Apple Inc Reportedly Apple has put plans to launch iTV product in 2014 on hold for now - tech blogs
Goldman Sachs Chief Economist Hatzius: expect that when the Fed starts tapering, it will combine it with a shift in forward guidance - CNBC interview - Anything is possible on tapering but believe Fed will wait until Yellen takes over as Chairman to begin taper. - Data suggest there was no major hit from the govt shutdown. - Have seen some economic acceleration in the last 6 months and expect more acceleration in 2014.
Walter Energy: Spike being attributed to renewed M&A chatter; BHP the rumored suitor
Atmel Corp Moves higher on circulation of link noting Atmel's flexible touchscreen technology that could be used in next generation smartphones with "curved" surfaces - Both Apple and Samsung are said to be developing handsets with curved surfaces.
- Link: {http://www.atmel.com/microsite/xsense/}
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BN 11/11 14:35 Statoil Oil Find Near Njord Boosts Area’s Prospects, Faroe Says
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Statoil Oil Find Near Njord Boosts Area’s Prospects, Faroe Says 2013-11-11 14:40:43.746 GMT
By Mikael Holter and Heather Burke Nov. 11 (Bloomberg) -- Statoil’s oil discovery at Snilehorn near the Njord field in the Norwegian Sea increases the chances of finding as much as 300m barrels of crude in surrounding areas, license partner Faroe Petroleum said. * “It’s looking very good for this license,” COO Helge Hammer of Faroe said in a phone interview. “We have two to three more prospects which have been largely de-risked by this discovery, which means that we might find more oil”
Story Link:NSN MW3SJ66K50XW<GO>
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--Editor: James Ludden
To contact the reporter on this story: Heather Burke in London at +44-20-7673-2044 or hburke2@bloomberg.net
To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net
European banks are getting closer to fair value in absolute terms, while remaining substantially undervalued relative to interest rates. We continue to advise being over-weighted in European banks although stock selection will become more important because of the expansion of valuations on an absolute basis. In particular, German banks (Commerzbank and Deutsche Bank) appear as the most attractive on a relative value basis relative to other European banks. We expect that European banks as a whole will continue to outperform the STOXX Europe 50 as they have been doing since 2012
To conclude, we continue to recommend an overweight allocation to European banks, and the valuation cycle suggests that they will continue to outperform. However, as banks approach fair value in absolute terms, stock selection is becoming key, and we are recommending “wholesale” buying of the sector. Out of the universe of European banks, all three listed Portuguese banks – BPI, BCP, and BES represent outstanding value, both in relative and absolute basis. Barclays and Credit Suisse are our top picks within the large cap global players. On the short side, we remain negative on Scandinavian banks and would recommend to exit the French banks, in particular BNP. SUMMARY OF RECOMMENDATIONS BUY BARCLAYS (BARC LN): 254p DEUTSCHE BANK (DBK GR): 34.8 COMMERZBANK (CBK GR): 9.3 CREDIT SUISSE GROUP (CSGN VX): 27.0 ERSTE BANK (EBS AV): 26.5 BANCO SANTANDER (SAN SM): 6.4 CAIXABANK (CABK SM): 3.7 BANKIA (BKIA SM): 1.03 BANCO DE SABADELL (SAB SM): 1.85 BCP (BCP PL): 0.11 BANCO ESPERITO SANTO (BES PL): 1.01 BANCO BPI (BPI PL): 1.16 SELL / SHORT NORDEA (NDA SS): 82.0 SVENSKA HANDELSBANKEN (SHBA SS): 297 UCG IMSE BANKEN (SEBA SS): 78.8 BNP (BNP FP): 53.6 LLOYDS BANK (LLOY LN): 74.9 07 November 2013 LONG / SHORT or SWITCH IDEAS (relative value) LONG BNK FP / SHORT EUROSTOXX (MSE FP) LONG BNK FP / SHORT SWEDISH BANKS (SEBA SS, NDA SS, SHBA SS) – mean reverting LONG CSGN VX / SHORT UBSN VX – (long bias) LONG CSGN VX / SHORT BNP FP – (long bias) – mean reverting LONG CSGN VX / SHORT XLF US – (long bias) – mean reverting LONG BARC LN / SHORT LLOY LN – (long bias) LONG BARC LN / SHORT BNP FP, SEBA SS – (long bias) – mean reverting LONG BARC LN / SHORT XLF US – (long bias) – mean reverting LONG GLE FP / SHORT BNP FP – mean reverting / wait for pullback LONG DBK GR / SHORT BNP FP LONG SAN SM / SHORT BNP FP – mean reverting LONG UCG IM / SHORT ISP IM
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Copper May Be ‘Next Year’s Iron Ore,’ Morgan Stanley Says 2013-11-11 14:25:40.616 GMT
By Arie Shapira Nov. 11 (Bloomberg) -- Morgan Stanley expects 2014 copper prices above Street ests, which call for lowest price since 2009, given “overly optimistic” supply forecasts. * Sees copper prices remaining flat over next 5 qtrs * Copper for Dec. delivery down 0.1% to $3.25/lb, earlier up as much as 0.7% * NOTE: FCX presents at Cowen conf. tomorrow 12:05pm
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To contact the reporter on this story: Arie Shapira in New York at +1-212-617-1488 or ashapira3@bloomberg.net
To contact the editor responsible for this story: Joanna Ossinger at +1-212-617-7789 or jossinger@bloomberg.net
Suit Charges 3 Credit Rating Agencies With Fraud in Bear Stearns Case
The headquarters of Bear Stearns in New York in early 2008. Patrick Andrade for The New York Times The headquarters of Bear Stearns in New York in early 2008. The collapse of two Bear Stearns hedge funds in 2007 was among the earliest signs of the impending financial crisis. More than six years later, lawyers continue to fight over the cause of their demise.
On Monday morning, liquidators seeking to recover money for investors in the funds filed a fraud lawsuit against three major credit rating agencies.
The action, filed in New York state court, accuses Standard & Poor’s, Fitch and Moody’s of assigning artificially high credit ratings to the mortgage bonds in the funds. When those bonds collapsed, the funds failed, resulting in more than $1 billion in investor losses.
In a 141-page complaint, the liquidators cite a trove of emails — some of which already surfaced in earlier cases — that they say show that the agencies knew their high-quality ratings on the mortgage bonds were a sham.
“It could be structured by cows and we would rate it,” an S&P employee said to a co-worker in a text message from 2007.
“We sold our soul to the devil for revenue,” a Moody’s employee said in an internal document.
In an email, another S&P employee called the firm’s ratings practices a “scam.”
James C. McCarroll, a lawyer representing the liquidators, said that by giving risky mortgage bonds misleading ratings, the agencies were enriching themselves at the expense of investors in the Bear hedge funds that owned these bonds.
“It is time for these organizations to be accountable for their misdeeds,” said Mr. McCarroll, a partner at Reed Smith.
The liquidators had signaled the action against the agencies in July with the filing of a four-page summons and notice, an effort to beat a six-year legal deadline for fraud cases in New York State.
Representatives for S&P, Fitch and Moody’s were not immediately available for comment.
The lawsuit is hardly the first to try and hold the ratings agencies accountable for losses incurred during the financial crisis. Earlier this year, the Justice Department filed a civil fraud action against S&P, the first federal enforcement action against a credit rating firm. Numerous state attorneys general have also sued S&P over similar claims in Federal District Court in Manhattan. Fitch and Moody’s were not named as defendants in those lawsuits.
S&P has denied wrongdoing and called the government’s case “entirely without factual or legal merit.” A federal judge denied S&P’s motion to dismiss the government’s action.
The lawsuit is also hardly the first legal action related to the two Bear funds, which collapsed in July 2007. Federal prosecutors brought criminal securities fraud charges against the funds’ managers, Ralph Cioffi and Matthew Tanin. The two fought the charges and a jury found them not guilty after a trial. Federal securities regulators also filed civil lawsuits against Mr. Cioffi and Mr. Tanin, and they both settled the cases without admitting any wrongdoing.
The liquidators have not only blamed the ratings agencies for the funds’ collapse. In August, JPMorgan Chase, which acquired Bear in 2008, reached a settlement with the liquidators, who had accused Bear of failing to properly structure the hedge funds and provide them with adequate oversight. It also settled with the funds’ directors, including Mr. Cioffi and Mr. Tanin. The terms of both settlements were undisclosed.
S&P, Moody’s and Fitch have come under widespread criticism in the wake of the financial crisis. Questions have been raised about their business practices and whether their independent analysis was compromised by the pursuit of profit.
During the housing boom, S&P, Fitch and Moody’s made millions by issuing ratings to the complex pools of home loans being packaged and sold by the banks. These pools, called residential mortgage-backed securities and collateralized debt obligations, collapsed in value when the financial crisis struck.
A report by the Financial Crisis Inquiry Commission concluded that the credit ratings firms were “key enablers of the financial meltdown.”
Mortgage bond investors have had mixed results bringing civil lawsuits against the ratings agencies. S&P and the other agencies have argued that their ratings are speech protected by the First Amendment. A number of judges have agreed with the ratings agencies and tossed these lawsuits. Others have said that ratings were not opinions, but misrepresentations that were possible the result of negligence or fraud.
The agencies have also said that their ratings were mere “commercial puffery” that were not to be relied upon, and that investors had the same information as they did.
In July, the federal judge denying S&P’s motion to dismiss the government’s case rejected this argument, calling it “deeply and unavoidably troubling.”
“If no investor believed in S&P’s objectivity, and every bank had access to the same information and models as S&P,” wrote Judge David Carter of Federal District Court in Los Angeles, “is S&P asserting, as a matter of law, the company’s credit ratings service added absolutely zero material value as a predictor of creditworthiness?”
Filings, Offerings and Pricings
Filings:
Maiden Holdings (MHLD) filed for a $300 mln mixed securities offering. - Hansen Medical (HNSN) filed for a ~62.60 mln share common stock offering by selling stockholders, which includes ~34.17 mln shares of common stock issuable upon the exercise of warrants. In a separate filing, co also filed for a ~5.291 mln share offering of commons tock by a selling shareholder. - Anadarko Petro (APC) filed for a mixed securities shelf offering for an undisclosed amount. - CDW (CDW) filed for a 15 mln share common stock shelf offering by selling stockholders. - Spirit Realty Capital (SRC) filed for a mixed securities shelf offering for an undisclosed amount. - WisdomTree (WETF) field for a 835K common stock shelf offering by a selling stockholder. - Bright Horizons (BFAM) filed for a ~7.5 mln share common stock offering y selling stockholders. - Magic Software (MGIC) filed for a $60 mln mixed securities shelf offering. - MPLX LP (MPLX) filed for a common unit offering representing limited partner interests for an undisclosed amount. - La Jolla Pharm (LJPC) filed for a ~142.86 mln share common stock offering by selling stockholders.
Offerings:
- Universal Health (UHT) announced a $50 mln at-the-market equity offering program. - Columbia Property Trust (CXP) announced preliminary results of its modified - Dutch Auction tender offer; total of ~9.57 mln shares of Common Stock were properly tendered and not properly withdrawn at or below the final purchase price of $25.00/share. - 8x8 (EGHT) announced an offering of 12.5 mln shares of its common stock.
Gapping up
In reaction to strong earnings/guidance: GURE +28.2%, GOGO +17.8%, ABFS +10.2%.
M&A news: VPHM +25.8% (to be acquired by Shire (SHPG) for $50 per share), SHPG +3.3% (acquiring VPHM for $50/sh).
A number of phama stocks are gapping higher following Shire's (SHPGY) acquisition of Viropharma (VPHM) at a 27% premium to Friday's closing price including: JAZZ +7.7%, RNA +7.7%, OXBT +5.4%, ARIA +5.2%, AMRN +3.2%, PPHM +3.1%, ARNA +2.3%.
Other news: HZNP +4.7% (Co and Mundipharma sign exclusive agreement to commercialize LODOTRA in the Middle East and Africa), GIVN +3.4% (receives reimbursement approval for PillCam COLON in Japan), JASO +3.2% (to supply 70 MW of modules to Shanghai CSET in China), TTWO +3.1% (postive mention on MadMoney), RIG +2.3% (agreement with Ichan Group; issues $3/sh spec div, provides update on MLP and margin improvement efforts), NQ +1.9% (continued volatility), CSIQ +1.6% (cont strength attributed to speculation of project win in Pakistan), GRPN +1.4% (cont strength), TSLA +1.2% (still checking).
Analyst comments: MZOR +4.9% (initiated with Overweight at Barclays), FUEL +4.3% (upgraded to Outperform from Market Perform at BMO Capital Mkts), YOKU +3.1% (upgraded to Buy from Hold at Brean Capital), BBY +2.1% (upgrabbded to Buy from Neutral at UBS)