Morning @ Cantor
Morning
@ Cantor 9/2 Today’s
Stories From Cantor Fitzgerald Sal
Catrini (908) 517-5067 CONTENTS: All
Headings Are Functioning Links
Sector News: Energy, Industrials, Transports, TMT, Materials, Autos, Fins, Real Estate, Consumer, Gaming/Lodging, HC, Other
Stories, Europe Trading Wrap, Asia Trading Wrap
Investment Banking Wrap: M&A, Money Raising
o US
Stock Futures
o S&P
Futures flat to dn at 7am et
o EU stocks off lows at 7am et..dn 0.3%
o Gold
and copper up small, crude dn small
o Oil steady near $74 as investors eye
U.S. jobs reports
o US dollar
flattish to dn a7am et
o Treasuries: flattish to dn a7am et
o
today
the Treasury will be announcing next weeks auction sizes. We are projecting
$33Bln 3 year notes, $21Bln 10 year notes (re) and $13Bln 30 year bonds (re).
The Treasury will also be auctioning $10Bln 10 year TIPS at 1PM, with the
backup in rates TIPS outperformed with 10 year B/E out ~5bps
o Fed
Chairman Ben Bernanke testifies before Financial Crisis Inquiry Commission, 9
a.m.
o ECB rate decision later
today.
o US same-store sales data
expected ahead of the equity open
o Jobs in focus to end the week: Aug Monster online employment index 136 vs
138 in July.
o IMF: Warns countries of
debt risks (Greece, Italy, Portugal, Japan). Dismisses idea of Greek default.
o Hungary debt auction again
fails to sell targeted amount
o China’s Yuan Reference Rate Strengthens the Most in Two
Months
o Homebuilder HOV
disappoints overnight
o
US libor:
3-month: Dollar: 0.294% vs prior 0.296%;
o Deutsche
Bank trading lower on talk of a capital increase – SA
o Earl is again upgraded to a Class 4 hurricane
and poses a serious threat to the Outer Banks and other parts of the East
Coast.
o
MWW Monster Employment Index falls 2
points m/m in August to 136
o Overseas
Action
o
Europe markets:
§ EU stocks off lows at 7am et..dn 0.3%
§ Euro Shares Lower Ahead of ECB Decision
o Asian
Markets: Nikkei +1.52%; Hang Seng +1.19%; Shanghai
Composite +1.25%
o Data:
§
France
Q2 ILO Unemployment Rate: 9.7% v 10.0%e
§
AUD
sinks after drop-off in trade surplus
·
AUSTRALIA
JUL TRADE BALANCE (A$): 1.9B V 3.1BE
§
Global
rates/ central banks in focus today:
·
European stocks fell, as investors adopted a
cautious stance ahead of the ECB rate announcement
·
ECB to extend liquidity lifeline amid uneven
recovery from Reuters
o The European Central Bank is expected to extend its
liquidity safety-net on Thursday, delaying its exit from crisis support as
policymakers confront a lopsided euro zone recovery and vulnerable banks in
perimeter countries
·
Sweden
Raises Interest Rates
o Sweden Central Bank (Riksbank) raised
interest rates by 25bps to 0.75%; as expected
·
Sweden's Riksbank: US Recovery Will Take
Longer Than Expected – DJ
o
Sweden's Riksbank:
Swedish Econ Developing Strongly In 2010, Sweden Recovery Dampened By US, Euro
Zone
·
South
Korea monetary authorities reiterated they would be more inclined to target
price stability,
implying additional tightening as early as the coming meeting – TTN
·
Brazil Maintains Rate at 10.75% After
Inflation Slows
·
Russia's
Central Bank Sees Drought Accelerating Inflation – DJ
o Inflation
rose by 0.6% in August--above official estimates of 0.5%--and is likely to top
government forecasts of 6% to 7%, Ulyukayev said.
·
Eurozone Q2 GDP revision +1.0% q/q vs
preliminary +1.0%
·
Euro-Zone Growth Jumps from WSJ.com
o The strongest rise in consumer spending since the start
of the financial crisis helped drive the euro zone's strong growth in the
second quarter.
·
France Q2 ILO
unemployment rate 9.7% and prior 9.9%. UK Aug Nationwide
House Price Index (0.9%) m/m vs consensus (0.2%), +3.9% y/y vs consensus
+4.9%. UK August Construction PMI 52.1 vs consensus 53.2.
o Economics today:
o Productivity (Q2-revised) at 08:30 ET Unit
Labor Costs (Q2-revised) at 08:30 ET
o Initial Jobless Claims at 08:30 ET
o Continuing Claims at 08:30 ET
o Jul Factory Orders at 10:00 ET
o Jul Pending Home Sales at 10:00 ET
o
Fed’s Rosengren, Pianalto speak at Washington
summit on foreclosures, vacant
properties, 9 a.m
o
EIA Natural Gas Storage Change, 10:30 a.m.,
August 27, 55
o
U.S. sells $10b 10-year TIPS, 1 p.m.
o
Treasury will sell $67b of 3-, 10- and
30-year securities next week, smallest
combination of the maturities since July
2009, according to a survey of the primary dealers required to bid on
the debt; Treasury will announce the amounts at 11 a.m.
- Earnings:
o
Toronto-Dominion Bank (TD CN), 6:30 a.m.,
C$1.45
o
Layne Christensen (LAYN), 7:01 a.m., $0.27
o
Del Monte Foods (DLM), 8 a.m., $0.27
o
UTI Worldwide (UTIW), 8:01 a.m., $0.17
o
Laurentian Bank of Canada (LB CN), 8:50 a.m.,
C$1.13
o
Esterline Technologies (ESL), 4 p.m., $1.21
o
ArcSight (ARST), 4 p.m., $0.13
o
Take-Two Interactive (TTWO), 4 p.m., (-$0.08)
o
Cooper Cos (COO), 4:01 p.m., $0.71
o
Ulta Salon, Cosmetics & Fragrance (ULTA),
4:01 p.m., $0.20
o
H&R Block (HRB), 4:05 p.m., $(0.41)
o
Mitel Networks (MITL), 4:17 p.m., $0.18
- Federal
Reserve Chairman Ben Bernanke
is set to appear before a panel investigating the financial crisis to give
his take on the meltdown and his views on potential systemwide risks posed
by large financial institutions, The Associated Press
o
Top M&A
o GAP: Great Atlantic & Pacific Tea Co, which
operates the struggling A&P supermarket chain, is mulling the sale of its
Food Emporium stores to boost liquidity, Reuters said , citing a report in The
Wall Street Journal.
o MMM, COGT: Three of the 10 biggest Cogent investors said
a 3M Co. bid for the fingerprint-identification systems maker, supported by its
chief executive officer and largest shareholder, is too low. BBG
o MMM, COGT: 3M, Cogent Sued by Investor Over $943
Million Buyout - BBG
o Wesco Financial : Berkshire
Hathaway has made a formal offer to buy the roughly 1.4 million shares it
doesn't already own of subsidiary Wesco
Financial, The Associated Press
o China Digs for Ways to Obstruct BHP's Bid for
Potash – CNBC link
§ Chinese
newspaper reported Beijing was considering launching an anti-monopoly
investigation into the deal
o
More
intrigue in the wonderful world of potash – FT
§
An even bigger week than usual for
potash-related deals and developments with Russia — undoubtedly spurred to new
competitive heights by BHP’s hostile $38.6bn bid for Canada’s PotashCorp —
signalling its support for the planned merger between potash producers Uralkali
and Silvinit.
§
On top of that come reports on Thursday that
China Mining United Fund, which owns minority stakes in various potash
producers including Canada’s Allana Potash Corp, is eyeing Allana’s Ethiopian
potash project and could raise its stake in the company.
§
But the bigger intrigue comes in the
BHP/PotashCorp bid saga. As DealJournal reports, Chinese agricultural conglomerate Sinochem has hired HSBC to advise it
on options regarding BHP’s bid for PotashCorp.
1.
http://ftalphaville.ft.com/blog/2010/09/02/332531/more-intrigue-in-the-wonderful-world-of-potash/
2.
http://blogs.wsj.com/deals/2010/09/01/sinochem-engages-hsbc-for-possible-potash-fight/
o
Autonomy
Corp PLC (AU/ LN): Autonomy was yesterday the subject of renewed
bid speculation, a Financial Times
o
Burger
King's Latest Pickle – WSJ link
§
As Burger King considers going private again, frustrated franchisees and
investors are wondering whether the burger chain needs a new strategy rather
than yet another new owner.
o
Top $ Raising
o GM Roadshow to Begin After US Elections:
Report – CNBC link
o Innkeeper-Lehman Deal Denied by Judge, BBG
§ U.S.
Bankruptcy Judge Shelley Chapman in Manhattan denied the real estate investment
trust’s request to give all its equity to the affiliate of Lehman Brothers
Holdings Inc. to satisfy a $220 million claim
o
Credit Markets
o TXU Tumbles as Natural Gas Imperils Biggest LBO -
BBG
§ Bonds
of the former TXU Corp., the largest leveraged buyout in history, are tumbling
as a plunge in natural gas prices raises concern the company may have a harder time
meeting its debt payments
o
Munis:
Bankruptcy “has become a real option” for Pennsylvania’s capital of
Harrisburg, City Council Vice President Patty Kim said. BBG
o Fed watch:
o
Wall
Street Shouldn't Count on Future Fed Bailout: Kohn –
CNBC link
o
Evans
Says U.S. Needs to Show Signs of Stronger Growth: BBG
§
Evans, speaking in Washington, says that
while the economy and home market have shown signs of stability, more
improvement is needed.
o
Monetary
easing won't help jobs: Fed officials Business Spectator
§
Plosser says
Fed should act only if deflation threat turns
§
Dallas Fed chief Richard Fisher said uncertainty over the potential cost of healthcare
reform and future taxes was keeping businesses from adding to their staffs, and
clarity on fiscal and regulatory policies was needed to reduce that
uncertainty. "For me, the ball is
in the fiscal court for now."
o
ECB
to Extend Liquidity Lifeline Amid Bumpy Recovery – CNBC link
o
The
U.S. government doesn't face any immediate risk of being forced into default by
the sovereign-debt market, but the long-term picture could be quite different,
according to an International Monetary Fund analysis. There is a 75% chance
that the U.S. can take on additional debt without being punished by a bond
market that demands unsustainable interest rates, the IMF said. The odds drop
to a troubling 50-50 if fresh borrowing tops 50% of the gross domestic product,
the IMF said. The Washington Post/Political Economy blog (01 Sep.) , MarketWatch
(01 Sep.)
o International Monetary Fund Warns G7 on Debt –
CNBC link
o Greece debt default seen as ‘unlikely’ – FT
o
International Monetary Fund report foresees
gradual adjustment and contradicts consensus view that restructuring is
inevitable
o
http://link.ft.com/r/OZMCDD/26DQVY/X82E2/26Y1Q9/LQP7GP/CM/h?a1=2010&a2=9&a3=2
o
Older
Americans have been successful during the economic slump at getting and keeping
jobs, a development that puts the spotlight on young people's plight in
entering the workforce, according to The Wall Street Journal. Since the
beginning of the recession, in November 2007, the U.S. has lost 7.4 million
jobs. In the same period, 1.8 million net jobs have been created that have been
filled by workers older than 55. The Wall Street Journal (02 Sep.)
o Romer: US may need Stimulus II
o WH economist Christina
Romer calls for more spending, less taxes (hit
yest) - Yahoo! News
o Departing White House economist Christina Romer
says the government has the tools for bringing down unemployment, but
policymakers need to find the will and wisdom to use them.
o Romer called on officials Wednesday to move
forward on policies that will increase government spending and cut taxes.
She also called for investments in infrastructure and new trade agreements.
o Romer said that while some new policies
should be viewed as emergency measures, most should be paid for with future
spending cuts or revenue returns. She said concerns about the mounting deficit
should not be used as an excuse "for leaving unemployed workers to
suffer."
o Romer is leaving her post as head of the
Council of Economic Advisers to return to the University of California,
Berkeley
o http://news.yahoo.com/s/ap/20100901/ap_on_bi_ge/us_obama_economist_1
o China will not launch a new stimulus
program, though it is wary of exiting the current one. There is no need
for major economic policy initiatives and credit growth is sufficient. Note on
17th of August China Ministry of Commerce Huo Jianguo planned to introduce
import stimulus as soon as September TTN
o SEC
Probes Canceled Trades – WSJ link
o Regulators are scrutinizing the
practice of "quote stuffing," in which investors place large numbers
of trades in a fraction of a second, then cancel them almost immediately.
o SEC
is looking at what role, if any, quote stuffing played in the May 6 "flash crash,"
o
The Cult of Equity is dead. Long live bonds from FT Alphaville
o
On
Thursday Robert Buckland writes that the 40-year cult of equity is — quite
simply — dead:
o
Equities
in Japan and Europe trade on dividend yields higher than their respective
government bonds. That is only 10% away on the S&P. Of course, this
derating of equity against bonds reflects current double-dip and deflation
fears, but it also a profound reassessment of both asset classes. The cult of
the equity is dead. Long live the cult of the bond.
o
And
he thinks there is little hope of it coming back any time soon:
o Liquidity Tide to Bonds Is Drowning Stocks: Manager on
cnbc
o
The asset allocation tides should not be
ignored when considering why investors remain overwhelmingly in favor of bonds
over equities according to Mark Tinker, a global portfolio manager at Axa
Framlington
o
http://www.cnbc.com/id/38968441
o retail SSS wrap as of 7am et:
o
COST Costco
reports August comps +7.0% vs Street +4.5%
o LTD Limited
Brands reports August comps +10.0% vs Street +7.1%
o
BKE The Buckle reports Aug comps (3.5%)
vs Street (6.7%)
o
FRED Fred's Aug comps +3.6%
in line to better than street
o
WTSLA Wet Seal reports
August comps +4.2% vs Street dn near 4%
o
SSI Stage Stores
reports Aug comps +0.5% vs Street near
+2.5%
o
FDO Family Dollar
reports Q4 comps +6.1% - in line with Street
o
PIR Pier 1 Imports
reports Q2 comps +11.2% (Guides Q2 EPS to $0.10-0.12 vs Reuters $0.08)
o
DEST Destination
Maternity reports adjusted Aug store comps (1.9%)
o
CATO Cato Corp reports
August comps +2.0%
o
ZUMZ -2% (Aug comps
better).. 9.1%vs. consensus at 7.5%
o Consumer: PSS -5.5% (earnings) Collective Brands's fiscal
second-quarter earnings grew 13% as the footwear retailer saw revenue rise
slightly and margins improve. But shares dropped 7.7% to $12.70 after hours as
results were far lower than analysts' estimates.
o
Homebuilder:
HOV
o Hovnanian Trims Losses, but Contracts Fall
Sharply – CNBC
o
Deliveries
Miss--Gross Margin Light--Impairments Worse – per WFC
o
Tech: Tokyo Electron (8035.JP) rose 1% when
Gartner raised its forecast for global semiconductor sales. SA
o Meat
price surge fuels fears of food inflation - FT
o
Global
meat prices have hit a 20-year high as robust demand from emerging countries
has coincided with a drop in production
o
http://link.ft.com/r/OZMCDD/26DQVY/X82E2/26Y1Q9/WL0QMO/CM/h?a1=2010&a2=9&a3=2
o
Consumer bankruptcies
fell 8 percent in August from Reuters
§
Bankruptcies filings by consumers fell 8
percent in August but still remained on track to top 1.6 million filings in
2010, according to a report by the American Bankruptcy Institute (ABI).
o
China's
August Car Sales Surge, Auto Stocks Jump – CNBC link
o Stocks of Chinese automakers, such as market leader
SAIC Motor, rose sharply on Thursday after China's robust car sales in August
surprised the market, boosted by Beijing's subsidies for fuel-efficient models.
o SAIC
shares rose 8.6 percent in Shanghai
o
India to target Google and Skype for
data access – Reuters link
o India
added Google and Skype to its electronic security crackdown on Wednesday and
began accessing some of the traffic carried on its initial target, Research In
Motion's BlackBerry
o
Banks : Architect of
UK Bank Supertax Admits it Failed
o Alistair
Darling admitted on Wednesday that Britain’s controversial supertax on bankers’
bonuses had failed to change the industry’s behavior over pay. The FT reports.
o said
he thought it was unlikely that the tax would be reinstated by the current
Con-Lib coalition government
o http://www.cnbc.com/id/38967729
o Airlines: CAL reports PRASM mostly in line with street
o August
consolidated and mainline PRASM increased 18%-19% y/y
o
Pernod Ricard dn 3%..reports mixed. CEO Sees No Double-Dip US Recession
o Pernod Ricard CEO Sees No Sharp US Recovery Either –
DJ
o
Jobs : Hayes up 4%
o Hays PLC (HAS.LN), the U.K.'s largest recruitment
company
o planning to double Hays' headcount in international
markets in the next four to five years. He also plans to double its headcount
in Asian markets in the next two years to meet demand in those strong markets,
which now operate at pre-recession levels.
o Spain biz up up 40% !!
o
o
Political Stories:
o
Outlook Dimming for Democrats – WSJ link
o
Eroding support for Democrats is roiling
dozens of House races and boosting Republican confidence that the GOP will
retake the House in November.
·
NY mayor denies
talk he might be Washington-bound – Reuters
link
·
Judge rules
against U.S. government on oil drilling – Reuters link
·
Special session
on California budget unlikely now – Reuters link
·
U.S. delays Web
traffic rules by seeking more comment – Reuters link
·
Illegal Immigration to U.S. Slows – WSJ link
o
The number of illegal immigrants entering the
United States has plunged by almost two-thirds in the past decade, a dramatic
shift after years of growth in the population, according to a new report by the
Pew Hispanic Center
o
Tensions
Rise as Mideast Talks Begin – WSJ link
o
Rising tensions in the Mideast cast a shadow over the start of the first
direct Israeli-Palestinian peace talks in nearly two years, and leaders at the
Washington summit vowed to press on.
o
Mexican
Drug Traffickers Using Tiny Planes For US Market - AFP
o
Mexican drug traffickers are using new means
to ship their narcotics to the lucrative U.S. market: ultralight aircraft that
can fly across the border, in a bid to go undetected. Over the past year and a half, Mexican
authorities have found "dozens" of these tiny planes on the border
o
Swing
sets removed at some W.Va. schools
o
Swings are being removed from Cabell County
schools in southern West Virginia in part because
of lawsuits over injuries. AP
o
EU Group Seeks Better Access to China –
WSJ link
o
European
business group urged the Chinese government to allow foreign businesses better
access to its vast domestic market, arguing that regulatory barriers could
threaten investment despite the economy's rapid growth.
o
"China is still one of the most heavily
controlled economies in the world," Jacques de Boisséson, the president of the European
Union Chamber of Commerce in China
o
Postal
Service seeks concessions in talks with its largest union – WP link
o
The
U.S. Postal Service, headed toward a loss of at least $7 billion this fiscal
year, opened contract talks with its largest union Wednesday seeking cost cuts
that could reshape the nation's mail-delivery system.
o
Cyber-bullying
defies typical stereotype –
WP link
o
The
advent of social networking sites and text messaging has allowed young girls
the opportunity to take on a role traditionally reserved for boys, experts say.
o Fund Stories
o
Bruised Quant Funds Seek a Human Touch – WSJ link
§ Computer-driven
mutual funds, chastened by poor results and a wave of redemptions, are striving
to become a little more like people in their investment decisions.
o Equity
Recap
o
Some nice green to start the month after the
-5% pretty much across the board in august. I’ll take it, especially in the
month that we move on to which is usually the ugliest historically. You
had some positive pmi data out of china, as well as Australia, coupled with
some better earnings and guidance from earth mover JOYG, which would be a
good pulse for the economy and throw in the better Chicago pmi and that
provided for a good bout of short covering, with some real money coming into
the market, although it still seemed to be somewhat of a seller’s strike as
guys were watching as we flirted but couldn’t really take out that 50 day
moving average on the Sp 500 with any authority. This in spite of the adp
which is the private sector coming in light and having last month being
revised lower. I would call it more of a reflex rally to an oversold
condition that was due. Key is, can we sustain this. Are we getting
to the point where like it was 18months ago that sales and earnings can only
look better with so much now of the ugly sentiment factored into stocks.
Breadth to the market had advancing issues outnumbering declining issues
6-1 while internally here, buy and sell names were relatively flat with volume
still noticeably light which is not a shocker for this time of the year
o
Asia and Europe were much stronger overnight
in response to positive manufacturing data out of China (both the government
PMI and the private (HSBC) PMI came in stronger than expected). S&P’s were
up 12 to 14 points in sympathy. Despite a weaker ADP Employment Report
(private payrolls 25k worse than expected at minus 10k), futures held their
gains into the 10:00 ISM numbers, When both ISM manufacturing and prices paid
came in well above expectations, futures reacted by jumping an additional
17 points to 1079.50. The balance of the session was spent in consolidation
mode, with futures closing above 1080 at the day’s high. Cash S&P closed up
almost 3%, with the smaller Cap Russell 2000 up almost 4%. Sentiment has
gotten extremely bearish after August’s nearly 5% fade. The feeling on the desk
seems to be that if the rally holds and builds, a lot of money could come off
the sidelines to make things really interesting.
o
All 10 S&P Industry groups were up over
1.5%, with Industrials and Financials strongest (each up 3.9%), followed by
Energy (up 3.6%). Telecom (yesterdays winner) was weakest today, up only
1.6%, as riskier groups were in favor. Specific movers included BKC, up 14.7%
on takeover speculation, while SKS (yesterday’s buyout story) faded 6% on a JP
Morgan downgrade. Other retailers acted well though, with JWN moving up 4.8%
and letter M rallying 4%. In tech, there was a tiny deal as SLRY moved up 42%;
another big gainer was SONS, up 10% on talk (again!) that CSCO is looking
at them. In the Machinery group, CAT moved up 4.6%, while miners RTP and BHP
rose 7.3% and 5.5% respectively. Resource names were also strong as FCX gained
5.8% to a 4 month high and XOM and CHV each moved up over 3% as Crude rallied
$2. In high priced names, AAPL was up $7.23 to $250, while NFLX rallied nearly
$10. Finally AMZN participated in the move with a $7 gain.
o
Billy Clark and Team
o
Investment grade Recap
o IG
spreads better across the board today with recent issues leading the way
tighter 3-5bps. BHI 40s are going out +127-122 after going out +132-128
yesterday and coming at +150 last week, SWK, APA, NE, and other deals tighter
as well. IG14 was ~4 tighter in line with cash spreads as we had the best
volume of the week on the heels of “positive” economic data and equities up,
cash continues to be put to work on the account side and hearing a large new
issue calendar awaits us after labor day. The way spreads feel now I
would not be the least surprised to see us rally into further issuance and I am
sure that I am not alone in that opinion.
o As
with last Friday, the treasury backup provided as much an impetus as anything
for the renewed account buying in the long end today, appreciate the focus on
cleaning up line items and while surprised we didn’t do the even spread, nearly
12 point dollar take out CAT 36/35 swap we were lifted on the 35s at left us
+99 bid CAT 5.30 35 and +103 bid on the CAT 6.05 36, still surprised to see
utilities trading at a discount to names like CAT, PEP, MCD, et al. – despite
recent issuance in the sector, feels like there is more value in a PacifiCorp
(BRK) first mortgage bond than a straight CAT 30yr…
o Of
course everything could change (again) tomorrow with the jobless numbers and
then Friday’s non-farm payroll number expected -100k, today’s ADP data came in
below expectations. Yet despite the numbers in the next two days one
takeaway from August is that IG spreads have remained extremely resilient and
even some recent deals that everyone agreed were priced aggressively (NWL 20’s)
have performed well in the medium term. Lower quality names do remain
under pressure (DOW 8.55 19 are out 40bps in August) as concern about absolute
yield levels, spread levels, and the overall economy have manifested themselves
in IG corps by account buying of higher quality 8yrs and in paper.
o Double
Dip continues to hit new highs on Google Trends in searches although is off
highs in the media - http://google.com/trends?q=double+dip&ctab=0&geo=all&date=2010&sort=0
o
o
Michael Salemo
o
Convertible Wrap
o
Higher credit quality names along with short
dated paper remain better bid. The VIX traded lower as equities traded higher.
Convertible Investors have found better returns making credit bets versus
volatility bets over the past few months. Saks stock traded back down
after takeover news cooled. Their bond traded dollar neutral down with the
common. According to Trace, customer buys outpaced customer sell orders for a
second day in a row and most names were unchanged or better by ¼ point.
o
Tom Fazio: ADCT 3.5%-17, CX 4.875%-15,
CIEN 0.25%-15, DOLE 7% pfd, MGM 4.25%-15, SNDK 1%-13, USU 3%-14
o
Thomas Fazio
o
Rates Commentary
o
The
volatile trading and price action continued for another day in Treasuries. The
Treasury market opened up lower overnight led by the belly on mainly on better
than expected manufacturing news out of China, German bund selling and large
selling of 10y futures. A slightly weaker than expected ADP report down 10K in
August versus an expected gain of 15K provided a small uptick early in the New
York session but the market quickly erased these gains minutes later. The major
selloff in the market occurred after the extremely strong ISM manufacturing
data 56.3 versus an expected 52.7, prices paid 61.5 versus an expected 55.3
(one of the strongest economic data releases we have witnessed in
quite some time) with Treasuries spiraling lower led by the long end (10y was
lower by 1 1/2 pts intraday, 30y was lower by over 3pts intraday). After heavy
volume and noise near the lows, the market settled down at these lower prices
(slightly off last Friday's levels) finding a small uptick
throughout the afternoon. At 3PM Treasuries were lower price across
the curve with benchmark yields 2.4-12.7bps higher.
o
The
Fed conducted its sixth purchase today, once again smaller than we anticipated
purchasing $900M out of $25.788Bln submitted.
o
Thursday
the Treasury will be announcing next weeks auction sizes. We are projecting
$33Bln 3 year notes, $21Bln 10 year notes (re) and $13Bln 30 year bonds (re).
The Treasury will also be auctioning $10Bln 10 year TIPS at 1PM, with the
backup in rates TIPS outperformed with 10 year B/E out ~5bps
o
Primary Dealer
SECTOR NEWS WITH MACRO IMPLICATIONS
o
FCEL
+1.7% (earnings) … FCEL FuelCell
Energy reports Q3 EPS
o CSIQ Canadian
Solar reports
o revenues of $328.7M vs First Call $305.66M
o For
the full year 2010, the company reiterates shipments guidance
o ASYS Amtech
Systems announces $37M in new solar orders
o
CNOOC:
Plans to invest up to CNY250B-300B to boost offshore oil production - Shanghai
Daily
o
Statoil
CEO Says Industry Comfortable With Oil Price at $70-80 -
BBG
o
Petropras
snapping up Brazil oil reserve..must
sell shares to fund – BBG says pays a high $8.50 per barrel..exact terms
tomorrow (Friday)
o
Gazprom's
Profit Triples - WSJ
link
o
Taiwan solar wafer makers holding price steady for Sept
2010 from
DIGITIMES
o Solar-grade
silicon wafer makers in Taiwan will not raise quotes for September 2010 as they
believe further price increase could have serious ramifications for the entire
solar sector, according to sources from the wafer suppliers. Spot quotes for
6-inch wafers will hold steady at US$3.8 and contract quotes at US$3.5-3.6 for
September, the sources indicated.
o
Land
Acquisition Starts for Australian LNG Project - WSJ link
o
Western Australia state said Thursday that it
has begun a compulsory acquisition process for land planned for the massive
Browse liquefied natural gas project, after talks with an indigenous land
council failed to reach a deal by the latest deadline.
o
Transocean
Rises as Fredriksen Considers Takeover Bid – BBG
o
Transocean Ltd., owner of the oil rig that
exploded while drilling BP Plc’s Macondo well in the Gulf of Mexico, rose in
New York trading after billionaire John Fredriksen said his Seadrill Ltd. may
bid for the company. “We’re looking at
everything that is reasonable,”
o
Fredriksen said today in an interview in
Oslo. “Transocean is reasonable these days. We’re looking at companies that are
cheap and that have good equipment.”
o
Four of UK's big six energy companies to be
investigated for misselling - BBC
o
PDE
Pride International reached agreement with BP Exploration & Production to
amend the contract for the Deep Ocean Ascension
o
VLO
Valero Energy in talks to sell Paulsboro refinery to PBF Energy -- Reuters
o
OMNI OMNI
Energy Services reports Q2 EPS
o
ASTI
Ascent Solar Technologies chairman Mohan Misra to retire, effective 31-Dec
o
o
U.S.
Benefits as Wheat Prices Soar – wsj
link
o
Germany's
Chemical Body VCI raised
its 2010 production outlook to 11% versus 8.5% prior view . The association
also increased its 2010 German chemicals sales to +18% compared to their prior
view +10%. It noted that German chemical industry was close to pre-crisis
levels
o
MMM,
COGT: Three of the 10
biggest Cogent investors said a 3M Co. bid for the fingerprint-identification
systems maker, supported by its chief executive officer and largest
shareholder, is too low. BBG
o MMM, COGT: 3M, Cogent Sued by Investor Over $943
Million Buyout – BBG
o
RBC
Regal Beloit acquires Rotor B.V.
o
TNB
Thomas & Betts announces new authorization to purchase up to 3M shares of
its common stock
o
DW Drew
Industries says its Lippert Components subsidiary has acquired the operating
assets of Sellers Mfg., Inc
o
SSD
Simpson Manufacturing completes the sale of Simpson Dura-Vent
o
CWST
Casella Waste reports Q1 EPS
o
LMT
Lockheed Martin final bids for units due next week reports Reuters, citing
sources
o
BLL Ball
Corp plans to consolidate salman can plant production
o
GEF Greif
reports Q3 EPS
o
OI
Owens-Illinois acquires Brazilian glass company
o
IESC
Integrated Electrical receives contract to build substation and transmission
line at new wind farm
o
LAWS,
PKOH Lawson Products sell Assembly Component Systems
("ACS") to a unit of Park-Ohio
o Germany
Aug new car registrations fell (27%) -- Reuters
o China's August Car Sales Surge, Auto Stocks
Jump – CNBC link
o
Stocks of Chinese automakers, such as market
leader SAIC Motor, rose sharply on Thursday after China's robust car sales in
August surprised the market, boosted by Beijing's subsidies for fuel-efficient
models.
o
SAIC shares rose 8.6 percent in Shanghai
o
GM's IPO Reportedly to
Price Nov. 17 from
TheStreet.com
o
General Motors' initial public offering is
expected to price on Nov. 17 with the shares making their public debut the
following day, a report says.
o
Kelley
Blue Book retains JP Morgan to sell the company - FT's Mergermarket
o
Kia
Motors Corporation: Union workers will vote on proposed deal with management
that could avert a strike; Would be the first time in 20 years a strike was
averted – TTN
o
TM:
Posted 57% in "conquest sales" in August - customers switching from
another brand - the highest since 2009 - WSJ
o
-
Suzuki Motor Corp: Company has cancelled its plans to develop an industrial
park for affiliated autoparts makers because of sluggish demand - Nikkei News
o
o CAL reports PRASM mostly in line with street
o August
consolidated and mainline PRASM increased 18%-19% y/y
o
Continental
Airlines Inc. must explain contradictory testimony in a lawsuit over its
proposed merger with UAL Corp., a lawyer in the case told a
judge. BBG
o
KSP K-Sea Transportation reports
o
BRK.A
Berkshire Hathaway's Burlington Northern reports weekly carloads (week ended
28-Aug); Total carloads and intermodal +11.0% to 186,748; last week +18.6%.
o
AMSWA
American Software reports Q1 GAAP EPS
o
WLFC Willis Lease signs agreement with SuperJet
International to purchase 6 Sukhoi Superjet 100 aircraft and options for 4
additional aircraft
o
Delta
Airlines: Strong Yen Brings More Passengers – wsj link
o
The president of Delta Air Lines Inc. Ed
Bastian said Thursday that the strong yen is helping to boost passenger demand
from Japan
o
http://online.wsj.com/article/SB10001424052748704206804575466863766017640.html?mod=WSJ_newsreel_business
o
Difficulty
in Improving Airline Safety – wsj link
o
This year may end up being the worst of the
past five years for airline crashes worldwide, and that doesn't count some
high-profile military and private-plane fatal accidents that killed major
political figures.
o
More
intrigue in the wonderful world of potash – FT
§
An even bigger week than usual for
potash-related deals and developments with Russia — undoubtedly spurred to new
competitive heights by BHP’s hostile $38.6bn bid for Canada’s PotashCorp —
signalling its support for the planned merger between potash producers Uralkali
and Silvinit.
§
On top of that come reports on Thursday that
China Mining United Fund, which owns minority stakes in various potash
producers including Canada’s Allana Potash Corp, is eyeing Allana’s Ethiopian
potash project and could raise its stake in the company.
§
But the bigger intrigue comes in the
BHP/PotashCorp bid saga. As DealJournal reports, Chinese agricultural conglomerate Sinochem has hired HSBC to advise it
on options regarding BHP’s bid for PotashCorp.
1.
http://ftalphaville.ft.com/blog/2010/09/02/332531/more-intrigue-in-the-wonderful-world-of-potash/
2.
http://blogs.wsj.com/deals/2010/09/01/sinochem-engages-hsbc-for-possible-potash-fight/
o
China
agricultural experts: Surging corn prices are only temporary and do not pose a
major threat to China's food security - China Daily
o
Potash Corp (POT CN)/ BHP Billiton PLC (BLT
LN)
1.
-A report in the Business Spectator said that
BHP investors could support a higher bid for Potash. A small sample of BHP
investors, questioned about the deal, said that an offer higher than USD 155
per share would begin to be prohibitively expensive.
2.
Potash Corp. rejection of BHP Billiton USD
130 per share offer has been strengthened by reports that Russian potash groups
are seeking higher prices from customers in Brazil and Asia. According to the
Sydney Morning Herald the marketing branch of Russian potash producers Uralkali
and Belaruskali, Belurusian Potash Company, is seeking to convince customers in
Asia and Brazil that potash prices will increase from their current level of
USD 375 per tonne to up to USD 420 per tonne. Indications of higher prices in
Russia are likely to provide support to Potashcorp rejection of BHP offer.
3.
A report in the Australian Financial Review
noted that a Canadian government official claimed that there were many concerns
regarding the purchase of all or Part of Potash by a Chinese sovereign fund or
state-owned business. The report cited Saskatchewan's Energy Minister Bill Boyd
as saying that there were concerns over Chinese groups, since it would be in
their interest to keep prices low, as potash consumption grows in China. China
could begin an anti-monopoly probe into the deal, even though BHP does not
currently produce any potash.
o China Digs for Ways to Obstruct BHP's Bid for
Potash – CNBC link
§ Chinese
newspaper reported Beijing was considering launching an anti-monopoly
investigation into the deal
o
Sinochem
hires HSBC on Potash (WSJ late yest)
§
China’s Sinochem has hired HSBC to advise it
on its options regarding PotashCorp of Saskatchewan, the target of a $38.6bn
hostile bid from BHP Billiton, reports DealJournal. The move is ‘preliminary’
and does not mean the Chinese state-owned company will make a counterbid for
Potash
§
http://blogs.wsj.com/deals/2010/09/01/sinochem-engages-hsbc-for-possible-potash-fight/
o
AGL-Mosaic merger given expert approval from Business Spectator
§
PWC report finds deal in shareholders' best
interests
o
Anglo Says Miners Plan Formal Queensland Rail Bid – BBG
§
Anglo American Plc said a group of mining
companies in Australia plans to lodge a formal bid for Queensland state’s coal
freight network next week after making a revised initial A$5.1 billion ($4.6
billion) proposal last month.
o
Miners discount as steel output falls – FT
§
The price of iron ore and coking coal will
drop next quarter as lower steel production forces global mining companies to
offer discounts on contracts
§
http://link.ft.com/r/OZMCDD/26DQVY/X82E2/26Y1Q9/M9UM8R/CM/h?a1=2010&a2=9&a3=2
o
CE
Celanese announces ethylene vinyl acetate price increases
o
SHW
Sherwin-Williams completes acquisition of Becker Acroma for SEK1.7B, or $227M
o
AKS AK
Steel reports Oct 2010 surcharges for electrical and stainless steels
o Tech: Tokyo Electron (8035.JP) rose 1% when
Gartner raised its forecast for global semiconductor sales. SA
o
AZPN Aspen Technology reports Q4 mixed
o
PSEM
Pericom Semiconductor completes acquisition of Pericom Technology
o
PAR
InfoWorld discusses patent infringement suit against 3PAR
o
http://www.infoworld.com/d/the-industry-standard/3par-sued-crossroads-systems-174?source=rss_infoworld_news
o
RHT Red
Hat in talks to buy Makara -- The Register, citing sources
o
TLEO
Taleo to acquire Learn.com for ~$125M in cash
o
HUTC
HUGHES Telematics signs agreement for its in-Drive telematics services
o
FCC Still Weighing Broadband Plan – WSJ link
o
The officials' remarks Wednesday came in
response to speculation that the agency had abandoned an effort to classify
broadband networks as common carriers under Title 2 of the Communications Act,
in the face of telecommunications-industry opposition.
o
U.S. delays Web
traffic rules by seeking more comment – Reuters link
o
VZ:
Verizon May Grant Smallest Dividend Raise Since 2006 - BBG
o
Amazon Cuts Some TV Shows to 99 Cents – WSJ link
o
India Wants to See Google, Skype Data – WSJ link
o India to target Google and Skype for
data access – Reuters link
o India
added Google and Skype to its electronic security crackdown on Wednesday and
began accessing some of the traffic carried on its initial target, Research In
Motion's BlackBerry
o
Xerox Touts Business Side – WSJ link
o
Cap Gemini Bets on Brazil With 233
Million-Euro CPM Braxis Deal - BBG
o
Capgemini (CAP.FR) buying CPM Braxis is a
"good move," says Cheuvreux. "The deal is in line with the
company's strategy to expand in emerging countries to deliver local
businesses," – DJ
o
BIDU:
Baidu Executive: In Talks About Possible M&As – DJ
o
: Talks Mostly Involve China Companies
o
Vodafone The Sunday Times reported Vodafone Chief
Executive Vittorio Colao has approved the sale of the company's 3.2% stake in China Mobile. A Vodafone spokeswoman
declined to comment on the report earlier this week.
o
Sony
Set to Compete with iTunes – WSJ
link
o
Sony announced a new digital-music service
that would work on Internet-connected Sony TVs, Blu-ray disc players, and
PlayStation 3's, entering a competitive space dominated by Apple
o
HP
may not see 2010 notebook shipments surpass 40 million units, says Digitimes
Research from
DIGITIMES
o
Due to a strong nosedive in global consumer
notebook demand, all the first-tier notebook vendors except Apple, reduced
their notebook orders significantly in July with Hewlett-Packard's (HP's)
volume dropping back to the levels of April and May, a monthly low for HP in
2010, while Acer also saw its shipments drop to less than two million units,
the company's lowest monthly volume in 2010, according Digitimes Research
senior analyst Joanne Chien.
o
NAND flash vendors cutting chip prices from DIGITIMES
o
NAND flash chip vendors are now more willing
to lower the prices of their NAND flash parts due to rising inventory levels,
according to industry sources, adding that the price of 32Gb NAND flash has
dropped to as low as US$4.30 per unit recently.
o
Deal or no deal? Disney,
TWC still on hold from NY Post
o
Negotiations between Time Warner Cable and
Walt Disney Co. were going down to the wire last night, as the two companies
worked to hammer out the details of a deal and avoid a system blackout of ABC
and ESPN, among other Disney properties
o
Cable & Wireless
offers suitors a tasty bite - there's just one obstacle from Telegraph
o
Cable & Wireless Worldwide was a big
riser in the market on rumours of a bid, possibly from AT&T of the US.
o
Cable & Wireless Worldwide (CW/ LN):
o
AT&T is not planning a takeover bid for
Cable & Wireless, a Financial Times market report claimed. The article
noted that Citigroup analysts highlighted a possibly very lucrative incentive
plan for Cable & Wireless management, which is linked to the company share
price as of March next year. Citigroup also downplayed the prospect of an
AT&T bid for Cable & Wireless, citing AT&T&'s existing UK
business, a limited potential for efficiencies, and its current focus on global
customers.
o
- A market report in the Independent
mentioned talk of possible bids for Cable & Wireless from Sprint Nextel
Corp.
o
Autonomy Corp PLC (AU/ LN):
Autonomy was yesterday the subject of renewed bid speculation, a Financial
Times market report said. The article added that Oracle and Microsoft were
again mentioned as potential bidders for Autonomy.- The Daily Telegraph citing
dealers who believe Autonomy might soon receive an offer at 2200p per share.
o
Trib creditors zero in
on Zell from
NY Post
o
Tribune Chairman Sam Zell's bid for immunity
from legal claims arising from the disastrous buyout of the company could be
slipping away. The judge overseeing the Tribune bankruptcy case yesterday
appointed a mediator to try to hammer out a settlement after dueling creditor
groups failed to agree on a...
o
BSkyB
signs up 3 millionth subscriber to high-definition television service from guardian.co.uk
o
ArcSight -- Approach With Caution from TheStreet.com
o
ArcSight, which is the subject of M&A
chatter, announces its first-quarter results after market close. James Rogers
tells you what to expect.
o
Hallmark (CRWN) channels go dark
for AT&T (T) U-verse subscribers - LA Times
o
http://www.latimes.com/business/la-fi-ct-hallmark-20100902,0,1585398.story
o
retail
SSS wrap as of 7am et:
o
COST Costco
reports August comps +7.0% vs Street +4.5%
o
FRED Fred's Aug comps +3.6%
in line to better than street
o
WTSLA Wet Seal reports
August comps +4.2% vs Street dn near 4%
o
SSI Stage Stores
reports Aug comps +0.5% vs Street near
+2.5%
o
FDO Family Dollar
reports Q4 comps +6.1% - in line with Street
o
PIR Pier 1 Imports
reports Q2 comps +11.2% (Guides Q2 EPS to $0.10-0.12 vs Reuters $0.08)
o
DEST Destination
Maternity reports adjusted Aug store comps (1.9%)
o
CATO Cato Corp reports
August comps +2.0%
o
ZUMZ -2% (Aug comps
better).. 9.1%vs. consensus at 7.5%
§
LTD Limited Brands reports August comps
+10.0% vs Street +7.1%
§ BKE The Buckle reports Aug comps (3.5%) vs Street (6.7%)
o
PSS
-5.5% (earnings) Collective Brands's fiscal second-quarter earnings grew 13% as
the footwear retailer saw revenue rise slightly and margins improve. But shares
dropped 7.7% to $12.70 after hours as results were far lower than analysts'
estimates.
o
HAIN Activist investor Carl Icahn bought another
chunk of Hain Celestial Group Inc. (HAIN)
shares, boosting his stake in the company to about 14%. The stock gained 2.9%
to $23.55 in late trading. DJ
o
OXM
-1.7% (earnings) Oxford Industries Inc.
(OXM) swung to a fiscal second-quarter profit on higher margins and steeper
prior-year charges, although sales continued to slide at most of the apparel
company's businesses. Shares fell 2.1% to $15.67 after hours although the
company lifted its outlook for the year.
o Pernod
Ricard dn 3%..reports mixed. CEO Sees No
Double-Dip US Recession
o Pernod Ricard CEO Sees No Sharp US Recovery Either –
DJ
o
DSG
International PLC shares rose 1.5%.... reported trading in line with
its expectations, but its outlook remains cautious
o
U.K.-based
electronics and white goods retailer DSG International PLC
(DSGI.LN) Thursday said first-quarter sales got a boost from soaring demand for
televisions during the football World Cup and from Apple Inc's (AAPL) iPad
o
"This is an encouraging start to the
year, especially given the challenging market conditions," said Chief
Executive John Browett, adding that he doesn't expect a double-dip recession in
the U.K. "We are back to reality and although it is not a normal market,
it is not a disaster either," he said.DSG is Europe's second-largest electrical goods
vendor by sales after Germany-based Metro AG's (MEO.XE) MediaMarkt,
o
COT
Barron's Weekday Trader is positive on Cott Corp
o
WBD Wimm-Bill-Dann
reports
o
BXC
Cerberus extends $3.40 per share cash tender offer for Bluelinx Holdings to
17-Sep from 10-Sep
o
GAP
Great A&P Tea may sell its Food Emporium stores - WSJ
o
HPY
Heartland Payment Systems announces settlement with Discover Financial Services
(DFS) for $5M
o
WAG,
GRMH Walgreens reaches definitive agreement with Graymark
Healthcare to acquire assets of 18 ApothecaryRx Pharmacies in 5 States
o
SORL SORL
Auto Parts acquires certain assets of Ruili Group
o
SAI SAIC
reports Q2 EPS continuing ops
o
OXM
Oxford Industries reports Q2 EPS
o
HAIN Activist investor Carl Icahn bought another
chunk of Hain Celestial Group Inc. (HAIN)
shares, boosting his stake in the company to about 14%. The stock gained 2.9%
to $23.55 in late trading. DJ
o
HWD
Harry Winston Diamond reports Q2 EPS
o
Harry
Winston swung to a fiscal second-quarter profit--its
first in 1 ½ years--on sharply higher mining revenue and retail sales growth as
diamond prices continued to increase. Shares
shot up 22% to $12.47 in late trading as the diamond company's earnings
topped Wall Street's expectations. DJ
o
Burger King in talks with hedge fund from FT Alphaville
o Burger
King is in talks with 3G Capital, a little-known US investment fund, about a
deal that could see the US burger chain return to private ownership for the
second time in a decade,...
o
BKC: Burger
King's Latest Pickle – WSJ link
§
As Burger King considers going private again, frustrated franchisees and
investors are wondering whether the burger chain needs a new strategy rather
than yet another new owner.
o
Consumer bankruptcies fell 8 percent in August from Reuters
§
Bankruptcies filings by consumers fell 8
percent in August but still remained on track to top 1.6 million filings in
2010, according to a report by the American Bankruptcy Institute (ABI).
o
GAP:
Great Atlantic & Pacific Tea Co, which operates the struggling A&P
supermarket chain, is mulling the sale of its Food Emporium stores to boost
liquidity, Reuters said , citing a report in The Wall Street Journal.
o
Meat price surge fuels fears of food
inflation - FT
o
Global
meat prices have hit a 20-year high as robust demand from emerging countries
has coincided with a drop in production
o
http://link.ft.com/r/OZMCDD/26DQVY/X82E2/26Y1Q9/WL0QMO/CM/h?a1=2010&a2=9&a3=2
o
Jimmy Choo (UK): The private
equity owner of Jimmy Choo plans to appoint investment banks to advise on
strategic options for the group, including a possible initial public offering
valuing the company at about £500m, FT reported. Goldman Sachs and Morgan
Stanley are the frontrunners to become advisers to Jimmy Choo, which was bought
in 2007 for £180m by Towerbrook Capital. However, people familiar with the
private equity group said it was considering all options, including an IPO in
the UK, the US or Asia. Towerbrook has been encouraged by a string of successful
recent flotations, including the £395m listing by fashion retailer Supergroup
and the HK$5.5bn share sale by L’Occitane in Hong Kong. Other options being
considered include a sale to another private equity group or for Towerbrook to
keep the company for a couple more years and invest in more stores,
particularly in the fast-growing Asian market. Any sale or flotation was not
expected to happen until next year, the people said.
o
Gambling revenue in Macau, the world’s
biggest casino hub, rose 40 percent to 15.8 billion patacas ($2 billion) in
August after SJM Holdings Ltd. and its rivals added tables for high-stakes
gamblers. Revenue at the six operators
in the only Chinese city where casinos are legal surged 63 percent from a year
earlier to 117.9 billion patacas in the eight months through August, according
to Macau’s Gaming Inspection and Coordination Bureau. BBG
o
o
MCO: Moody’s Drops Muni-Ratings Lawsuit Protection
Bid Amid Protests – BBG
o
Moody’s Corp. will discontinue its use of
language seeking to have taxpayers indemnify it against lawsuits related to
municipal-bond ratings after states including California and New Jersey
complained.
o MCO Moody's initiated market perform at Keefe, Bruyette &
Woods
o
Deutsche Bank trading lower on talk of a
capital increase – SA
o
Toronto-Dominion Bank reports
o
o
GS: Goldman Sachs invests to get its image right
in China from Telegraph
o
Invesment bank hires public relations firm
Brunswick to find out the state of its reputation
o
Ping
An, which was suspended June 30, jumped 2.7% to HK$66.10,
off an intraday high of HK$69.20, after it said it plans to acquire a 32% stake
in Shenzhen Development Bank for CNY29.1 billion, as part of its plan to become
a financial conglomerate.
o
AIG Taiwan unit buyer hopes for favourable
solution from Business Spectator
o
Primus Financial willing to move offshore
assets to Thailand to please regulators.
o AIG: Primus
CEO: Remain Committed To Taiwan Nan Shan Bid – CNBC: -Primus Financial Holdings Ltd., whose
US$2.15 billion bid for Nan Shan Life Insurance Co. jointly launched with China
Strategic Holdings Ltd. (0235.HK) was rejected by Taiwan's government earlier
this week, "remains committed to the transaction," Robert Morse,
chief executive of private equity firm, told CNBC in an interview broadcast
Thursday.
o
Wesco Financial : Berkshire
Hathaway has made a formal offer to buy the roughly 1.4 million shares it
doesn't already own of subsidiary Wesco
Financial, The Associated Press
o
Connecticut probes First Niagara-NewAlliance deal - Reuters
o
WSC
Berkshire Hathaway (BRK.A) makes formal proposal to Wesco Financial
o
HCC HCC
Insurance increases quarterly dividend by 7.4% to $0.145 from $0.135
o
BRO
Brown & Brown reports the acquisition of Crowe Paradis
o
HOV
Hovnanian reports Q3 EPS
o
Fannie Holds Line on Servicer Delays of Foreclosures from American Banker
o Fannie
Mae wants out of its defaulted residential mortgage holdings as quickly as
possible and is warning loan servicers not to stand in its way.
o
MATK
-2.4% (earnings) Martek Biosciences Corp.'s (MATK) fiscal third-quarter profit
increased by one-third as the company's top line was boosted by a recent
acquisition and margins improved. But shares fell 2.5% to $21.85 in after-hours
trading as the company forecast fourth-quarter results generally lower than
Wall Street expected. DJ
o
CRME
+12.2% (EU approval for Brinavess) Cardiome Pharma Corp.'s (CRME) injectable
formulation of vernakalant, a treatment for irregular heartbeat, has received
European approval. Cardiome and marketing partner Merck & Co. (MRK), said
the drug, which will be marketed under the name Brinavess, is the first product
in a new class of treatments for the condition, known as atrial fibrillation,
to launch in the European Union. Shares of the Canadian biotech firm jumped 12%
to $6.96 in late trading. DJ
o
RSCR
Res-Care says it continues to have takeover discussions with Onex Corporation
o
COO
Consensus metrics for Cooper Companies
o
KCI
KCI's LifeCell and Novadaq enter North American sales and marketing agreement
for exclusive Distribution of SPY Imaging System
o
ATEC,
BSX, MDT, NUVA, ZMH, STJ, SYK, WMGI Stifel Nicolaus initiates; Alphatec Holdings
(ATEC) initiated buy with $3.25 target; Nuvasive (NUVA) initiated buy with $37
target; Zimmer Holdings (ZMH) initiated buy with $58 target; Boston Scientific
(BSX) initiated hold with $6 target; Medtronic (MDT) initiated hold with $36
target; St. Jude Medical (STJ) initiated hold with $35 target; Stryker (SYK)
initiated hold with $50 target; Wright Medical (WMGI) initiated hold with $16
target
o
CI
CIGNA announces that CFO Annmarie Hagan is leaving the company, effective today
o
ANGN
Angeion restructures board
o
HNSN
Hansen Medical announces first sale of Lynx Irrigated Ablation Catheter
o
SXCI SXC Health Solutions announces
two-for-one stock split
o
o
TMT
o
CapGemini buys 55%
stake in Brazils CPM Braxis pre mkt +2%
o
Vivendi
chairman sees no sign of double dip and numerous upgrades after
yesterdays numbers
o
UK
MID-CAP & Smaller Companies
o
SPICE (SPI LN): The board of Spice and Cinven Limited announced
that they are in advanced discussions regarding an offer for the entire issued
and to be issued share capital of the Company at a price of 70p in cash per
share. Currently 6.3% better @ 67.25p.
o
McBRIDE (MCB LN): Full Year results. Clean Profit before Tax rose
by 43% to £44.4m which was slightly better than broker forecast, with net debt
£6m lower than forecast at £60m. Key news is that the company is making good
progress on fully recovering material cost inflation without losing contracts.
Also volumes are flat in Q1 having been down 2% in Q4, with Europe in
particular improving. Recovery in both profitability & sentiment is
believed to be underway after being knocked by downgrades and exacerbated by
the change in management team. Trading up 8.5% @ 153.4p.
o
RESTAURANT GROUP (RTN
LN): Interim PBT
impressive at £24.6m (consensus range believed to have been from £22.6m -
£23.7m). Manaagement confidence indicated by a 10% increase in the interim
dividend to 1.54p. Trading 2.8% better @ 249.8p.
o
GO-AHEAD GROUP (GOG
LN): Despite being down
29%, PBT are slightly better at £88.7m than broker forecast (£84.4m). The
biggest profit decline has been in Rail, down 24%, with Bus off only 3%. Rail
has been hit by the High Speed service on the South Eastern franchise running
below planned capacity. Also the new Southern franchise has not sustained
previous profitability. Bus operations have remained resilient. Biggest
sector riser, up 4.2% (46p) @ 1134.
o
o Japan
•
NKY+1.52%, TPX +0.99%
•
NKY rose after US and Chinese manufacturing
data eased investor worries about the global economy. Turnover on the TPX rose
to 1.18 trillion yen from 1.17 trillion yen yesterday
•
Stocks rose across most sectors led by
industrials, tech, materials, consumer and health care
•
Exporters rose after US ISM manufacturing
beat expectations easing concerns on economic slowdown: autos +0.93%, CE
+1.25%, precision +2.45
•
LCD-related names rose after Goldman Sachs
said a decline in prices for LCD panels will slow and shipping volume of the
panels for televisions will start recovering this month
•
Best performing sectors on the TPX: mining
+2.50%, precision +2.45%, airline +2.26%; worst performing sectors: oil &
coal 0.58%, pulp & paper -0.11%, real estate +0.10%
o Hong
Kong
•
HSI +1.19%; HSCEI +1.65%
•
Stocks rose after faster-than-expected growth
in US manufacturing temporarily eased concerns over an economic slowdown.
Turnover on the HSI fell to HK$17.63B from HK$19.35B yesterday
•
HK retailers rose after July retail sales
rose more-than-expected and ahead of mid-autumn festival and China National
Day:
•
Macau gaming mixed after casino revenue rose
40% YoY to 15.8B patacas in August, slowing from July but in-line with
expectations:
•
Autos rose after China car sales accelerated
in August:
•
Commodities names rose after metal and oil
prices rose
o China
•
SHCOMP +1.25%; SZCOMP +1.84%
•
Stocks rose led by automakers and commodities
producers after vehicle sales rose and US manufacturing grew faster than
expected. Turnover on the SHCOMP rose to 135.73B yuan from 122.52B yuan
yesterday
•
Stocks rose across most sectors led by
consumer, tech, health care, industrials and materials
•
Autos +7.05% after car sales accelerated in
August
•
Metals +2.34% and oil & gas producers
+1.05% after metal and oil prices rose
•
Oil services & equipment +1.48% after the
Shanghai Securities News said China may invest in offshore drilling equipment
INVESTMENT
BANKING
o
BKC: Burger
King's Latest Pickle – WSJ link
§
As Burger King considers going private again, frustrated franchisees and
investors are wondering whether the burger chain needs a new strategy rather
than yet another new owner.
o
More
intrigue in the wonderful world of potash – FT
§
An even bigger week than usual for
potash-related deals and developments with Russia — undoubtedly spurred to new
competitive heights by BHP’s hostile $38.6bn bid for Canada’s PotashCorp —
signalling its support for the planned merger between potash producers Uralkali
and Silvinit.
§
On top of that come reports on Thursday that
China Mining United Fund, which owns minority stakes in various potash
producers including Canada’s Allana Potash Corp, is eyeing Allana’s Ethiopian
potash project and could raise its stake in the company.
§
But the bigger intrigue comes in the
BHP/PotashCorp bid saga. As DealJournal reports, Chinese agricultural conglomerate Sinochem has hired HSBC to advise it
on options regarding BHP’s bid for PotashCorp.
4.
http://ftalphaville.ft.com/blog/2010/09/02/332531/more-intrigue-in-the-wonderful-world-of-potash/
5.
http://blogs.wsj.com/deals/2010/09/01/sinochem-engages-hsbc-for-possible-potash-fight/
o China Digs for Ways to Obstruct BHP's Bid for
Potash – CNBC link
§ Chinese
newspaper reported Beijing was considering launching an anti-monopoly
investigation into the deal
o
Sinochem
hires HSBC on Potash (WSJ late yest)
§
China’s Sinochem has hired HSBC to advise it
on its options regarding PotashCorp of Saskatchewan, the target of a $38.6bn
hostile bid from BHP Billiton, reports DealJournal. The move is ‘preliminary’
and does not mean the Chinese state-owned company will make a counterbid for
Potash
§
http://blogs.wsj.com/deals/2010/09/01/sinochem-engages-hsbc-for-possible-potash-fight/
o
Transocean
Rises as Fredriksen Considers Takeover Bid – BBG
o
Transocean Ltd., owner of the oil rig that
exploded while drilling BP Plc’s Macondo well in the Gulf of Mexico, rose in
New York trading after billionaire John Fredriksen said his Seadrill Ltd. may
bid for the company. “We’re looking at
everything that is reasonable,”
o
Fredriksen said today in an interview in
Oslo. “Transocean is reasonable these days. We’re looking at companies that are
cheap and that have good equipment.”
o
Cable & Wireless offers suitors a tasty bite -
there's just one obstacle from
Telegraph
o
Cable & Wireless Worldwide was a big
riser in the market on rumours of a bid, possibly from AT&T of the US.
o
Cable & Wireless Worldwide (CW/ LN):
o
AT&T is not planning a takeover bid for
Cable & Wireless, a Financial Times market report claimed. The article
noted that Citigroup analysts highlighted a possibly very lucrative incentive
plan for Cable & Wireless management, which is linked to the company share
price as of March next year. Citigroup also downplayed the prospect of an
AT&T bid for Cable & Wireless, citing AT&T&'s existing UK business,
a limited potential for efficiencies, and its current focus on global
customers.
o
- A market report in the Independent
mentioned talk of possible bids for Cable & Wireless from Sprint Nextel
Corp.
o
Ping
An, which was suspended June 30, jumped 2.7% to HK$66.10,
off an intraday high of HK$69.20, after it said it plans to acquire a 32% stake
in Shenzhen Development Bank for CNY29.1 billion, as part of its plan to become
a financial conglomerate.
o
AIG Taiwan unit buyer hopes for favourable
solution from Business Spectator
o
Primus Financial willing to move offshore
assets to Thailand to please regulators.
o AIG: Primus
CEO: Remain Committed To Taiwan Nan Shan Bid – CNBC: -Primus Financial Holdings Ltd., whose
US$2.15 billion bid for Nan Shan Life Insurance Co. jointly launched with China
Strategic Holdings Ltd. (0235.HK) was rejected by Taiwan's government earlier
this week, "remains committed to the transaction," Robert Morse,
chief executive of private equity firm, told CNBC in an interview broadcast
Thursday.
o
GAP: Great Atlantic &
Pacific Tea Co, which operates the struggling A&P supermarket chain, is
mulling the sale of its Food Emporium stores to boost liquidity, Reuters said ,
citing a report in The Wall Street Journal.
o
ArcSight -- Approach With Caution from TheStreet.com
o
ArcSight, which is the subject of M&A
chatter, announces its first-quarter results after market close. James Rogers
tells you what to expect.
o
Wesco Financial : Berkshire
Hathaway has made a formal offer to buy the roughly 1.4 million shares it
doesn't already own of subsidiary Wesco
Financial, The Associated Press
o
CASY: Couche-Tard sweetens bid for Casey's for 2nd
time
o
Reuters) - Canada's Alimentation Couche-Tard
Inc (ATDb.TO) raised its offer for Casey's General Stores (CASY.O) to $38.50 a
share on Wednesday, trumping the $38 a share offered by Casey's under a
recapitalization plan aimed at thwarting a Couche-Tard takeover
o
HAIN Activist investor Carl Icahn bought another
chunk of Hain Celestial Group Inc. (HAIN)
shares, boosting his stake in the company to about 14%. The stock gained 2.9%
to $23.55 in late trading. DJ
o
Connecticut probes First Niagara-NewAlliance deal - Reuters
o
Continental
Airlines Inc. must explain contradictory testimony in a lawsuit over its
proposed merger with UAL Corp., a lawyer in the case told a
judge. BBG
o
MMM, COGT: Three of the 10 biggest Cogent investors said
a 3M Co. bid for the fingerprint-identification systems maker, supported by its
chief executive officer and largest shareholder, is too low. BBG
o
Allianz
May Sell Its Polish Bank Branches To Rival Alior - --Polish Allianz Bank, a
unit of Allianz SE (ALV.XE), is close to selling its 56 bank branches in Poland
to rival Alior Bank SA, daily Rzeczpospolita reports, citing an anonymous
source familiar with Allianz.
o
TUI (TUI1.GR) not close
to buying remainder of TUI Travel - Daily Mail
o Spice
(SPI.LN) and Cinven Limited say are in advanced talks regarding an offer
at £0.70/ share in cash for company - BBG
o
CCG
Campus Crest Communities files amended S-11; increases size of IPO and changes
underwriters
o
IPO size is increased to $488.75M from
$385.3M. The lead underwriters are not Raymond James, Citi, Goldman, Sachs
& Co. and RBC Capital Markets. The previous filing listed KeyBanc as one of
the lead underwriters rather than RBC. The IPO was initially filed on
14-May-10. Proposed symbol on the NYSE is CCG.
o
Kelley
Blue Book retains JP Morgan to sell the company - FT's Mergermarket
o
GM's IPO Reportedly to
Price Nov. 17 from
TheStreet.com
o
General Motors' initial public offering is
expected to price on Nov. 17 with the shares making their public debut the
following day, a report says.
o
SAIL
shortlists JPM, 5 others for share sale: sources
o
Reuters) - State-run Steel Authority of India
(SAIL.BO) has shortlisted JP Morgan (JPM.N), Deutsche Bank (DBKGn.DE) and four
others to manage a follow-on share offering that could raise up to $1.7 billion
o
Jimmy Choo (UK): The
private equity owner of Jimmy Choo plans to appoint investment banks to advise
on strategic options for the group, including a possible initial public
offering valuing the company at about £500m, FT reported. Goldman Sachs and
Morgan Stanley are the frontrunners to become advisers to Jimmy Choo, which was
bought in 2007 for £180m by Towerbrook Capital. However, people familiar with
the private equity group said it was considering all options, including an IPO
in the UK, the US or Asia. Towerbrook has been encouraged by a string of
successful recent flotations, including the £395m listing by fashion retailer
Supergroup and the HK$5.5bn share sale by L’Occitane in Hong Kong. Other
options being considered include a sale to another private equity group or for
Towerbrook to keep the company for a couple more years and invest in more
stores, particularly in the fast-growing Asian market. Any sale or flotation
was not expected to happen until next year, the people said.
***All eco data from Bloomberg and DJ
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