Morning @ Cantor
Morning @ Cantor 6/25
Today’s Stories From Cantor Fitzgerald
Sal Catrini (908) 517-5067
EARLY US LANDSCAPE****
· US Stock Futures… SPs flat to up..off low as fin reform digested…US dollar strengthens against key currencies and commodity prices weaken… Crude oil slips 0.54% to US$76.10/bbl. Copper and gold spot prices weaken small. Metals and miners weigh heavily on the materials sector. BP (-7.16%)
· Dollar moves off highs as risk slight bid at 7am et
o Thurs, Spreads closed significantly wider with HY underperforming IG and stocks underperforming credit… Since the roll, credit has significantly weakened with sovereigns, financials, HY, and IG (in that order of weak performance) being sold. Per ZH
o Friday: Today sees Q1 GDP …..and Rebalancing, Bank Reform to Hang Over Stocks..Jobs report next Friday coming into play
o Oracle Earnings and Sales Top Forecasts; Shares Leap, but RIM Profit Beats Forecasts, but Sales Miss
· Banks rally…. get good news in EU and US?? Lincoln and Volcker rules worse case off the table…..on US fin reform that hit this AM…..Also FT (see story below), says Basel III goes eay on banks
· EU stocks lower but off lows at 7am et…dn 0.3% - the widening of Greece's CDS spreads to new record levels worries overnight
· Equities attempted to rebound this morning, however a positive start was short-lived as investors began dumping shares in BP
· EUR weighed dn …. comments by ECB's Nowotny on the Austrian banking sector ate away at the European currencies.
· Spot gold was up $6 yesterday..this morning, spot gold is down $2… Gold Heads for First Weekly Drop in Five
· copper is down almost 1.5%
· Asian Markets: hit… Nikkei (1.92%); Hang Seng (0.21%); Shanghai Composite (0.54%)
· Yuan Hits Post-Revaluation High Ahead of G20 Summit
· The yuan has climbed almost 0.5 percent since the People’s Bank of China said June 19 it would end a two- year peg
· BP dn 6% - Storms heading towards gulf…BBG; costs over $2.3B now; hurting oil stocks in EU
· Libor: 3-month: Dollar: 0.535% vs prior 0.537%;
· Data
o Germany May Import Prices +0.6% m/m vs consensus +0.2%
o Japan May core CPI (1.2% y/y vs survey (1.3%); Tokyo June core CPI (1.3%) y/y vs survey (1.4%).
· G-20 in focus into the weekend
o El- Arian from Pimco G20 will accomplish nothing – BBG
o Too early to tell if yuan rise will be enough, Obama says - Business Spectator
o Europe Should Ignore U.S. Stimulus Call at G-20, Taylor Says
§ “You don’t need extra stimulus packages right now,”Taylor, the Stanford University professor who created a rule to guide monetary policy, said in an interview yesterday at a central bankers conference in Oslo. “That is an important message right now, especially with the G-20 meeting coming up.”
o World can no longer depend on U.S. to drive growth, Geithner says
§ U.S. Treasury Secretary Timothy Geithner said the world "cannot depend as much on the U.S. as it has in the past" to fuel economic growth. Global prosperity depends on other major economies doing more to increase their growth, he told BBC. Geithner said the U.S. and Europe aren't as far apart on the issue of deficit reduction as some policymakers have suggested. BBC (25 Jun.)
§ Flaherty: G-20 moves toward "concrete" target for deficit reduction
– Policymakers at a Group of 20 meeting in Toronto stand a good chance of adopting concrete guidelines for the reduction of a national deficit, said Canadian Finance Minister Jim Flaherty. Progress toward a global debt-cutting target came as European leaders joined Canadian officials in pressing for strong austerity, while the U.S. called for a slower, more cautious approach to budget reduction, fearing a double-dip recession. Financial Post (Canada) (24 Jun.) , The Globe and Mail (Toronto) (24 Jun.) , The Globe and Mail (Toronto)/G8/G20 Global View blog (24 Jun.)
· Evans-Pritchard Announces Fed Contemplating $5 Trillion QE Expansion – ZH link
o Key members of the five-man Board are quietly mulling a fresh burst of asset purchases, if necessary by pushing the Fed's balance sheet from $2.4 trillion (£1.6 trillion) to uncharted levels of $5 trillion." We are very curious where the DT's reporter has found this information, since if it comes from a credible source this is a massive game changer
o Actual telegraph story link:
o http://www.telegraph.co.uk/finance/economics/7852945/Ben-Bernanke-needs-fresh-monetary-blitz-as-US-recovery-falters.html
· Sovereign Crisis Has Stoked Stability Risks, BOE Says
o The Bank of England said the sovereign debt crisis in Europe has increased the risk of instability in the U.K. financial system, and banks need to raise more capital to guard against shocks.
o “The speed with which Greece’s problems were transmitted to other countries and markets highlighted persistent fault lines in the global financial system,” the central bank said in its Financial Stability Report today in London
· Chinese Auditor Issues Warning on Local Debt – NYT link
o China's central government has begun a series of investigations this week into how much debt was incurred by local governments last year as part of economic stimulus programs undertaken in response to the global financial downturn.
· China asks coal miners to not raise prices Business Spectator
o Says higher prices will hamper efforts to control inflation
· The Austrian central bank said Tier 1 ratio of top 6 Austrian banks would drop to 8% by end-2011 under stress test but adds that Austrian banks have low exposure to troubled EU economies – SA
· gold standard redux??: Central Banks Join the Ranks Of Investors Who Like Gold cnbc
o “We will see some derivation of a gold standard in the next 5 to 10 years," said Brian Hicks, U.S. Global Investors money manager, in a conference call this week with financial advisors and consultants.
o A true gold standard would mean you could exchange paper notes for a fixed amount of bullion. While Hicks isn't suggesting that, he expects there will be “some percentage, perhaps 20%” of reserves will be in a “basket of currencies”.
o We have been seeing baby steps in the direction of countries holding more gold
o http://www.cnbc.com/id/37858437
· Deflation not threat to Europe: Schauble from Business Spectator
o German Finance Minister says federal deficit reduction on track
· Inflation coffee hit a 12 year high yesterday
· Inflation Rogers Says Inflation ‘Extremely Serious,’ Sees Stocks Falling
o Bloomberg) -- Investor Jim Rogers, chairman of Rogers Holdings, said the threat of inflation is “extremely serious” and the world is in an ongoing bear market for financial assets.
· India's PM Singh commented that the global economic recovery remained fragile and uneven. He expressed concern over signs emerging within the Euro zone – TTN
· French unions today participated in a nationwide strike against revised pension plans of increasing the retirement age to 62 from 60 by 2018.
· Guardian article that Greece might have put up some of its islands for sale to save the economy.
· Money Raising:
o Agbank A-shares 16 times oversubscribed in pre-marketing - from Business Spectator
o FN Fabrinet 8.5M share IPO offering priced at $10 through Morgan Stanley and Deutsche
§ Of the 8.5M figure, FN sold 2.83M shares and holders sold 5.67M. The IPO priced below the anticipated $12-14 range and will trade under the symbol 'FN.'
· M&A:
o APP +7.3% (Burkle stake) APP American Apparel Amends Loan; Burkle Buys Shares – BBG
o MENT Mentor Graphics adopted a shareholder rights plan
o STST Not clear that Argon ST sale will go through - NY Post
o AIG sale of Taiwan unit hits new snag – FT
· Short interest hit overnight: as of 15-Jun
o Nasdaq: short interest in all NASDAQ securities totaled 7,382,752,919 shares vs 7,209,400,601 shares at the end of the previous reporting period. This is 3.07 days average daily volume, compared with an average of 2.69 days for the previous reporting period.
o NYSE: short interest increased to 14,480,523,435 shares from 13,980,057,757 (revised) shares on 28-May. The short interest on 15-Jun was equal to 3.79% of the total shares outstanding.
· Demand bad news: Baltic Dry Bulk index falling to 2,502; lowest level since early October and a 40% decline since the peak last month….Baltic Dry was only down 0.5% yesterday, 21st consecutive decline nonetheless
· Demand good news WSJ(6/25) Seeing Rebound, Firms Spend
o Companies are stepping up spending on equipment as the recovery that first took hold in manufacturing broadens to other areas of the economy
o Spending on such capital goods fell sharply during the recession, and even now, businesses remain cautious as they eye turbulence in Europe and worry that the recovery could still stumble. But with demand for goods around the world continuing to rise, that uncertainty is being trumped by concern about getting left behind
o "We're seeing global commerce expand and as a result we want to be very aggressive in our international expansion," said Alan Graf, chief financial officer at FedEx Corp. "We're back on the offensive."
· BP stories:
o BP CDS LOOKS TO BE ANOTHER 20 WIDER IN LONDON, LAST 565/585
o BP is financially strong, no plans to file for bankruptcy -- company spokesperson
o Caribbean Storms Strengthen, May Head for Oil Spill -BBG
o The first tropical storm of the Atlantic hurricane season has a 60 percent chance of forming this weekend, with one computer model indicating it could head into the Gulf of Mexico where BP Plc has a flotilla of vessels trying to clean up an oil spill.
o BP updates on GoM oil spill; cost to date approx $2.35B (
o BP - company plans to start paying Gulf Coast businesses a month in advance for projected losses caused by the spill, instead of waiting for them to submit claims based on losses already incurred.
§ http://online.wsj.com/article/SB10001424052748704911704575326650613695746.html
o BP: Oil-Spill Cost Hits $2.35 Billion
o BP’s Relief Well Detects the Leak; Plugging May Start in Weeks - BBG
o ORCL +3.7% (earnings) ORCL- strong Q4 results, but guidance looks conservative. Software license revs helped to drive the beat. Mgmt acknowledged that the guidance was conservative, but attributed it to Europe and dollar concerns
· ACN +2.2% (earnings) mostly in line
· RIMM -4.8% (earnings) RIMM: revs looked weak, but strong margins helped to drive a beat. Net adds were down 13% in the Q, which is a major negative for Qs to come. Management was very positive on product releases to come late Q2 into Q3. Data usage caps at AT&T could help, if people decide to make the switch to cheaper data plans like RIMM because RIMM users use 1/3 the data of AAPL users.
· FINL -4.4% (earnings)
· HRB H&R Block reports – mostly in line
· Citigroup Short Interest Jumps – thestreet link
· Inflation: McBride warns of raw material costs Telegraph
o McBride shares tumbled yesterday after the supplier of household and personal care products warned costs of its raw materials were soaring.
o The company said its key materials costs had risen by 4pc since December and there is "significant risk" that they could rise by another 4pc to 6pc by the end of the year.
o McBride produces private-label goods for some of the world's largest retailers, such as dishwasher tablets for Asda and shaving gel for Tesco
· Financial reform: THERE WILL BE MORE ON THIS TODAY…..
o "The Volcker rule could have been a lot worse for the banking sector than the version distributed this evening. This version will still hurt profitability and impact business decisions. But it is not the knock-out blow some had feared,"
o US banks win Volcker rule change exemption from Business Spectator link
o Senator Christopher Dodd proposed that up to three per cent of a bank's Tier 1 capital could be invested in private equity and hedge funds, and that a bank's investment in any single fund not exceed three per cent of the fund's total ownership interest.
o Those thresholds were backed by both the Senate and House delegations to the "conference committee" and will be included in the final bill if it is finally approved.
o It was still being debated into the wee hours on Friday morning by the panel.
o House approves Senate's proposal on bank trading curbs.
o Lawmakers hoped to finish the overall bill on Friday. If they can, the bill would need to pass both the Senate and the House before it could go to President Barack Obama to be signed into law. Democrats want that to happen before July 4.
· Dodd Offers New Plan for Volcker Rule
o Finally. Senate Banking Committee Chairman Christopher Dodd (D., Conn.) offered his changes to the “Volcker” rule. It would strengthen some parts of the provision in the Senate financial overhaul bill — and weaken others
o Dodd’s proposal aims to:
– more clearly define “proprietary trading.”
– allow insurers in some cases to do trading necessary for their normal course of business.
– prevent conflicts of interest by sponsors and underwriters of asset-backed securities.
– allow small investments in hedge funds and private equity funds, but ban companies from using these funds to escape proprietary trading limits. Investments in hedge funds and private equity funds could only be 3% of a bank’s tangible common equity.
– require banks to divest their proprietary trading activities within two years. The Federal Reserve can extend this period if necessary.
· Goldman Sachs, JPMorgan to Help Pay for Overhaul, Frank Says
o Banks with more than $50 billion in assets and hedge funds with more than $10 billion will “pay for the expenses of this bill,”
· US Jobless Aid, Tax Bill Fails in US Senate
o The Senate shelved the sprawling legislation after a third attempt to pass it failed, 57-41, with the result that by the end of this week, 1.3 million unemployed Americans will have lost their jobless assistance.
· North Korea issues no-sail warning; missile eyed Reuters
o North Korea has issued a no-sail warning off the west coast of the Korean Peninsula in what South Korean officials said on Friday was likely part of routine military drills, amid heightened antagonism between the rivals.
· Bomb Hits Greek Law Enforcement Ministry, 1 Dead – TEL
- Economics:
- Q1 Final GDP, Core PCE, Deflator at 08:30 ET
- Jun Final U. of Michigan Confidence at 09:55 ET
- Earnings:
- There are no major companies expected to report this session
TODAY’S BIG STORIES
· Equity Wrap:
o They started us lower along with Europe on the continued fears out of Europe and more uncertainty on our end. That on top of an investment community that is filled to the gills with stocks and other instruments, lent itself to a market that is uninspired right now. You had some of the guys that were bought on hopes of a rebound a few months ago, now telling you things won’t be as good going forward i.e. TOL, LEN was helped by cost cutting and revs were light, the deutsche bank industrial conference was still going of which most of them endorsed guidance and had decent comments like UTX. By day’s end we were lower and Europe closed near the lows for their day.
o Technically 1,070 looks like next level of support as 1,100 is resistance. Yet the action was very quiet with the combo of world soccer, summer doldrums and no conviction deterring any type of action. Breadth to the market had declining shares outnumber advancing ones by almost 4-1 while internally here, sell names outnumbered buy names by 2-1
o S&P futures were lower this morning on continued worries over European sovereign debt, particularly Greece. With the 8:30 release of (better) Jobless Claims, futures rallied from down 10 to down only 3. Unfortunately, there was little follow through at the cash open, and S&P’s resumed their decline. By 11;00, we were down 17; at this point, bargain hunters emerged and we rallied 11 points over the next three hours. At 2:00, 3 points shy of the earlier highs, the bulls tired. We fell 15 to a new low of 1066.50 (off nearly 21 points, or 2%, on the day). By the close, the bulls only managed a modest stabilization, leaving the cash index off 1.7% for the session.
o All 10 S&P industry groups closed lower, with Consumer Discretionary weakest (off 2.4%) and Utilities strongest (still off 0.3%). In earnings related news, NKE was off 4%, while BBY fell 5.6%. After the bell. ORCL rose 1.3% on an earnings beat, while RIMM fell 6.5% on an earnings miss. During the session, Banks were pressured by rumblings from Washington that restrictions on proprietary trading may be tougher, as legislators scramble to come to agreement and present President Obama with a bill by July 4th (ideally, the administration wanted it before this weekend’s G20 meeting). One interesting divergence: despite a stronger Euro, stronger metals prices and weaker Treasuries, investors seemed to shun the risk trade, at least as far as equities were concerned.
o (Billy Clark and team)
· Treasury’s Wrap:
o Another run-up overnight and into the morning hours with world equities heading lower on the continued European sovereign debt dears. The Treasury bid slowly dissipated throughout the morning starting after the slightly stronger durable goods orders (down -1.1% versus expected to be down 1.4%), claims were almost right on. The small selloff continued in the late morning and early afternoon as the remainder of this weeks supply, $30Bln 7 year notes loomed. There were varying views beforehand to the outcome of today: who would play for the tail after yesterday’s 5Y?, month end buying? risk adverse buying? All told, bids were aggressive and larger than average (3.01 bid to cover) with the auction coming .7bps through at 2.575%. Stats were close to average with indirects purchasing 51%, directs 10%.
o Unlike yesterday, however, Treasuries could not hold the stop as bonds were redistributed, profit taking and MBS tied selling pushed the Treasury market lower. Treasuries quickly found their lows grinding higher throughout the remainder of the session as US equities sold off. At 3PM Treasuries were mixed with the main outlier the 30year which underperformed throughout the day. Given that many waited to buy dips in the Treasury market 20-30bps ago in the intermediate through long end, sovereign debt nervousness, the extremely poor economic data, month end/ quarter end buying (index intension is approximately .06 but this is quarter end and year end for many) and the last of Treasury coupon supply until July 12, we look for Treasuries to continue their rally throughout the remainder of the month.
o Primary Dealer
· Investment grade Wrap:
o IG spreads were mixed to only slightly wider in lighter volume in non-finance names despite the IG14 out 5 towards 120 and equities down 145. The VIX crept back up towards 30 and the Euro was unchanged wrapped around $1.23. Volumes felt like a summer Friday as Italy was knocked out of the World Cup in the morning and Japan advanced over Denmark in the afternoon. GOM names were all down in their lightest volumes in weeks with front end BP holding firm and the intermediate paper down 1-2pts towards the all time lows with the 19s now below $82. APC and RIG weaker as well as we remain buyers of Kerr McGee paper, going out $90.50 buyers of the 24s, only marginally softer on the day.
o Buy interest continues to be selective in the long end with low absolute rates and more focused in intermediate paper. The last few days have seen some quarter end index buying driving some names tighter with fewer natural sellers around. The market remains of a couple different minds and for the past week and a half we have had good two way flow while the rest of the street has gotten more quiet focusing on a good mix of on the runs and more esoteric paper. We covered on the 10MM CBE 17s in for the bid and are a +72/10yr bid for 10MM and looking for more similar paper.
o MICHAEL SALEMO
· CMBS DAILY RECAP
o Another slow day with under $200mm in BWICs. Did see $83mm in seasoned mez paper from four accounts
o GG10s are finishing the day 10bps wider, which is not bad. A few months ago, they would be 20+bps wider with the stock mkt off 1.7%. The technicals remain strong. Just not any meaningful selling in the space. I dont think there was one spready dupers out for the bid today.
o Saw in Real Estate Alert where a DC office was selling for $793 a ft. Good real esate and cash flows are trading well. Tertiary mkts not so good.
o GEORDIE WALKER
· Corporate Bond Sales in U.S. Fall 19% as Recovery Shows Strain
o Companies sold $16.5 billion of debt, compared with $20.3 billion last week, as sales of new homes fell to a record low rate and the Federal Reserve said Europe’s sovereign debt crisis is rendering U.S. financial conditions “less supportive” of an economic recovery
o Corporate bond yields fell to the lowest in a month, following Treasuries.
· Citigroup will sell $3.2 billion in U.S. auto loans to Santander
o Banco Santander's Santander Consumer USA plans to buy about $3.2 billion in vehicle loans from Citigroup's CitiFinancial Auto, marking a major move into the U.S. consumer-credit market for the Spanish bank. The companies said Santander also will take over servicing for $7.2 billion in loans that will stay on Citigroup's books. Santander, Spain's biggest bank, wants to expand its presence in the U.S. and China. Bloomberg (24 Jun.)
· Fed watch: Fed reports balance sheet assets of $2.35T on Wednesday, +$175M w/w and +$320.6B y/y
o Holdings of US Treasury securities were $777B on 23-Jun, +$19M w/w and +$123.8B y/y.
o Holdings of mortgage-backed securities were $1.13T on 23-Jun, +$1.1B w/w and +$661.4B y/y.
o Holdings of federal agency debt securities were $165.6B on 23-Jun, ($592M) w/w and +$69B y/y.
· Money flows:
o Junk Bond Funds Win $1.1 Billion, Most Since March – EPFR
o All bond funds monitored received a total of $2.58 billion in net inflows – EPFR
o AMG data reports equity fund outflows of ($2.8B) in w/e 23-Jun vs inflows of $11.4B in w/e 16-Jun
· hedge funds stories:
o EU Hedge Fund Rule Talks Break Down – NYT link
§ Talks have collapsed between the European Parliament and national governments over new controls for hedge funds due to a continuing dispute over licensing for funds from outside the bloc, Reuters
o Commodities Star Trader Hall Absorbs Loss – WSJ link
§ In what may serve as a cautionary tale for traders who bolt for hedge funds, legendary energy trader Andrew Hall, formerly of Citigroup, saw his commodity fund decline 10% last month as bullish bets didn't pay.
· US states, muni’s:
o muni’s: Build Americas Have Biggest Week in 6 Months as $3 Billion Sold – BBG
o Muni Swaps’ Wider Risk Spread Shows Default Fear - BBG
§ Credit-default swaps on the Markit MCDX municipal bond index more than doubled to $226,500 on June 22, the highest since April 2, 2009, from $90,000 on Sept. 28.
o States of Crisis for 46 Governments Facing Greek-Style Deficits - BBG
§ Even as the U.S. appears to be on the mend -- gross domestic product has climbed three straight quarters -- finances in Arizona, Illinois, New Jersey, New York and other states show few signs of improvement. Forty-six states face budget shortfalls that add up to $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities, a Washington research institution. State spending is12 percent of U.S. GDP
§ “States are going to have to cut back spending and raise taxes the same way Greece and Spain are,” says Dean Baker, co- director of the Center for Economic and Policy Research in Washington. “That runs counter to stimulating the economy and will put a big damper on the recovery in the latter half of this year.”
o NJ: Bloomberg) -- New Jersey Governor Chris Christie vetoed legislation designed to reduce a $1 billion increase in unemployment taxes, saying lawmakers need to amend it to include limits on benefit payments to employees fired for misconduct
· U.K. considers increasing the retirement age every 5 years
o Britain's coalition government is preparing legislation that would automatically increase the retirement age based on life expectancy. Officials are searching for a way to scale back increasingly high pension costs. The age at which people may retire could be raised every five years, senior government officials said. The Times (London) (subscription required) (25 Jun.)
· Why Greece Will Rather Sell Islands than Default – CNBC
o As reports resurface that Greece is considering selling leases to some of its islands to pay down debt, fears are growing that the euro zone member could restructure its debt over the summer months
o Worries that Greece will default have rippled through markets, causing a crisis of confidence in some euro zone members' ability to pay their debts
o http://www.cnbc.com/id/37916955
· China’s Export Economy Begins Turning Inward
o workers are crucial for China’s economy in another way: They must start buying the very products they manufacture, spending their paychecks on lipstick and lingerie, plastic lawn chairs and plasma television sets
o http://www.cnbc.com/id/37913951
· Reid's high-stakes climate bill gamble POLITICO
o Senate Majority Leader Harry Reid (D-Nev.) is planning a high-risk, high-stakes strategy for bringing climate and energy legislation to the floor ahead of the August recess
o The gamble: yoking a bipartisan, fast-track measure to overhaul offshore drilling rules with a broad, contentious bill capping greenhouse gas emissions that otherwise would have almost no chance of passage on its own.
§ Reid’s own Democrats are mixed on the strategy for notching 60 votes
§ Read more: http://www.politico.com/news/stories/0610/38999.html#ixzz0rr51PkGd
COMPANY NEWS WITH MACRO IMPLICATIONS
Energy
o China Wakes Up to Shale-Gas Potential WSJ
§ China is playing catch up to Asian rivals in the race to buy into North America's shale gas sector.
o Study Predicts Natural Gas Use Will Double from NYT > Business
§ A Massachusetts Institute
of Technology report said that although natural gas would gain in the energy
market, that could change by midcentury.
o Roth and Rau upgraded to neutral from sell at West LB Equity Markets
o BP shares trading lower on credit event concern, Caribbean storm strengthening
o Petrofac downgraded to hold from buy at Collins Stewart
o Sevan Marine says Sevan Driller commenced operation as from 25-Jun; on full day rate
o BP updates on GoM oil spill; cost to date approx $2.35B
o SBM Offshore refinances and expands its existing revolving credit facility
o BP: Oil majors unenthusiastic about partnering with BP – FT
§ http://www.ft.com/cms/s/0/d9c7e826-7fb7-11df-91b4-00144feabdc0.html
o SSN Samson Oil & Gas agrees to sell part of Goshen County project
o BP provides subsea operational update; ~7,215 barrels of oil were collected during the first 12 hours on 24-Jun
o ATPG ATP secures $150M senior term loan and option for additional $350M loan
o FCEL FuelCell Energy announces secondary offering through Lazard
o XOM Mid-Atlantic Convience Stores acquires majority interest in Uppy's Convenience Storea and 170 stores from Exxon Mobil
o ATPG +1.7% (secures financing)
INDUSTRIALS/ HOMEBUILDERS
· Buzzi Unicem upgraded to outperform from underperform at Cheuvreux
· AZZ AZZ Inc reports
·
· The Berkeley Group reports slightly better
· STST Not clear that Argon ST sale will go through - NY Post
· Hitachi General Electric (GE) reviewing ownership structure of nuclear-power alliance – WSJ
o http://online.wsj.com/article/SB10001424052748704911704575326522226740104.html?mod=wsjcrmain
· BA Boeing grounds 787 fleet temporarily due to a problem in the horizontal tails built by Italian manufacturing partner Alenia (FNC.IM) - Seattle Times
o http://seattletimes.nwsource.com/html/businesstechnology/2012201147_boeing25.html
· CNW Con-way announces expansion of relationship with Caterpillar (CAT) Logistics Services
· UNHR UNR Holdings files $25M stock offering through Ladenburg Thalmann; intends to apply for listing on NYSE Amex
· FRPT Force Protection awarded $19.6M modification
· KBR KBR awarded Petroleo Brasileiro contract for ammonia plant
· AVAV AeroVironment reports much better
TRANSPORTS
· GNK Genco Shipping & Trading to hold conference call at 10:30 ET to discuss purchase of 13 Supramax vessels
· AMR Bloomberg) -- AMR Corp. will include private equity and a leveraged buyout among options under consideration for its American Eagle regional airline, Eagle Chief Executive Officer Dan Garton said.
· BA Boeing Says 787s May Need New Tail Parts on ‘Workmanship Issue’ - BBG
· Bourbon plans to invest $2.0B in expanding/updating oilfield vessel fleet; selling 16 bulk carriers to Genco (GNK) for $545M
· Stagecoach upgraded to buy from hold at Deutsche Bank
Tech/media/ telecom sectors
- ALTI +25% (Proterra agreement)
- ACN reported mostly in line
§ ACN - in line Q and guidance. The company expects positive growth from its European business in FY11, and is performing well in the region now. Consulting booking were the nnegative in the Q coming in slightly light, but management and tech consulting bookings were better
o RIMM: revs looked weak, but strong margins helped to drive a beat. Net adds were down 13% in the Q, which is a major negative for Qs to come. Management was very positive on product releases to come late Q2 into Q3. Data usage caps at AT&T could help, if people decide to make the switch to cheaper data plans like RIMM because RIMM users use 1/3 the data of AAPL users.
o ORCL- strong Q4 results, but guidance looks conservative. Software license revs helped to drive the beat. Mgmt acknowledged that the guidance was conservative, but attributed it to Europe and dollar concerns
o SNX- mostly in line Q with upside coming from SMB, federal gov't and retail with product shortages in TVs, networking and printer supplies. Guidance looks conservative and mgmt said the macro IT environment is "recovering at slightly more modest levels"
o
o TSMC, UMC expected to revise 2010 capex- Commercial Times
o SNE: PlayStation near deal with Hulu- Reuters
o Hulu's Subscription Service Could Come Next Week – For Some of You- All Things Digital
o AAPL: iPhone4 having reception problems when held in your left hand- CNBC
o BBI: Holders OK Combining Share Classes, Reverse Split- Barron’s
o Optical Discs: Global demand for blank optical discs up for Blu-ray, down for CD, DVD- JRIA- Digitimes
o Hard drive makers reduce 3Q10 shipments forecast by 5-10%- Digitimes
o Panel makers feel effects from China salary hikes- Digitimes
o LCD TV to lead overall panel demand in 2H10- Digitimes
o AAPL: iPad spurs e-book reader price war- iSuppli
o Large-size panels: shipments and revenues reach record highs in May- DisplaySearch
Miners/ steel sectors etc
o ACCC to decide BHP, Rio JV fate in July
o from Business Spectator
o Regulator sets date for decision on Pilbara project.
o Bloomberg) -- Mining takeovers in Australia may reverse a slump after new Prime Minister Julia Gillard signaled a desire to resolve a dispute over a minerals tax that prompted the downfall of her predecessor, investment bankers said
o Mitie Group acquires the integrated Facilities Management business of Dalkia for €12.5M
o Solvay and Arkema (AKE.FP) to buy back minority cross-holdings in their vinyls production jvs
o Beiersdorf initiated buy at Nomura Securi
o AA United Steelworkers members ratify new four-year contract covering 5,400 employees at ten Alcoa locations
o ACCL Accelrys announces that Institutional Shareholder Services recommends shareholders vote for proposed agreement to merge with Symyx Technologies (SMMX)
o Anooraq Resources general meeting aprroves name change to Atlatsa Resources
o AGT Apollo Gold and Linear Gold report that shareholders approved business combination
o HWD Harry Winston Diamond completes $100M senior secured revolving credit facility
o CDE +2.2% (production starts at Kensington mine) CDE Coeur d'Alene Mines begins production at New Kensington gold mine in Alaska
o NCS NCI Building Systems purchases coil coating facility
Autos sector:
o Toyota to Reopen China Plant as Denso Workers Return – BBG
o Toyota, Nissan Chiefs’ Combined Pay Less Than Alan Mulally’s – BBG
o Volkswagen prefs downgraded to neutral from buy at UBS
o Luxury Revival Prompts BMW, Mercedes to Add Shifts
§ (Bloomberg) -- Mercedes-Benz, Bayerische Motoren Werke AG and Audi AG are adding staff and cutting summer factory breaks to boost production as demand for luxury cars returns quicker than they had planned.
o SAIC Motor to Raise $1.47 Billion
o Auto dealers move closer to avoiding more U.S. oversight
§ from Automotive News
§ Auto dealers got one step closer to a complete exemption from oversight by a new U.S. consumer finance agency being created under a financial-regulation bill.
o GM tells steering unit that buyers - and future - depend on worker concessions
§ from Automotive News
§ GM still still hopes Nexteer can approve a 'competitive labor agreement' in Saginaw, Mich., before Wednesday, when a 'transaction signing commitment' is set to expire.
o Magna investors need info before vote- regulator
§ Reuters
§ Ontario Securities Commission not convinced deal abusive
· Rolls-Royce warns of "severe disruptions" to engine manufacturing – FT
o http://www.ft.com/cms/s/0/b30d75c4-7fc7-11df-91b4-00144feabdc0.html
· Daimler downgraded to neutral from buy at UBS
· Volkswagen prefs downgraded to neutral from buy at UBS
· Ontario Securities Commission tells Magna International to give shareholders more information on C$863M buyout of Frank Stronach - Globe and Mail
· Volkswagen (VOW.GR) CEO planning Porsche management reshuffle – FT
o http://www.ft.com/cms/s/0/3fb33d46-7ff1-11df-91b4-00144feabdc0.html
· Toyota Motor to supply Subaru (7270.JP) with small cars on OEM basis as soon as this fall – Nikkei
o http://e.nikkei.com/e/ac/TNKS/Nni20100624D24JFF02.htm
· Strikes make Honda Motor's China figures plunge in May - South China Morning Post
§ http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=68fd770306a69210VgnVCM100000360a0a0aRCRD&ss=Companies&s=Business
Financials:
· "The Volcker rule could have been a lot worse for the banking sector than the version distributed this evening. This version will still hurt profitability and impact business decisions. But it is not the knock-out blow some had feared,"
o US banks win Volcker rule change exemption from Business Spectator link
o Senator Christopher Dodd proposed that up to three per cent of a bank's Tier 1 capital could be invested in private equity and hedge funds, and that a bank's investment in any single fund not exceed three per cent of the fund's total ownership interest.
o Those thresholds were backed by both the Senate and House delegations to the "conference committee" and will be included in the final bill if it is finally approved.
o It was still being debated into the wee hours on Friday morning by the panel.
o House approves Senate's proposal on bank trading curbs.
o Lawmakers hoped to finish the overall bill on Friday. If they can, the bill would need to pass both the Senate and the House before it could go to President Barack Obama to be signed into law. Democrats want that to happen before July 4.
· Banks win battle for limits to Basel III
o Plans by global regulators to compel banks to set aside billions of dollars in extra capital to cope with future crises are to be pared back after intense lobbying by the industry.
o After wrangling over the details of a regulatory overhaul published six months ago, a consensus on the Basel committee is suggesting that its proposals be thinned down.
o http://www.ft.com/cms/s/0/96ca4a38-7fbb-11df-91b4-00144feabdc0.html
· HRB H&R Block reports – mostly in line
· Citigroup Short Interest Jumps – thestreet link
· SHBI Shore Bancshares files $75M mixed shelf
· WABCO Holdings guides full year EPS to $1.75-$2.05 vs prior $$1.40-$1.80 and Reuters $1.77
o WABCO now expects an estimated increase in 2010 sales of 30 to 35% in local currencies, up from 23 to 28% in its previous guidance. WABCO has also raised its full year 2010 guidance for performance operating margin to range from 8% to 9%, up from its previous guidance of 6.5% to 8.5%, and operating margin on a U.S. GAAP basis to range from 7.7% to 8.7%, up from its previous guidance of 6.2% to 8.2%.
o WBC will hold a 09:00ET conference call to discuss the guidance (877.844.0834).
· US banks and funds to face $19bn levy - FT link
o Banks and hedge funds will be hit with a $19bn fee to pay costs associated with financial reform, says Barney Frank, chairman of the US House financial services committee
· Goldman Sachs Reclaims Top Spot in Global M&A – CNBC link
· Upheaval Sweeps Consumer Finance
o Even before Congress unveils a consumer-protection agency, new state and federal laws are ushering in the most sweeping changes in consumer finance since the 1960s.
o http://online.wsj.com/article/SB10001424052748704629804575324932694423998.html?mod=WSJ_hps_LEFTWhatsNews
· Bank of England calls for gradual capital change MarketWatch
o The Bank of England says measures to strengthen banks' capital levels need to be phased in over a number of years.
o The Bank of England on Friday said measures to strengthen banks' capital levels need to be phased in over a number of years as a media report also indicated the committee responsible for setting new capital requirements will pare back some of its tougher suggestions.
· American International Group's failed sale of its Asian life insurance unit AIA has led to increased tensions between Chief Executive Robert Benmosche and Chairman Harvey Golub, the Financial Times said,
· AIG American International Group may lose one of its top two executives – FT
· BANR Banner upgraded to market perform from underperform at Keefe, Bruyette & Woods
· FNM Experts having trouble understanding Fannie Mae's latest strategy – NYT
o http://www.nytimes.com/2010/06/25/business/25fannie.html?ref=business&pagewanted=all
· Mizuho Financial Group to issue 5.61B new shares in July
· Tier 1 ratio of top 6 Austrian banks would drop to 8% by end-2011 under stress test
· Austrian banks stress test- SA
o Loan loss provisions at Austrian banks is seen staying high
o Austrian banks are still exposed to risks and corporate lending is restrained
o Evnironment for banks difficult
o Austrian banks have low exposure to troubled EU economies
o Expects local banking sector to require more capital in the mid-term due high regulation
o The Austrian stress test assumed that Eastern European bad debt rises by 14.8 percentage points over baseline
· Mizuho Financial Group to undertake up-to-¥800B stock offering in July – Nikkei
o http://e.nikkei.com/e/ac/TNKS/Nni20100625D25EE208.htm
· Basel III battle breaks for banks – FT
o http://www.ft.com/cms/s/0/96ca4a38-7fbb-11df-91b4-00144feabdc0.html
· Resolution cash call means money for institutional investors, not investment banks - London Times
o http://www.thetimes.co.uk/tto/business/industries/banking/article2573180.ece
· GS Goldman Sachs in first place as M&A adviser for H1 – Independent
· CYS Cypress Sharpridge 9.5M share secondary priced at $12.50 through Barclays Capital Rational AG downgraded to hold from buy at UniCredit
·
· BANR Banner Corporation 75M share secondary offering priced at $2.00 through DA Davidson
· FXCB Fox Chase Bancorp announced that the Plan of Conversion and Reorganization was approved; will offer 8.7M shares at $10 per share
· NPBC National Penn Bancshares comments on previously disclosed transaction to sell Christiana Bank unit
· SANTANDER (+0.79%) announces that it has reached an agreement with Citigroup to purchase US$3.2bn of CitiFinancial Auto's auto loan portfolio. In addition, Santander and Citi have entered into an agreement under which Santander will service a portfolio of US$7.2bn of auto loans that will be retained by Citi. S&P
Real Estate:
o VNO Vornado Realty Trust announced that it will record 32.7% share of Toys R Us Q1 results in Q2
o "Sell Block": Cramer says investors need to steer clear of St. Joe Company (JOE), the largest real estate developer in Florida. According to Cramer, the company simply cannot yet quantify the downside from tar balls from the GoM spill washing up on its beaches. CNBC
o Shares of real estate company Hudson Pacific Properties rose in their trading debut Thursday after pricing at the bottom of the expected price range, The Associated Press
o Analysts Question Fannie’s Threat on Mortgage Defaults from NYT > Business
§ Experts wondered what Fannie Mae, the mortgage finance giant, hoped to achieve by announcing it would punish owners who strategically defaulted.
o Timeshare Delinquencies at 2-Year Low from American Banker
§ Total delinquencies on timeshare loans packed into asset-backed securities declined sharply in March and hit the lowest level since just before the financial crisis hit its ...
- Record-low rates in the U.S. fail to stimulate mortgage lending
- Interest rates on residential mortgages have fallen to a historic low in the U.S., but homebuyers aren't rushing in to take advantage of them. Freddie Mac said the average rate on a 30-year fixed-rate mortgage declined to 4.69% this week, the lowest rate since the company started collecting such data in 1971. Mortgage applications and home sales continued to slide. The Washington Post (25 Jun.)
§
CONSUMER
· EK Eastman Kodak to cut back on patent lawsuits when printers become profitable – WSJ
· Devro trading update: sees a stronger than anticipated finish to H1
· Suedzucker reports Q1 operating profit €149M vs year-ago €88M.
· Imperial Tobacco takes Scottish parliament to court – Guardian
o http://www.guardian.co.uk/business/2010/jun/24/imperial-tobacco-fights-scots-cigarette-display-ban
· MLP Maui Land & Pineapple announces intent to complete $40M rights offering and repurchase senior secured convertible notes
· EL Estee Lauder updates previously disclosed savings program
· CPB Campbell Soup agrees to sell German Village Products pasta plant
· SYUT Synutra reports follow-on public offering through Oppenheimer and Roth
· FINL Finish Line reports BETTER
· APP American Apparel holder Ronald Burkle discloses a 6% stake in a 13D filing
· L’Occitane (973.HK) declined 3% despite saying FY profit rose 40%
GAMING, LODGING, & LEISURE
· PNK Pinnacle Entertainment says President Casino in downtown St. Louis will not re-open prior to its planned permanent closure
HEALTHCARE
· MASI Masimo files mixed shelf of indeterminate amount
· GILD EU's CHMP adopts positive opinion for Gilead Sciences' Rapiscan intended as pharmacological stress agent for radionuclide myocardial perfusion imaging
·
· Basilea Pharmaceutica [BSLN.SW]: Shares opened down 6.4% after company announced that the new phase III program would delay by 18 months the market launch for antifungal Isavuconazole. Company was cut to Neutral from Buy by UBS
· NeuroSearch receives reprimand from OMX for providing insufficient level of information on R&D announcement
· Basilea Pharmaceutica downgraded to neutral from buy at UBS
· Pharming Group downgraded to hold from accumulate at KBC
· Sonova added to Europe Focus List at Credit Suisse
· AZN AstraZeneca says FDA resets decision date for review of motavizumab to 27-Aug
· Basilea Pharmaceutica provides update on phase III program for the antifungal isavuconazole
· SNY Sanofi-Aventis and Metabolex enter a global licensing agreement on MBX-2982
· JNJ Johnson & Johnson does not expect to use Fort Washington, Pa, plant before end of 2010 – WSJ
· MHS Medco Health, BIG direkt execute agreement for portfolio of advanced pharmacy-driven solutions
· AET Aetna scraps plans for double-digit rate hike in California - Los Angeles Times
From our EU/London desk
· Oils
· BP (-7%). Stock falls as the chances of Tropical Storms in the Gulf increase.
· Metals and Miners
· Norsk Hydro (-1.8%). First day of trading for Norsk Hydro Rights (NHYT NO).
· Rio Tinto (-1.2%). Company spokesman says that the Australian Mining tax, as originally proposed, is now 'dead' following the change in Australian Prime Minister.
· BKG LN figs NET better/ ptax light sees housing mkt stabilising
· ICLL AV AGM at 1300 GMT
· G1A GY CMD day 2
· CAPGEMINI: Positive read-across from Accenture– S&P
· FRANCE TELECOM: Eyes Africa, Middle East acquisitions– S&P
· ARCELORMITTAL: May need to curb output– S&P
· NOVO NORDISK: To boost sales force (Bloomberg)
· Heavy Trucks stabilise – ACEA– S&P
· Nestle among preferred bidders for Kraft's Polish– S&P
· AVIS EUROPE launches GBP151m rights issue – S&P
· BERKELEY GROUP: FY PTP falls 8.4%, targets earnings– S&P
· DAVIS SERVICE GROUP: Trading in line with expectations– S&P
· KELLER: FY results to fall between current range of ests – S&P
From our Asian desks
o Japan
• NKY -1.92%, TPX -1.42%
• NKY fell breaking below a key support level after fresh signs of US consumer weakness combined with a strong yen raised concern about the outlook for corporate earnings. Turnover on the TPX fell to 1.03 trillion yen from 1.1 trillion yen yesterday
• Stocks fell across most sectors led by tech, industrials, materials and exporters. Utilities and health care gained
• Exporters fell on a strong yen: autos -1.66%, CE -1.98%. Canon (7751) -4.47% on CS downgrade
• Chip-related companies fell on Credit Suisse and Mizuho downgrade/ estimates cuts: Tokyo Electron (8035) -5.61%, Elpida Memory (6665) -8.43%, Advantest (6857) -3.71%
• Banks -0.58% after report the Basel Committee is set to relax its proposals on bank capital rules: Mizuho (8411) -1.29% after Reuters reported the lender will sell as many as 6B new shares to raise 930B yen in capital
• Shippers -1.92% as the Baltic Dry Index continued to fall. Nippon Yusen (9101) -1.45% said it may beat the annual profit forecast at its container-carrying unit as rebounding demand allows the introduction of peak-season surcharges
• Best performing sectors on the TPX: electric power & gas +0.62%, pulp & paper +0.35%, pharma +0.29%; worst performing sectors: real estate -3.05%, electric appliances -2.89%, glass & ceramics -2.71%
• Bridgestone (5108) +0.75% after the tiremaker raised its 1H net income forecast by 37% to 37B yen, citing increased revenue and higher prices oversea
o Nikkei today
• Japan core CPI fell 1.2% YoY in May, the 15th consecutive mth of decline, vs. consensus -1.3% and moderating from -1.5% in April
o Hong Kong
• HSI -0.21%; HSCEI -0.59%
• Stocks fell as US companies’ worse-than-estimated profit forecasts heightened concerns about economic growth. Turnover on the HSI fell to HK $14.60B from HK$21.48B yesterday
• Mainland banks fell after the China Daily reported Chinese local government debt may depress banking industry profitability: ICBC (1398 HK) -0.51%, BoC (3988 HK) -0.49%
• Shippers fell after the Baltic Dry Index fell: Cosco Pacific (1199 HK) -3.64%, China Shipping Container Lines (2866 HK) 1.02%, China Cosco (1919 HK -1.42%
• Exporters to the US fell on concerns weak consumer spending will hurt earnings: Foxconn (2038 HK) -3.10%, Esprit (330 HK) -2.63% after an investor sold more than 1% of the company early trading. A single trade of 17M shares, equivalent to 1.3% of outstanding shares, was executed 5 seconds after the market’s open at a price of HK$45.55
• Zhongyu Gas Holdings (8070 HK) -16.46% after the piped-gas distributor posted a 1Q loss
• Zijin Mining (2899 HK) -1.34% after the company cancelled its A$545M purchase of Indophil Resources after a Philippine province where the Australian company operates banned open-pit mining. Zijin said it abandoned the agreement due to “uncertainties” over the deal
• Neo-China (563 HK) -42.63% to HK$2.84 on trading resumption after it said it had sold 45% stake to Shanghai Industrial
• Alibaba (1688 HK) +0.98% after it agreed to buy US company Vendio Services to boost sales outside China
o Headlines:
• Sound Global (967 HK) said it postponed a proposed dual listing in Hong Kong and the sale of new stock. The listing and share sale could not be undertaken “on acceptable terms,” the company said – Bloomberg
o China
• SHCOMP -0.54%; SZCOMP -1.78%
• Stocks fell on thin volume. Uncertainty in the macro economy and the risk of downward earnings growth forecast revisions are weighing on stocks. With little incentives to buy, investors are adopting a wait-and-see attitude. In addition upcoming major listing of the Agricultural Bank sapped investor demand for other shares. Turnover on the SHCOMP fell to 50.84B yuan from 61.66B yuan yesterday
• Stocks fell across most sectors led by health care, tech, industrials, materials and consumers. Telecom and financials rose
TODAY’S EVENTS
DAILY VIEW
CONFERENCES
Friday June 25:
o American Diabetes Association 70th Scientific Sessions - Jun 25, 2010 - Jun 29, 2010
· ORMP , ROG.S
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
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
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 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
o Morningstar, Inc. Investment Conference - Jun 23, 2010 - Jun 25, 2010
o Platts Annual Private Power in Central America Conference - Jun 24, 2010 - Jun 25, 2010
o Sidoti & Company, LLC MicroCap Conference - Jun 25, 2010
· 8AM: MERC , TUNE , UMH
· 8:40AM: ADEP , BIOC , HYC
· 10AM: AHCI , CBLI , CRY , EMAN , XRIT
· 10:40AM: DARA , MDXG
· 11:20AM: FHCO , LMAT , TMM
· 1:30PM: GAXC.OB
· 2:50PM: DTPI , KMGB , ZIGO
· BITS , CVCO , IPAS , NP
o TechConnect World Conference - Jun 21, 2010 - Jun 25, 2010
o Terrapinn Agriculture Outlook Europe Conference - Jun 23, 2010 - Jun 25, 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 McCloskey Group Coal USA Conference - Jun 24, 2010 - Jun 25, 2010
COMPANY MEETINGS/OTHER DAILY EVENTS
· Friday June 25:
o Shareholder Meetings
§ KFRC, DIGA, CLSN, RSCR, ESEA, BPZ, SPNC, VVUS
o Intercell AG Annual Meeting
ECONOMICS
· Friday June 25:
o 0830 GDP
o 0830 Personal Consumption
o 0830 Core PCE
o 0955 University of Michigan Confidence Index
EARNINGS
o Industrials/Homebuilders
· Friday June 25: KBH, AMN, AZZ
o Financials
· Friday June 25: ABCW
o Tech/Telecom
· Friday June 25: PALM
o Healthcare
· Friday June 25: ABCW, FBPI
INVESTMENT BANKING WRAP
M&A
· More private equity deals in Q2, but hardly 'mega'- Reuters
o funds are making a comeback, scouring deals from Australia to America after nearly two years of virtual shutdown, but private equity-backed M&A volumes remain far short of the boom times.
o As of June 22, private equity-backed mergers and acquisitions in the second quarter were up 125 percent from a year earlier to $40 billion, and were up by a third from the first quarter, M&A Bankers Buoyed as Gillard Signals Tax Resolution – BBG
o Thomson Reuters data showed. For the year, such deal totaled $70 billion, more than double a year earlier.
o http://www.reuters.com/article/idUSN2410702720100625
· Top M&A advisers in the first half of 2010- Reuters
o http://www.reuters.com/article/idUSN2413276520100625
· GS Goldman Sachs reclaims top spot in global M&A
o With global dealmaking still subdued, Goldman's (GS.N) advisory role on nearly $190 billion of transactions allowed it to retake the M&A crown from Morgan Stanley (MS.N), which last year bested its arch-rival for the first time since 1996.
o http://www.reuters.com/article/idUSLDE65M1SO20100625
· Europe drags global takeovers to six-year slump- Reuters
o As of June 22, global M&A this year was worth just under $976 billion, according to Thomson Reuters data, less than half the value of the first half of 2007, M&A's peak year, and only moderately higher than the first half of 2004, when M&A was recovering from the dot-com implosion.
o http://www.reuters.com/article/idUSLDE65N0I020100625
· Withdrawn M&A at 5-year low as firms get cautious- Reuters
o More bids announced this year are crossing the finish line, with withdrawn M&A and announced failed bids at their lowest level since 2005
o Despite headline-grabbing withdrawals like Prudential Plc's (PRU.L) aborted $35.5 billion purchase of AIG's (AIG.N) Asian life unit etc, such deals made up only 8.3 percent of deal volume globally this year
o http://www.reuters.com/article/idUSN2425198220100625
· M&A Bankers Buoyed as Gillard Signals Tax Resolution- BBG
o Mining takeovers in Australia may reverse a slump after new Prime Minister Julia Gillard signaled a desire to resolve a dispute over a minerals tax that prompted the downfall of her predecessor
· DIC dismisses talk of assets fire sale- FT
o Dubai International Capital, a heavily-indebted investment arm of the emirate’s ruler, has dismissed speculation about a fire sale of assets by promising to keep its five majority-owned companies in Europe for at least two more years
o http://www.ft.com/cms/s/0/25c9e8d6-7fb9-11df-91b4-00144feabdc0.html
· AIG CEO, Chairman at odds over failed AIA deal – FT
o American International Group's failed sale of its Asian life insurance unit AIA has led to increased tensions between Chief Executive Robert Benmosche and Chairman Harvey Golub
o http://www.reuters.com/article/idUSSGE65O03G20100625
· LGF Lions Gate holds talks with MGM over merger- FT
o Any deal would face approval from billionaire investor Carl Icahn, who raised his stake in Lions Gate to 31.8 percent earlier this month. Icahn has openly criticised a bid for MGM
o http://www.reuters.com/article/idUSLDE65O00I20100625
· Australia's CSR may see China sugar sale soon- Reuters
o A senior executive at China's Bright Food Group met with Australian conglomerate CSR Ltd this week for talks to secure a $1.4 billion sale of CSR's sugar arm
o A deal was expected early next month but was conditional on receiving approval from Australia's Foreign Investment Review Board (FIRB),
o http://in.reuters.com/article/idINSGE65O01X20100625
· MBT MTS, Comstar boards approve merger, shares up- Reuters
o The boards of Russia's top mobile operator MTS (MBT.N) and its Comstar (CMSTq.L) fixed line unit on Friday recommended a merger between the two in an up to $1.03 billion bid to cut costs and offer more services
o http://www.reuters.com/article/idUSLDE65O0D920100625
· WSFS Financial Corporation (WSFS) to acquire National Penn Bancshares's unit Christiana Bank & Trust- SA
o The transaction is financially attractive, as it is expected to be accretive to EPS in 2011.
o Conference Call: June 25, 2010 at 8:00ET. 877-312-5857 or 253-237-1168
· NCS NCI Building Systems purchases coil coating facility
· CMCSA FCC sends letter to Comcast requesting more information regarding NBC acquisition
o http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299031A1.pdf
· TPG works new Fidelity National restructuring- NYPOST
o Private-equity titan TPG Capital is trying to resurrect a buyout or restructuring deal for payment-processing firm Fidelity National Information Services
o Last month the roughly $15 billion leveraged buyout of Fidelity by a group including TPG, The Blackstone Group and THL and THL Partners had been the talk of the private-equity universe, until negotiations collapsed
o http://www.nypost.com/p/news/business/pe_deal_revived_sw5JqlYDiotJQ2xMI5uqAJ#ixzz0rrA8nCAA
· AMR’s Eagle Options to Include LBO, Private Equity- BBG
o AMR Corp. will include private equity and a leveraged buyout among options under consideration for its American Eagle regional airline
o The CEO said has just begun evaluating possibilities for Eagle’s future, including leaving it as a wholly owned unit of AMR
· Chinatrust not pursuing Nan Shan deal- SCMP
o Chinatrust, which last year agreed to buy 30 percent of Nan Shan from the Hong Kong companies once they acquired the insurer, would not pursue the deal
o Chinatrust agreed to buy the Nan Shan stake last November for $660 million, but the memorandum of understanding expired on Friday
o http://www.reuters.com/article/idUSTOE65O01G20100625
· STST Argon's sale looking iffy- NYPOST
o The publicly-traded, $600 million Fairfax, Va., company, which put itself on the block on Jan. 12 and two weeks ago asked for final bids from peers including Boeing and BAE Systems, has still not told suitors if any of their bids are acceptable,
o "It doesn't look like a very strong process," the source said.
· Doubts cast over Telefónica disposal- FT
o Portugal Telecom on Thursday cast doubt on whether Telefónica would succeed in its attempt to buy the Portuguese telecoms company out of their Brazilian mobile phone joint venture.
o http://www.ft.com/cms/s/0/670faec0-7f8c-11df-9973-00144feabdc0.html
· AGT Apollo and Linear Shareholders Approve Merger to Create Brigus Gold- (PR)
o Apollo Gold Corporation and Linear Gold report that their shareholders overwhelmingly approved the business combination of the two companies to form Brigus Gold at their respective meetings of shareholders earlier today
· KFN KKR bidding alone for Australia's Healthscope- India times
o Private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] said on Friday that CVC Asia-Pacific has decided not to join KKR's $1.5 billion bid for Healthscope
o http://1click.indiatimes.com/article/0e8RdMIdsydaP?q=Asia
· HAS Hasbro says not in buyout talks- Reuters
o Hasbro said it is not involved in any talks regarding a potential sale of the company, despite a news report that said it had been in negotiations for a possible leveraged buyout
o http://www.reuters.com/article/idUSTRE65N2ZO20100624
· HAS Hasbro: Not a Great Toy for Private Equity, Anyway- Dealbook
o Hasbro may make some of the world’s most popular toys, but it wouldn’t necessarily make a great plaything for private equity barons, Breakingviews says.
o the seasonal toy business would be expensive to finance with real — rather than Monopoly — money. Even with big cuts, the potential returns from a deal look meager,
o http://dealbook.blogs.nytimes.com/2010/06/25/hasbro-not-a-great-toy-for-private-equity-anyway/
· Weinstein Said to Wipe Out $450 Million Debt With Goldman Deal- BBG
o Goldman was paid $115 million and took ownership of 250 films with $225 million in receivables and future cash flow that should retire Weinstein’s debt, said the person, who asked not to be identified because the accord isn’t public.
o Weinstein will be paid to manage the movies and can buy them back before 2016.
· Alibaba makes first US acquisition- FT
o Alibaba.com, the world’s largest online marketplace for trade between businesses, has taken another step in its global expansion with an agreement to acquire Vendio, a US-based e-commerce site
o http://www.ft.com/cms/s/2/671d2416-8003-11df-91b4-00144feabdc0.html?ftcamp=rss
$ RAISING
IPOs
· FN Fabrinet 8.5M share IPO offering priced at $10 through Morgan Stanley and Deutsche
§ Of the 8.5M figure, FN sold 2.83M shares and holders sold 5.67M. The IPO priced below the anticipated $12-14 range and will trade under the symbol 'FN.'
· Hudson Pacific Raises $218 Million in Office REIT IPO- BBG
o Hudson Pacific Properties Inc., a real estate investment trust that invests in office properties in California, raised $218 million pricing its shares at the low end of the forecast range for its initial public offering
o The REIT sold 12.8 million shares at $17 each after offering them for $17 to $19, according to Bloomberg data and a filing with the Securities and Exchange Commission
· IEDU China Education files amended S1; increases IPO size to 4M shares from 3.5M
· BioHorizons Sinks Its Teeth Into $100 Million I.P.O.- Dealbook
o BioHorizons did not disclose how many shares it might sell, or when it might go public. Its proposed ticker symbol is ”BHZN.” The book-running managers of the offering and Piper Jaffray and Jefferies & Co., with Canaccord Genuity and Cowen & Company as co-managers.
o http://dealbook.blogs.nytimes.com/2010/06/25/biohorizons-sinks-its-teeth-into-100-million-i-p-o/
· A Long, Hard Path to the Public- Dealbook
o Finally, a decade after its founding, Higher One got its chance on June 17, raising nearly $35 million in an initial public offering on the New York Stock Exchange. The shares made their debut at $12 and closed on Thursday at $14.67, a slight rise from their first-day close
o Many analysts view Higher One’s success as a sign of a long-awaited thaw in the market for initial public offerings
· SMT Smart Technologies files $730.7M IPO through Morgan Stanley, Deutsche, and RBC
· Agbank A-shares 16 times oversubscribed in pre-marketing- Business spectator
o Institutional investors subscribe to over 70 bn yuan-denominated shares, report says.
· Travelport eyes US public offering- FT
o Travelport is planning to pursue a flotation in the US after the travel reservations group was forced to pull a $1.9bn offering in London earlier this year.
o However, while a second attempt at a UK float has not entirely been ruled out, a US listing is now considered more likely
o http://www.ft.com/cms/s/0/9e07b6d8-7fe7-11df-91b4-00144feabdc0.html?ftcamp=rss
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 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
o BANR Banner Corporation 75M share secondary offering priced at $2.00 through DA Davidson
o CYS Cypress Sharpridge 9.5M share secondary priced at $12.50 through Barclays Capital
o FXCB Fox Chase Bancorp announced that the Plan of Conversion and Reorganization was approved; will offer 8.7M shares at $10 per share
NEWS
· Resolution in £2bn cash call for Axa bid- Globe and Mail
o Friends Provident-owner Resolution unveiled details of a £2bn rights issue as it announced an agreement to buy most of the UK business of French insurance giant Axa for up to £2.75bn
o Resolution said its shareholders had agreed to sub-underwrite 52pc of the rights issue ahead of the capital raising’s announcement, a level which experts say is unprecedented and which reduces the risk for the underwriters Barclays Capital and RBC Capital Markets
· Mizuho Financial Group to issue 5.61B new shares in July
· Magna investors need info before vote- regulator- Reuters
o Magna International Inc (MGa.TO) must provide shareholders with more information in order to proceed with a vote on a plan that would pay its founder around $900 million for giving up his controlling shares, a Canadian regulator ruled on Thursday.
o http://www.reuters.com/article/idUSN2523511220100625
· APP American Apparel snags debt lifeline, Burkle bet- Reuters
o Clothing maker American Apparel Inc (APP.A) has struck a deal with creditors and secured a high-profile billionaire investor, dodging a potential breach of debt covenants and sending its shares up 7 percent.
o http://www.reuters.com/article/idUSSGE65N0G320100625
· SBM Offshore refinances and expands its existing revolving credit facility
· Industrials: UNRH UNR Holdings files $25M stock offering through Ladenburg Thalmann
· Energy: FCEL FuelCell Energy announces secondary offering through Lazard
· Consumer: SYUT Synutra reports follow-on public offering through Oppenheimer and Roth
· MASI Masimo files mixed shelf of indeterminate amount
· SHBI Shore Bancshares files $75M mixed shelf
·
***All eco data from Bloomberg and DJ
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