After Hours Summary: AKAM +11%, IRBT +6%, MKSI / KRA / RGC +4% higher and ACHC -18%, AMD -12%, MANH -11%, CMG -9.5%, EW / JNPR -7% lower following earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: AKAM +11.3%, IRBT +5.7%, USNA +4.8%, MKSI +4.2%, KRA +4.1%, RGC +3.7%, NUVA +2.8%, AMED +2.1%, VNOM +1.8%, (light volume), BXMT +1.5% (ticking higher), ILMN +0.6%, MRCY +0.3%, F WB +0.2% (also commences $700 mln offering of convertible senior notes due 2022)
Companies trading higher in after hours in reaction to news: BONT +6.4% (after closing near highs on credit facility update), ALDX +4.8% (initiated after the close with Overweight ratings and $22 tgt at Cantor Fitzgerald), SENS +3.3% (continued strength), TNDM +2.2% (to make any new features approved for the t:slim X2 Insulin Pump by the FDA in 2018 available to all in-warranty users at no cost through the Tandem Device Updater), AMC +1.4% and CNK +0.4% (following RGC results), OSTK +0.8% (extending today's move higher after confirming key details on tZERO's ICO at Money 20/20)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ACHC -18.4%, AMD -11.6%, MANH -10.8%, CMG -9.5%, EW -6.8%, JNPR -6.6%, VICR -6.3%, SFLY -3.6%, NBR -2.8%, TXN -1.8%, T -1.5%
Companies trading lower in after hours in reaction to news: SNSS -13.5% (commences offering of common stock and Series D Convertible Preferred Stock), HCM -9.4% (to offer US$262.0 million of ADSs), IDRA -7.3% (commences $60 mln common stock offering), SALT -6.6% (commences 10 mln common stock offering), BIOA -5.7% (accepted the resignation of Pres/COO Fabrice Orecchioni; will be assuming advisory role through to February 24, 2018), ATNM -4.2% (indicated lower after filing for $200 mln mixed securities shelf offering and $75 mln ATM under 424B3), PFLT -3.8% (to offer 6 mln shares of common stock in public offering), SVRA -2.1% (announces its indication expansion strategy of its lead product candidate Molgradex for the treatment of nontuberculous mycobacterial lung infection; commences common stock offering), VRAY -1.4% (raised approx $50 mln through offering), NVDA -0.5% (following AMD / TXN results)
Asia Mid-Session Update: Australia CPI weaker than expected; China 10-yr yield rises to 3-yr high
***Asia Summary***
-Asian equity markets opened the session mostly higher. On Tuesday, the Dow rose by 0.7% amid earnings reports from Caterpillar, McDonald’s and 3M. The Nikkei 225 is attempting to have its 17th straight higher close.
-Auto components manufacturer, Nidec Corp has gained over 0.5% after raising its FY profit forecasts.
-Shares of technology name, Canon Inc, have gained over 1% on better than expected profits, higher guidance and plan to pay a special dividend. Nintendo has gained over 2% ahead of its earnings due on Oct 30th. In South Korea, LG Display has gained over 0.7%, as quarterly net profit and revenues beat consensus expectations.
-In the financial sector, Japanese ‘mega banks’ have continued to gain following Sunday’s election results. Mitsubishi UFJ has risen by over 1.5%, while Mizuho Financial has gained over 1%.
-Financials in Hong Kong are trading higher, as China’s 10-year government bond yield rose to the highest level since 2014. Shares of rail equipment company Zhuzhou CRRC are gaining, after declining earlier in the week on 9-month financial results. The Hang Seng Property index is also rising, adding on to the gains seen in the prior session.
-In the Philippines, miners are trading generally higher amid speculation that the government could end the ban on open-pit mines. Global miners, Rio Tinto and BHP have traded higher on the session. On Tuesday’s session, US copper producers rose after copper traded higher by over 0.6%.
-Australian retailers are trading generally lower. Wesfarmers has declined following its Q1 trading update, as the company reported a y/y decline in sales at its Coles unit. Woolworths and Harvey Norman have declined by over 1%, amid the trading update from Wesfarmers and release of Australia’s Q3 CPI data.
-Following these inflation figures, the Aussie has declined by over 0.5%, as the data missed market expectations and CPI remained below the lower end of the RBA’s 2-3% inflation target. Amid the CPI data, Australia’s 3-year bond yield has declined on the session, after gaining ahead of the inflation figures.
-In the Philippines, the Peso currency has hit lows against the US dollar not seen since 2006. Philippines Sept budget balance data (released on Tuesday) showed a deficit.
-Looking ahead, Japanese companies seen reporting earnings later today include Chugai Pharmaceuticals, Daiwa Securities, Fanuc, Hitachi Chemical and Matsui Securities. Taiwanese tech firm UMC may also report its quarterly figures. On Thursday’s session, Australia’s ANZ Bank and South Korean chipmaker Hynix are due to report their respective results.
-US companies due to report on Wednesday include Amgen, Boeing, Coca-Cola, Freeport-McMoran, International Paper, Las Vegas Sands and Visa.
***Key economic data***
- (AU) AUSTRALIA Q3 CONSUMER PRICES (CPI) Q/Q: 0.6% V 0.8%E; Y/Y: 1.8% V 2.0%E; TRIMMED MEAN Q/Q: 0.4% V 0.5%E ; Y/Y: 1.8% V 2.0%E
- (AU) AUSTRALIA SEPT SKILLED VACANCIES M/M: 0.0% V 0.3% PRIOR
***Speakers and Press***
Japan
- (JP) Japan to consider tax benefits for companies that raise wages - Japanese Media
- (JP) Japan said to consider proposing increase in the tobacco tax for fiscal year 2018 - Japanese Press
- (JP) PM Abe Cabinet approval ratings rise in Asahi and Yomiuri Polls following recent elections
- (JP) Japan Chief Cabinet Sec Suga: To decide on extra budget for typhoon after monitoring
Korea
- (KR) South Korea and China Defense Ministers said to have held their first bilateral talks in over two years on the sidelines of a regional security forum - financial press
China/Hong Kong
- (CN) China NDRC to begin checking property prices for any 'violations'
Australia/New Zealand
- (NZ) New Zealand PM Designate Ardern: Grant Robertson to become Finance Minister
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.2%, Hang Seng +0.7%; Shanghai Composite +0.1%; ASX200 +0.1%, Kospi +0.2%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.1%, Dax +0.1%; FTSE100 -0.0%
***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.1770-1.1753; JPY 113.97-113.75; AUD 0.7784-0.7717;NZD 0.6912-0.6881
- Dec Gold -0.3% at $1,274/oz; Nov Crude Oil -0.1% at $52.42/brl; Dec Copper -0.3% at $3.19/lb
- (CN) PBoC OMO: Injects CNY160B in 7 and 14-day reverse repos v CNY250B injected prior; injects net CNY0B v CNY140B prior
- USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6322 V 6.6268 PRIO
- (KR) Bank of Korea (BOK) sells KRW 2.4T v KRW2.4T offered 2-yr monetary stabilization bonds; avg yield 2.04% v 1.85% prior
- (CN) China MoF sells 7-yr upsized bonds at 3.7714%, bid-to-cover 2.72x; 3-yr bonds at 3.6%; bid-to-cover 2.0x
***Equities notable movers***
Australia/New Zealand
- FBU.NZ Guides FY18 EBIT for B+I is expected at loss NZ$160M; EBIT ex- B+I NZ$680-720M; names Ross Taylor as CEO, effective Nov 22nd ; -2.1%
- WES.AU Reports Q1 Curragh coal production 3Mt v 2.5Mt y/y; Coles Sales A$9.37B v A$9.40B y/y; -2.3%
- MSB.AU Teva reportedly seeking buyers for its A$40M Mesoblast stake – press; -11%
Japan
- 7203.JP Scaling back Mexico plant capacity by 50% and will reduce investment by 30%; -0.4%
- 6370.JP Raises H1 guidance Net ¥7.4B from ¥5.3B y/y; FY17/18 Net ¥15B from ¥13B; +8.7%
- 5486.JP Reports H1 Net ¥19.6B v ¥18.3B y/y, Op ¥32.2B v ¥31.0B Rev ¥482.4B v ¥446.1B y/y; -7.6%
China/Hong Kong
- 973.HK Reports H1 Net Rev €548.2M, +1.1% y/y (cc); -6.5%
Closing Market Summary: Caterpillar, 3M Earnings Boost Dow to Record HighThe stock market crept higher on Tuesday, notching its first win of the week, following a largely solid batch of third quarter earnings. Caterpillar (CAT 138.24, +6.56) and 3M (MMM 234.65, +13.10) pushed the Dow (+0.7%) to a new record high after reporting particularly strong Q3 results, while the S&P 500 (+0.2%) and the Nasdaq (+0.2%) finished with more modest gains.
Caterpillar and 3M both reported stronger-than-expected earnings and revenues on Tuesday morning and raised their guidance for fiscal year 2017. The two industrial giants climbed 5.0% and 5.9%, respectively, helping the S&P 500's industrial sector (+0.5%) settle near the top of the sector standings.
However, fellow industrial giant--and Dow component--United Technologies (UTX 119.74, -1.15) tumbled 1.0%, despite beating third quarter profit estimates.
The lightly-weighted materials sector (+0.6%) finished roughly in line with the industrial space, but the heavily-weighted financial sector (+0.7%) did even better, making the most of a curve-steepening trade in the bond market. Treasuries finished mixed, with the yield on the benchmark 10-yr Treasury note climbing three basis points to 2.41%, while the 2-yr yield slipped one basis point to 1.57%.
McDonald's (MCD 163.88, +0.54) advanced 0.3% on Tuesday, even though its third quarter earnings fell short of expectations. The opposite was true for health care giants Eli Lilly (LLY 85.17, -2.01) and Biogen (BIIB 315.73, -12.82), which tumbled 2.3% and 3.9%, respectively, despite reporting stronger-than-expected earnings and revenues.
The health care sector (-0.7%) finished at the bottom of the sector standings, alongside other countercyclical groups like consumer staples (-0.3%) and telecom services (-0.6%). In general, cyclical sectors outperformed their countercyclical peers on Tuesday, signaling an increased appetite for risk among investors.
In Washington, Senator Jeff Flake (R-AZ) announced that he will not run for re-election in 2018. Mr. Flake has been a critic of President Trump and will be a Senator to watch as he now seemingly has fewer political consequences if he decides to vote against Republican legislation. The GOP holds just a two-seat majority in the Senate.
Investors did not receive any economic data on Tuesday.
However, on Wednesday, market participants will receive several economic reports, including the weekly MBA Mortgage Applications Index at 7:00 ET, September Durable Orders (consensus 1.3%) at 8:30 ET, the August FHFA Housing Price Index (consensus 0.4%) at 9:00 ET, and September New Home Sales (consensus 555K) at 10:00 ET.
- Nasdaq Composite +22.6% YTD
- Dow Jones Industrial Average +18.6% YTD
- S&P 500 +14.8% YTD
- Russell 2000 +10.6% YTD
Cognizant to acquire Netcentric
24 OCT 2017
Cognizant [NASDAQ:CTSH], a Teaneck, New Jersey-based professional services company, has agreed to acquire Swiss-based Netcentric.
Deal Snapshot
- Terms: Undisclosed, expected to close in 4Q17
- Strategic Rationale: Enhances Cognizant's ability to deliver business critical digital experience solutions for clients in Europe and around the world
-
Target (Netcentric)
- Business Description: Provides digital marketing services using Adobe Experience Cloud technology
- Ownership: Private
- Financials/Size Description: Four office locations in Europe; 380 employees
Buyer (Cognizant)
- Ownership: Public [NASDAQ:CTSH]
- Business Description: Provides IT services, including digital, technology, consulting, and operations services
- Size: USD 43.9bn market cap
- Acquisition History: Has made at least 10 other acquisitions since 2016, including TMG Health in June
Press release:
Cognizant (NASDAQ: CTSH) today announced it has entered into an agreement to acquire Netcentric, a leading provider of digital experience and marketing solutions for some of the world's most recognised brands, and a leading independent Adobe partner in Europe.
Netcentric's digital marketing teams in the United Kingdom, Netherlands, Switzerland and Germany, as well as regional delivery centers in Barcelona and Bucharest, will enhance Cognizant's ability to deliver business critical digital experience solutions for clients in Europe and around the world. The transaction is expected to close in the fourth quarter of 2017, subject to satisfaction of closing conditions, including German regulatory review. Financial details were not disclosed.
Headquartered in Zurich, Netcentric works with leading brands such as Allianz, Mercedes-Benz, Miles & More, Raiffeisen, Swisscom and UBS, helping them personalise and deliver engaging digital experiences to customers. At the close of the acquisition, approximately 380 digital marketing specialists from Netcentric will join the Cognizant Digital Business practice, which addresses clients' needs to redefine business models, innovate products, deepen market intelligence and enhance digital experiences to drive growth and efficiencies in their businesses.
"The rapid growth of our business is driven by clients who understand that flourishing with the new digital economy requires merging marketing and digital concepts powered by more flexible IT that is delivered globally," said Elian Kool, CEO, Netcentric. "By joining forces with Cognizant, we will be able to integrate marketing, technology, analytics and AI to help clients provide personalised experiences across multiple channels and enable their digital transformation."
"We are excited about the Netcentric acquisition as it underscores our commitment to our clients across Europe and enhances our portfolio of digital capabilities in the interactive and digital marketing space," said Gajen Kandiah, President, Cognizant Digital Business. "It also further extends our Adobe Experience Cloud presence for the global brands we serve. We continue to expand on the digital marketing and experience skills our clients demand, and round out our ability to deliver these services to the market at scale."
nuTonomy exclusively targeted strategics for capital, sale, source says
MergerMarket
Had mulled USD 60m capital raise
Pre-revenue status complicated deal talks
nuTonomy, a driverless car technology company, spoke to strategics about potential financing while simultaneously considering a sale, said a source close to the situation.
Delphi Automotive [NYSE:DLPH] announced plans Tuesday to acquire nuTonomy for reportedly USD 400m upfront. Morgan Stanley and law firm Gunderson Dettmer advised nuTonomy on the sale, the source said.
GCA Advisors and Goldman Sachs advised Delphi, the Gillingham, UK-based auto parts manufacturer. Fenwick & West served as legal counsel, the source said.
Morgan Stanley was hired a year or so ago by the company, said the source.
In the summer of 2016, nuTonomy launched its driverless taxi testing program in Singapore. nuTonomy had been seeking USD 60m to gain two additional years of runway on the program, which is still undergoing trials, the source added. Though nuTonomy was not aggressively marketed as a sale target, the company was willing to talk to investors that wanted to get involved at a higher level than providing capital, the source explained.
In June 2016, nuTonomy’s CEO Karl Iagnemma told this news service that the company, which had then raised USD 19.6m in capital, was considering a new round and had talked to many types of potential investors, declining to elaborate on a specific timeline for either the round or an exit. Iagnemma did not return calls for comment for this story.
A spokesperson for Delphi declined to comment on the deal background, but said that both Delphi and nuTonomy are heavily involved in Automated Mobility on-Demand (AMoD) services in Singapore. News reports on the sale indicated that the companies expect to complete the Singapore program by 2019.
nuTonomy has also recently begun testing cars in the Boston area, while Delphi was approved to start a similar program in Massachusetts earlier this year, the spokesperson said. The deal will speed up both companies’ ability to commercialize AMoD, he said.
nuTonomy was pitched exclusively to strategics since they would be able to offer higher valuations than investors, the source said. International and domestic players in both the automotive and technology spheres took a look at the business, with serious talks beginning in the summer of 2017. Prior to Delphi’s signing a few days ago, nuTonomy was considering an alternative investment—not an acquisition, the source said, declining to provide specifics.
Every party involved, the source said, had a different idea for how to invest in nuTonomy, with some wanting to acquire the business and others wanting to put in money and then strike up commercial partnerships, the source said. “That’s why it took so long,” the source added.
The deal was also atypical because the valuation for the company, which is pre-revenue, was not based off projected earnings. “It was just the number they wanted,” said the source.
Delphi emerged as the winning suitor because its automatic vehicle strategy is very complementary to nuTonomy’s, and because it can provide better access to resources and speed up development plans, said the source. According to a press release, Delphi is adding 70 of nuTonomy’s engineers and scientists to its existing team of more than 100.
The deal is slated to close by the end of the year and no antitrust complications, nor any divestitures, are expected, said the source.
Previous investors in nuTonomy, founded in 2013 by Iagnemma and CTO Emilio Frazzoli, included Ford Motor’s [NYSE:F] venture capital arm Fontinalis Partners, Highland Capital Partners, Signal Ventures, Samsung Ventures and the investment arm of the Singapore Economic Development Board.
In the 2016 story, Iagnemma told this news service that the company would be interested in launching driverless car programs in China, the UK and certain US markets following the completion of its Singapore plan. He mentioned that Jaguar was testing nuTonomy’s technology in the UK.
With VIX down
if there is a Buyer of VXX, meaning somebody is expecting a jump on VIX very soon, VXX only pay off on BIG move and on very short time investment
watch out