Gapping up
In reaction to strong earnings/guidance:
- TEUM +10%
M&A news:
- GWR +8.6% (to be acquired by Brookfield Infrastructure (BIP) and GIC for $112/share in cash, or approximately $8.4 bln)
- AMAT +3.8% (to acquire Kokusai Electric Corporation for $2.2 bln in cash from KKR)
Select Macau related names showing strength:
- WYNN +4.9%, LVS +4.2%, MLCO +3.3%, MGM +2.2%
Select China related stocks trading higher:
- BZUN +4.3%, MOMO +3.9%, CTRP +3.8%, JD +3.7%, WB +3.5%, BITA +3.2%, BABA +3.1%, VIPS +3.1%, BIDU +2.8%, CMCM +2.8%, EDU +2.3%, CAT +2.1%
Select Tech/Semiconductor related names showing strength:
- NPTN +21.1%, SWKS +7.6%, LITE +7.2%, IPHI +6.8%, MU +6.2%, STM +6.1%, ACIA +6%, QCOM +5.8%, WDC +5.7%, MRVL +5.4%, XLNX +4.9%, FNSR +4.9%, AVGO +4.9%, NVDA +4.9%, AMD +4.8%, TSM +3.9%, ASML +3.8%, LRCX +3.3%, INTC +3%, STX +2.9%, AAPL +2.7%, TXN +2.6%
Other news:
- BCYC +29.2% (announces completion of Oxurion's Phase I clinical trial evaluating the safety and tolerability of a single intravitreal injection of THR-149 in patients with diabetic macular edema)
- ATRA +5% (reports initial ATA188 Phase 1 safety results; were well tolerated with no dose-limiting toxicities)
- RTRX +4.6% (announces FDA approval of THIOLA EC 100mg and 300mg tablets for treatment of cystinuria)
- CERC +3.7% (announces positive final results of CERC-301 in the treatment of neurogenic orthostatic hypotension)
- AFMD +3.1% (to be added to Russell 2000)
- SAN +1.5% (announces planned capital actions -- include common dividends to Banco Santander, S.A., the co's sole shareholder, of $125 million per quarter) .
Analyst comments:
- PLAN +4.1% (upgraded to Buy from Neutral at Goldman)
- ETSY +3.3% (initiated with a Buy at Needham)
- TGLS +3.2% (upgraded to Strong Buy from Outperform at Raymond James)
- TPC +2.9% (upgraded to Buy from Neutral at DA Davidson)
- W +2.7% (initiated with a Buy at Needham)
- CPE +2.6% (upgraded to Overweight from Equal Weight at Barclays)
- UTHR +2.5% (upgraded to Outperform from Neutral at Credit Suisse)
- SIX +2.3% (upgraded to Overweight from Sector Weight at KeyBanc Capital Markets)
- FIVE +2% (resumed with an Overweight at Morgan Stanley)
Polyus predicts ‘wave’ of gold M&A this year
Russia’s largest gold miner says industry ‘clearly open’ for consolidation
The gold mining industry is set for a “wave of M&A” as smaller miners look to consolidate to capitalise on higher prices, according to Russia’s largest gold miner Polyus.
“The space is clearly open to M&A,” Polyus’ 36-year-old chief financial officer Mikhail Stiskin told the FT.
The world’s largest gold companies have been busy acquiring rivals this year, with Barrick Gold buying Randgold Resources in January and Newmont Mining acquiring Goldcorp in April.
But Mr Stiskin, a former investment banker, said that activity would move down to the mid-tier companies following gold’s rise to a six-year high last week of over $1,440 a troy ounce.
“There will be consolidation,” he said. “There are some companies that don’t have the luxury of any projects and they are still driven by egos: this combination will push them towards M&A, especially given the high gold prices. The shareholders will become more supportive.”
Mr Stiskin said Polyus was not looking at any deals since it has over 100 internal projects to work on. In 2017 Polyus bought the rights to develop the giant Sukhoi Log gold deposit from the government. Polyus aims to spend $2bn-$2.5bn developing the mine, Mr Stiskin said.
Polyus is no longer looking for a strategic investor after talks with Chinese conglomerate Fosun collapsed last year, he added.
“We can self-finance it,” Mr Stiskin said. “We may also do project financing, debt financing.”
Investors in Polyus were spooked last year after US sanctions were imposed on Suleiman Kerimov, whose son Said owns a controlling 79 per cent stake in the gold miner.
But London-listed shares in the company have recovered by 40 per cent this year and Mr Stiskin said risks around Russia had been “exaggerated”.
Mr Stiskin said Polyus aims to increase the free float to between 25 to 30 per cent from the current 20 per cent, in a bid to attract larger investors.
In April Mr Kerimov sold a 3.8 per cent stake in the gold miner for $390m, but Mr Stiskin declined to comment on any timetable for future share sales.
Early premarket gappersGapping up:
- NPTN +24.4%, IPHI +10.1%, LITE +7.5%, SWKS +7.4%, STM +5.8%, MRVL +5.6%, MU +5.5%, XLNX +5.5%, WYNN +5.5%, WDC +5.4%, QCOM +5.2%, CHK +5.1%, LVS +5%, AMD +4.9%, FNSR +4.9%, AVGO +4.9%, TSM +4.7%, BZUN +4.5%, MOMO +4.2%, NVDA +4.1%, JD +4%, WB +4%, BITA +3.9%, BIDU +3.8%, CTRP +3.7%, ASML +3.4%, MLCO +3.3%, LRCX +3.3%, INTC +3.2%, BABA +3.2%, AMAT +3.2%, VIPS +3.1%, TSLA +2.9%, AAPL +2.8%, DB +2.8%, TXN +2.8%, FCEL +2.7%, PLUG +2.7%, STX +2.5%, EDU +2.5%, MT +2.3%, CMCM +2.3%, NFLX +2.2%, CAT +2.2%, BHP +1.2%
Gapping down:
- HMY -6.2%, AG -5.2%, AU -5.2%, KGC -4.6%, SBGL -4.4%, GOLD -4.1%, AUY -4%, FSM -3.5%, GFI -3.1%, NEM -2.9%, GDX -2.9%, PAAS -1.6%, GLD -1.6%, SSYS -1.5%, BUD -0.5%
US bond ETFS attract record $25.4bn inflows in June
Global growth and trade worries send investors hunting for safety
Fixed income exchange traded funds in the US have attracted $25.4bn in June, the biggest monthly inflows on record, as investors pile into bonds amid an uncertain growth outlook.
The record take for US bond ETFs surpassed the previous monthly milestone set in October 2014 by 45 per cent and brings the annual net inflows for fixed income ETFs to $73.5bn, according to Bloomberg data.
Investors have turned to bond funds to reduce risk as doubts over the health of the global economy dominated markets in June. China and the US have failed to strike a trade deal, and central banks around the world have shifted toward more dovish monetary policy in the face of growth concerns.
“Investors are looking to bonds to mitigate equity risk,” said Matthew Bartolini, head of Americas research for SPDR, State Street Global Advisors’ ETF business. “Weak economic data presents a tangible risk to the market as we go into the summer, when there will be fewer traders in front of their trading screens — that means the summer is going to be an important period.”
A slowing growth outlook in the US has led the Federal Reserve to change tack after raising rates four times last year. Fed fund futures have now priced in a 76 per cent chance that interest rates will drop by 25 basis points when the central bank’s committee charged with setting rates meets in July.
“The economic environment has been driven by the Fed’s increasingly dovish stance — that is driving these inflows,” said Stephen Laipply, head of the US fixed income strategy for iShares, BlackRock’s ETF business. The fund manager represents around half of the global fixed income ETF market, which hit $1tn in assets earlier this year.
The inflows also reflect the rising use of ETFs by investors to buy and sell bonds. The exchange-traded vehicle typically bundles hundreds of bonds together with the promise of greater liquidity compared to trading bonds individually.
“We think fixed income ETFs will hit $2tn within five years as you continue to see institutional investors adopt these products to manage risk,” Mr Laipply said.
Government bond ETFs have proven most popular this year. The iShares 7-10 year Treasury bond ETF has attracted $5.5bn this year, the largest total for an individual bond ETF, followed by the iShares 20+ year Treasury bond ETF with $4.5bn and the Vanguard total international bond ETF with $4.5bn.
Some analysts said the June flows also reflect the push away from active portfolios towards cheaper, index-tracking funds, such as ETFs. Passive investing is closely associated with the equity market where funds follow common indices like the S&P 500, but a series of new products aiming to entice fixed income investors to use ETFs have helped draw inflows.
“It’s enormous,” said Dave Nadig, managing director at ETF.com, speaking of the June record. “Every time we get a pullback like we had in the fourth quarter, the same thing happens — money comes out of active funds and flows into ETFs.”
Wha-Tether could be going on with the bitcoin price?
Two-and-a-bit weeks ago, Alphaville moderated a panel at a crypto conference on crypto exchange "market integrity and consumer protection" (which, as we were quick to point out, felt a bit like a contradiction in terms. We're still not sure that was a good way to warm up the crypto crowd).
Two of the panelists had the audacity to wear bitcoin socks. They hadn't even co-ordinated their outfits. They were just wearing bitcoin socks. In 2019. This felt bullish.
Bitcoin socks worn by panelists at the 2019 CryptoCompare conference
The conference itself was also quite buzzy (albeit in the typically slightly unhinged crypto way). One of the offensive-sock-wearing panelists, from crypto exchange Kraken (who was also wearing a #reckless cap) decided to tell the audience, after we'd said a few times that we didn't think exchanges were doing enough to protect consumers, that "bitcoin IS consumer protection". This, unlike our comments about the paradox inherent in the panel's title, seemed to go down very well with the crowd, who broke out into rapturous applause, and then continued to do so at every word the young offensive-sock-and-cap-wearing panelist uttered.
When the panel was finished, the "chief growth officer" at Binance, generally thought of these days as the world's biggest crypto exchange (although it's hard to know for sure because the entire economy is Fyre Festival and exchanges make up report their own volumes), was mobbed by fans wanting selfies with him.
It was almost like bitcoin was... cool again? But yet, outside of this surreal crypto conference and the even more surreal #cryptotwitter-sphere, nobody seemed to be talking about it.
We know it's a bit of a basic -- in the modern sense of the word basic -- move to paste Google search trend charts into articles (particularly because TEEIFF) but here's a Google search trend chart pasted into an article (for worldwide searches for bitcoin over the past five years):
As you can see from the chart, interest in bitcoin has crept up a little in the past month or so, but not that much. Nothing like it did in 2017.
But if you look at a chart of the bitcoin price, things do look a bit like 2017 (screenshot from CoinMarketCap, which aggregates the prices across several exchanges):
Bitcoin hit as high as $13,850 last Wednesday, having surged about 75 per cent in the space of two weeks. It's now fallen sharply again-- it's trading around the $11,000 mark at pixel. But that still represents an almost quadrupling in the price since the start of the year.
So what gives? Could it be, as some have claimed, because of the great invention that is Libra? Well that might be helping a bit on the margins, just because it's helped to get "crypto" back in the headlines, but it's not the main thing going on here. As we have pointed out many times now, Libra is neither a cryptocurrency nor decentralised and neither does it run on a blockchain. Also, bros at crypto conferences might be getting excited at numbers going up, but the retail interest -- from the kind of people who might have got drawn in by "crypto" headlines in 2017/18 -- just isn't there this time.
Or could it be that old chestnut about bitcoin being a "safe haven", as Chinese media declared it to be towards the end of last week? Er, no. Bitcoin shows basically no correlation with "risk-off" market episodes and is also neither safe nor havenish.
Ben Munster of crypto site Decrypt wrote an article last week that offers some clues as to what in the name of Satoshi is going on. Because the other thing that has happened over the past month or so is that almost $1bn worth of Tether, the original "stablecoin", has been printed. Its total "market cap" now at about $3.6bn, having almost doubled since the start of April. This, of course, is the same Tether that is being sued by the New York Attorney General's office for allegedly using its reserves to cover up $850m of funds on sister exchange Bitfinex.
Munster's piece explains in detail how huge orders of new Tethers are made by "whales" (AKA a small group of big-money traders) just before the price starts to go up, and then dumped onto exchanges. But the particularly noteworthy thing about the piece is that the person innocently doing the explaining is Will Harborne, founder of Ethfinex, a subsidiary of Bitfinex, which is being sued alongside Tether by the NYAG. (Coincidentally Harbone was also one of the people on our panel, though obviously as an ETH bro he was one of the two not wearing bitcoin socks.)
From the piece:
When you see a large Tether “print,” said Harborne, it means a handful of wealthy clients have essentially pre-ordered batches of tethers, days in advance, to then dump on the market—often before it’s begun to surge. Tethers are useful to these large holders, who can trade them—paired to Bitcoin, Ether, Litecoin and other coins—on high-liquidity exchanges that don’t accept fiat currencies...
With that in mind, here's another chart that looks a little different to 18 months ago -- one from Blockchain.info, showing bitcoin trading volumes in dollars (the big spike is in late 2017/early 2018):
According to Blockchain.info, about $417m worth of bitcoin was traded on Friday on the main dollar-based exchanges. Which sounds decent until you notice that about $37bn worth of Tether was traded on Friday, according to CoinMarketCap.
A post published on Medium late Friday, by Sussex University Professor Carol Alexander and PhD student Michael Dakos goes into some more detail, and features a nice chart showing the supply of Tether versus the bitcoin price over the past few months:
Bitcoin blogger and Attack of the 50-foot Blockchain author David Gerard indicated to us the manipulation of bitcoin via Tether is so obvious that it's an insult to tulips to compare bitcoin to such phenomena:
This isn't even a bubble. This is just Tether market manipulation.
We have contacted Tether and Bitfinex for comment and will update this story if and when they respond.
In the past, Bitfinex representatives have insisted to Alphaville that the expansion of tether supply is entirely linked to authentic buying interest. In some cases, however, tethers are also originated into reserves in anticipation of demand as well.
The Hunt for the Brink’s-Mat Gold is a compelling podcast about Britain’s biggest ever armed robbery
Presented by Martin Brunt, the series tells the story of a crime that captured the imagination of the nation
On November 26 1983, six armed men entered the Brink’s-Mat security depot near London’s Heathrow airport and, with the help of an inside man leaving a door on the latch, made away with gold bullion worth £26m (£100m in today’s money). It remains Britain’s biggest ever armed robbery.
The Hunt for the Brink’s-Mat Gold, which tells of the robbery and the lengthy police investigation that followed, forms the inaugural two-parter from Story Cast, a new podcast series from Sky News with perhaps the least exciting name in the medium’s history. It nonetheless delivers a hugely compelling yarn taking in larger-than-life gangsters, international drugs cartels, coppers in disguise and superglued suitcases of cash dropped from aeroplanes for laundering.
The series is presented by Martin Brunt, who has worked as a crime correspondent for 30 years and has long been fascinated with the Brink’s-Mat investigation that is far from wrapped up (around a third of the gold is still missing). Crucial here is the testimony of Ian Brown, the detective superintendent originally charged with the task of unearthing the missing gold, and who has never before spoken publicly about the case. Brunt and co can’t resist a bit of bad-boy romanticisation — one of the robbery’s masterminds is known as “The Colonel”, while the man whose job it was to melt down the gold is called “Goldfinger”. As Brown notes: “Not only did [the robbery] capture the imagination of the police, it captured the imagination of the nation.”
Less effective is the production, which is wildly overcooked. Along with some odd background music including the Dallas theme tune, the series is overrun with ringing telephones, barking dogs, police sirens, crashing waves (to signal offshore bank accounts) and the sound of duct tape being unspooled as Brown recalls how security guards were tied up, doused with petrol and threatened with a lighter. Such effects sit uncomfortably in a medium that has moved on from the clunky broadcasting tics of yore. Nevertheless, the story itself is deftly told and so outlandish that you have to remind yourself that what you are hearing is true.
If artfully executed heists are your thing, then you’ll enjoy a 2014 episode of 99% Invisible, the Roman Mars-hosted series about design and architecture. Entitled Breaking the Bank, it looks at the part that building design has to play in bank robberies and tells tales of assorted heists, some imagined or fictionalised and others real, and the complicated lengths to which their masterminds go to avoid being caught.
I also love the seriesLast Seen, about a bold art heist in which Rembrandt’s painting “Christ in the Storm on the Sea of Galilee” was taken from a Boston museum in 1990, along with 12 other artworks including a Vermeer, a Manet and five by Degas. They are yet to be recovered.