt Cliffhanger, Goldman Gets Film Library Stake- WSJ
o Independent film studio The Weinstein Co. has agreed to a major debt restructuring that gives Goldman Sachs Group and an insurance company possession of more than 200 films in its library, including "The Road" and "Halloween II
o Independent film studio The Weinstein Co. has agreed to a major debt restructuring that gives Goldman Sachs Group and an insurance company possession of more than 200 films in its library, including "The Road" and "Halloween II
o http://online.wsj.com/article/SB10001424052748704629804575325270578772024.html
· Theolia launches a €60.5M capital increase
· Financials: CYS Cypress Sharpridge plans to offer 8M shares in an underwritten public offering through Barclays
***All eco data from Bloomberg and DJ
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