>>> US Close Dow +0,08% S&P-0,05% Nasdaq -1,03% Russel

Closing Market Summary: Upbeat Week Ends on Cautious Note

The stock market finished an upbeat week on a mixed note. The S&P 500 shed less than a point, ending the week higher by 1.3%, while the Dow Jones Industrial Average (+0.1%) cemented a 1.7% advance for the week. High-beta names underperformed, which weighed on the Nasdaq Composite (-0.3%) and the Russell 2000 (-1.3%).

Equity indices displayed strength in the early going with the S&P 500 tagging the 2,019 level during the opening 30 minutes of the action. However, that represented the high watermark for the benchmark index, which returned to its flat line by the close.

The early advance followed the failed independence referendum in Scotland, which averted a potential storm in the financial markets. Once the uncertainty was cast aside, participants directed their focus to the Alibaba Group (BABA 93.89, +25.89) IPO, which represented the largest public debut to date. Shares of Alibaba opened at $92.70 after pricing at $68/share, but could not settle above the opening print.

Alibaba followed a similar pattern as the broader market with the latter being weighed down by influential sectors like financials (-0.3%), technology (-0.4%), and industrials (-0.1%).

Despite today's underperformance, the financial sector finished the week among the leaders with a solid gain of 1.5% since last Friday. Meanwhile, technology lagged since the open following disappointing quarterly results from Oracle (ORCL 39.80, -1.75). The stock tumbled 4.2% in reaction to below-consensus earnings/revenue and news that CEO Larry Ellison will step down from his post.

Also of note, Oracle's peer, SAP (SAP 74.00, -3.35), lost 4.3% after announcing the acquisition of Concur Technologies (CNQR 126.82, +19.02) for $129 per share. High-beta chipmakers were unable to fill the void left by the two software giants as evidenced by a 1.2% decline in the PHLX Semiconductor Index. Despite today's slide, the index still finished the week with a strong gain of 1.5%.

For its part, the industrial sector lagged amid weakness in machinery stocks after Caterpillar (CAT 102.47, -1.87) provided a disappointing update regarding its sales over the past three months. The Dow component lost 1.8%, while peer Joy Global (JOY 58.02, -1.20) fell 2.0%.

Caterpillar was the weakest performer in the Dow and the only stock that fell more than 1.0%. On the upside, 22 index components posted gains with Coca-Cola (KO 42.05, +0.26) leading the pack. The stock climbed 0.6%, contributing to the relative strength of the consumer staples sector (+0.2%).

Similar to consumer staples, the remaining three countercyclical groups settled ahead of the broader market. Telecom services and utilities both jumped near 1.0%, while health care (+0.1%) ended among the leaders despite volatile action in the biotech space. The iShares Nasdaq Biotechnology ETF (IBB 275.23, +0.16) tacked on 0.1%.

Treasuries spent the session in a steady climb, pressuring the 10-yr yield to 2.58%. Participation was well ahead of average thanks to the Alibaba IPO and quadruple witching. More than 1.8 billion shares changed hands at the NYSE floor.

Economic data was limited to the Leading Indicators report for August, which showed an increase of 0.2% on top of an upwardly revised 1.1% (from 0.9%) reading for July. The consensus estimate called for an increase of 0.4%. The difference between what was expected and what was reported can be traced directly to the building permits contribution, which subtracted 0.18 percentage points in August. Consensus estimates could not be updated in a timely manner to reflect the impact of the weaker than expected building permits report, which was released yesterday.

On Monday, the Existing Home Sales report for August will be released at 10:00 ET.
  • Nasdaq Composite +9.7% YTD 
  • S&P 500 +8.8% YTD 
  • Dow Jones Industrial Average +4.2% YTD 
  • Russell 2000 -1.6% YTD 

>>> US Early premarket gappers

Early premarket gappers

Gapping up: CNQR +19.7%, PDEX +18.2%, PDEX +18.2%, DRC +10.9%, NAVB +9.8%, INVN +6.3%, MCP +6.1%, HIMX +3.8%, RBS +2.6%, AEO +2.6%, SHLD +2.5%, GNC +2.2%, AMD +1.8%, VOD +1.4%, GILD +1.2%, INFY +1.2%, JD +1.2%, GSK +1%

Gapping down: CLDT -4.6%, SAP -4%, TIBX -3.8%, TIBX -3.8%, SNE -3.1%, ORCL -3%, ORCL -3%, BXMT -2.9%, STM -2.3%, GLUU -1.9%, MT -1.2%, SDRL -1.1%, RIO -1%, GST -0.9%, IAG -0.9%

(MergerMarket) Actavis easier target for Pfizer than AstraZeneca, but hurdles re


  • Actavis not politically sensitive target
  • Actavis may want breathing space to digest Forest acquisition
  • Any deal likely to be costly

Actavis [NYSE:ACT] would make a more viable target for Pfizer [NYSE:PFE] and should be a willing seller at the right price, according to a source familiar with the company and an industry banker.

As a US company that inverted into an Irish tax domicile in July 2013, Actavis is politically a much easier target than a national flagship such as AstraZeneca [LON:AZN], said a second source familiar with the matter and the industry banker.

Pfizer had aimed to change its tax domicile to the UK through a tax inversion via the acquisition of AstraZeneca. But a deal with Actavis would offer a lower tax rate than AstraZeneca. In 2013, Actavis had an effective tax rate of 17.7% versus AstraZeneca’s 21.3% for the same year.

But Actavis may be unwilling to jump into a second large deal so soon after its acquisition of Forest Laboratories [NYSE:FRX], said the second source. Additionally, Actavis has other options besides Pfizer, he added.

Actavis is still digesting its latest mega-merger and would appreciate some breathing space before another large deal, said the second source familiar with the matter. Actavis completed its USD 24bn acquisition of Forest Laboratories in July this year. But there is no reason why Actavis cannot do a deal while integration goes on, said the industry banker.

Actavis is expected to extract all the synergies from its acquisition of Forest Laboratories in 2015, and consensus figures have it trading at a discount to its peers. Looking at projected 2015 EBITDA, Actavis is trading at 11.2x against a peer average of 13x, according to Dealreporter analytics.

Actavis CEO Brent Saunders would be a willing seller if Actavis received a compelling offer, said the first source and the banker. Any bid could be very expensive, the banker added, citing JPMorgan research that said Actavis may require a USD 350 per share offer. Actavis is trading at USD 237 today (19 September).

But Saunders is unlikely to have joined Actavis simply to turn it around and sell it, noted a second industry banker. Saunders joined Forest Laboratories in late 2013, before selling the company to Actavis the following year. An investor in the company noted that when Saunders was asked at a conference why he did not buy more stock in Actavis, he replied that it was because he knew too much about M&A plans to do so.

Actavis’s focus on generics and specialty pharmaceuticals would make it a good fit for Pfizer, allowing a tie-up to generate significant cost synergies, said the first source. Given the large amount of synergies that the generics unit would have, Pfizer would not be significantly levered if it made a bid for Actavis, said the first source.

Should Pfizer wish to make a move for Actavis, it should do so as soon as possible to avoid being caught out by US anti-tax inversion rhetoric, said the second source.

Actavis would be an easy inversion target for many large cap US pharma companies, including Allergan [NYSE:AGN], Eli Lilly [NYSE:LLY], Merck [NYSE:MRK], Pfizer and Bristol-Myers Squibb [NYSE:BMS]. But the second source noted that management at Eli Lilly, Merck and Bristol-Myers Squibb have all said that they were not interested in an inversion deal.

And while there are a lot of buyers who would be interested in Actavis, with a current market capitalisation of USD 63bn, it is becoming a large target, he said.

Meanwhile, Actavis is also sought-after as a buyer. Top-20 investors in Salix Pharmaceuticals [NASDAQ:SLXP] have expressed their dissatisfaction with its deal with Cosmo Pharmaceuticals [VTX:COPN] and would rather the company be bought by Allergan or Actavis.

A tie-up between Actavis and Salix would make strategic sense as both have specialty pharmaceutical pipelines, said the second source familiar with the matter. But there is less urgency in buying Salix – Actavis could wait until it has completely integrated its recent mergers, the source added.

Pfizer declined to comment. Actavis could not be reached for comment.

NY Post : Hedge funds going strong despite Calpers’ choice

Hedge funds going strong despite Calpers’ choice

The flood of cash into hedge funds is still going strong despite the California Public Employees’ Retirement System’s announcement earlier this week that it was abandoning the category. Pension-fund giant Calpers, which said it will divest $4 billion in hedge-fund investments, was one of the leaders in bringing pension money to hedgies, fueling explosive growth over the past decade. The departure is viewed as a bad omen for the industry, which has underperformed the broader market indexes for the past five years. However, investors appear to be coming out of the woodwork looking for the next market rock stars. New hedge funds raised $15.6 billion in the first half of the year — the most since just before the financial crash of 2008. That high-water mark of $19.5 billion occurred during the first six months of 2008. Six of the 47 new funds raised more than $1 billion — a stark contrast to last year when only one new fund managed to raise $1 billion, according to a survey by Absolute Return, a hedgie news and data provider. The hot new managers are coming from such names as Ziff Brothers family office, Seth Klarman’s Baupost and Eric Mindich’s Eton Park Capital. Stock pickers are disproving the notion of a market downturn, raising $10.6 billion, or 68 percent of the total. Former Baupost co-portfolio manager Herb Wagner set the record with Finepont Capital, which raised $2 billion to invest in worldwide stocks by July 1. Industry stalwart David Einhorn, who has a firm that invests in other hedge funds, helped Anand Desai launch his firm, Darsana Capital, in June after spending nine years investing in equities at Eton Park. Einhorn, in a letter to investors, said Desai was "partnered with only a small group of investors." Desai raised $1.2 billion. Another new face is Yen Liow, who left the Ziff Brothers family office to start Aravt Global, yet another equity shop. Liow also raised $1.2 billion.

NY Post : Hollywood emerges as winner in Alibaba’s market debut

Hollywood emerges as winner in Alibaba’s market debut

After IPO, Alibaba plans to pour cash into movies

If Hollywood handed out an award for film financing, it would go to Alibaba founder Jack Ma. Studio heads are anticipating an influx of investment dollars from Asia, thanks to the Chinese e-commerce giant, which is poised to pull off the biggest public stock sale in history on Thursday. Japan’s Softbank — which owns more than a third Alibaba Group Holdings and is sitting on a large pile of cash as a result — has been visiting the bamboo-decorated executive suites of film studios with an eye toward winning a role in the movie business, sources said. "The Japanese have started to take an interest," said one source. "They’ve talked to Jeffrey Katzenberg’s DreamWorks Animation." Softbank has held early stage talks with at least three other studios, Relativity, Lionsgate and Legendary Entertainment, according to sources familiar with the discussions. A spokeswoman for DreamWorks said the firm couldn’t comment on speculation. Relativity and Legendary declined to comment, while Lionsgate didn’t respond to a request for comment. A major player in Japan’s mobile market, Softbank also owns 70 percent of No. 3 wireless player Sprint. The company is hunting for content partnerships that can strengthen Sprint against larger rivals Verizon and AT&T. At the same time, Softbank, run by Japan’s richest man, Masayoshi Son, is talking to Alibaba about how they might jointly approach Hollywood from both an investment and content acquisition standpoint. Alibaba’s Ma is interested in creating the "Netflix of China" by acquiring streaming rights to shows and films, in particular in geographic territories where Netflix doesn’t have much of a foothold, said one person familiar with talks. Modal Trigger SoftBank CEO Masayoshi Son (left) and Jack Ma, the founder and chairman of Alibaba Group Holding, in July. Photo: Reuters "Softbank and Alibaba are both looking at investing," said a top Hollywood executive. "They are getting aggressive." Son’s $20 million investment in Ma’s Alibaba has turned into $55 billion windfall just a decade and a half later. Given their lucrative history, it makes sense for them to pursue investment opportunities. "Mashayoshi Son and Jack Ma haven’t engaged [directly] yet, but the two companies are trying to get smart," said a source. Clearly, Softbank has money to burn — and the movie business can easily help spend it. "Hollywood has a way of sniffing out the dumb money," said one source. Meanwhile, Softbank appears intent on driving deeper into the media business. Last year, the Japense tech and telecom made an $8.5 billion bid to acquire Universal Music Group from Vivendi, which rebuffed the offer. Softbank already has articulated a strategy to get deep into the video gaming business, according to one source. Last year, it acquired Finland-based game maker SuperCell for $1.5 billion. Softbank wasn’t immediately reachable for comment.

(BFW) Greece to Miss Asset Sales Revenue Target This Year: Kathimerini

Greece to Miss Asset Sales Revenue Target This Year: Kathimerini
2014-09-19 06:23:44.215 GMT


By Nikos Chrysoloras
Sept. 19 (Bloomberg) -- Hellenic Republic Asset Development
Fund’s total 2Q revenue from state asset sales, real estate
leasing was EU309m, Kathimerini reports, without citing anyone.
* HRADF 1Q revenue was almost zero; revenue since June
insignificant: Kathimerini
* Almost certain that total 2014 revenue will fall short of
revised target of EU1.5b this yr: Kathimerini
* HRADF may get EU187m from sale of natural gas grid operator
DESFA this yr, EU100m from sale of Astir Palace hotel
complex in Athens: Kathimerini
* Real estate securitization unlikely to be completed before
1H 2015; maximum expected revenue for 2014 at EU1b:
Kathimerini
* NOTE: Deadline for horse-betting concession is today; OPAP,
Global Family Partners venture has committed to bid


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Nikos Chrysoloras in Athens at +30-210-7419022 or
nchrysoloras@bloomberg.net
To contact the editors responsible for this story:
Vidya Root at +33-1-5365-5018 or
vroot@bloomberg.net
Eleni Chrepa

(BofA-ML) THe Flow Show, Strong Inflows in Equity, big bond redemption

* Largest weekly redemptions from bond funds of 2014 ($3.8bn) but strong inflows to equity funds ($5.5bn)
* Largest weekly redemptions from European equity funds in over 3 years ($4.6bn –Chart 1), of which UK (pre-Scottish referendum) accounted for $1.0 billion
* First EM equity outflows ($1.1bn) in 15 weeks following Sept EM underperformance
* 39th consecutive week of inflows to IG bond funds but…another week of big
* outflows from HY bond funds (outflows total $27bn past 10 weeks)

>>> Asset class flows
* Equities: $5.5bn inflows ($8.8bn into ETF’s vs $3.2bn out of LO funds) (boosted by RIA reallocation from bonds to equities)
* Bonds: $3.8bn outflows (largest weekly outflow YTD) (Table 1)
* Precious metals: $0.4bn outflows (4 straight weeks)

>>> Equity flows
* Europe: $4.6bn outflows (largest weekly outflows in more than 3 years – since Aug’11)
* EM: $1.1bn outflows (first outflows in 15 weeks) (Table 2)
* US: $8.7bn inflows (all via ETF’s – mainly SPY, IJH, IVV)
* Japan: flat

>>> FICC flows
* 39 straight weeks of inflows to IG bond funds ($3.1bn)
* 4 straight weeks of modest inflows to EM debt funds ($0.1bn)
* $3.2bn outflows from HY bond funds (largest in 6 weeks) (Chart 3)
* $2.9bn outflows from govt/tsy funds (largest in 13 weeks)
* 10 straight weeks of redemptions from floating-rate debt ($0.8bn)

>>> Liberty Global downplays talk of takeover bid for ITV

Liberty Global downplays talk of takeover bid for ITV

Liberty Global, a UK-based cable company, is trying to downplay expectations that it will make a takeover bid for ITV, the Financial Times reported. Liberty Global chief executive Mike Fries said recently at an investor conference that the company’s acquisition of a 6.4% stake in ITV in July does not signify anything with regards to the listed UK-based television broadcaster, according to the newspaper.

The item also noted that Liberty Global’s strategy chief Jim Ryan also downplayed speculation that the group will acquire content providers, describing such deals as “ancillary” to Liberty’s primary cable business.

Some Liberty Global investors have in private voiced concerns that a potential takeover of ITV would be unnecessary and expensive, the item said, citing a person familiar with Liberty’s thinking.

However, an analyst cited by the report believed that Liberty’s downplaying of the speculation was very “rational” no matter what its strategy is, as a company should avoid adding to speculation regarding a specific acquisition.

Another analyst cited by the report expressed the opinion that Liberty’s acquisition of its ITV stake was “opportunistic.” The analyst thought that Liberty has no plans for a takeover of ITV in the near future.

As reported, the entrepreneur John Malone is the controlling shareholder in Liberty Global.

ITV’s market capitalisation stood at GBP 8.61bn (EUR 10.97bn) at the close of trading in London yesterday, 18 September.


Source Financial Times