Asia Market Update: China and Hong Kong follow Fed and hike rates; Aussie employment change jumps more than expected
***Headlines/Economic Data***
General Trend: Asian equities trade mixed following tightening measures out of the US Fed and PBoC
-Chip-related companies trade generally higher: Taiwan Semi +1%, Samsung Electronics +1.5%
-A$ and Australian bond yields rise on better than expected employment data
-Heavy data session for China
-European rate decisions coming up
-China and HK Airline names higher on oil prices
Japan
-Nikkei 225 opened -0.3%, closes -0.3%
Mega banks track earlier weakness in US financials: Mitsubishi UFJ -2%, Mizuho Financial -1.7%, Sumitomo Mitsui -1.5%
Telecom names decline as Rakuten confirms plans to enter mobile network business; Rakuten -3%, KDDI -1.8%, Docomo -1%, Softbank -2.8%
-JAPAN DEC PRELIM PMI MANUFACTURING: 54.2 V 53.6 PRIOR
-Japan govt may project ¥1T tax revenue boost in FY18 - Nikkei
-Japan MoF sells ¥1.0T v ¥1.0T indicated in 0.6% in 20-yr JGBs; avg yield 0.573%; bid to cover 4.56x
-(JP) Nikkei poll of business leaders shows that majority of respondents said they will or are likely to spend more on personnel in FY18
-Japan Govt will revise up its FY18 real GDP growth forecast to 1.8% (prior 1.4%) due to recovery in external demand along with capital spending and private consumption; FY17 estimate of 1.5% is also likely to be upgraded; Expected that figures will be approved at next week's Cabinet meeting.
-Looking ahead: BoJ Tankan survey due for release on Friday.
Korea
-Kospi opened +0.2%, later extended gains
-Samsung Electronics +1.5%
-LG Electronics +5% (amid positive broker commentary)
-Banks add onto Wednesday’s gains: Woori Bank +2.5%, Shinhan Financial +1.8%
-Bank of Korea Gov Lee: No significant market impact from Fed rate hike
-South Korea Vice Fin Min Hyoung-Kwon: Korea market anxiety over FOMC rate hike isn’t big; Great uncertainty regarding pace of US tightening; Korea to prepare for US tightening with preemptive steps
-(KR) South Korea will supply 1M registered private rent houses over the next 5-yrs - Korean press
-(CN) China MOFCOM: China to strengthen economic and trade cooperation with South Korea
-Looking ahead: South Korea Nov Trade Balance due for release on Friday
China/Hong Kong
-Hang Seng opened +0.4%, Shanghai flat
-Hang Seng Property Index +1%; China Nov home sales hit 5-month high
-Hang Seng Materials Index +1.2%, Financials Index -0.3%
-Hang Seng Consumer Goods Index +0.8%: CHINA NOV RETAIL SALES Y/Y: 10.2% V 10.3%E; YTD Y/Y: 10.3% V 10.3%E
-PBoC raised rates connected to open market operations (OMO) and medium-term lending facility (MLF) after US Fed rate hike
-(CN) PBoC commented on its rate moves: Said OMO rate hike reflects market supply and demand; Normal reaction to Fed rate increase; OMO rate hike to ease market distortion; Interest rate adjustment was less than market expectations
-(CN) China former PBOC economist: monetary policy should move toward tight bias; OMO rate hike warns speculator - Xinhua
-(HK) Hong Kong Monetary Authority (HKMA) raises base rate by 25bps to 1.75%, inline with US Fed move: ***Insight: Because the HK$ is pegged to the USD Hong Kong generally follows the Fed's moves.
-(CN) China State Council: China will step up supervision over state assets and SOEs with differentiated regulatory policies for state firms and more emphasis on overseas projects
-(CN) China Banking Regulatory Commission (CBRC) Fan Wenzhong: Will steadily advance liberalization of the banking industry following the latest government move to widen foreign access to the financial sector
-(HK) Hong Kong Monetary Authority (HKMA) Chan: This is an abnormally low rate environment for mortgages; Home price can’t be divorced from purchasing power
-(CN) China MOFCOM: Hopes US tax cuts 'worries' won't materialize
- USD/CNY (CN) PBoC sets yuan reference rate at 6.6033 v 6.6251 prior (highest fix since Nov 23rd)
- (CN) PBOC Open Market Operations (OMO): injects CNY50B v CNY130B prior in 7 and 28-day reverse repos v skips prior; Net drains CNY190B v injects CNY60B prior; raises yield on 7-day reserve repo to 2.5% from 2.45%; 28-day yield to 2.8% from 2.75%
-(CN) PBOC LENDS CNY288B V CNY188B PRIOR IN MEDIUM-TERM LENDING FACILITY (MLF); OFFERS 1-YEAR LOANS AT 3.25% V 3.20% PRIOR
-(CN) CHINA NOV INDUSTRIAL PRODUCTION Y/Y: 6.1% V 6.1%E ; YTD Y/Y: 6.6% V 6.6%E
-(CN) CHINA NOV YTD URBAN FIXED ASSETS Y/Y: 7.2% V 7.2%E; NBS said fixed-asset investment slowing and steadying
-(CN) China Nov Foreign Direct Investment (FDI) CNY124.9B, +90.7% y/y; YTD CNY803.6B, +9.8% y/y
-(CN) Jan-Nov Outbound Direct Investment (ODI) $107.8B, -33.5% y/y
-(CN) China MOFCOM: Notes 'irrational' ODI was been effectively curbed; no new ODI in property, sports and entertainment.
-Chinese officials comment on taxes amid proposed US tax reforms
-(CN) China National Bureau of Stats (NBS): Companies in China see heavy tax burden, there is room for China to further cut taxes and fees; Sees 'necessity' to further tackle tax burdens.
-(CN) China MOFCOM: Hopes US tax cuts 'worries' won't materialize; no new ODI in property, sports and entertainment; Hopes US can fulfill promise to create stable environment for investors from other countries including China; hopes US will not set obstacles for investors during assessment of deals; Encourages domestic companies to import natural gas
-China Conglomerate HNA Group: Strength in share price and US dollar denominated bond prices comes amid speculation regarding financing talks
Australia/New Zealand
-ASX 200 opened +0.1%, closes -0.1%; Energy Index +0.7%, Materials +0.6%; REIT Index -0.7% (outperformed on prior session, higher interest rates)
-Refiner Caltex Australia +3%: Australia competition regulator to oppose Woolworth’s sale of service stations to BP (A$1.79B transaction)
-Department Store Myer Holdings -8% (cautious H1 guidance)
-Aussie extends gains to 1-month high amid employment data and Nov Chinese data
-Aussie 3-year bond yield rises over 5bps following employment data
(AU) AUSTRALIA NOV EMPLOYMENT CHANGE: 61.6K V +19.0KE; UNEMPLOYMENT RATE: 5.4% (near 5-year low) V 5.4%E; Participation Rate: 65.5% v 65.1%e (matches highest reading since Sept 2011)
-(AU) Australia Dec Consumer Inflation Expectation: 3.7% v 3.7% prior(
(NZ) New Zealand Treasury half-year economic and fiscal update: keeps 2017/18 bond program unchanged at NZ$7.0B; Cut 2017/18 and 2018/19 GDP growth forecasts; raised 2018 CPI forecast; Sees smaller budget surpluses in coming years
- WOW.AU ACCC to oppose BP's purchase of Woolworth service stations; -0.6%
- MYR.AU Guides H1 adj Net materially lower y/y; profit and sales deteriorated in recent weeks; -7.6%
Other Asia
-(MY) World Bank raises Malaysia 2017 GDP growth forecast to 5.8% from 5.2%; sees 2018 GDP growth at 5.2%
-Looking Ahead: India Nov Wholesale Price Index (WPI) due for release later today
North America
-US equities ended mostly higher: Dow +0.3%, S&P 500 -0.1%, Nasdaq +0.2%, Russell 2000 +0.6%
-S&P 500 Consumer Staples Sector +0.6%; Financials -1.2%
-FED: (US) FOMC RAISED TARGET RATE RANGE 25BPS TO 1.25-1.50% (AS EXPECTED); Vote 7-2 (Evans and Kashkari dissent); Confirms average Fed official looking for 3 hikes in 2018
-(US) FOMC UPDATED ECONOMIC FORECAST FOR DEC MEETING (V. SEPT); Cuts midpoint of 2017 Core PCE inflation forecast to1.5% (prior 1.5-1.6%), Cuts 2018 Core PCE forecast to 1.7-1.9% (prior 1.8-2.0%)
-(US) Fed Chair Yellen: seen pickup in economic growth and business investment, as well as improvement in economies abroad - post FOMC decision comments; Fed did discuss tax policy, most of colleagues did put fiscal stimulus into projections
-Tax Reform: (US) House and Senate leaders said to have reached an agreement in principle on tax reform bill – press
-(US) Sen Finance Chair Hatch (R-UT): confirmed GOP has reached deal on tax legislation; confident there are sufficient votes to passed agreed-upon deal
-M&A: 21st Century Fox: Reportedly Disney deal to value Fox at just over $40/shr, paying up to $29/shr for Fox assets – press
-Energy: (US) DOE CRUDE: -5.1M V -3ME
-Looking Ahead: US President Trump to update on deregulation efforts on Thursday, US Nov Retail Sales due
Europe
-(UK) UK govt loses vote on EU withdrawal bill amendment by 309-305; House of Commons votes to give lawmakers final say on Brexit deal – press; Marks the first time PM May has lost a vote in the Commons on her Brexit plans
-(DE) German DIHK Chambers of Commerce: Brexit may raise Germany EU cots by €8B/year – US financial press
-(UK) Nov RICS House Price Balance: 0% v 0%e
-M&A: Gemalto: Atos confirms its proposed all-cash public offer at a price of €46.0 per Gemalto share (Follows the offer being rejected)
-Shell: Reportedly to sell Agentina downstream assets to Raizen for $1B - press
-Norske Skog [NSG.NO]: Appointed Evercore Partners to act as its financial adviser in connection with a sale of Norske Skog AS and its subsidiaries by way of a competitive sale process which will commence imminently
-Looking ahead: European rate decisions due later today from SNB, ECB and BoE, along with EZ Prelim DEC PMI data, UK Nov Retail Sales and IEA Monthly report
***Levels as of 01:00ET***
- Nikkei225 -0.3%, Hang Seng -0.5%; Shanghai Composite -0.5%; ASX200 -0.2%, Kospi +0.7%
- Equity Futures: S&P500 0.0%; Nasdaq100 0.0%, Dax +0.1%; FTSE100 -0.0%
- EUR 1.1843-1.1822; JPY 112.79-112.53; AUD 0.7675-0.7628;NZD 0.7024-0.6997
- Feb Gold +0.9% at $1,260/oz; Jan Crude Oil +0.2% at $56.70/brl; Mar Copper -0.5% at $3.04/lb
After Hours Summary: NDSN +11.8%, BAND +11.4%, PIR -25.3%, ABM -10.1% following earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: SMIT +30% (thinly traded), NDSN +11.8%, BAND +11.4%
Companies trading higher in after hours in reaction to news: IMUC +82.2% (achieved key milestone in its research-stage Stem-to-T-Cell immuno-oncology program), MARK +8.6% (announced that China ShenHua Energy has selected KanKan as its artificial intelligence technology partner), MYO +6.4% (rebounding from 13% two day decline), DPW +6.3% (following today's 21% move higher), GLUU +5.2% (attributed to new game launch), WWR +4.5% (to acquire Alabama Graphite Corp), FLXN +3.9% (to acquire the global rights to GQ-203 from GeneQuine Biotherapeutics) CMCM +2.7% (Cheetah Mobile and Microsoft announce collaboration to incorporate Microsoft's AI into Cheetah's product matrix; official version will be released January 2018), HMNY +1.9% (after closing down 33% on the day), VERU +1.4% (after closing near highs - up 40% on the day), FOXA +1.4% (WSJ reporting potential asset deal valuing FOXA at $40/share), OCUL +1.3% (extending today's move higher -- after hours boost following Pres/CEO insider buy disclosure)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: PIR -25.3%, ABM -10.1%
Companies trading lower in after hours in reaction to news: DRNA -8.2% (proposes underwritten public offering of common stock), OMF -7.3% (announces secondary offering of 7.5 mln shares of common stock by selling stockholder -- affiliate of Fortress Investment Group), GPP -6.7% (thinly traded; indicated lower on block trade pricing), PBYI -2.6% (EMA has requested that the Scientific Advisory Group on Oncology provide an opinion on the clinical aspects of the MAA for neratinib at a meeting to be held on January 11, 2018), MTOR -2.3% (files mixed securities shelf offering
Atos confirme son intention d'acquérir Gemalto pour créer un leader mondial en cyber sécurité, technologies et services numériques
Atos SE [Euronext Paris : ATO] (« Atos »), leader international de la transformation digitale, a pris note ce soir de l'annonce de Gemalto N.V. [Euronext Amsterdam : GTO] (« Gemalto ») faisant suite à sa proposition amicale d'acquérir Gemalto.
London, December, 14, 2017
Paris, 13 décembre 2017
Atos SE [Euronext Paris : ATO] (« Atos »), leader international de la transformation digitale, a pris note ce soir de l'annonce de Gemalto N.V. [Euronext Amsterdam : GTO] (« Gemalto ») faisant suite à sa proposition amicale d'acquérir Gemalto.
Atos confirme sa proposition d'offre publique intégralement en numéraire au prix de 46,0€ par action Gemalto (coupon attaché).
Ce prix reflète pleinement la juste valeur de Gemalto et présente une prime significative sur le dernier cours de bourse de clôture non affecté (environ 42%). L'offre a reçu un soutien marqué des marchés financiers, des investisseurs et de la communauté des analystes depuis son annonce. Elle offre aux actionnaires de Gemalto une opportunité immédiate et substantielle de valorisation de leurs actions.
Atos réitère sa volonté d'engager des discussions et reste confiant que le conseil d'administration de Gemalto ouvrira un dialogue direct et constructif au sujet de l'offre d'Atos. Atos réaffirme le caractère amical de son offre fondée sur un projet industriel solide et attractif pour les deux sociétés, leurs employés, leurs clients et l'ensemble des autres parties prenantes. Atos, qui recrute plus de 10 000 employés par an, confirme que l'ensemble des 15 000 employés de Gemalto seront accueillis et intégrés au sein du groupe. Atos confirme également son intention d'intégrer tous les métiers de Gemalto en son sein et de maintenir la marque Gemalto.
Atos poursuit la mise en oeuvre de la transaction proposée et prépare à cette fin, avec ses conseils, l'ensemble des notifications réglementaires ainsi que le projet de document d'offre devant être déposés auprès de l'autorité de marché néerlandaise (Autoriteit Financiële Markten, AFM) et des autres autorités compétentes.
Par ailleurs, Atos répondra rapidement et de manière détaillée à l'ensemble des points soulevés par Gemalto dans son communiqué de presse et sa lettre en date du 13 décembre 2017.
TEVA - To host conference call to discuss restructuring plan and additional measures to improve its business and financial performance at 8:00 a.m. ET on Dec 14th
- Teva Pharmaceutical Industries Ltd. (NYSE: TEVA) announced today that it will issue a press release on its restructuring plan and additional measures to improve its business and financial performance on Thursday, December 14, 2017 at 7:00 a.m. ET. Following the release, Teva will conduct a conference call and live webcast on the same day, at 8:00 a.m. ET.
t arget Corp. (NYSE: TGT) today announced it has agreed to acquire Shipt, Inc., a leading online same-day delivery platform, for $550 million in cash. Target will leverage its network of stores and Shipt's proprietary technology platform and community of shoppers to quickly and efficiently bring same-day delivery to guests across the country. The acquisition significantly accelerates Target's digital fulfillment efforts, bringing same-day delivery services to guests at approximately half of Target stores by early 2018. The service will be offered from the majority of Target stores, and in all major markets, before the 2018 holiday season.
At launch, Target will offer same-day delivery of groceries, essentials, home, electronics and other products, while expanding the products offered over time. By the end of 2019, same-day delivery will include all major product categories at Target.
"We laid out an ambitious strategic agenda in early 2017, which included a focus on giving our guests a number of convenient ways to shop with Target, whether it's ordering online and picking up in one of our stores, driving up to pick up an order, or taking advantage of services like our new Restock program. With Shipt's network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country," said John Mulligan, executive vice president and chief operating officer for Target. "By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery, and Shipt's service-oriented approach aligns well with Target's commitment to delivering an exceptional shopping experience for our guests."
Founded in 2014 and located in Birmingham, Alabama, Shipt is a rapidly growing membership-based grocery marketplace and same-day delivery platform. The service leverages an extensive network of over 20,000 personal shoppers to fulfill orders from various retailers and deliver within hours in more than 72 markets. Shipt values a personalized, customer-first delivery experience that simplifies life and saves time for members. Through Shipt's app, members are connected to local, reliable shoppers who help facilitate a quality delivery experience that is personalized, efficient and convenient.