BOFA-ML
* KONECRANES - Terex selling $300m/ 7m shares @ EU37.40; MS sole books on deal.
* HELLA - $115m/ 2.35m shares priced at EU45.50; DB/Lampe books. D/G'd away....
* STOXX CHANGES: ADDS -CTEC,LIGHT,BIM,LOOMB & DELETES -OCDO,DRX,MS,FINGB.......
SEADRILL - 1Q17 EBITDA US$291m, higher than c.US$250m guide. Announce new CEO..
DIXONS - Encouraging with LfL +4% & FY revs to be +9%. PBT guide good (334).+2%
TELENOR - Thailand sub, DTAC selected as a partner for 4G on TOT (136)....+1-2%
BRITVIC - Revs beat est by 2%, EBITA +6.7% to £73.6m. All reads well (710)..+1%
BUNZL - Completes the previously announced purchase of DDS in the US (2467).+1%
BABCOCK - Inline with sales 1% ahead. Should be good enough today (980).....+1%
PENNON - Beat with EBITDA +8% y-y & group EBIT +16% y-y. FY div 35.96p (912)+1%
ZOOPLA - Inline with revs £117.9m and EBITDA £45m. Net debt higher (362)....+1%
DNA - We initiate coverage with BUY and a PO of EUR15 (+25% upside) (12.3)+0.5%
GPOR - Record yr for lettings activity & ahead of ERV. LTV of +12.2% (667)+0.5%
SAGE - Senti +ve; Intuit reported strong FQ3 results & guided up FQ4 (704)+0.5%
VONOVIA - FFO1 +17.1% YoY, largely inline. FY FFO guide inc by €70mn (34.5).u/c
CARREFOUR - Brazil unit said to file for IPO amid jumpy market (22.87)......u/c
DONG - Has sold its oil business to Ineos for at least $1.05b. Nos ok (281).u/c
ATLANTIA - Spec may sell its entire 34% stake in Cellnex; Economista (24.5).u/c
GLENCORE - Approached Bunge about a potential consensual biz combo (289)....-1%
CELLNEX - Atlantia may sell entire 34% stake to facilitate Abertis deal (17)-1%
MINERS - Copper -1.1%, Iron Ore fut -5% with BHP OZ -0.74%, RIO OZ -1.2%....-1%
IBSTOCK - Encouraging signs in the new build mkt in the last 4 months (240).-1%
BARCLAYS - Being sued £1.6b by US group that bought UK subprime biz (212)...-1%
FIAT - Sued by Justice Dept over diesel emissions (stock -4% in the US) (9).-2%
MARKS - FY adj PBT 3% ahead BUT home & clothing sales -5.9% v -3.7% (378).-2-3%
KINGFISHER - Sales inline but LFL down 60bps which will weigh today (350).-2-3%
MEDICLINIC - EPS inline but outlook looks light & d/graded away from us(843)-3%
CS
Adecco -2% CS DOUBLE DOWNGRADE to UNDERPERFORM (automation risk)
Babcock +1-2% FY revs 1% ahead, outlook good
Britvic -1% 1H revs 756.3mln cons 743mln, Op profit slightly light
Celnex +1-2% Enters into a strategic consortium partnership
Cosmo Pharm +1-2% CS INITIATE with OUTPERFORM (Risk reward)
Dong +1-2% Sells oil business to Ineos for at least $1.05b
Dixons UNCH UK LFL +2% cons +1%, FY PBT guidance unch
Fiat -2% DoJ launches civil lawsuit
Glencore -3% Informal approach to Bunge, Bunge says not in talks
Interoll +1% Receives major order in North Americ
Kingfisher -4-5% 1Q sales of £2.86bn, LFL sales light, France weak
M&S -2% EBIT inline but outlook mixed
Miners -2-3% Copper -0.95%, Brent +0.45%, Iron Ore -4.50%, China -0.50%
Pennon +1% 2% EBITDA beat, interest and tax driven
Randstad -2% CS DOUBLE DOWNGRADE to UNDERPERFORM (automation risk)
Sunrise +2-3% Enters into a strategic partnership led by Cellnex
Umicore +0.5% In talks With Fedrus to sell Building Products Unit
Vedanta M/P EBITDA 3.2bn Cons 3.3bn
Vonovia +1-2% Reported Q1 FFO1 +17.5% YoY, reiterate div guidance
ZPG +1% Revs 5% ahead, Comparison biz 7% ahead and portals 2% ahead
MainFirst Pre Mkt Indications
*ALTICE-To drop use of SFR Brand by end of 2018 says Les Echos....U/C
*UMICORE-In talks wih Fedrus to sell Building Prods Unit..........+0.5%
*VONOVIA-Q1 Pft 130.7m,FFO 218.2m(225),FY FFO 900-925m(830-850)...+2%
*ROCHE-Unveils new positive data for Esbrief in IPF...............U/C
*CARREFOUR-Files for IPO of Brazil Unit,will incl Atacadao........+0.5%
*ADP-In talks to sell 80% of Hub Safe to Groupe Samsic............+1%
*SUNRISE-In deal with group led by Cellnex,sells Swiss Towers.....+1.5%
*FREENET-Owns 24.5% of Sunrise Comm,read across from Cellnex......+0.5%
Shore
M&S - Fy revs 10.62(Est10.58).Ptp 613.8m(596m)Divi 18.7p.Home&Clothing-5.9%..+1%
BABCOCK - Fy adj ptp494.8m(Est456.71m).Fy divi 28.15p.Fy order book 19b.....+2%
KINGFISHER - grp sales -0.9% (cc),LfL -0.6%,B&Q sales -4.6%,Screwfix +20.3%..-1%
MEDICLINIC - FY in line,revs +30% £2.75bn,op.profit +26% £362m..............UNCH
IBSTOCK - sees encouraging trading momentum,FY expectations unchanged.......UNCH
LTON FOOD - trading inline,slower start to yr in Holland,strong bal sheet.UNCH
POLYPIPE - on track to meet FY expec,revs +6%,LfL +4.6%,margins in line.....UNCH
HOLLYWOOD BOWL - strong H1 performance,revs +7.9%,op.profit +18.5%..........+2%
WYNNSTAY - reported profits to be materially lower..........................-10%
BERENSDEN - rejects Elis proposal "significantly undervalues the company"...+1%
GREAT PORTLAND - NAV 799p portfolio valuation -4.9% rental decline 1.3%......-1%
WOOD GROUP - acquires CEC coontrols for USD44mill plus USD15mill deferred...UNCH
GLENCORE - agri arm makes informal offer for rival Bunge,mkt cap USD11.5bill.-4%
BRITVIC - 1H rev £756mill(est.543m),profit £68mill,int div 7.2p,+ve FLS......+2%
VENDANTA - Fy loss 8.2c/share,EBITDA USD3.2b,final div 55c,prod 190k boepd..+2%
DIXON CARPHONE - PBT guidence £485m-490m,rev +9%,like-4-like sales +4%.......+1%
PENNON - Fy pretax £250mill(est231m) revs slight miss,div 25p..............UNCH
RBC PRE-MKT INDICATIONS
*ANTOFAGATSA: -1% AGM comments, sees FY'17 end in balance or touch light.
*BABCOCK: +1% FY'17 adj profit before tax beats, dividend better.
*BERENDSEN: +2% statement defending position not to talk to ELIS.
*BRITVIC: +1% H1 revenues beat, FY'17 confident, John Daly new Chairman.
*BUNZL: 0% completes purchase of DDS.
*CELLNEX: 0% acquisition of SUNRISE TOWERS for €430M.
*DIXONS: +3% Q4'17 sales +6% v +1% consensus, FY LFL +9%, all regions growth.
*DONG ENERGY: -1% confirming sale of E&P oil business to INEOS for $1.05B.
*FIAT: -1% US Justice Department files lawsuit.
*GLENCORE: -1% said to make takeover approach to BUNGE (+16.6%).
*GPOR: +1% FY'17 EPRA net asset value per share 799p, strong performance.
*KGF: -3% Q1'17 LFL -0.6%, tough France (LFL -5.5%), not enough.
*MKS: -3% headline 3% PBT beat, but weaker sales, clothing LFL -5.9% v -4.4%.
*PENNON: +1% FY'17 group adj EBITDA 3% beat, no change in dividend policy.
*UBSG: 0% EXPANSION: buys AUTOVIA DEL CAMINO from DBK for €450M.
*WOOD GROUP: 0% acquisition of CEC CONTROLS for $44M.
*VONOVIA: +3% Q1'17 FFO +17%, FY'17 forecasts raised.
GENERALIST STAFFING: For this Ideas Engine report, we analysed 503 US occupations to gauge whether the market is accurately pricing the risk of automation for staffing companies. Our proprietary analysis suggests that 67% of temp occupations are at high risk of automation versus 50% for the broader economy. We believe these longer-term headwinds need to be factored into shorter-term valuations; as such, we downgrade Adecco and Randstad to UP (from OP), reducing our TP to SFr 63 (from SFr 75) and to €48 (from €60), respectively.
Dow +0.21% S&P +0.18% Nasdaq +0.08% Russell +0.28%
Equities finished higher for the fourth day in a row. ten of eleven sectors finished in positive territory with the financial group (+0.8%) leading the advance. On the downside, the consumer discretionary sector (-0.4%) settled at the bottom of the day's leaderboard. Retailers weighed on the sector, evidenced by the 1.7% decrease in the SPDR S&P Retail ETF (XRT 40.55, -0.76), after AutoZone (AZO 581.40, -78.09) and DSW (DSW 16.21, -1.44) missed earnings expectations. AZO also missed top-line estimates while DSW reported a 3.0% decrease in comparable store sales. The two companies settled lower by 11.8% and 8.2%, respectively. The remaining sectors--industrials (+0.2%), energy (+0.2%), materials (+0.2%), consumer staples (+0.1%), telecom services (+0.1%), and real estate (+0.1%)--finished roughly in line with the broader market. However, the energy sector's performance is worth pointing out in light of the White House's proposed budget, which calls for selling half of the United States' Strategic Petroleum Reserve (SPR). Initially, WTI crude faced some overnight selling pressure. However, the commodity was able to recover, ending the session 0.7% higher at $51.48/bbl. US After Hours TCS +39%, TLYS +18%, INTU +9%, VSAT +5% higher and ANW -19%, OOMA -15% lower on earnings/guidance.Asian indices traded mixed in the wake of 4th consecutive session of gains on Wall St, where rising Treasury yields helped Financials lead the broader index. Mainland China is underperforming following a surprise sovereign rate cut by Moody's - the first since 1989: "China's financial strength will erode over the coming years, with economy-wide debt continuing to rise as potential growth slows", China CDS rose about 3bps in the wake of the downgrade.
Nikkei +0.52% Hang Seng -0.12% CSI -0.63% Shanghai -0.83%
Eur$ 1.1179 CNH 6.8833 CNY 6.8923 JPY 112 GBP 1.2971 CHF 0.9765 RUB$ 56.4260 WTI $51.61 +0.27%
S&P -0.06% EuroStoxx -0.03% Dax -0.08% SMI +0.13% FTSE -0.07%
Macro :
- China Cut to A1 From Aa3 by Moody’s, Outlook to Stable
- WTI Rises to One-Month High; OPEC May Extend Cuts
- Deutsche Boerse Changes Composition of Stoxx Europe 600 Index ( Changes to take effect at market opening June 19)
- Philips Lighting, BioMerieux, Loomis B, and Convatec will be added
- Ocado, Drax, Mediaset, Fingerprint Cards ’B’ leave index
Keep an eye on :
- ADP FP : ADP in Exclusive Talks to Sell 80% of Hub Safe to Samsic
- ATC NA : Altice to Drop Use of SFR Brand, Les Echos Says
- BCP PL : BCP Sold EU1b of Covered Bonds to EU Institutional Investors
- BF/B US : Constellation Brands Said to Offer to Buy Brown-Forman: CNBC
- CAI AV : CA Immo Confirms FY FFO I Target of More Than EU100 Million
- DENERG DC : Dong Energy Sells Oil Business to Ineos for at Least $1.05b
- EUCAR FP : Europcar Buys German Car Rental Co. Buchbinder
- FCA IM : Fiat Chrysler Reviewing U.S. Lawsuit, Vows Vigorous Defense
- GLEN LN : Glencore Confirms It Has Made an Informal Approach to Bunge (Yesterday Night)
- GLEN LN : Glencore, Bunge Talks Focus on Ties Rather Than Sale: Reuters
- GLEN LN : Bunge Says Not in Combination Talks With Glencore (this morning)
- IHG LN : Lone Star Seeks Sale of 42 Hotels For More Than GBP1b: Times
- KCR FH : Terex Completes 7m Konecranes Shrs Sale at EU37.40/Placing Shr
- NVDA US : SoftBank Said to Amass $4 Billion Stake in Nvidia
- PHM SM : Sandra Ortega Raises Pharma Mar Stake to 5.01%: Expansion
- CFR VX : Richemont to Move Couvet Cartier Staff to Other Sites: Le Temps
- ROG VX : Roche Unveils New Positive Data for Esbriet in IPF
- RDSA NA : Shell May Sell 8.8% Stake in Canadian Natural Resources:Reuters
- UBSG VX : UBS Buys Spain Autovia Del Camino From Deutsche Bank: Expansion
>>> Up
*Arcadis Raised to Buy at Kepler Cheuvreux, PT EU17
*Amec Raised to Outperform at Macquarie, PT 725p
*Autoliv Raised to Overweight at Morgan Stanley, PT $120
*EasyJet Raised to Add at AlphaValue
*Highland Gold Raised to Buy at VTB Capital, PT 200p
*Kone Raised to Equal-weight at Barclays
*National Express Raised to Overweight at JPMorgan, PT 404p
*Natixis Raised to Reduce at AlphaValue
*Scor Raised to Overweight at JPMorgan, PT EU39
*Sevan Marine Raised to Hold at DNB Markets, PT NOK14
*Swedbank Raised to Neutral at MedioBanca, PT SEK246
*Vilmorin Raised to Buy at Natixis
*Wood Group Raised to Outperform at Macquarie, PT 965p
>>> Down
*Adecco Cut to Underperform at Credit Suisse
*Danone Cut to Reduce at Oddo & Cie, PT EU60
*Deutsche Telekom Cut to Hold at Kepler Cheuvreux, PT EU19
*Go-Ahead Cut to Neutral at JPMorgan, PT 1,852p
*Hella Cut to Equal-weight at Morgan Stanley, PT EU41
*Homeserve Cut to Neutral at Citi, PT 795p
*Homeserve Cut to Sector Perform at RBC, PT 750p
*Liberty Global Cut to Neutral at Credit Suisse
*Randstad Cut to Underperform at Credit Suisse
*Shaftesbury Cut to Hold at Liberum
*TalkTalk Cut to Sell at Goldman, PT 150p
*Telekom Austria Cut to Reduce at Kepler Cheuvreux, PT EU6
*TFI IM Cut to Underperform at MedioBanca
*UCB Cut to Hold at HSBC, PT EU64
*UCB Cut to Add at AlphaValue
*UDG Cut to Hold at Jefferies, PT 785p
*Wheeler Real Estate Cut to Market Perform at JMP
>>> Initiation
*AMS New Equal-weight at Morgan Stanley, PT CHF60
*Bertrandt Resumed Sell at Bankhaus Lampe, PT EU74
*Cosmo New Outperform at Credit Suisse, PT CHF200
*Lysogene New Buy at SocGen, PT EU7
China’s sovereign debt downgraded by Moody’s
Beijing condemns rating agency decision that could damp foreign appetite for bonds
China’s finance ministry chastised Moody’s on Wednesday after the US rating agency downgraded Beijing’s sovereign credit rating, highlighting investor concerns over rising debt and the slow pace of economic reforms intended to transform the country’s growth model.
“Moody’s has overestimated the difficulties faced by China’s economy and underestimated the government’s ability to deepen reforms,” the ministry said in response to the downgrade, which initially rattled China’s stock markets and currency.
Moody’s downgraded China one notch from Aa3 to A1, its fourth-highest rating. On the credit scale used by rival agencies Fitch Ratings and Standard and Poor’s, the move is equivalent to a downgrade from double A minus to A plus. S&P still rates China at double A minus although with a negative outlook, while Fitch already had China at A plus.
“The downgrade reflects Moody’s expectation that China’s financial strength will erode somewhat over the coming years, with economy-wide debt continuing to rise as potential growth slows,” Marie Diron, the agency’s associate managing director for sovereign risk, wrote in an announcement on Wednesday.
“While ongoing progress on reforms is likely to transform the economy and financial system over time, it is not likely to prevent a further material rise in economy-wide debt, and the consequent increase in contingent liabilities for the government.”
The news initially unnerved Chinese investors. The yield on benchmark Chinese five-year government bonds spiked from 3.80 per cent to 3.95 per cent in the minutes following the announcement but had returned to the previous level by midday, according to the National Interbank Funding Center.
Domestic investors generally ignore foreign ratings of Chinese bonds. Meanwhile, foreign penetration of China’s bond market remains tiny, with foreigners owning about Rmb424bn ($61.5bn) of Chinese government bonds at the end of April, equal to 4 per cent of the outstanding total, according to China Central Depository and Clearing.
Moody’s shifted its ratings outlook for China to negative in March last year, with S&P following suit four weeks later. Fitch — which has generally been more bearish on China than its counterparts — has maintained its A plus ratings with stable outlook since 2007.
While Moody’s acknowledged China’s efforts to rebalance its economy away from reliance on debt-fuelled stimulus, the agency believes progress is too slow to arrest deterioration in its financial strength.
“The planned reform programme is likely to slow, but not prevent, the rise in leverage,” the agency said. “The importance the authorities attach to maintaining robust growth will result in sustained policy stimulus. Such stimulus will contribute to rising debt across the economy as a whole.”
Luke Spajic, who heads Pimco’s emerging Asia portfolio, said the risks highlighted by Moody’s had already been “well flagged” by the market. “Markets have been anxious about policy tightening and the upcoming political changes,” Mr Spajic said, referring to a Chinese Communist party congress that will select President Xi Jinping’s leadership team for his second term in office.
The Moody’s statement also noted that capital outflows and renminbi depreciation pressures had limited China’s scope for using monetary policy to stimulate the economy. It said this limitation would force authorities to rely more on fiscal spending.
Moody’s expects China’s direct fiscal debt to reach 40 per cent of gross domestic product by the end of next year and 45 per cent by 2020, in line with a median debt level of 41 per cent in 2016 for A rated sovereigns but above the 37 per cent median for those with double A ratings.
In addition, it notes that China’s reliance on disguised fiscal spending through off-budget special purpose vehicles owned by local governments is likely to persist. The Financial Times reported this month on a confidential World Bank assessment warning of risks from so-called local government financing vehicles.
Moody’s also referred to quasi-fiscal spending by other state-owned enterprises, which the agency views as contingent liabilities for the central government.
The agency mentioned slow progress on financial reforms designed to improve credit pricing and allocation, citing distortions caused by widespread assumptions that the government will bail out certain borrowers to prevent default.
“The ratings downgrade is a stark warning of the risks posed by rapidly rising leverage that could prove costly even if it does not result in a financial crisis,” said Eswar Prasad, economics professor at Cornell University and former head of the International Monetary Fund’s China division. “The slow and uneven pace of banking and broader financial sector reforms suggests that little progress has been made in improving the quality of bank lending.”
Asia Mid-Session Market Update: Moody's cuts China sovereign rating for the first time since 1989
***US Session Highlights***
- (US) Fed’s Kashkari (dove, voter): it's hard to believe there would be a spike in inflation; hard to see 3% growth in US given demographics
- (US) MAY PRELIMINARY MARKIT MANUFACTURING PMI: 52.5 V 53.0E
- (US) APR NEW HOME SALES: 569K V 610KE
- (US) MAY RICHMOND FED MANUFACTURING INDEX: +1 V 15E (lowest since Sep 2016); new orders 0 v 23 prior
- Investors digested Trump's budget plan, which calls for large cuts to Medicaid and social services, with major indices making small gains for the day. Markets were unperturbed after weak US data and a heinous terrorist attack in the UK overnight. Fixed income fell out of favor again, as investors regained interest in risk; 10-year Notes yield rising 3bps on the day. In the S&P, Financials was the best performing sector, up 0.8%, with Consumer Discretionary the only losing sector, down 0.4%
***US markets on close: Dow +0.2%, S&P500 +0.2%, Nasdaq +0.1%***
- Best Sector in S&P500: Financials
- Worst Sector in S&P500: Consumer Discretionary
- Biggest gainers: A +4.6%; ADM +3.7%; NUE +3.3%
- Biggest losers: AZO -11.8%; ALXN -9.3%; BRO -6.2%
- At the close: VIX 10.7 (-0.2pts); Treasuries: 2-yr 1.32% (+4bps), 10-yr 2.28% (+3bps), 30-yr 2.95% (+3bps)
***US movers afterhours***
- TCS: Reports Q4 $0.17 v $0.10e, R$221M v $214Me; Guides initial FY17 $0.25-0.35* v $0.25e, R$830-850M v $837Me, SSS down low single digits; +40.9% afterhours
- TLYS: Reports Q1 -$0.01 v -$0.10e, R$120.9M v $114Me; Guides Q2 $0.07 to $0.03 v $0.02e; SSS "flat to up low single digits"; +16.6% afterhours
- INTU: Reports Q3 $3.90 v $3.87e, R$2.54B v $2.50Be; Guides Q3 $0.16-0.18 v $0.15e, R$795-815M v $772Me; +9.1% afterhours
- BG: Issues statement: Not in talks on combination with Glencore; -3.4% afterhours
- STNG: To merge with Navig8 Product Tankers Inc., will pay $42.2M cash consideration; -4.8% afterhours
- ANW: Reports Q1 $0.03 v $0.36e, R$1.5B v $1.16Be; EBITDA $27.1M v $21.9M y/y; -18.1% afterhours
***Key economic data***
- (NZ) NEW ZEALAND APR TRADE BALANCE (NZD): 578M V 267ME (2nd straight trade surplus); 12-MONTH YTD: -3.48B V -3.8BE
- (AU) AUSTRALIA Q1 CONSTRUCTION WORK DONE Q/Q: -0.7% V -0.5%E
- (AU) AUSTRALIA APR SKILLED VACANCIES M/M: +0.1% V -0.6% PRIOR
***Asia Session Notable Observations, Speakers and Press***
- Asian indices traded mixed in the wake of 4th consecutive session of gains on Wall St, where rising Treasury yields helped Financials lead the broader index despite confirmation that the overnight explosion in Manchester was in fact a terror act. Mainland China is underperforming following a surprise sovereign rate cut by Moody's - the first since 1989. The rating agency noted that "China's financial strength will erode over the coming years, with economy-wide debt continuing to rise as potential growth slows", though the "stable outlook reflects our assessment that, at the A1 rating level, risks are balanced." Moody's also forecast leverage across the China economy to increase in coming years and reform to slow, as sustained policy stimulus will lead to higher debt. China Finance Ministry responded that the assessment overestimated economic difficulties and underestimates ability to deepen supply side reform, maintaining that debt levels will be reasonable and govt reform will help curb local debt risks.
- China CDS rose about 3bps in the wake of the downgrade and AUD/USD fell some 40pips below 0.7450, though the spillover was contained to only marginal declines in US equity futures and a slight ripple in the risk-gauge USD/JPY pair. FX majors were otherwise fairly rangebound going into tomorrow's FOMC policy meeting minutes where investors will look for more clues about the Fed's intended policy mix, including anticipated balance sheet reduction later this year.
- In other notable economic data, New Zealand Apr trade balance registered its 2nd straight month of surplus, with Exports volume at a 2-year high of 4.75B v 4.4Be. Shipments to China also rose over 20% y/y, helping NZD/USD to session highs above 0.7020. Modest upward momentum in NZD was helped by earlier release of Fonterra milk price forecast hike speculated to result in sooner RBNZ tightening than currently expected.
China
- (CN) China will further open its economy to foreign investors, through measures such as allowing investment in more industries, such as services - Chine media
- (CN) China margin trading is at a 3-month low and 60% lower than the peak 2 years ago - Chinese press
- (CN) MSCI notes there are still over 100 stocks suspended in China
Japan
- (JP) BOJ Gov Kuroda: Many people agree the natural interest rate has fallen in recent years, leading to unconventional monetary policy - press
- (JP) Japan PM Abe planning to hold talks with US Pres Trump at upcoming G7 summit - press
- (JP) Japan Upper House approves government’s two nominees for BoJ board; Vote to move to lower house
Australia/New Zealand
- (NZ) Fonterra Raises 2016/17 farmgate milk price to NZ$6.15/kg; Affirms FY17 EPS NZ$0.45-0.55
- (NZ) Fonterra's increase of price forecasts today may lead RBNZ to hike rates sooner than expected - NZ Press
Korea
- (KR) According to one survey, analysts are unanimous in expectation for Bank of Korea (BOK) to hold rates unchanged this month - Korean press
- (KR) South Korea govt to submit extra budget to Parliament in June - Korean press
***Asian Equity Indices/Futures (00:30ET)***
- Nikkei +0.5%, Hang Seng -0.2%, Shanghai Composite -0.4%, ASX200 -0.1%, Kospi +0.2%
- Equity Futures: S&P500 -0.1%; Nasdaq -0.1%, Dax -0.1%, FTSE100 -0.2%
***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.1175-1.1190; JPY 111.75-112.00; AUD 0.7440-0.7480; NZD 0.6990-0.7020
- June Gold -0.3% at 1,252/oz; July Crude Oil flat at $51.47/brl; July Copper -1.2% at $2.57/lb
- SPDR Gold Trust ETF daily holdings fall 5.0 tonnes to at 847.5 tonnes; lowest since Apr 12th
- (US) Weekly API Oil Inventories: Crude: -1.5M v +0.9M prior
- (CN) Dalian iron ore down over 5% in early trade
- (CN) PBOC to inject combined CNY90B v CNY140B prior
- (CN) PBOC SETS YUAN MID POINT AT 6.8758 V 6.8661 PRIOR; 1st weaker fix in 3 sessions
- (AU) Australia MoF (AOFM) sells A$800M v A$800M indicated in 2.75% 2027 bonds; avg yield 2.545% v 2.515% prior; bid-to-cover 3.04x v 3.24x prior
***Asia equities notable movers***
Australia
- Iluka (ILU) +6.1%; Increases Zircon Reference price
- Worleyparsons (WOR) +3.6%; investor day comments
- Programmed Maintenance Services (PRG) +2.3%; Reports FY17
Japan
- Toshiba (6502) +8.0%; Western Digital said to have proposed ¥2T offer for chip unit as part of partnership with INCJ and DBJ
- Nippon Express (9062) +1.6%; Working with Amazon to launch a logistics service allowing small and mid-size businesses to send exports to the US - Nikkei
- Park 24 (4666) -2.4%; May report H1 op profit ¥9B, -10% y/y (prior forecast +1% y/y) - Nikkei
Hong Kong
- Worldgate Global Logistics (8292) +4.0%; Share buyback
- Sustainable Forest Holding (0732) +3.2%; Guides Q1
- Hilong Holding (1623) -4.5%; Pakistan contract
After Hours Summary: TCS +39%, TLYS +18%, INTU +9%, VSAT +5% higher and ANW -19%, OOMA -15% lower on earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: TCS +38.6%, TLYS +17.9%, INTU +8.6%, VSAT +5.4%
Companies trading higher in after hours in reaction to news: SPHS +8.7% (received the regulatory clearance topsalysin for the treatment of patients with urological diseases; clinical sites can now begin dosing eligible patients in a Phase 2b study in localized prostate cancer), GLYC +8.1% (continued strength -- offering pricing expected tonight), UNXL +7.9% (confirmed management and directors acquire shares in the open market), IMGN +4% (sells its IMGN529/DEBIO 1562, a clinical-stage anti-CD37 ADC for the treatment of patients with B-cell malignancies), AXAS +1.6% (to acquire 2,008 net acres and 33 Boepd in Texas prospective for the Wolfcamp/Bone Spring for $22.2 million), AEO +0.6% (maintains $0.125 quarterly dividend)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: ANW -18.6%, OOMA -15.4%
Companies trading lower in after hours in reaction to news: NBIX -8.5% (announces that the initial Phase II Tourette syndrome T-Force GREEN study of INGREZZA did not meet its primary endpoint), SNDX -5.9% (to offer and sell $50 million of its common stock in an underwritten public offering, XGTI -5.7% (entered into a purchase agreement and a registration rights agreement with Lincoln Park Capital Fund), STNG -4.8% (Scorpio Tankers announces merger agreement with Navig8 Product Tankers and the launch of a concurrent public offering of common shares), BG -3.3% (Bunge is modestly pulling back on reports that Glencore is discussing partnership), UHS -3% (seeing continued weakness on reports of expanded probe), ALNY -1.7% (commences underwritten public offering of 5 mln shares of its common stock), HMNY -1.6% (modest pullback), TREE -1.3% (commences $200 mln private placement of convertible senior notes due 2022), ESRX -0.6% (announced that Christopher A. McGinnis, the principal accounting officer and Controller, will be leaving the Company on June 9, 2017 to pursue another opportunity), ABT -0.4% (Abbott-Thoratec recalls HeartMate II LVAS Pocket System Controller due to risk of patient injury and/or death during backup controller exchange; devices recalled in the U.S. 28,882)
Several utility/electric names are lower following PJM auction update: DYN -4.2%, CPN -1.8%, EXC -0.5%