TheChek News Flow

Pres Obama's NSA adviser Blinken: Next round of sanctions to target Russia's defense minitry and companies close to Putin; Will not agree to Ukraine request for military assistance - press - "Starting this week, in coordination with our allies and partners, we'll be exerting additional pressure on the people closest to him (Putin), the companies they control, the defense industry... We could send weapons to Ukraine. It wouldn't make a difference in terms of their ability to stand up to the Russians."

Finra investigating E*Trade for potentially rigged markets

Regulators are investigating discount brokerage giant E*Trade’s history of stock order executions, fueling more suspicion of rigged markets and high-frequency front-running, The Post has learned. The Financial Regulatory Authority (Finra), Wall Street’s regulator, is looking into whether its clients received the best pricing on their purchases. Finra opened the probe well before the latest public flare-up over high-frequency trading, or HFT, but the investigation hits many of the same hot buttons. Finra is determined to find out how E*Trade has priced and electronically routed customer orders to G1 Execution Services, a business it bought for a reported $173 million and sold this year to Susquehanna for about $75 million. “Finra notified E*Trade Securities LLC and G1 Execution Services LLC that it is conducting a probe of both firms’ routing practices,” E*Trade disclosed in a footnote in its latest 10-K annual regulatory filing. “The Company is cooperating fully with Finra in this examination and, under the agreement governing the sale of G1 Execution Services to Susquehanna, remains responsible for any resulting actions taken against G1 Execution Services, as a result of such investigation.” “Allegations of wrongdoing are coming to the forefront, and brokers are having to play defense and perhaps take a more candid and sobering look at the existing practices in terms of compensation for flow,” said Javier Paz, an analyst at Aite Group who covers retail brokerage, speaking generally of the industry. More specifically, the Securities and Exchange Commission is said to be mulling a change that would require brokers to give investors more information about whether they’re receiving “best execution” when they trade stocks, according to industry sources. Until it sold the unit to Susquehanna, E*Trade was sending most of its customer orders to G1. In 2012, former E*Trade board member Ken Griffin, chief executive of the Citadel investment firm,, publicly challenged E*Trade’s best-execution routing practices. He later resigned from the board. At issue, sources believe, are fears that E*Trade put its drive for profitability ahead of customers’ best financial interests. E*Trade seems to be candid. In its 10-K annual report, the discount broker notes it has implemented changes to its order routing-related practices and procedures — recommended during its own review — and it also kept regulators in the loop. Any regulatory investigations could subject E*Trade to monetary penalties and cease-and-desist orders, E*Trade disclosed. A spokesman for Finra said there was nothing to add on E*Trade. The SEC and E*Trade had no comment.

Siemens intervenes in General Electric’s bid to acquire Alstom

The French government has postponed a meeting with General Electric to discuss the US manufacturer’s bid for French rival Alstom’s energy business, saying that it wants time to examine a separate offer from Germany’s Siemens. Arnaud Montebourg, industry minister, had been planning to meet Jeffrey Immelt, GE’s chief executive, in Paris on Sunday to discuss the unconfirmed $13bn approach. Alstom’s board is also expected to meet on Sunday to consider the GE offer.

Mr Montebourg said: “Given the strategic stakes for French industry and economy, the government won’t accept any precipitous decision made without taking account of alternative choices in the national interest.” Siemens on Sunday confirmed that it had sent a letter to Alstom saying it was willing to hold talks with the French power generation and train manufacturer regarding “future strategic opportunities”. A person familiar with Siemens’ thinking told the Financial Times that Siemens had not tabled a counterbid but was happy to hold discussions if Alstom was interested. Siemens' intervention could find favour with the French government, which was reported to have urged the German group to step forward to prevent a jewel of French industrial prowess falling into US hands. This would not be the first time Mr Immelt has been snubbed after flying to Paris to try and win French government support. Four years ago his bid for Areva’s power grid equipment business was rejected in favour of a domestic deal including selling some of that business to Alstom. Some analysts said last week that the German engineering group would probably not stand idle if its big US rival tried to buy a much bigger footprint in Europe. The FT understands that Joe Kaeser, Siemens’ chief executive, held strategic talks with his Alstom counterpart some weeks ago but these did not lead anywhere. The failure of those initial discussions suggests that finding a solution agreeable to both Siemens and Alstom will not be easy. Siemens first considered a takeover of Alstom in 2004 but those plans were stymied by the opposition of then president Nicolas Sarkozy. Relations between Alstom and Siemens have been tense over the years. Nevertheless, Siemens’ political connections in France could stand it in good stead as there is said to be considerable sympathy in Paris for the idea of building a European champion in trains and power generation. Mr Kaeser, Siemens’ chief executive, has in the past expressed his support for building a European champion in trains. Siemens’ successful sale of its SIS IT solutions business in 2010 to France’s Atos Origin – which the companies described as having created a “pan-European IT champion” – showed that Franco-German combinations are possible. Olivier Esnou at Exane BNP Paribas said Siemens might be interested in Alstom as under Mr Kaeser, Siemens is tightening its focus on all aspects of the electrification chain. Siemens is very careful regarding its balance sheet . . . they’d need huge European assurances that it wasn’t going to fly back in their faces An enhanced GE presence in power grids would be a particular worry for Siemens as GE could bring its greater financial strength to bear here. “Siemens is very careful regarding its balance sheet . . . they’d need huge European assurances that it wasn’t going to fly back in their faces,” a London-based analyst said on Friday, before news of the Siemens letter. Some analysts also view a Siemens counterbid as difficult due to considerable overlaps in their transmission, power generation and rail businesses, as well as Alstom’s focus on Europe where Siemens is already well represented. “Siemens would probably not counterbid due to antitrust issues in Europe in most businesses,” Gael de Bray at Société Générale said. Moreover, a GE acquisition of Alstom’s energy business might turn out to be positive for Siemens as it would have one less competitor in European power generation. Siemens and GE already coexist quite happily in the US market and could do so in Europe. “The implications are positive as [a successful GE bid] would further consolidate the power generation and transmission market – which is positive from a competitive behaviour and pricing standpoint,” Mr de Bray said.

Siemens Enters Race for Alstom Unit German Industrial Group Has Started Bidding for Alstom Unit After GE Opens Talks

* Siemens SIE.XE -1.56% Says Has All Financial Means To Consummate Transaction With Alstom ALO.FR +10.93% — Letter

*Siemens Commits to No Layoffs in France For At Least Three Years -Letter

*Siemens Has No Plans To Dispose Meaningful Parts of Business It Acquires from Alstom -Letter

*Siemens: If Alstom Board of Directors Back Proposal, Siemens to Enter Immediately Negotiations—Letter

*Siemens: Deal with Alstom Unique Opportunity to Create Two Strong European Champions—Letter

*Siemens Proposed to Alstom Acquisition Against Cash Consideration — Letter

*Siemens Proposed to Buy Thermal Power Division — Letter

*Siemens Proposed to Purchase Renewable Power Division—Letter

*Siemens Proposed to Purchase Grid Division—Letter

*Siemens Values these Alstom Enterprises At €10B-€11B—Letter

*Siemens Also Considers to Transfer Parts of Global Transmission Headquarters to France—Letter

*Siemens Prepared to Contribute Significant Parts of Rail System Ops To Alstom — Letter

BERLIN—German industrial conglomerate Siemens said Sunday it had entered the running to acquire the power-generation unit of French heavy machinery maker Alstom SA.

General Electric Co. GE +0.53% of the U.S. is already in talks to buy the energy operations of Alstom.

"Siemens has submitted a letter to the board of Alstom to signal its willingness to discuss future strategic opportunities," Siemens said. The company declined to comment further.

An Alstom spokeswoman declined to comment.

A bid from Siemens could complicate GE's plans because a European linkup with the German company may be more welcomed by French authorities. Many Europeans consider U.S. companies to be more focused on profit and less concerned about employees and national interests than European firms.

Siemens competes with Alstom in areas such as production of power-generation and transmission equipment as well as train manufacturing. Siemens is stronger in the power sector than Alstom, but lacks its access to the French market, while Alstom is stronger in the growing market of high-speed trains.

General Electric's efforts to buy the Alstom unit ran into political headwinds Friday when French Economy Minister Arnaud Montebourg said his staff were pursuing alternatives to the possible deal in the hope of keeping the company in French hands.

Mr. Montebourg on Sunday wrote to GE Chief Executive Jeffrey Immelt to postpone a planned meeting and warn that a potential deal could face conditions from the French government.

On Friday, Mr. Montebourg said his staff were pursuing alternatives to the proposed sale—which he said Alstom had started negotiating "without informing the government."

French unions also have expressed concern about such a deal and have called on the government to prevent the company from being dismantled.

"Alstom is the symbol of French industrial strength and know-how," Mr. Montebourg told reporters Friday morning on a trip to southwestern France. "The government is expressing its patriotic concern and vigilance."

As a globally diversified technology business, Alstom has long been considered a strategic asset by French authorities. The government bailed out the company a decade ago and spun off some assets that ended in foreign hands. Over the past couple of years, Alstom has been struggling amid cutbacks in capital spending by Europe's utilities, slack economic growth on the continent and weaker emerging markets.

Mr. Immelt was planning to travel to France on Sunday to meet with the country's authorities, including Mr. Montebourg, to discuss his plans for Alstom, two people familiar with the matter said. Mr. Immelt had also planned to meet with French Prime Minister Manuel Valls and President François Hollande's staff, one of the people said.

A spokesman for GE declined to comment.

GE is in talks to buy Alstom's power-generation, renewable-energy and electricity-transmission businesses, people familiar with the matter said. Such a transaction would leave the French company a much smaller concern focused on commuter trains and rail infrastructure.

The deal would likely carry a price of more than $10 billion, according to people familiar with the matter. It could be completed by early next week, one of these people said.

The remarks from Mr. Montebourg, an outspoken minister known for butting heads with foreign companies, suggest the government could dig in its heels to keep Alstom in French hands. The company employs 18,000 people in the country and makes the iconic TGV bullet train. The minister didn't elaborate on the possible alternatives or say whether the government would be ready to invest cash in Alstom.

Alstom's energy business accounted for more than 70% of the company's €14.5 billion, or roughly $20.1 billion, in sales from last April through December, the first nine months of its fiscal year. The rail business accounts for the rest of the company's revenue.

In January, Alstom said it anticipated "moderately negative" cash flow for its thermal-power business in the second half of the year. That weak outlook drove the company's shares to a nine-year low.

An acquisition of Alstom's energy business would give GE new power-turbine business in emerging markets and Europe, and provide entry to the transmission-equipment market, where the American company lacks a strong presence.

Alstom moved to calm unions' concerns about a deal. In an unscheduled meeting with labor union representatives on Friday, Chief Executive Patrick Kron said the company was in talks over a transaction involving an industrial operation but that reports about a full takeover by GE were groundless, according to Christian Garnier, a representative of the company's CGT union. Mr. Kron also told labor representatives that the company's board was to meet Friday.

Barron's Summary: Positive on KMB, GE, AIG; Negative HLF, SHLd

- Cover story: Poll of 152 institutional investors reveal their sentiment on current US market conditions. Still see room for stocks to grow but not as bullish as last years poll. Positive on KMB: seen as a big, well run company with decent growth prospects and steady dividends. Positive on GE: favorite stock of money managers; (Positive on BAC,C) at 9 times 2015 estimated earnings are simply too cheap to ignore. Managers are positive on KO, CLX, MCD, AAPL, BRKA; undecided on FB, AMZN, TWTR, CMG; Negative on HLF, SHLD. p. 25;

- Tech Trader: Looks at companies that recently reported earnings and how sentiment plays a big part in their current and future value. Even though FB reported solid 72% growth in revenue, as new users join the fold Facebook will find it harder to deliver ad revenue in the future. AMZN stock continues to suffer as sentiment seems to be souring and sales growth was expected to accelerate, not slow down. AAPL, despite just a 5% growth in revenue last quarter, continues to profit from sales of older iPhones and fierce loyalty to the company. p. 21;

- Trader: Coupled with the Ukraine crisis, valuation concerns that have gripped the markets returned friday. Utilities sector has been the best performer this year up 13%; Mixed on LNKD: Costs are rising as fast as their revenue. Valuation embeds significant future profit growth, so slowing growth should be of great concern to investors, p M4; Positive on ZTS: Offers a solid business with pricing power and good financial characteristics, p. M5;

- Features: 1). Positive on AIG: Still looking to regain investor confidence, AIG could be poised to grow in the near term. Trapped capital related to past expenses are due to be released and can be put to profitable use which could possibly result in doubling the stock price in the next 5 years, p.17; 2). Positive on PFE: Will be splitting into three companies in 2017. Two will be growth companies and the other will be its global established pharmaceutical division which will sell drugs that have lost or soon will lose patent protection, p.19; 3). Positive on TLW.UK: Though the company has had a few setbacks in the last couple years due to drilling disappointments and cost concerns, the company shares look to grow by 25% if they can get support from other partners. (Positive on APC, TOT, CEO), p.20;

- Small Caps: Positive on TRIB: medical testing equipment maker thinks they can sell 460 of the $25,000 diabetes testing machines this year and 600 in 2015. Also looking to gain from a drug thats currently in trials and nearing FDA approval. p. 40; - Follow-Up: Positive on AAPL: Shares could continue to rise as an aggressive share repurchase program coupled with strong iphone sales have the tech giant back on the upswing; Positive on SRPT: had a huge week due to a FDA reversal which allowed their Duchenne muscular dystrophy drug from accelerated approval; p.14;

- European Trader: Positive on NVS, GSK: Both companies will benefit greatly from a deal in which Novartis agreed to buy GlaxoSmithKlines cancer drug business for as much as $16 billion and in return, GlaxoSmithKline said it would pay as much as $7.1 billion for Novartiss vaccine business. The companies will also combine Novartiss over-the-counter pharmaceutical business with Glaxos consumer drug business; p. M6;

- Asian Trader: As economic growth picks up in Aisa, exports are starting to grow and small companies are likely to benefit. (Positive on PChome Online, Gujarat Pipavav Port (India), GS Home Shopping Network, Playmates Toys), p. M7;

- Emerging Markets: Without improving fundamentals, emerging market stocks and rtfs continue to stay low and value and price action arent enough reason to justify more exposure. (Negative on China Railway Group, China Railwy Construction), p. M7;

- Commodities: Silver prices continue to struggle as bountiful supply outpace demand. It may gain in price though if gold prices rise and take silver along for the ride, p. M11;

- Streetwise: The fact that the S&P has managed to stay in positive territory to start off the year suggests the rally in stocks may still have momentum as the calendar turns to the 2nd half of the year. (Positive on AAPL, JPM, CVX), p. 9;