NY Post : Goldman Sachs reportedly halts plans for crypto trading

Goldman Sachs reportedly halts plans for crypto trading

Goldman Sachs is ditching plans to open a desk for trading cryptocurrencies as the regulatory framework for crypto remains unclear, Business Insider reported on Wednesday, citing people familiar with the matter.

In recent weeks, Goldman executives have concluded that many steps still need to be taken, most of them outside the bank’s control, before a regulated bank would be allowed to trade cryptocurrencies, the financial news website reported.

“At this point, we have not reached a conclusion on the scope of our digital asset offering,” Goldman Sachs spokesperson Michael DuVally told Reuters.

The Wall Street bank was planning to clear bitcoin futures for some clients as the new contracts were going live on exchanges when the cryptocurrency rocketed to a record high of $16,000 in December.

In October, Goldman chief executive Lloyd Blankfein had tweeted, “Still thinking about Bitcoin. No conclusion – not endorsing/rejecting. Know that folks also were skeptical when paper money displaced gold.”

Blankfein’s tweet was in sharp contrast to comments made by JPMorgan Chase CEO Jamie Dimon, who called bitcoin a “fraud. It is worse than tulips bulbs,” Dimon had said, referring to a famous market bubble from the 1600s.

Goldman rival Morgan Stanley had spoken in favor of the currency, with CEO James Gorman calling it “more than just a fad.”

The virtual currency can be used to move money around the world quickly and with relative anonymity, without the need for a central authority, such as a bank or government. A fund holding the currency could attract more investors and push its price higher.

Several small US firms have been reshaping their business models to capitalize on the craze for blockchain technology, which supports cryptocurrency.

Beverage maker Long Island Iced Tea Corp.’s shares jumped nearly 300 percent in late December after the company said it would rebrand itself Long Blockchain Corp.

However, regulators across the world have been intensifying their scrutiny of initial coin offerings and cryptocurrency exchanges.

Last year, the US Securities and Exchange Commission warned that some of the coins issued in ICOs could be considered securities, implying that trading them would have to comply with federal securities laws.

Bitcoin was trading down nearly 5.11 percent at $6,985 on the Luxembourg-based Bitstamp exchange on Wednesday.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • LE -14.2%, REVG -9.5%, GWRE -8.2%, TENB -6%, ZS -3.6%, DOCU -2.7%, MDB -2.7%, OLLI -1.1%

Other news:

  • IOVA -14.5% (may be attributed to World Conference on Lung Cancer full abstracts being released yesterday; co presented at HC Wainwright conference midday and is scheduled to present at Wells Fargo conf today)
  • PRQR -14.2% (to offer $75 mln ordinary shares in underwritten public offering)
  • KALV -5.1% (to offer shares of common stock in underwritten public offering)
  • DRNA -4.7% (proposes underwritten registered public offering of 6.15 mln shares of common stock)
  • CGC -4% (modestly pulling back from new all time highs; completed purchase of Hiku)
  • CRON -3.2% (in sympathy with TLRY)
  • VIAB -1.5% (after seeing late strength on reports that CBS, National Amusements are in settlement talks)
  • FHB -1% (announces pricing of secondary offering of 20 mln shares of its common stock for total gross proceeds of ~ $577 mln)
  • VLRS -0.9% (Aug Traffic)

Analyst comments:

  • TLRY -7.4% (downgraded to Market Perform from Outperform at Northland Capital)
  • BEN -1.7% (downgraded to Underweight from Neutral at JP Morgan)
  • COP -0.9% (downgraded to Neutral from Buy at BofA/Merrill)
  • SBGI -0.9% (downgraded to Neutral from Buy at B. Riley FBR)
  • RAD -0.7% (resumed with a Sell at Goldman)
  • CVX -0.6% (downgraded to Neutral from Buy at BofA/Merrill)

>>> US Gapping up


Gapping up
In reaction to strong earnings/guidance:

  • CLDR +12.9%, DCI +11.3%, VRNT +10.3%, SECO +7.7%, AVAV +7.4%, GIII +6.7%, MBUU +4.6%, NAV +4.2%, CTRP +3.1%, FUN +1.9%

Other news:

  • EYPT +17.5% (announced that Centers for Medicare and Medicaid Services approved transitional pass-through status and reimbursement through a C-code for DEXYCUTM 9%)
  • NVCR +8.9% (reports Tumor Treating Fields plus chemotherapy extends median overall survival by 6.1 months in STELLAR Ph 2 registration trial in mesothelioma compared to historical control; to host investor briefing Sept 25)
  • ARWR +8.2% (will present initial clinical data for ARO-HBV at the 18th World Gastroenterologists Summit)
  • SPPI +7.6% (reports new interim data from the EGFR cohort and for the first time the HER2 cohort in the MD Anderson Phase 2 trial; Updated data will be presented Sept 24 and will include data into September)
  • MXWL +6.6% (announced grid energy storage subsystem design-in with Siemens)
  • LHO +1.4% (LaSalle Hotel's Board of Trustees determines that Pebblebrook Hotel Trust's (PEB) unsolicited, non-binding proposal does constitute a 'superior proposal' to Blackstone (BX) transaction )
  • DWDP +1.1% (files mixed securities shelf offering )
  • ATRA +0.9% (enters into a strategic collaboration with Moffitt Cancer Center)

Analyst comments:

  • VOD +1.3% (upgraded to Buy from Neutral at Citigroup)
  • TCF +0.9% (upgraded to Buy at BofA/Merrill)

>>> Banca Romaneasca attracts the interest of Banca Intesa Sanpaolo – report (tr

Banca Romaneasca attracts the interest of Banca Intesa Sanpaolo – report (translated)
06 SEP 2018
Italy’s Banca Intesa Sanpaolo [BIT:ISP] has joined the pool of potential bidders for Banca Romaneasca, the Romanian subsidiary of National Bank of Greece [OTCMKTS:NBGIF], Ziarul Financiar reported.
Citing banking sources, the item said the Italian bank and Romania’s Eximbank are the latest to submit non-binding bids.
The deadline for indicative offers is 24 September, the item noted.
So far, the list of potential buyers includes private equity funds JC Flowers and Axxess Capital, as well as Greece’s Vardinogiannis family - which all already control small Romanian banks, as reported.
In March, the National Bank of Romania declined to clear Banca Romaneasca’s acquisition by OTP Bank for EUR 650m.
Last year, Banca Romaneasca posted a net profit of RON 20m (EUR 4.3m) on assets worth RON 6.2bn.

Reuters : A weak hand (Rally / Casino)


Bondholders face a risky last roll of the dice at Rallye, which controls French supermarket group Casino. Credit markets are growing increasingly nervous about the indebted group. Owner Jean-Charles Naouri has bank lines to fall back on, but that may be a mixed blessing for creditors.

Rallye is grappling with a tricky combination of debt and a difficult retail business. It owns a 51.1 percent stake in Casino and relies on its dividends to service borrowings. The need to funnel cash to its parent makes it hard for Casino to reduce gearing from a toppy three times EBITDA. That, along with tough competition in France has caused its share price to almost halve this year. The decline leaves Rallye with borrowings of 2.9 billion euros and assets, which consist mostly of the Casino stake, worth 1.7 billion euros.

Bond markets are jittery. Rallye’s five-year credit default swaps, a form of insurance against default, have soared to over 2,800 basis points, from just over 700 in March. That implies a more than 80 percent probability of failure, according to Eikon. Rallye’s 3.4 percent bond maturing in 2022 yields 26 percent. Some 975 million euros of bonds come due between now and March.

That’s not all. Rallye also issues commercial paper, a form of short-term borrowing typically used by highly rated companies and banks. It placed 1.3 billion euros of the notes this year, but issuance in August was just 65 million euros compared with a monthly average of around 200 million euros since the start of 2017, according to Breakingviews estimates. Rallye has 311 million euros of commercial paper outstanding which must be repaid over the next 100 days.

Naouri, a former senior civil servant and banker, has a backup. Banks have committed 1.7 billion euros of credit facilities. But there’s a catch. Most of this debt is secured – for every euro that Rallye borrows, it must put up 1.3 euros’ worth of Casino shares. Based on the supermarket’s current share price, Rallye would have to pledge its entire holding in Casino to meet bond maturities between now and March, according to Breakingviews estimates.

It might not come to that. Casino plans to sell 1.5 billion euros of assets to pay down debt. And its share price may recover, easing pressure on Rallye. But the risk is that Rallye pledges its Casino shares to banks, and then fails. That would be a blessing for holders of shorter-dated debt who get repaid, and a bad day for those left at the table.

Reuters : A weak hand


Bondholders face a risky last roll of the dice at Rallye, which controls French supermarket group Casino. Credit markets are growing increasingly nervous about the indebted group. Owner Jean-Charles Naouri has bank lines to fall back on, but that may be a mixed blessing for creditors.

Rallye is grappling with a tricky combination of debt and a difficult retail business. It owns a 51.1 percent stake in Casino and relies on its dividends to service borrowings. The need to funnel cash to its parent makes it hard for Casino to reduce gearing from a toppy three times EBITDA. That, along with tough competition in France has caused its share price to almost halve this year. The decline leaves Rallye with borrowings of 2.9 billion euros and assets, which consist mostly of the Casino stake, worth 1.7 billion euros.

Bond markets are jittery. Rallye’s five-year credit default swaps, a form of insurance against default, have soared to over 2,800 basis points, from just over 700 in March. That implies a more than 80 percent probability of failure, according to Eikon. Rallye’s 3.4 percent bond maturing in 2022 yields 26 percent. Some 975 million euros of bonds come due between now and March.

That’s not all. Rallye also issues commercial paper, a form of short-term borrowing typically used by highly rated companies and banks. It placed 1.3 billion euros of the notes this year, but issuance in August was just 65 million euros compared with a monthly average of around 200 million euros since the start of 2017, according to Breakingviews estimates. Rallye has 311 million euros of commercial paper outstanding which must be repaid over the next 100 days.

Naouri, a former senior civil servant and banker, has a backup. Banks have committed 1.7 billion euros of credit facilities. But there’s a catch. Most of this debt is secured – for every euro that Rallye borrows, it must put up 1.3 euros’ worth of Casino shares. Based on the supermarket’s current share price, Rallye would have to pledge its entire holding in Casino to meet bond maturities between now and March, according to Breakingviews estimates.

It might not come to that. Casino plans to sell 1.5 billion euros of assets to pay down debt. And its share price may recover, easing pressure on Rallye. But the risk is that Rallye pledges its Casino shares to banks, and then fails. That would be a blessing for holders of shorter-dated debt who get repaid, and a bad day for those left at the table.

FT : The danger of a ‘blind Brexit’

The danger of a ‘blind Brexit’
Approach would leave the UK without any assurance over future trade relationship

This first week back at Westminster has been a pretty calamitous one for Theresa May and her Brexit strategy.

At home, her Chequers plan has been  roundly condemned by hardline Conservative Brexiters who demand a “Canada-style” clean break with the EU.

In Brussels, Michel Barnier has issued a clear rejection of the PM’s proposal for the UK to stay in the single market for goods but not services, telling British MPs the idea is dead.

Meanwhile, on the other outstanding question in the Brexit talks — the future status of Northern Ireland — Mrs May is getting no joy either.

The EU insists on maintaining a Northern Ireland-only backstop in the Article 50 withdrawal agreement. In other words, if a future UK-EU trade deal fails to provide a frictionless border across Ireland, then Northern Ireland will have to stay in the single market and abide by the EU’s customs code.

The British hate this, of course, because it drives a border down the Irish Sea; but the EU shows no sign of budging.

Given this deadlock, it is hard to see how progress can now be made in the Brexit talks. But the past 24 hours have brought some new indications of how the EU side now sees the way to a deal.

The EU’s thinking can be gauged in a note published by Mujtaba Rahman of Eurasia Group, based on a briefing from European officials. Some of the thinking was confirmed in a subsequent piece by Bloomberg, which moved sterling.

Mr Rahman says the EU is still giving no ground on Chequers or the Irish backstop. Instead, the EU is now focused on the political declaration that accompanies the Withdrawal Agreement. 

The EU wants the political declaration to specify that the UK and EU are working towards agreeing a “free-trade agreement with customs co-operation” by the end of the transition period in December 2020. 

Mr Rahman says that, for EU officials, the crucial point about such a formula is that it does not preclude more ambition about the trade relationship in the future. Essentially, the “FTA with customs co-operation” will articulate the “floor” of the UK and EU’s ambition. In other words, this is the minimum the two sides will seek to achieve — but it could be more.

There are attractions to this approach. First, it solves the problem in the Tory party. For Jacob Rees-Mogg and his hardliners, the aspirational language about “FTA plus a customs arrangement” would be close to the Canada- style deal they seek.

At the same time, this is not a disaster for Mrs May either. True, she gets nowhere with Chequers. But she can always argue that the UK can aspire to reach a Chequers arrangement in a future treaty.

Squaring Northern Ireland’s Democratic Unionist party will be much harder. They will need a lot of convincing that the Northern Ireland backstop is something that will never happen. But they may have no choice but to accept it or bring down Mrs May.

Would such an approach work? Some UK officials say this may be the only way to secure an orderly Brexit in March 2019. There is just one problem: far from being an agreement on a trade framework, this is a leap in the dark — a blind Brexit — in which Britain leaves the EU without the slightest assurance over what its future trade relationship will be.

Can Britain accept a blind Brexit? Many are bound to see it as an unacceptable outcome to the Article 50 process.

Britain would be paying €39bn to leave the bloc. But without any commitment on its future trade arrangements, it will have thrown away all its negotiating leverage.

The UK will have an orderly Brexit in March. But the clock will immediately start ticking down to the end of the transition period in December 2020, with every possibility that this will end up being the cliff edge.

The problem is that when MPs come to vote later this year, they may have no choice but to accept this outcome. Many MPs might well see the alternatives — no deal, a general election and a second referendum — as too hazardous to contemplate.

But MPs should be in no doubt either about what a blind Brexit implies. For Britain, it would be a humiliation, not a solution

WSJ : Investors Weed Out Weakest Links in Emerging-Market Tumult

Investors Weed Out Weakest Links in Emerging-Market Tumult
A rising dollar and higher U.S. interest rates are pressuring stocks, bonds and currencies in developing economies

As stocks, bonds and currencies in developing economies come under renewed stress from a rising dollar and higher U.S. interest rates, investors are trying to separate economies able to weather the storm from those too fragile to cope.

The MSCI Emerging Markets Index has dropped by almost a fifth since its January high, hovering on the edge of a bear market, commonly defined by a fall of 20% or more from a recent high.

“My fear of contagion is that right now the sentiment towards the whole emerging-market spectrum is very fragile,” said Mario Castro, a Latin America currency strategist at Nomura.

A common thread affecting those economies: The dollar is by far the most commonly used currency in global trade and debt markets. So when the U.S. economy looks in much better health than the rest of the world and the Federal Reserve is lifting interest rates, upheaval often follows in the developing world.


Currencies in the developing world have sold off against the dollar, led by the Turkish lira and Argentine peso, which are down by more than 40% and 50% this year. The Indian rupee reached its weakest-ever levels this week, and the Indonesian rupiah is trading at two-decade lows.

This is neither a string of unrelated blowups nor a meltdown where contagion spreads by panic selling moving from nation to nation. It is somewhere in the middle: creating both dangers and opportunities for investors.

Many markets face similar issues: While U.S. manufacturing output probably grew at its fastest in 14 years in August, according to Institute for Supply Management surveys, a poll of purchasing managers in manufacturing firms around the world, published by JPMorgan and IHS Markit , showed the slowest output growth in nearly two years.

Raw-materials prices have also faltered, with the Bloomberg Commodity Index falling 9% since its peak in May. That puts pressure on major exporters of commodities other than oil, such as Brazil, Chile and Indonesia.


Moreover, many investors buy emerging-market assets in broad funds, rather than country by country. So when they reduce exposure, developing markets can be hit all at once.

“There are a lot of people out there who are distressed sellers or forced sellers,” said Mark Tinker, head of the Framlington Equities Asia business at AXA Investment Managers.

The links extend into developed markets such as Western Europe, given the region’s lending ties to countries including Russia and Turkey and its trading ties with China.

Mr. Castro said much was riding on a presidential vote this year in Brazil that will decide whether the country enacts changes to keep its economy healthy and debt in check. “There is a lot at play in the elections, and Brazil is systemically important for emerging markets,” he said.

Money managers also say it is possible to distinguish clearly between different kinds of developing nations.

“There is a debt crisis in emerging markets. They’ve just racked up way too much debt, and those chickens are coming home to roost. But we need to differentiate clearly when we talk about these concerns,” said Bryan Carter, head of emerging-market debt at BNP Paribas Asset Management.

“You can separate almost all countries into one or two camps: the countries with central banks that have decided to keep up with the Fed and hike rates and those that have consciously decided not to,” he added.

Mr. Carter said Argentina was in the first camp. He said the country’s bonds were his largest single overweight position, based in part on the country’s orthodox economic governance. In contrast, Brazil and South Africa have allowed their currencies to take the strain, rather than raise interest rates.

Others note that China has successfully taken yet another path, amping up spending and loosening monetary policy rather than following the Fed. As a consequence, while shares have fallen sharply this year, prices of Chinese government debt have risen, sending yields lower, in contrast to other emerging markets.

“My view is that China has already become less EM-like than it was in 2016,” said Karthik Sankaran, director of global strategy at Eurasia Group. A previous growth scare gripped Chinese markets in 2015-16.

Even in more vulnerable countries, some fund managers are snapping up securities issued by companies that are stronger than their domestic economies. “You have companies in Indonesia that are very export oriented, with no foreign debt. That’s an absolute winner,” said Leon Goldfeld, a multiasset portfolio manager at J.P. Morgan Asset Management.