>>> Aphria leading cannabis stocks lower after missing Q3 estimates

Aphria leading cannabis stocks lower after missing Q3 estimates
  • The cannabis company reported lower volume sequentially as costs went up; the company also wrote down Latin American assets
  • The company has rejected a hostile bid from Green Growth Brands (GGBXF)
  • APHA -12.87% ELLXF -7.80% TGODF -6.41% CRON -6.28% OGRMF -5.78% CVSI -6.11% NBEV -5.74% TLRY -5.10% CURLF -4.80% ORHOF -4.90% CWBHF -4.49% CRLBF -4.28% CGC -3.81% IGC -3.78% ACB -3.67% PYX -3.23%

WSJ : China Investigates Ericsson Over Licensing as 5G Competition Heats Up Some

China Investigates Ericsson Over Licensing as 5G Competition Heats Up
Some 20 investigators from China’s market regulation agency raided telecom-equipment maker’s Beijing office

BEIJING—Swedish telecom-equipment maker Ericsson AB is under investigation by China’s antitrust authorities over its technology licensing practices, as the competition between companies and governments heats up over next-generation 5G information networks.

Some 20 investigators from China’s State Administration for Market Regulation raided Ericsson’s Beijing office Friday, said a person familiar with the matter. Ericsson spokesman Peter Olofsson confirmed the investigation late Sunday, and said it follows complaints from unspecified sources about the company’s intellectual property-licensing practices.

Mr. Oloffson declined to comment further other than to say Ericsson is cooperating with the investigation. The market regulation agency didn’t respond to a request for comment.

The Chinese probe targets one of the biggest Western companies building 5G network infrastructure, and Ericsson holds a valuable portfolio of patents for technologies related to 5G standards, which are essential for everything from base stations to smartphones.

A bruising fight is under way between the U.S. and China over 5G, which promises superfast data transmission that will underpin autonomous driving vehicles, robotic assembly lines, remote surgery and other next-wave businesses.

Telecommunications operators are expected to spend hundreds of billions of dollars in the coming years to build out the networks. The U.S. has effectively barred China’s Huawei Technologies Co. from domestic 5G networks and is trying to persuade allies to do likewise, saying that the Chinese company is beholden to the Communist Party and thus presents an espionage and security risk in networks that will be pervasive. Huawei denies the allegations.

While Ericsson wouldn’t address the source or the substance of the complaints against it, a Chinese state media report suggested that they involve licensing patents for smartphones.

Once 5G-compatible devices are rolled out, handset makers are likely to face an increase in royalty fees they must pay to Ericsson, said the People’s Posts and Telecommunications News in an online report. The report said Ericsson will likely impose 5G patent fees on top of fees for older generation technologies such as 3G and 4G.

The Posts and Telecommunications News is the official newspaper of China’s Ministry of Industry and Information Technology, which sets telecommunications policy and is an architect of government plans to make China a 5G leader.

The probe may be a part of a negotiating tactic of Chinese handset makers, said Phil Marshall, chief research officer of Tolaga Research, a mobile-industry research firm based in New Zealand.

Currently, handset makers are preparing smartphones that would have 3G, 4G and 5G technologies in them, Mr. Marshall said. The timing of this probe could be “related to them trying to make sure to reduce the cost of using Ericsson IPR,” he said, referring to intellectual property rights.

China has in recent years spent more to import microchips than oil, prompting the government to back big pushes to boost domestic production of semiconductors and otherwise reduce licensing costs for its smartphone makers.

Chinese antitrust regulators previously investigated U.S. chip maker Qualcomm Inc. and found that its practice in licensing patents for mobile phones violated China’s antimonopoly law. In 2015, Qualcomm agreed to pay $975 million in fines and to use a different formula for calculating patent royalties on devices sold in China.

China is a key market for Ericsson, accounting for 7% of the Swedish company’s 2018 revenue, according to the company.

In recent years, Huawei has surpassed Ericsson and Finland’s Nokia Corp. to become the world’s biggest maker of cellular-tower hardware, internet routers and related telecom equipment.

Opportunities presented by 5G are imminent. In China, the government and major carriers have said they plan trials of 5G in 2019 and aim to roll it out in a larger scale in 2020. In the U.S., companies are expected to test pilot network installations by the end of the year and the government is preparing to auction off broad swaths of airwaves.

Still, Ericsson, as well as Nokia, have yet to capitalize on the U.S. scrutiny against Huawei, partly for fear that if they are seen trying to take advantage of the situation, Beijing could retaliate by cutting off access to the massive Chinese market.

>>> Goldman Sachs on Conference Call

Goldman Sachs on Conference Call
  • Will provide strategy and performance targets update in its 1Q20 conference call.
  • Sees growth opportunities in deposits.
  • Evaluating all business segments;
  • Expect to grow aggregate U.S. and U.K. by more than $10 bln a year on average;
  • Will migrate businesses into its bank entities.
  • Can optimize in FICC and Private Equity Investments; FICC under close review.
  • Will reduce capital intensity of its business; Will reduce balance sheet investments.
  • Q1 Environment mixed
  • Financials, TMT, Natural Resources and Healthcare seeing demand.
  • Saving $100 mln a year using its own cash management business

FT : Goldman creates team of investment bankers for smaller companies Comes amid

Goldman creates team of investment bankers for smaller companies
Comes amid push to broaden client base

Goldman Sachs is setting up a new team of investment bankers to serve companies worth less than $2bn, as the Wall Street giant intensifies its efforts to broaden its client base.

Chief financial officer Stephen Scherr told analysts that Goldman had already hired over 40 bankers and added over 1,000 new clients since its 2017 announcement that it would target new clients as part of a drive to boost revenues.

“We decided to expand the strategy, creating specialised team in the investment banking division to serve new clients with enterprise values of less than $2bn,” Mr Scherr said, adding that Goldman would “dedicate 100 bankers to this over time.”

More broadly, Mr Scherr said that fixed income, currencies and commodities (FICC) was a “particular focus” of a broad-based review of Goldman’s businesses. “To that end we are advancing a plan to enable FICC to improve its returns.”

He singled out commodities as an area that was being “closely reviewed” and said the firm had “identified opportunities to cut expenses from certain underperforming parts of the commodities business and increase investors in others”.

“We have already taken many of these actions and expect to continue to make refinements over time,” he added.

He stressed, however, that on FICC overall: “While we may adjust our focus and footprint in some of these areas we remain committed to serving our clients at scale.”

Mr Scherr also outlined plans to reduce the “capital intensity” of Goldman’s private equity business.

FT : Credit Suisse to take majority stake in Chinese joint venture

Credit Suisse to take majority stake in Chinese joint venture
Latest sign China is opening up its financial sector to overseas competition

Credit Suisse is poised to take majority control of its Chinese investment-banking joint venture, the second major international lender to do so as the country opens up its financial sector to overseas competition.

The Swiss bank has reached an agreement with partner Founder Securities to increase its stake in their joint venture to 51 per cent from 33.3 per cent, a previous limit for non-Chinese companies, by way of a capital injection of about SFr94m ($94m), according to statements from both parties on Monday. The deal still has to be approved by regulators, expected in August.

Credit Suisse follows local rival UBS, which won approval from regulators to take a controlling stake in its own joint venture in December. The presence of another international bank onshore in China shows the eventual success of a decades-long lobbying campaign in Beijing, which argued the country’s nascent capital markets would benefit from foreign investment and expertise.

Despite numerous setbacks, recently pressure has built on China’s top leadership open their markets if they expect reciprocal treatment overseas. Regulators vowed to speed up the process and a year ago gave clearer timeframes for allowing banks, securities companies, asset managers and insurers to take full ownership of their local operations.

Of other international banks, only HSBC has been granted permission to take a 51 per cent stake in a national-level securities joint venture, taking advantage of special rules for Hong Kong-funded institutions. JPMorgan and Nomura have received permission to expand, but have not yet reached agreements with other shareholders to acquire majority stakes. Goldman Sachs and Morgan Stanley have said they are considering similar moves.

(BTIG) Walt Disney upgraded to Neutral

Walt Disney upgraded to Neutral at BTIG Research -- The Force is Strong Enough (For Now)

BTIG Research upgrades DIS to Neutral from Sell. After watching Disney's streaming strategy investor day last Thursday, firm remained skeptical and were planning to stick to their SELL rating. Offering a wider array of well-known library content at a lower than expected price excited investors and shifted the Disney narrative (for now) away from its secularly challenged media network portfolio, especially with Disney management willing to set an ambitious 60-90 million five-year subscriber target for Disney+. While it is nearly impossible to disprove a five-year projection for a service that has not even launched, Disney's subscriber targets appear overly aggressive relative to the planned level of original programming investment (only $2.5 billion by 2024), with many other unanswered questions from firm's Handbook. While Disney is admittedly not going as far as firm would like in their direct-to-consumer strategy (collapsing windows and proactively cannibalizing legacy businesses), Iger and Disney are clearly listening to much of what firm has written over the past few years and appear to realize an even more dramatic shift in Disney's strategy will be required as its legacy businesses erode. Firm suspects Iger and Disney do not believe their own break-even projections for DTC, but will move investors over time, as their faith in Disney's DTC strategy grows.

WSJ : Goldman’s Profit Falls 21% as Trading Slows Bank’s trading revenue dropped

Goldman’s Profit Falls 21% as Trading Slows
Bank’s trading revenue dropped 18% in latest quarter, while investment-banking revenue was flat

Goldman Sachs Group Inc.‘s first-quarter profit fell 21% from a year ago as quiet trading and underwriting took a toll across Wall Street.

Goldman posted a quarterly profit of $2.25 billion, or $5.71 a share, on revenue of $8.81 billion. Both are lower than a year ago, when a newly amped-up market generated outsize trading fees.

The bank’s profit beat the expectations of analysts polled by Refinitiv, who predicted $1.97 billion, or $4.89 a share, though revenue came in lighter than the expected $8.99 billion.

Trading revenue fell 18% to $3.61 billion compared with a year-ago quarter, in which a suddenly vibrant market spurred investors off the sidelines. That mirrors a 17% drop at JPMorgan Chase JPM 4.69% & Co., which reported quarterly earnings last week.

But without the big consumer business that bolstered JPMorgan’s earnings last week, Goldman is more beholden to its Wall Street traders and investment bankers to power earnings.

The firm has been investing heavily to change. It is growing a consumer bank, partnering with Apple Inc. on its first credit card, raising new investment funds it can collect fees to manage, and building data services it hopes will lure new types of trading clients.

Those business, though, “haven’t yet hit their stride,” Chief Financial Officer Stephen Scherr said earlier this year. Meanwhile, they have required more than $1 billion of investment spending, and investors being asked for patience are looking for signs of progress.

To that end, Mr. Scherr and his boss, Chief Executive David Solomon, have set a slew of financial targets and promised regular updates. That kind of transparency is unusual for Goldman, which historically kept its cards close and relied on steady profits to placate shareholders.

Goldman’s investment-banking revenue was flat from a year ago at $1.81 billion. A rise in merger fees helped offset a slowdown in securities offerings that hit across Wall Street, exacerbated by a government shutdown that delayed approvals for new issuances. The firm said its backlog of deals, a closely watched measure of future fees, was down from the end of 2018.

Goldman’s money-management unit posted revenue of $1.56 billion, down from a year ago.

>>> Goldman Sachs beats by $0.69, reports revs in-line

Goldman Sachs beats by $0.69, reports revs in-line
  • Reports Q1 (Mar) earnings of $5.71 per share, $0.69 better than the S&P Capital IQ Consensus of $5.02; revenues fell 12.6% year/year to $8.81 bln vs the $8.89 bln S&P Capital IQ Consensus.
  • Net revenues in Institutional Client Services were $3.61 billion for the first quarter of 2019, 18% lower than the first quarter of 2018 and 49% higher than the fourth quarter of 2018.
  • Net revenues in Investment Banking were $1.81 billion for the first quarter of 2019, essentially unchanged compared with the first quarter of 2018 and 11% lower than the fourth quarter of 2018