>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: EJ +9.8%, TEDU +4.5%, AINV +2.1%, PWRD +2%, NPTN +1.1%.

M&A related: ARX +25.4% (to be acquired by Cobham plc for ~$1.46 bln; shareholders to receive $10.50 per share in cash), ARNA +4.6% (Hearing M&A speculation attributed to the move), AZN +2% (Retuers discusses comments from analysts that Pfizer (PFE) deal for AZN may not be dead yet).

Other news: OPHT +25.6% (co entered into ex-US licensing and commercialization agreement for Fovista with Novartis (NVS)), ONCY +11.1% (releases ASCO presentation, trial could pave the way for phase I/II trials and combination studies), NEWL +8.7% (cont strength), CLVS +7.5% (received breakthrough therapy designation for CO-1686 for the treatment of second-line EGFR mutant non-small cell lung cancer (NSCLC) in patients with the T790M Mutation), EW +2.9% (Edwards Lifesciences, Medtronic (MDT) agree to global transcatheter valve litigation settlement; all patent litigation between the companies to be dismissed; MDT will make a one-time payment to EW of $750 mln), NEON +2% (Director disclosed a 50K common stock purchase on May 19 at $3.77/share), PLUG+1.6% (cont volatility), CS +1.2% (confirmed a comprehensive and final settlement regarding all outstanding U.S. cross-border matters), MYGN +1.1% (Prolaris test predicts mortality risk in prostate cancer biopsy study), DATA +0.8% (positive comments on Mad Money).

Analyst comments: ACXM +3.8% (upgraded to Outperform from Market Perform at Wells Fargo), IRDM +2.5% (upgraded to Strong Buy from Outperform at Raymond James), CCL +2.1% (upgraded to Equal-Weight from Underweight at Morgan Stanley), GLOP +1.6% (initiated with a Outperform at Clarkson Capital), ARUN +0.9% (initiated with a Outperform at Imperial Capital)

>>> Valeant Pharmaceuticals International To discuss Allergan proposal at invest


Valeant Pharmaceuticals International To discuss Allergan proposal at investor meeting; reiterates intention to announce an improved bid for Allergan; emphasizes it will not be all cash
- Valeant to respond to assertions Allergan has made that the Valeant model is not sustainable, that the Bausch + Lomb portfolio is not growing, that Valeant slashes R&D and is not committed to innovation, and that it will be impossible to capture $2.7 billion of synergies without impacting top-line growth. We continue to believe that a Valeant and Allergan merger will be a powerful combination for all stakeholders, including patients, physicians and health care providers, employees and shareholders. On May 28, as we previously mentioned, we intend to announce an improved bid for Allergan shareholders to consider. To address recent speculation, we want to make clear that the improved offer will not be an all cash deal. > 
- Presentation items:~
That our decentralized operating model allows us to deliver a relentless focus on organic growth, customize the commercial models for each business/geography, and unleash entrepreneurship from high-quality, hard-working business leaders That we have maintained/accelerated revenue growth for almost all of the platform assets we have acquired That Bausch + Lomb's organic growth has accelerated to 10%+ since we have acquired the company, almost exclusively through volume growth. We remain on track to overachieve our original synergy targets That our targeted, disciplined and highly efficient R&D approach and global R&D model has resulted in substantially more launches than our competitors over the last 6 years. We have a rich late-stage product pipeline that we have both developed internally and acquired through a number of our acquisitions. We will continue to augment this pipeline with late stage product in-licensing, partnerships and acquisitions to allow us to bring additional innovation to the marketplace That our track record of capital allocation has generated superior cash-on-cash returns, short pay back periods, and show that in aggregate, across all our deals, we are significantly ahead of our deal models That our operating model will accelerate Allergan's growth outside the U.S. substantially

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: DKS -15.3%, SPLS -10.5%, URBN -4.5%, VOD -3.6%, CNTF -2.4%, HD -1.4%, PLAB -1.3%, PRGN -1.2%.

M&A news: T - 1.0% (WSJ discusses regulatory concerns with DTV acquisition).

Other news: ECYT -5.4% (co and Merck (MRK) announced withdrawal of conditional marketing authorization applications for vintafolide and companion imaging components, etarfolatide and intravenous folic acid in Europe), ACRX -3.4% (filed for $150 mln mixed securities shelf offering; also files for 3.07 mln share common stock offering by selling shareholders), GPK -2.3% (announced commencement of a secondary common stock offering of 43,654,214 shares by selling stockholders), SWHC -1.9% (trading lower following DKS earnings, commentary on weak hunting season), LOW -1.2% (in sympathy with HD earnings), BP -1% (efforts to reverse oil spill ruling has been denied, according to reports), HSBC -0.7% (charged for rate rigging by EU).

Analyst comments: MCP -1.8% (downgraded to Underweight from Equal-Weight at Morgan Stanley), JCP -0.9% (downgraded to Underperform from Market Perform at Wells Fargo), LOCK -0.7% (downgraded to Neutral from Buy at Goldman), APC -0.7% (downgraded to Equal Weight from Overweight at Barclays).

>>> US Early premarket gappers

Early premarket gappers

Gapping up: OPHT +22.8%, TEDU +7.4%, CLVS +6.5%, EJ +5.7%, ARNA +4.5%, CCL+2.4%, AZN +2.2%, NEON +2%, RRGB +1.9%, PLUG +1.8%, DATA +1.4%, MDT +1.6%,NPTN +1.1%, AINV +1%, KBR +0.9%

Gapping down: SPLS -10%, ECYT -5.4%, URBN -4.6%, VOD -3.6%, ACRX -3.4%, GPK-2.2%, HD -1.6%, PLAB -1.3%, PWRD -1.2%, JCP -1%, TJX -0.5%

(Telegraph) World's most expensive divorce: Russian oligarch to pay four billion

World's most expensive divorce: Russian oligarch to pay four billion Swiss francs (£2.6 billion) - and 20 centimes

Swiss court orders Dmitry Rybolovlev, owner of French football club AS Monaco, to pay 4,020,555,987 Swiss francs and 20 centimes, or £2,681,297,538 and 78 pence, to his ex-wife Elena

It is thought to be the most expensive divorce in history, involving a bitter tussle over two of the most valuable properties bought in the United States and a £100 million Greek island once owned by Aristotle Onassis.
Strange then, perhaps, that the battle should go down to the very last centime.
A Swiss court has ordered Dmitry Rybolovlev, the Russian billionaire owner of French football club AS Monaco, to hand over half of his fortune to his ex-wife Elena, a sum which the Geneva judge ruled to be precisely 4,020,555,987 Swiss francs and 20 centimes - or £2,681,297,538 and 78 pence.
Mr Rybolovlev was ordered to hand over the astronomical sum to his former wife, who lives in the Swiss city, on May 13, according to Le Temps, the Swiss daily newspaper. The couple, who wed in Cyprus, had been married for 23 years.
If the sum proves correct, it will dwarf the previous most punitive divorce, estimated at $2.5 billion (£1.5 billion), between Alec Wildenstein, the art heir, and his former wife Jocelyne. The second highest divorce settlement until now came when Rupert Murdoch, the media mogul, was ordered to award his former wife, Anna, $1.7 billion (£1 billion) in 1999.

The Geneva court declined to provide details of the ruling, which a spokesman said was in accordance with its policy of only sharing it with the parties to a case.
Mr Rybolovlev and his ex-wife have been engaged in an acrimonious fight since 2008 over the terms of their divorce, as she sought a major slice of his estimated nine-billion-dollar (£5.3 billion) fortune, which he made in the potassium industry - making him the world's 147th richest man, according to Forbes magazine.
Elena reportedly also won custody of the couple's 13-year-old daughter Anna, along with Mr Rybolovlev's half of their former home in Cologny, an up-market neighbourhood of Geneva.
Among the trophy properties to which his ex-wife laid claim were two of the most expensive residences ever bought in the US.
These were Donald Trump's Palm Beach mansion, Maison de L'Amitie, bought in 2008 for $95 million (£56 million) in 2008, and a New York flat bought in 2012 by trusts linked to Mr Rybolovlev and his 25-year old daughter, Ekaterina, for $88 million (£52 million) - said to be the highest sum ever paid for an apartment in the city at the time.
Other properties Mr Rybolovlev owns include a $20 million (£12 million) Hawaii mansion he bought from the Hollywood star, Will Smith, and La Belle Epoque penthouse in Monaco, where he lives, for which he reportedly forked out $300 million (£178 million).
He bought the Greek island of Skorpios from the Onassis dynasty last year for a reported £100 million, again for his daughter, a socialite show jumper. The island was made famous as the location of Aristotle Onassis's wedding to the former US First Lady, Jacqueline Kennedy, in 1968.
Mr Rybolovlev's wealth came from the sale of his stake in Uralkali, a Russian fertiliser business, for $6.5 billion in 2010. He went on to buy AS Monaco in December 2011, and has since splashed out on players in a bidding war against Qatari-owned Paris Saint Germain.
Mr Rybolovlev, who lives in Monaco, also has an estate in the southern French resort of Saint Tropez and his assets include an art collection filled with paintings by Picasso, Van Gogh, Gauguin and Monet.
Since splitting from her husband, Elena Rybolovleva has been followed almost round the clock by private detectives, she told the Swiss financial magazine Bilan in a rare interview in January.
In February, she was questioned by police in Cyprus on suspicion of stealing a diamond ring reportedly worth £15 million, borrowed from her daughter but not returned, and which belonged to a trust. She was released without charge.
She was by Mr Rybolovlev's as he rose from a doctor-turned-entrepreneur into a stockbroker and banker, before becoming chairman and majority shareholder of Uralkali. They stayed together during his 11 months in jail - when he was accused of murdering a competitor before the charges were dropped - and when threats on his life led him to wear a bullet-proof vest and move his family to Switzerland.
He was said to be stunned when he found out about the divorce petition on New Year's Eve 2008 from his bankers, after his accounts were frozen.
In that petition, the then Mrs Rybolovleva said she could no longer take his infidelities, describing parties on yachts where, she said, he had shared some "young conquests with his friends, and other oligarchs".

>>> Interesting chart of the ratio between SCXP (Stoxx600 small cap) vs LCXP (St


Is the Small Cap/Large Cap Ratio a warning?
The ratio of SCXP (Stoxx600 small cap) vs LCXP (Stoxx600 large cap) has tracked the DAX for the best part of 3 years. In 2011, the ratio peaked about 2 months before the DAX declined 30%+ in just over a month (Chart 1). The DAX had been moving sideways for the most part of the year. The DAX has been moving sideways for the most part of this year. The small cap/large cap ratio has peaked and so far declined in isolation of the broad market, repeating the pattern witnessed in the US and UK. The back drop in 2011 was vastly different from today: a European Sovereign crisis, global PMIs rolling over, an end to QE and a US debt downgrade. However, the decline in the ratio maybe the smoke to a wider positioning fire.

Chart 1: Ratio of SCXP/LCXP vs DAX.


 

 

(HSBC) Iberian Regulated Utilities - Hard to justify further potential return

Hard to justify further potential return – Snam is the exception

* Defensive attractions amply priced in with many companies trading at wide PE and/or RAV premiums
* Lower sovereign risk is a tailwind but creates danger of lower medium term returns combined with lack of inflation
* We prefer gas to power, initiating at UW for REE (TP EUR61) and Terna (TP EUR3.90). Our preferred stock is Snam (OW, TP EUR4.80) followed by Enagas (Neutral, TP EUR23)