Caterpillar Inc CEO: Miners are buying new equipment well below acceptible replacement rates, boding well for future mining hardware sales - conf call
- Inventory declines are over, will not be a big story this year.
Royal Bank of Scotland To recognize a £1.9B provision covering various litigation claims and conduct related matters
- The Board of RBS has decided to provide £1.9 billion covering various claims and conduct related matters affecting Group companies, primarily those related to mortgage-backed securities and securities related litigation, following recent third party litigation settlements and regulatory decisions.
- An additional £465 million provision for Payment Protection Insurance redress and related costs. Q4 2013 claims experience has continued at previous rates (c.£225 million per quarter) rather than declining as anticipated and claims are now expected to continue for a longer period. The cumulative provision is £3.1 billion, of which £2.2 billion had been utilised at 31 December 2013. The remaining provision of £0.9 billion covers approximately twelve months of redress and administrative expenses.
- A further £500 million provision for Interest Rate Hedging Products redress and administration costs. The increase in provision reflects both higher volumes and anticipated redress payments, recalibration of our methodology based on experience during Q4 2013, and additional administration charges. The cumulative provision, including expenses, was £1.25 billion at 31 December 2013.
Facebook Adobe Report Finds Social Media Drives Record Revenue Per Visit for Retailers; Facebook Competition Heats Up
- Adobe today released its Q4 2013 Social Media Intelligence Report analyzing paid, earned and owned social media trends. Key findings of the Adobe Digital Index report show that Facebook, Twitter, Pinterest and Tumblr drove an unprecedented amount of qualified traffic to retail sites in Q4 with revenue per visit (RPV) increasing across social channels. Tumblr RPV rose 340 percent year-over-year (YoY), followed by Pinterest (244 percent), Twitter (131 percent) and Facebook (72 percent). The data also confirms that Facebook is facing increased competition with share of referred visits to retail sites growing the fastest YoY for Twitter and Pinterest, 125 and 89 percent respectively.
Maker of premium oil drilling pipes is one to watch
Boring can be good. Tenaris, which makes premium oil drilling pipe, has certainly been dull – the shares have gone sideways for four years as the energy sector has lagged behind the market and oil companies have been cautious on capital spending. But it would be a mistake to doze off here.
Shale oil and gas drilling is nearly a quarter of premium pipe demand. The natural gas price has quietly doubled to $5 per million cubic feet, and more drilling should follow.
Mexico, in particular, needs gas for energy and to make petrochemicals. It currently imports much of its needs from the US, but Mexico sits on a lot, too: the sixth largest gas reserve globally, according to the US Energy Information Agency. Pemex, the state oil company, needs to spend more developing its resources. Last month’s changes to the Mexican constitution should allow the company to partner with private companies and do just that. Good news for Tenaris, which supplies Pemex with most of its pipe. New Pemex Chief Executive Emilio Lozoya says Pemex could lift its investment budget from 2016 by at least $5bn per annum – 20 per cent – with almost all of that going to exploration and development.
Tenaris has healthy 13 per cent return on equity, free cash flow for dividend increases or investment, and $800m in net cash. Tenaris’ main competitor Vallourec, which counts Petrobras as its key customer, has half the return on equity, net debt of 2.7 times earnings before interest taxes depreciation and amortisation, and no free cash flow. Yet the two trade at roughly the same valuation.
Meanwhile, Mr Boring is about to get a love letter. The US government should announce on Valentine’s day anti-dumping duties against some of Tenaris’ offshore competitors. It derives half of its sales in the US, so the news should boost business. That should get the blood pumping.
Credit Absolute Return: A Non-Traditional Approach to Investing in Credit Markets
• The PIMCO Credit Absolute Return Strategy seeks to maximize risk-adjusted total returns across a variety of market conditions. It has significant discretion to allocate actively across a broad range of global credit sectors.
• The strategy focuses on companies with growth profiles that are significantly higher than the economy's overall growth rate in the markets where they operate.
• We are finding attractive opportunities today in several areas, including U.S. housing, Asia gaming and energy.
Moody's: Brazil's slow growth poses little credit risk to rest of Latin America
- Brazil's persistently low economic growth of the last few years has limited implications for the economies and credit quality of the other Latin American countries, says Moody's Investors Service in a new report. Possible "slowdown contagion" from Brazil will be limited because only a few countries have strong economic ties to Brazil, and these linkages are mainly through trade.
- Within the region, trade exposure is particularly high in four countries: Paraguay, Bolivia, Argentina, and Uruguay.
Shanda Games Limited Receives non-binding proposal to acquire the company at $6.90 (approx 22% premium)
- Received a preliminary non-binding proposal letter dated January 27th, 2014 from Shanda Interactive Entertainment Limited, the controlling shareholder of the Company, and an affiliate of Primavera Capital Limited. According to the Proposal, the Consortium proposed to acquire the Company in a "going private" transaction for US$3.45 per class A or class B ordinary share, or US$6.90 per American depositary shares (each representing two class A ordinary shares) (each an "ADS"). Based on the offer price, the Proposal values the Company at approximately US$1.9 billion in fully enlarged equity value. According to the Proposal, the offer price represents a premium of 21.3% to the Company's volume-weighted average price of its ADSs on January 24, 2014 and a premium of 44.4% to the volume-weighted average price of its ADSs during the last 30 trading days.
- As of January 27, 2014, the Consortium members beneficially owned, in the aggregate, approximately 76.2% of the Company's outstanding shares.
- According to the Proposal, the proposed transaction is intended to be financed with a combination of equity capital funded by the Consortium members and third-party debt. The Consortium's proposal letter states that its proposal constitutes only a preliminary indication of its interest and is subject to negotiation and execution of definitive agreements relating to the proposed transaction. A copy of the proposal letter is attached hereto as Exhibit A.
- The Board is reviewing and evaluating the Consortium's Proposal, and the Company expects that the Board will form a special committee consisting of independent directors to evaluate and, if appropriate, negotiate the Proposal and to consider other strategic options available to the Company.
- As of January 27, 2014, the Consortium members beneficially owned, in the aggregate, approximately 76.2% of the Company's outstanding shares.
- According to the Proposal, the proposed transaction is intended to be financed with a combination of equity capital funded by the Consortium members and third-party debt. The Consortium's proposal letter states that its proposal constitutes only a preliminary indication of its interest and is subject to negotiation and execution of definitive agreements relating to the proposed transaction. A copy of the proposal letter is attached hereto as Exhibit A.
- The Board is reviewing and evaluating the Consortium's Proposal, and the Company expects that the Board will form a special committee consisting of independent directors to evaluate and, if appropriate, negotiate the Proposal and to consider other strategic options available to the Company.
(Reuters) - EU competition regulators will tell Hutchison Whampoa this week that the $1 billion deal for its 3 Ireland mobile phone business to take over Telefonica's O2 Ireland unit might be problematic unless it offers concessions, two people familiar with the matter said on Monday.
Regulatory reviews of the Irish merger and another in Germany where Telefonica Deutschland is seeking to buy Dutch group KPN's local unit E-Plus, are seen as critical for the mobile industry in determining whether the European Commission will allow deals which reduce the number of players in a national market.
The European Commission opened an in-depth investigation into the 780 million-euro ($1 billion) bid by Hutchison for O2 Ireland two months ago and will send a statement of objections laying out its concerns to Hutchison this week, the sources said.
"It shows the Commission getting tough on three to four deals," one of the people said.
"Hutchison will be offering concrete remedies once it receives the statement of objections," the person said.
The acquisition of Telefonica's mobile business in Ireland would quadruple Hutchison's share of the Irish market to 37.5 percent, behind market leader Vodafone's 39.4 percent but ahead of rival Meteor's 19.7 percent.
Commission spokesman Antoine Colombani, declined to comment.
The EU watchdog has set an April 24 deadline for its decision. It can extend the review depending on when Hutchison submits concessions. The company can request an oral hearing in front of senior Commission officials to argue its case.
Last year Hutchison's Austrian unit won EU regulatory approval for its acquisition of Orange Austria from France Telecom only after agreeing to divest some radio spectrum and making it easier for rivals to access its network.
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S&P 500 Correction of 9%-15% Seen by Oppenheimer’s Worth 2014-01-27 13:57:07.747 GMT
By Andrew Cinko Jan. 27 (Bloomberg) -- Oppenheimer technical analyst Carter Worth says in note he’s raising his forecast for the size of the correction to 9%-15% from prior 6%-9%; implies an S&P 500 drop to within 1683-1572 range from Dec. 31 close. * Prior forecast was made “when things were not as steep and uncorrected and complacent as they are now” * Even at 15%, would still be “garden variety” correction, “just a bit more vigorous” * NOTE: Jan. 13, Worth listed buys/sells for early part of ’14 * NOTE: Jan. 6, Worth said this yr may be volatile * NOTE: Worth repeatedly recommended reducing exposure to stocks last year amid rally, for example, in July said rally was “unsustainable" * NOTE: Earlier, Strategas, Piper Jaffray see S&P 500 bounce this week * NOTE: Earlier, S&P Drop to 1750 ’More Likely,’ Says MKM; BTIG Watching 1768
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To contact the reporter on this story: Andrew Cinko in New York at +1-609-279-4533 or cinko@bloomberg.net
BAML: VODAFONE - ML analyst thoughts on the situation here.. he would BUY into the weakness.. 1. Potential target for AT&T, Softbank, China Mob 2. Service rev gth improving 3. A 5% discount to sector at 5.2x EBITDA.