WSJ : Schlumberger Profit Fell Sharply Despite Revenue Increase (-1.2% after hou

Schlumberger Profit Fell Sharply Despite Revenue Increase

Company Says Overall Global Economic Outlook Remains Mixed

Schlumberger SLB -1.07% posted higher revenue for the second quarter, driven by the oil-field services company's higher activity offshore and key land markets.

The company's profit, however, declined from the year-earlier period when Schlumberger booked a $1 billion gain tied to OneSubsea, its joint venture with Cameron International Inc.

The Houston company said the overall global economic outlook remains mixed, although "the fundamentals for a slow and steady recovery...remain intact."

"On the other hand, the gap between oil supply and demand is tightening on stronger demand and lower non-OPEC supply leading to narrower spare capacity and consequent support for oil prices that modulate customer spend," the company said. Natural gas markets, on the other hand, appear comfortably supplied, with little upward pressure on prices, it said.

Schlumberger has reported strong revenue growth in recent years as ramped-up activity in Canada and the deep-water U.S. Gulf of Mexico helped offset weakness in onshore North America revenue.

For the most recent period, Schlumberger posted a profit of $1.6 billion, or $1.21 a share, down from $2.1 billion, or $1.57 a share, a year earlier. Earnings from continuing operations, excluding charges and credits, rose to $1.37 a share from $1.15 a year earlier.

Revenue rose nearly 8% to $12.05 billion.

Analysts surveyed by Thomson Reuters had forecast a profit of $1.36 a share on $11.9 billion in revenue.

Revenue in North America rose 15% to $3.89 billion, while the Middle East and Asia saw an 11.7% growth to $2.97 billion and Europe, Africa and the Commonwealth of Independent States rose 4% to $3.23 billion. Revenue in its Latin American segment, however, fell about 3% to $1.85 billion.

The company's stock, up 27% since the beginning of the year, closed at $114.64 on Thursday. Shares fell about 1% to $113.35 in recent after-hours trading.

>>> Schlumberger (bevera) majority sold to Sastre Holding for an undisclosed fee

Schlumberger majority sold to Sastre Holding for an undisclosed fee 

Schlumberger, the Austrian sparkling wine and spirits group, has seen 51% of its shareholding sold to Switzerland-based Sastre Holding, Wirtschaftsblatt reported, citing an official statement. The article pointed out that the vendor is German spirits group Underberg. As previously reported, Underberg said that it wants to sell its 51% stake in Schlumberger earlier this year. No deal value was disclosed.

Wirtschaftsblatt noted that Sastre Holding is controlled by German/Swedish businessman Frederik Paulsen jun., who is looking to gain a foothold in the international sparkling wine and spirits market.

Schlumberger has a market cap of EUR 41.4m.


Source Wirtschaftsblatt

>>> Shire and AbbVie still negotiating on break fee

Shire and AbbVie still negotiating on break fee

Shire, an FTSE-100, pharmaceuticals company and listed Chicago, Illinois-based, rival AbbVie are still negotiating over a break fee with regards to Abbvie’s GBP 31bn (EUR 39.18bn) takeover bid, Financial Times reported.

The newspaper cited people close to the matter for the claim, which appeared in a longer report about the prospects of the deal being announced today, 18 July.

AbbVie is poised to announce a deal as early as this morning, the item said. However, people close to the talks cautioned that there is still a chance that the deal could collapse. The people added that an agreement is at hand following talks regarding terms.

Shire this week indicated that it was prepared to recommend AbbVie’s revised offer of GBP 53.20.

Shire and AbbVie refused to comment, the article said.


Source Financial Times

WSJ : Hermès Sales Growth Slows

Hermès Sales Growth Slows
The French Luxury-Goods Firm Hurt by Asian Markets

PARIS—French luxury-goods house Hermès International SA RMS.FR -0.26% said on Friday that second-quarter sales grew 5.8%, a tempering of its galloping growth in recent quarters.

Hermès, famous for its Kelly bags and silk scarves, said it sold €963 million ($1.3 billion) worth of goods in the second quarter, up from €910 million last year. Excluding currency fluctuations such as the weakening yen, sales would have increased 9.6%.

Hermès' second-quarter growth marks a slowdown compared with the 10% jump it recorded in the first quarter, and the 12% growth it achieved in the same period last year.

The more subdued growth at Hermès sends a signal that the luxury-goods market is facing curbs on its growth. Hermès, which is seen as the most exclusive of the major luxury brands, often logs the strongest growth in the sector. Rival labels such as Louis Vuitton and Gucci are trying to raise their profile by emphasizing leather products to be on par with Hermès.

But Hermès too is being blustered by headwinds. Its watch sales slumped 15% in the second quarter. Hermès said the wholesale trade of watches is difficult, especially in China. Watches in China became a social marker of wealth, one that has become stigmatized amid an anti-corruption crackdown by the government.

Another problem in Asia is Japan, where sales dropped 6.3% in the second quarter. Luxury goods sales in Japan had been boosted in the first quarter ahead of a sales tax increase. Excluding the effect of the weak yen, sales in the second quarter inched up 1.6% in Japan.

Hermès said weak foreign currencies will hit its bottom line. It forecast that its first-half operating margin, which it will publish next month, will be "slightly lower" than the 33.1% margin it recorded last year in the first half. The company added it will be "close" to the full-year margin last year of 32.4%.

(BofA-ML) The Flow Show - High Yield, High Noon

Link to document {http://bit.ly/1jW5j0N}

* Largest weekly outflows ($2.7bn) from HY bond funds since Aug’13
* Note divergence between relative performance of HY vs IG and S&P 500 ...either HY rallies or stocks soon in a bit of trouble
* Our B&B Index continues to suggest more greed than fear in financial markets (current reading of 7.3 close to 8.0 threshold to trigger a contrarian “sell” signal
* BofAML private client allocation to equities currently 61%, a 9-year high, while bond (24%) and cash (11%) allocations at 9-year lows...also indicates correction risks rising
* Geopolitics a potential catalyst but for decent correction rate volatility needs to rise
* Weekly flows show inflows to equities ($6.2bn) outpace inflows to bonds ($3.5bn). But the reverse is true year-to-date with $81bn into equity funds and $112bn into bond funds


>>> Asset class flows
* Equities: $6.2bn inflows (all inflows via ETF’s – SPY, MDY, FTSE China A50, QQQ)
* Bonds: $3.5bn inflows (4 straight weeks) (Table 1)
* Commodities: $0.4bn inflows (4th straight week)

>>> Equity flows
* EM: $1.1bn inflows (6 straight weeks); 4-week inflows as % of AUM = 0.5% (threshold for contrarian “sell” is 1.5%)
* Europe: outflows in 3 out of past 4 weeks ($0.3bn) following a record 47 straight weeks of inflows from Jul’13 to May’14 = region falling out of favor
* US: $2.5bn inflows (divergence between $4.7bn into ETF’s and $2.2bn outflows from long-only funds)
* Japan: flat

>>> FICC flows
* Largest weekly outflows ($2.7bn) from HY bond funds since Aug’13 (Chart 4)
* 30 straight weeks of inflows to IG bond funds ($4.7bn)
* 16 straight weeks of inflows to EM debt funds ($0.9bn) (largest in 6 weeks)
* 2 straight weeks of inflows go Govt/Tsy funds ($0.9bn)
* Outflows from floating-rate debt funds in 13 out of past 14 weeks ($0.3bn)

>>> What to look at today - 18/07/2014 (VIX @ 14,54 +32,2%)

US Market closed lower on geopolitical concerns, small cap closed 1,5% lower (Russel 2000), closing below its 200d MA, market almost traded +ve but slide on news of Malaysian Airlines was shot down...all sectors traded lower, while safe-haven assets like gold, Treasuries, and the yen rallied. Gold futures rose 1.5% to $1319.70/ozt, while Treasuries ended on their highs with the 10-yr yield down seven basis points at 2.46%. For its part, the dollar/yen pair fell to 101.25, less than 60 pips away from the lowest level of the year for the risk-sensitive pair...volume were light at 690 mil shares, VIX @ 14,54+32,2%...Israel invasion of Gaza is pushing mkt lower...SWKS +8.9%, WAL +2.8%, GOOG +1.2%, RP -26.5%, AMD -17.9%, IBM -1.8% following earnings/guidance...China property sector is in focus with the release of June property price data...Asian markets were cautipus after Ukrain developments..Malaysian Airlines (MAS MK) -11%...- BOJ released the minutes of its June policy meeting, reiterating most members agree on continued easing until 2% inflation is stable. BOJ also agreed to monitor risks and adjust policy if needed, while some members saw the easing effects intensifying. Nikkei225 is the underperformer among the regional indices, tracking firmer JPY receiving the safe-haven bid during the US session when USD/JPY fell below 101.10 - 1-week low...Nikkei -1.2% Hang Seng -0.31% Shanghai +0.25%

Eur$ 1.3522 S&P -0.10% EuroStoxx -0.50% FTSE -0.38% Dax -0.35% SMI -0.58%

Macro
- Iran Seeks to Extend Interim Deal to Nov. 24 as Talks Continue
- Fed Normalization May Need to Begin Sooner, Not Later: Bullard
- FSI May Buy Intesa, UniCredit Stakes in Alitalia: Repubblica

Keep an eye on :
- AC FP : Accor 2Q Total Rev., LFL Sales Growth Beats Ests.
- A2A IM : Italy’s A2A to Cede About 2% of EPCG in Tax Debt Conversion
- BAR BB : Van De Wiele's Stake in Barco Reached 10% Threshold on July 14
- BES PL : Portugal Isn’t Preparing to Recapitalize BES, Albuquerque Says
- BC IM : Brunello Cucinelli 1H Prelim. Rev. Beats Ests.
- CEQ NO : Cermaq 2Q EBIT Pre Fair Value NK123m vs NK137m Year Earlier
- BN FP : Danone Buys 40% of Kenya’s Brookside Dairy, Le Figaro Says
- EDF FP : Cheniere Energy and Electricite de France sign 20-year LNG sale and purchase agreement
- ELUXB SS : Electrolux 2Q Op. Profit Ex-Items Beats Ests.
- ERICB SS : Ericsson 2Q Net Beats, Sees 2H Boost From Contracts
- RF FP : Eurazeo to Invest EU70m for Majority Stake in Colisee f(4th biggest retirement home company) or 64% stake - EV of E175, Annual rev of E152
- FRE GY : Fresenius Kabi Recalls Drugs Over Glass Particles, FDA Says
- RMS FP : Hermes 2Q Sales Miss, Sees 1H Op. Margin Slightly Lower Y/y
- HUH1V FH : Huhtamaeki 2Q Matches Ests.; Sees Stable Trading Conditions, to Evaluate Options for Films Business; May Sell Unit
- MEO GY : Metro Said to Hire Deutsche Bank to Advise on Electronics Unit
- NOVN VX : Novartis CEO Confident Co. Won't Be Part of Big Merger: BAZ
- REC BB : FSMA Asks Bois Sauvage to Cut Its Recticel Stake to Below 30%
- REC NO : REC Silicon Cuts 2014 Production Guidance; Sees Higher Costs
- RCO FP : Remy 1Q Remy Martin Unit Organic Sales Miss Ests.
- SAABB SS : Saab 2Q Op. Profit Beats Est.; Sales Lower
- SCH NO : Schibsted 2Q Oper. Rev. Misses Est.; Online Classifieds Rev. Up
- SEV FP : Suez Environnement to Buy Remaining 24.14% Stake in Agbar
- SEV FP : Caixa to Buy 7% of Suez Environnement, Le Figaro Says
- SDRL NO : Seadrill Partners to Raise Seadrill Operating Stake for $373m
- SHP LN : Shire, AbbVie to announce $53 billion merger by Friday: sources - Reuters
- SKAB SS : Skanska 2Q Construction Orders Rise 5.3%
- TIE1V FH : Tieto 2Q Profit Misses Ests.; Still Sees 2014 Adj. Ebit Growing
- VOLVB SS : Volvo 2Q Net, Rev. Miss Est.; Maintains Truck Mkt Outlook
- WRT1V FH : Waertsilae 2Q Profit Beats Ests.; Revises FY Outlook on China JV

>>> Brokers Upgrades & Downgrades

>>> Up
*ALSTOM RAISED TO BUY VS NEUTRAL AT UBS
*BURBERRY RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*EASYJET RAISED TO OUTPERFORM VS SECTOR PERFORM AT RBC CAPITAL
*FERRAGAMO RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*HIKMA RAISED TO BUY VS NEUTRAL AT GOLDMAN
*SAINT-GOBAIN RAISED TO EQUALWEIGHT AT MORGAN STANLEY

>>> Down
*AFK SISTEMA CUT TO NEUTRAL VS BUY AT UBS
*BARRATT DEVELOPMENTS CUT TO HOLD VS BUY AT LIBERUM
*DAIMLER CUT TO NEUTRAL AT CREDIT SUISSE
*HEIDELBERGCEMENT CUT TO UNDERWEIGHT AT MORGAN STANLEY
*TECHNIP CUT TO NEUTRAL VS BUY AT UBS
*TGS NOPEC CUT TO SELL VS NEUTRAL AT UBS
*WOOLWORTHS HOLDINGS CUT TO NEUTRAL VS OUTPERFORM: CREDIT SUISSE

>>> PT Change
*DUFRY PT RAISED TO CHF190 VS CHF165 AT JEFFERIES, KEEPS BUY

>>> Initiation
*ADVANCED COMPUTER SOFTWARE RATED NEW BUY AT LIBERUM, PT 141P
*CITYCON RATED NEW OVERWEIGHT AT JPMORGAN; PT EU3.3
*CONTINENTAL RATED NEW BUY AT BERENBERG; PT EU200
*LEG IMMOBILIEN RATED NEW BUY AT SOCGEN; PT EU60
*RECKITT BENCKISER RATED NEW ADD AT NUMIS
*SUBSEA 7 RAISED TO BUY VS NEUTRAL AT UBS

>>> Call
>> Stock
*EXPERIAN EXITS UBS MOST PREFERRED EUROPE SUPPORT SERVICES SHRS
*FERREXPO EXITS MOST PREFERRED METALS & MINING SHRS AT UBS
*HAYS, BERENDSEN ENTER UBS MOST PREFERRED SUPPORT SERVICES SHRS
*SISTEMA REMOVED FROM 3Q14 TOP 10 EEMEA IDEAS AT BOFAML

(Exane) M&A Target List Update - Bouygues Inv. Case

* I want a new drug
We believe there is at least a 50% chance that Pfizer returns with a sweetened offer for
AstraZeneca in November, when the take-over panel’s restrictions expire. The manner in which the
two companies approached the possible take-over last time was less than optimal for their
respective shareholders, who were left frustrated by the failure of the parties to engage in
meaningful discussions. However, AZN’s attractiveness for Pfizer is unchanged (and possibly
enhanced by recent pipeline data). We think AZN is unlikely to invite Pfizer to talk before
November and investors will have to wait until then for Pfizer to return with a proposal that gets the
AZN board to engage (around GBP56-58?). But if AZN CEO Soriot's estimates of the sales
potential of the AZN pipeline are to be believed, a higher price should not be an insurmountable
barrier. Meanwhile AZN offers a 3.9% net dividend yield, which should limit downside. November is
only 4 months away, not that long to wait given the potential upside of around 30%.

* Yielding to temptation
The temptation is to take profits in Shire here – with Abbvie’s offer worth just over GBP53 and the
stock trading at GBP49 there is around 8% upside left. Given the noises coming from the US
around a possible interdiction of tax redomiciliation we have decided to take profits. Since Shire’s
entry in 2011 we have made a 195% return on this position.

* Telecoms switch
We are removing Colt from the list and replacing it with Bouygues after the latter’s recent fall. We
have held Colt for three and a half years now. While the valuation remains extremely low the poor
operating characteristics of the business have cost us a 30% underperformance over that period.
The recent earnings disappointment and lack of results from the restructuring make us nervous of
continuing to hold the stock simply on the M&A story. The Bouygues case is well known but the
value creation of synergies and market repair have been partially priced out recently following a
number of non-committal statements from all the players potentially involved. It looks like a good
entry point into a deal that will surely be done one day.

Amazon Nudged to Weigh Content Expansion Amid Fox Bid: Real M&A

+------------------------------------------------------------------------------+

Amazon Nudged to Weigh Content Expansion Amid Fox Bid: Real M&A 2014-07-17 23:37:16.266 GMT

(For a Real M&A column news alert: SALT REALMNA <GO>.)

By Brooke Sutherland July 18 (Bloomberg) -- After Rupert Murdoch’s attempt to grab Time Warner Inc., online giants Amazon.com Inc. and Google Inc. may decide to accelerate their expansion into content. The bid from Twenty-First Century Fox Inc. would create the world’s biggest media company and bring HBO’s “Game of Thrones” and “The Lego Movie” into Murdoch’s fold. Amazon has started creating original TV shows, and Google’s YouTube has funded filmmakers to fill new channels, though neither is a formidable competitor to Netflix Inc. or Hulu LLC. A takeout of Time Warner could drive Google and Amazon to get more serious about expanding, said CRT Capital Group LLC. The Internet companies may prefer to sign licensing deals or build more content on their own, said JMP Group Inc. If they wanted to be bolder, Google or Amazon could buy their way to more programming with a purchase of “The Hunger Games” maker Lions Gate Entertainment Corp., or Amazon could even buy Electronic Arts Inc., CRT said. French video-game maker Ubisoft Entertainment would be easier to digest, said Bank of Montreal. Google could even go as far as to make a bid for Time Warner, Wunderlich Securities Inc. said. Should Fox and Time Warner combine, “a lot of chips are in one hat at that point,” Neil Doshi, an analyst at CRT, said in a phone interview. Amazon and Google would “have to get pretty aggressive in terms of how they think about content, what they want to do.” Representatives for Mountain View, California-based Google and Seattle-based Amazon didn’t respond to requests for comment.

Offer Confirmation

Time Warner, the owner of HBO and TNT, confirmed this week that it received a more than $75 billion offer from Fox. While the New York-based company rejected the bid, Murdoch is willing to pay even more, people with knowledge of the matter said, a sign the billionaire is undeterred by the rebuff. The confirmation comes after Time Warner Chief Executive Officer Jeff Bewkes was asked last week whether Google or Fox would be interested in a purchase. If Time Warner is in play, Google may be inclined to weigh an offer, Wunderlich said July 16. The potential acquisition sparked a rally in media stocks representing about $90 billion of shareholder value as investors bet it may presage more consolidation. Content providers could combine to build scale and strengthen their power to negotiate with distributors, which are striking deals of their own. It could also mean Amazon and Google may want to double down on content.

Working Plans

Proprietary shows and movies are appealing to the Internet companies because it gives consumers one more reason to engage with their platforms. Amazon has already been developing programming and financing pilot episodes for children’s shows and comedies to air through the company’s Instant Video service. A few years ago, Google announced it would spend about $100 million to support video programming on YouTube. The company also said last year that the site would begin selling subscriptions to film and TV services over the Internet to compete with Netflix. Amazon and Google “are trying to build this consumer ecosystem to be the one-stop shop for media consumption,” Kerry Rice, an analyst at Needham & Co., said in a phone interview.

Exclusive Producers

A takeover of a company such as $4.4 billion Lions Gate by either Amazon or Google could make sense, said Doshi of CRT. Alibaba Group Holding Ltd., China’s biggest e-commerce company, is teaming up with Lions Gate to stream Hollywood movies and TV shows through a new set-top box. “A lot of these movie studios want to get deeper entrenched in online,” Doshi said. “And if Amazon or Netflix or Google has deep pockets and is willing to pay a lot of money to do deals, I don’t know if it would be too far off for one of these companies to potentially acquire a movie studio and be able to make movies exclusively for their subscribers.” For Google, a deal would bolster the YouTube brand and allow the company to charge more for advertising on a high- quality film, the analyst said. Yesterday, the company reported sales that exceeded analyst estimates. Amazon could consider buying a video-game maker, maybe even a company as large as Electronic Arts, which is valued at $11.6 billion, to drive more people to gaming on its Fire TV system, according to Doshi. Ubisoft, with a market value of about $2 billion, may be a more logical first step into video-game content for Amazon should it pursue that path, said Edward Williams of BMO.

‘Left Field’

“Amazon could step in and buy a console game company and then look to help that company take its content onto mobile through the Kindle ecosystem,” the analyst said in a phone interview from New York. “Buying an Ubisoft, which is a fraction of the size of EA, financially is just an easier one to swallow. It’s definitely a left-field move, but it’d be kind of an intriguing one.” Representatives for Redwood City, California-based EA and Ubisoft said their companies don’t comment on speculation. A representative for Lions Gate, based in Santa Monica, California, didn’t respond to requests for comment.

Better Yet

Getting bigger in content doesn’t necessarily mean acquisitions. Buying a major media company is a risky and expensive endeavor, and Amazon and Google may prefer to just license shows and movies or negotiate a joint venture arrangement, said James McQuivey, an analyst at Cambridge, Massachusetts-based Forrester Research Inc. “Frankly, owning the content creates all kinds of hassles,” he said in a phone interview. “I think most of these companies would want to think twice.” Buying an established content producer could undermine the neutrality of the companies’ platforms, said Ron Josey of JMP Securities, a unit of JMP Group. Amazon and Google may also prefer to develop their own shows and movies. Such a move would mimic Netflix, whose “House of Cards” and “Orange is the New Black” have grown in popularity. “Both of these companies are sufficiently large, they can sort of do whatever they want,” said Josey, a New York-based analyst. Google and Amazon probably “feel they can at least give it a good try on their own before they have to go out and buy someone to have that type of offering. History suggests that they believe they can build things just as well as anybody.”

For Related News and Information: Fox’s Play for Content Throne Buoys Discovery, Scripps: Real M&A NSN N8V09B6JTSF2 <GO> Murdoch Said Open to Offer More Than $75 Billion for Time Warner NSN N8TQH76S972H <GO> Liberty Global $824 Million ITV Stake Shows Value of Content NSN N8V7ET6KLVRD <GO> Google deal news: GOOGL US <Equity> TCNI MNA <GO> Amazon deal news: AMZN US <Equity> TCNI MNA <GO> Bloomberg Industries, diversified entertainment: BI DVEN <GO> Top deal news: DTOP <GO> Real M&A columns: NI REALMNA <GO>

To contact the reporter on this story: Brooke Sutherland in New York at +1-212-617-0448 or bsutherland7@bloomberg.net To contact the editors responsible for this story: Beth Williams at +1-212-617-2307 or bewilliams@bloomberg.net Whitney Kisling

>>> Asian Update

Asian Market Update: China property price growth slows further

***Economic Data*** - (CN) CHINA JUN NEW HOME PRICES M/M: PRICES RISE IN 8 OF 70 CITIES V 15 PRIOR; Y/Y: PRICES RISE IN 69 OF 70 CITIES V 69 PRIOR - NPD: June total US video game sales $736M, +24% y/y

***Index Snapshot (as of 02:30 GMT)*** - Nikkei225 -1.3%, S&P/ASX +0.1%, Kospi -0.4%, Shanghai Composite +0.3%, Hang Seng -0.5%, Sept S&P500 -0.1% at 1,951

***Commodities/Fixed Income/Currencies*** - Aug gold -0.1% at $1,316, Aug crude oil +0.6% at $103.83/brl, Sept Copper flat at $3.22/lb - (AU) Australia MoF (AOFM) sells A$1.5B in 2.75% bonds due 2019; Avg yield: 2.8736%; Bid-to-cover: 2.59x - (JP) Japan's MoF sells ¥2.46T in 0.1% (0.2% prior) 5-yr notes; Avg yield: 0.147% v 0.185% prior; Bid to cover: 4.14x v 4.62x prior - (US) Weekly Fed Balance Sheet Total Assets Week ending July 16th: $4.40T v $4.38T prior; Reserve Bank Credit: $4.36T v $4.34T prior; M1 y/y change: 11.1% v 10.9% w/w; M2 y/y change: 6.5% v 6.4% w/w - USD/CNY: (CN) PBoC sets yuan mid point at 6.1568 v 6.1564 prior setting (weakest Yuan setting since Jul 8th; 6th consecutive weaker setting)

***Market Focal Points/Key Themes*** - China property sector is in focus with the release of June property price data. Across all-70 cities prices fell m/m for the 2nd consecutive month, down -0.5% v -0.2% prior, while y/y price growth slowed to 4.2% from 5.4%. Overall, new home prices rose in just 8 cities vs 15 in the prior month and fell in 52 cities vs 35 prior. Existing home sales price declines were pronounced even in the top-tier cities, with 1.3% m/m declines in Beijing and -0.7% in Shanghai. Top property names are trading higher however on indication of more relaxed sentiment toward easing property curbs from a Chinese govt official. Newly appointed Land and Resources (MLR) Minister Chen Zhenggao said the local govt can introduce policies on property market according to their situation. Those comments come in the context of the statement from Ministry of Housing and Urban-Rural Development official overnight who said the govt supports reasonable housing needs, but would curb speculative demand.

- Sentiment started out cautious overall across the Asian markets, tracking late-session selloff on Wall Street. There is little certainty over the details in the downing of Malaysian Airlines aircraft in east Ukraine, as Western leaders express their condemnation for the presumed terrorist act and call for international investigations on the ground. Rebel leaders said they will hand over the aircraft blackbox to Moscow and that they will agree to a ceasefire to facilitate the recovery operation. Separatists are also pleading innocence, stating they do not have the required technology to down an aircraft flying at 10km altitude, while Ukraine Pres Poroshenko said he was certain his side did not fire on any aerial targets. Russia Pres Putin said the entire conflict is to blame for the tragedy, but that ultimately the fault is with Kiev for conducting military action in the region. Malaysian Airlines shares were down 10%, and most international carriers have now formally diverted their routes away from Ukraine. Geopolitical tensions were also emanating out of the Middle East, where Israeli govt confirmed it has started ground operations in Gaza.

- BOJ released the minutes of its June policy meeting, reiterating most members agree on continued easing until 2% inflation is stable. BOJ also agreed to monitor risks and adjust policy if needed, while some members saw the easing effects intensifying. Nikkei225 is the underperformer among the regional indices, tracking firmer JPY receiving the safe-haven bid during the US session when USD/JPY fell below 101.10 - 1-week low.

- Among notable US names reporting results after market close, GOOG is up modestly despite missing on earnings as paid clicks rose 25% y/y. Seagate and IBM are down about 2% each in extended session, and AMD is down a pronounced 19% on contracting gross margins and soft revenue guidance for Q3.

***Equities*** US markets: - GTIV: Rejects Kindred offer; receives alternative proposal from another party at $17.25/shr (8% higher than $16/shr offer from KND); does not disclose the name of the alternative party; +10.9% afterhours - SWKS: Reports Q3 $0.83 v $0.80e, R$587.0M v $570Me; +8.3% afterhours - CE: Reports Q2 $1.47 v $1.23e, R$1.77B v $1.72Be; Raises FY14 EPS growth to 15-17% (implies $5.18-5.27 v $5.09e) from 12-14%; +2.4% afterhours - MATW: Reports Q2 $0.86 v $0.80e, R$280.0M v $264Me; +1.1% afterhours - GOOG: Reports Q2 $6.08 v $6.23e, R$12.7B v $12.4Be; +1.0% afterhours - PETM: Said to be interviewing investment banks, seeking advice amid investors' demand for sale - financial press; +0.9% afterhours

- COF: Reports Q1 $2.04 v $1.79e, R$5.5B v $5.43Be; -0.3% afterhours (after initially rising over 0.6%) - STX: Reports Q4 $1.10 (adj) v $1.10e, R$3.30B v $3.32Be; Guides Q1 Rev at least $3.55B v $3.52Be; Q1 product GM to be relatively flat - conf call; -1.7% afterhours - IBM: Reports Q2 $4.32 v $4.31e, R$24.4B v $24.2Be; -2.0% afterhours - AMD: Reports Q2 $0.02 v $0.03e, R$1.44B v $1.44Be; Guides Q3 Rev +2%, +/- 3% q/q implies $1.47B v $1.58Be; -19.0% afterhours

Notable movers by sector: - Consumer Discretionary: Unicharm 8113.JP +1.8% (press speculation on Q1 results); Qingdao Doublestar 000599.CN -1.7% (prelim H1 results) - Financials: Haitong Securities 6837.HK -0.3% (H1 prelim results); China Vanke 000002.CN +3.8%, Poly Real Estate 600048.CN +6.6% (China Jun housing price data) - Materials: OZ Minerals OZL.AU -0.7% (Q2 production results); BBMG Corp 2009.HK -1.4% (H1 guidance) - Energy: China Shenhua Energy 1088.HK -1.4% (Jun coal output) - Technology: Sharp Corp 6753.JP -3.1% (press speculation on Q1 results); Forgame 484.HK -10.5% (H1 guidance) - Utilities: Yaskawa Electric 6506.JP +2.9% (Q1 results)