>>> What to look at today - 29th of November 2016

Dow -0.28% S&P -0.53% Nasdaq -0.56% Russell -1.35%
US Market closed lower. Best Sector utillities Worst Financials. Investors stayed cautious as volatility from oil ans europe cautious mood ahead of Italian referendum. Crude oil began the day on a modestly lower note as investors reassessed the likelihood of an OPEC supply cap agreement. Saudi Arabia made headlines last week by opting out of a meeting between OPEC and non-OPEC members. The move cast doubts on the country's willingness to agree to joint supply measures. However, carryover selling interest faded when Iraq indicated that it was willing to cooperate with its fellow producers. WTI crude ended the day higher by 2.5% ($47.11/bbl; +$1.15) after sinking 3.2% in the prior session. The oil collective is scheduled to meet in an official capacity on Wednesday. seven sectors ending in negative territory. The financial (-1.4%), energy (-1.3%), and health care (-0.9%) spaces outpaced today's losses in the broader market while rate-sensitive utilities (+2.0%), telecom services (+0.8%), and real estate (+0.2%) gained amid declining market rates. US After Hours THO +10%, VNET +5%, ZTO +3%, UNH +2% higher following earnings/guidance... SCVL -12% following earnings/guidance, NVLS -54% on Ph 2 update, several names lower following secondary offering news. Asian Markets appear to be in the holding pattern going into major risk events this week, namely the OPEC meeting on Wed, jobs data on Friday, and Italian referendum on Sunday. Currencies were in narrow ranges and metals off their highs on profit taking. Saudi Arabia offering Iran freeze at 3.7MBD v 3.97MBD requested by Iran; both delegates have made proposals at OPEC meeting. Japan Eco data slightly better, Household spending y/y decline was at the lowest rate in 6 months, while sequential Retail Sales growth hit a 2-year high.

Nikkei -0.27% Hang Seng -0.23% CSI +0.79% Shanghai +0.21%

Eur$ 1.0603 CNH 6.9148 CNY 6.8920 JPY 112.12 GBP 1.2410 CHF 1.0136 RUB 64.9303

S&P Unch EuroStoxx +0.10% FTSE -0.08% Dax-0.10% SMI Unch


Macro :
- SocGen Sees $27b of Equities to Sell for Month-End Rebalancing
- French, German Bank Lobbies Warn of Basel IV ‘Adverse Effects’
- Draghi Says ABS Can Make Positive Contribution to Credit Growth
- Money Has Moved Back to U.S. After Trump’s Win, Mobius Says, Next Global Crisis Will Be Caused by Central Banks’ Actions: Mobius
- Higher U.S. Yields Lead to Tightening of Finl Conditions: Choy

Keep an eye on :
- AIR FP : Airbus Safran Launchers, Dassault Systemes to Develop Ariane 6
- ATLN VX : Actelion Weighs Combination With Parts of J&J: FT http://on.ft.com/2fu4XS9
- BT/A LN : BT Said to Choose Mike McTighe as Openreach Chairman: Sky
- DAI GY : Daimler Trucks Chief Sees EU400m Extra Cost Cuts : HB
- DENERG DC : Maersk, Dong Seen Advised by BAC, JPM on Potential Merger: Rtrs
- EDF FP : French Regulated Gas Prices to Rise 2.62% Ex Taxes in Dec: AFP
- EDP PL : EDP Signs PPA to Sell Energy Produced by Meadow Lake Wind Farm
- ENGI FP : French Regulated Gas Prices to Rise 2.62% Ex Taxes in Dec: AFP
- EVK GY : Evonik Will Acquire Technology From Metex
- GLPG NA : Galapagos Says $10m Milestone Payment Triggered From AbbVie
- IMG LN : Alibaba, Tencent Said Interested in Imagina Stake: Confidencial
- MC FP : Going Ex Div today €1.40
- POS AV : Porr 3Q Net Rises 10% to EU13.3m; Sees Full-Year Earnings Rising
- RSDA NA : Shell Said to Consider Sale of Iraq Oil Assets: Reuters
- RWE GY : RWE CEO Sees Decision on Reinstating Dividend in Spring: WAZ
- SPI AV : S Immo 9M Net Jumps to EU118.6m After Sale of Berlin Properties
- SAF FP : Airbus Safran Launchers, Dassault Systemes to Develop Ariane 6
- OO5930 KS : Samsung Plans Dividend Increase, Buyback; Reviewing Holding Co.
- GLE FP : SocGen Won’t Give ‘Collective, Permanent’ Pay Rise: Les Echos
- STL NO : Statoil CFO Still Sees Oil Market Rebalancing in 2017
- TSLA US : SEC Criticized Tesla Over ‘Tailored’ Accounting: WSJ
- TKA GY : Tata Steel, Thyssenkrupp May Cut Port Talbot Capacity: Reuters
- TIME US : Bronfman, Kreiz Offered $18-$20/Share for Time Inc.: Letter
- UBSG VX : UBS Reduces Equities Exposure on Higher Bond Yields, Strong USD
- UCG IM : UniCredit Invited 9 Banks to Manage EU13b Recap: Messaggero
- VOW3 GY : VW Extends Bridge Financing Until June 2017 Amid Scandal Costs

>>> Europe : Brokers Upgrades & Downgrades - 29th of November 20

>>> Up
*Aker BP Raised to Buy at Deutsche Bank, PT NOK160
*Assa Abloy Raised to Outperform at Exane, PT SEK185
*Essilor Raised to Buy at SocGen, PT EU115
*Eurocommercial Properties Raised to Neutral at UBS, PT EU35
*Italgas Raised to Buy at Goldman, PT EU4.20
*Kinnevik Raised to Neutral at UBS, PT SEK220
*LafargeHolcim Raised to Buy at AlphaValue
*L'Oreal Raised to Sector Perform at RBC, PT EU159
*Nordex Raised to Buy at HSBC, PT EU25
*Sanofi Raised to Overweight at Morgan Stanley, PT EU91

>>> Down
*Ahold Cut to Underperform at Macquarie, PT EU17
*Alstom Cut to Underperform at Exane, PT EU24
*Atlas Copco Cut to Underperform at Exane, PT SEK265
*BW Offshore Cut to Hold at SocGen, PT NOK0.42
*Cafom Cut to Accumulate at Euroland Corporate, PT EU10.10
*CTS Eventim AG & Co Cut to Hold at Bankhaus Lampe
*Delphi Automotive Cut to Underweight at Morgan Stanley, PT $59
*Enagas Cut to Neutral at Goldman, PT EU27
*Hays Cut to Underweight at Morgan Stanley, PT 145p
*Indivior Cut to Equal-Weight at Morgan Stanley, PT 385p
*Lufthansa Cut to Reduce at Kepler Cheuvreux, PT EU9.50
*National Grid Rated New Sell at Goldman, PT 854p
*Nostrum Oil & Gas Cut to Neutral at Credit Suisse
*Pagegroup Cut to Equal-Weight at Morgan Stanley, PT 400p
*Red Electrica Cut to Neutral at Goldman, PT EU19
*Sandvik Cut to Neutral at Exane, PT SEK110
*Snam Cut to Neutral at Goldman, PT EU4
*UCB Cut to Equal-Weight at Morgan Stanley, PT EU72

>>> PT Change


>>> Initiation
*Air Liquide Rated New Buy at HSBC, PT EU115
*Air Products Rated New Hold at HSBC, PT $140
*Autoliv Rated New Buy at Jefferies, PT $112
*Barclays Rated New Outperform at Credit Suisse, PT 260p
*Continental Rated New Buy at Jefferies, PT EU190
*Faurecia Rated New Buy at Jefferies, PT EU37
*Gamesa Resumed Buy at HSBC, PT EU24
*Goodyear Rated New Buy at Jefferies, PT $36.50
*HELLA Rated New Hold at Jefferies, PT EU37
*HSBC Rated New Neutral at Credit Suisse, PT 600p
*H&M Rated New Neutral at Bryan Garnier, PT SEK295
*Inditex Rated New Buy at Bryan Garnier, PT EU38
*Italgas Rated New Buy at HSBC, PT EU3.90
*Linde Rated New Hold at HSBC, PT EU158
*Lloyds Rated New Neutral at Credit Suisse, PT 65p
*Nokian Renkaat Rated New Hold at Jefferies, PT EU34
*Praxair Rated New Hold at HSBC, PT $113
*RBS Rated New Underperform at Credit Suisse, PT 180p
*Schaeffler Rated New Hold at Jefferies, PT EU13.50
*Standard Chartered Rated New Underperform at Credit Suisse

>>> Call

>>> Asian Update

Asia Mid-Session Market Update: Japan consumption on the mend as Household Spending and Retail Sales data top forecasts

***US Session Highlights***
- (US) NOV DALLAS FED MANUFACTURING ACTIVITY: 10.2 V 1.5E (first positive reading in 23 months)
- (RU) Kremlin spokesperson: Russia Pres Putin and Iranian President Rouhani agree to coordinate actions on hydrocarbons markets - press
- IBM: Pre-holiday online shopping was up +10% y/y; sees double-digit online sales growth on Cyber Monday
- Gold miners bounce along with prices; Post-election favorites see profit-taking

***US markets on close: Dow -0.3%, S&P500 -0.5%, Nasdaq -0.6%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Financials
- Biggest gainers: CTSH +7.0%, NRG +5.5%, NEM +4.8%, PEG +3.3%, ED +2.8%
- Biggest losers: HRB -9.0%, VMC -5.7%, PXD -4.9%, MRO -4.6%, MLM -4.0%
- At the close: VIX 13.2 (+0.8pts); Treasuries: 2-yr 1.10% (-1bp), 10-yr 2.32% (-5bp), 30-yr 2.98% (-4bp)

***US movers afterhours***
- TIVO: Netflix and TiVo enter into intellectual property agreements, which will allow both companies to deliver better experience to their customers; +9.6% afterhours
- THO: Reports Q1 $1.49 v $1.23e, R$1.71B v $1.52Be; +8.7% afterhours
- UNH: Guides initial FY17 $9.30-9.60 v $9.13e, R$197-199B v $197.5Be; +2.2% afterhours
- BOJA: Announces secondary of 6M shares (16.4% of shares outstanding); -7.1% afterhours
- SCVL: Reports Q3 $0.54 v $0.54e R$274.5M v $276M: Cuts FY16 $1.46 - $1.51 v $1.59e; -13.5% afterhours
- NVLS: Cavosonstat Phase 2 clinical trial results for treatment of Cystic Fibrosis failed to meet primary endpoint; -53.0% afterhours

***Asia Session Notable Observations, Speakers and Press***
- Markets appear to be in the holding pattern going into major risk events this week, namely the OPEC meeting on Wed, jobs data on Friday, and Italian referendum on Sunday. Currencies were in narrow ranges and metals off their highs on profit taking.
- Oil prices tracked lower in electronic trade in the wake of late US-hours reports that OPEC experts did not reach an output deal at their working meeting on Monday before the formal Wednesday summit. Subsequent reports in Asia suggest Saudi Arabia has offered Iran a freeze at 3.7MBD, below 3.97MBD requested by Tehran as it recovers from western sanctions.
- Economic data calendar focused on Japan, where the domestic component of the economic picture has brightened. Household spending y/y decline was at the lowest rate in 6 months, while sequential Retail Sales growth hit a 2-year high. Recall the private consumption part of Japan economy in Q3 was a paltry 0.1%.

Energy:
- (SA) Saudi Arabia offering Iran freeze at 3.7MBD v 3.97MBD requested by Iran; both delegates have made proposals at OPEC meeting

China:
- (CN) China State Administration of Foreign Exchange (SAFE): To pause outbound deals with $50M+ remaining FX quota; asked banks to report capital account trades of $5.0M+
- (CN) PBoC said to request some local banks to cap home mortgage loans - financial press
- (CN) PBoC Deputy Gov Yi Gang: Capital that has flown from China will return in the future citing abundant FX reserves and strong business environment - Chinese press

Japan
- (JP) Japan Iron and Steel Federation Chairman Kosei Shindo: Steel demand and production is recovering
- (JP) Japan considering tax breaks for home improvements - Nikkei

Australia:
- (AU) Macquarie: S&P/ASX200 to rise 7.5% in 2017 to reach 5,875

***Asia Key economic data:***
- (JP) JAPAN OCT RETAIL SALES M/M: 2.5% (2-year high) V 1.1%E; RETAIL TRADE Y/Y: -0.1% (smallest decline in 8 months) V -1.6%E
- (JP) JAPAN OCT OVERALL HOUSEHOLD SPENDING Y/Y: -0.4% V -1.0%E (8th consecutive decline, smallest decline in 6 months)
- (JP) JAPAN OCT JOBLESS RATE: 3.0% V 3.0%E; Job to applicant: 1.40 v 1.39e; multi-year high
- (AU) AUSTRALIA OCT HIA NEW HOME SALES M/M: -8.5% V 2.7% PRIOR

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.4%, Hang Seng flat, Shanghai Composite +0.6%, ASX200 flat, Kospi -0.2%
- Equity Futures: S&P e-mini -0.1%, Dax flat, FTSE100 +0.2%

***FX ranges/Commodities/Fixed Income (00:00ET):***
- EUR 1.0590-1.0620; JPY 111.60-112.25; AUD 0.7460-0.7500; NZD 0.7065-0.7085
- Dec Gold flat at 1,190/oz; Jan Crude Oil -0.7% at $46.75/brl; Mar Copper -1.4% at $2.62lb
- JGB: (JP) Japan MoF sells ¥2.08T in 2-yr 0.1% JGBs; Avg yield: -0.156% v -0.237% prior; bid to cover: 4.27x v 4.41x prior
- (KR) South Korea Central Bank sells 30-yr bond; Yield: 2.205% v 1.805% prior
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8889 V 6.9042 PRIOR (2nd consecutive firmer setting; Strongest fix in a week)

Notable movers by sector:
- Consumer discretionary: Tingyi Cayman Islands Holding Corp 322.HK -2.7% (Q3 result); Samsonite 1910.HK +2.7% (Q3 result)
- Financials: Tower TWR.AU -3.6% (FY16 result)
- Industrials: Bridgestone Corp 5108.JP -0.5% (Deutsche Bank cuts to hold); SMC Corp 6273.JP +0.7% (Jefferies raise to buy); Furukawa Electric Co 5801.JP +3.4% (Nomura raises to buy)
- Technology: Ourgame International 6899.HK +0.9% (Q3 result); Samsung Electronics 005930.KR +0.1% (to raise dividend)
- Materials: Pact Group Holdings PGH.AU +5.4% (UBS raises to neutral); ALS ALQ.AU -6.6% (H1 result)
- Energy: Horizon Oil HZN.AU +2.6% (guidance)
- Healthcare: Estia Health EHE.AU -6.7% (liquidity issues); Mayne Pharma MYX.AU -1.7% (Oct result)
- Telecom: Vocus Communications VOC.AU -24.3% (guidance)
- Utilities: Yaskawa Electric 6506.JP -2.1% (Jefferies cuts to underperform)

>>> US After Hours Summary: THO +10%, VNET +5%, ZTO +3%, UNH +2% highe

After Hours Summary: THO +10%, VNET +5%, ZTO +3%, UNH +2% higher following earnings/guidance... SCVL -12% following earnings/guidance, NVLS -54% on Ph 2 update, several names lower following secondary offering news

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: THO +9.8%, VNET +4.7%, ZTO +2.8%, UNH +2.2%

Companies trading higher in after hours in reaction to news: TIVO +6% (TiVo and Netflix enter into product and intellectual property agreements), RMAX +1.4% (light volume; acquires the Master Franchise for the Georgia, Kentucky/Tennessee, and Southern Ohio Regions; terms not disclosed), QSR +1.2% (higher on light volume after long position discussed by Aaron Cowen of Suvretta Capital Management at the Robin Hood Investors Conference)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SCVL -12.1%

Companies trading lower in after hours in reaction to news: NVLS -53.6% (Phase 2 trial evaluating efficacy and safety of two doses of cavosonstat failed to demonstrate benefit in absolute change in percent predicted FEV1 or in sweat chloride reduction at 12 weeks), FOLD -27.3% (announces U.S. regulatory pathway for Migalastat for Fabry Disease; acknowledge the FDA's position that accelerated approval based on kidney GL-3 reduction is not currently an option), GLBS -10.2% (after stock doubled today), COTV -4.3% (commences 10 mln common stock offering by selling stockholders), BOJA -4.1% (announces a 6 mln share underwritten public offering of common stock by selling shareholders), FDUS -3.9% (commences registered public offering of 2.5 mln shares of common stock through an underwritten public offering), TCBI -3.6% (announces an underwritten public offering of 3.0 mln shares of common stock), BIP -3.2% (light volume; Brookfield Infrastructure announces $750 million equity offering), CHKE -2.5% (launches public offering of shares of its common stock, announces preliminary Q3 financial results, gives FY17 & FY18 guidance; to acquire Hi-Tec Sports International Holdings B.V. for approx. $95.8 mln in a share purchase agreement), SITE -2.5% (ticking lower; commences 8 mln common stock offering by selling stockholders Clayton, Dubilier & Rice, and Deere)

>>> US Dow -0.28% S&P -0.53% Nasdaq -0.56% Russell -1.35%

Closing Market Summary: Stocks Pull Back After Post-Election Run

The stock market began the week on a lower note as the major averages consolidated after their post-election run. The Nasdaq Composite (-0.6%) settled slightly behind the S&P 500 (-0.5%). The domestically-oriented Russell 2000 (-1.3%), however, snapped a 15 session win streak.

Participants favored a cautious approach at the start of the week as volatility from the oil pit and concerns out of Europe kept risk appetite in check. This also encouraged some profit-taking activity as investors assessed whether the broader market has risen too far, too fast. The benchmark index has gained 3.6% so far this month while the Russell 2000 has surged 11.6% over that time. 

Crude oil began the day on a modestly lower note as investors reassessed the likelihood of an OPEC supply cap agreement. Saudi Arabia made headlines last week by opting out of a meeting between OPEC and non-OPEC members. The move cast doubts on the country's willingness to agree to joint supply measures. However, carryover selling interest faded when Iraq indicated that it was willing to cooperate with its fellow producers. WTI crude ended the day higher by 2.5% ($47.11/bbl; +$1.15) after sinking 3.2% in the prior session. The oil collective is scheduled to meet in an official capacity on Wednesday.

Developments in Italy were also in focus as investors eyed a downturn in the country's banking names. Banca Monte dei Paschi di Siena tumbled 13.8% after the bank initiated a debt-for-equity swap and stated that it could face up to EUR8 billion in fines. The name also saw pressure ahead of the country's constitutional referendum. Italian citizens will vote on December 4 on whether the powers of the Senate should be reduced. Prime Minister Matteo Renzi stated that if the referendum should fail, he will resign. 

The benchmark index finished near its session low with seven sectors ending in negative territory. The financial (-1.4%), energy (-1.3%), and health care (-0.9%) spaces outpaced today's losses in the broader market while rate-sensitive utilities (+2.0%), telecom services (+0.8%), and real estate (+0.2%) gained amid declining market rates.

The heavily-weighted financial sector (-1.4%) moved lower in sympathy with European banking names. The SPDR S&P Bank ETF (KBE 40.28, -0.73, -1.8%) narrowed its monthly gain to 16.2%. This compares to an advance of 11.9% in the broader sector. Heavily-weighted Wells Fargo (WFC 51.58,- 1.04) finished lower by 2.0% after being downgraded to "Hold" from "Buy" at Jefferies.

Biotechnology demonstrated relative weakness in the health care sector (-0.9%), evidenced by the 1.6% loss in the iShares Nasdaq Biotechnology ETF (IBB 279.99, -4.47). The ETF narrowed its November gain to 9.1% as investors continued to walk back their initial post-election assessment. Eli Lilly (LLY 67.20, -1.92) ended down 2.8% after being removed from the "US 1 List" at Bank of America/Merrill Lynch.

In the consumer discretionary space (-0.8%), retail names underperformed as the SPDR S&P Retail ETF (XRT 46.07, -0.57) declined by 1.2%. The ETF was under pressure as investors examined data from Black Friday and speculated on results from Cyber Monday. Kohl's (KSS 54.05, -0.76), Macy's (M 43.13, -1.01), and Nordstrom (JWN 56.06, -1.79) declined between 1.4% and 3.1%. 

Treasuries ended on a higher note as longer-dated issues outperformed. The yield on the 2-yr note finished down two basis points (1.10%) while the yield on the benchmark 10-yr note fell five basis points to 2.31%.

Today's trading volume was below the recent average of 1.0 billion as fewer than 847 million shares changed hands at the NYSE floor.

There was no economic data of note released today. 

Tuesday's economic data will include the second estimate of Q3 GDP (consensus 3.0%) and the Q3 GDP Deflator (consensus 1.5%), which will each cross the wires at 8:30 ET. Separately, the Case-Shiller 20-city Index for September (Bconsensus 5.2%) and November Consumer Confidence (consensus 100.0) will be released at 9:00 ET and 10:00 ET, respectively. 

  • Russell 2000: +17.0% YTD
  • Dow Jones: +9.6% YTD
  • S&P 500: +7.7% YTD 
  • Nasdaq Composite : +7.2% YTD 

WSJ : How Iran, Russia Could Derail Oil-Production Deal

How Iran, Russia Could Derail Oil-Production Deal
OPEC members engage in a last-minute blitz of diplomacy ahead of a meeting on Wednesday

VIENNA—Iran and Russia have emerged as potentially deal-breaking obstacles to cuts in global oil production as the Organization of the Petroleum Exporting Countries engages in a last-minute blitz of diplomacy ahead of a meeting on Wednesday.

OPEC agreed in September to trim production to reduce a global oversupply of oil but left the details of who cuts how much to Wednesday’s meeting in Vienna. The gathering comes two years after OPEC decided to step aside and let prices fall, as the market plummeted to historic lows that ushered in a period of cheap prices for consumers.

Russia, which isn’t part of OPEC, said last week it was willing to hold its production steady but stopped short of agreeing to cut its output, which is the highest of any country. Iran said on Saturday it was negotiating an exemption from cutting its output, the third-highest in the 14-nation OPEC cartel behind Saudi Arabia and Iraq.

Saudi Arabia walked away from a deal in April for OPEC members and Russia to freeze output at a certain level because Iran wouldn’t participate. Iran and Saudi Arabia have long been rivals for power in the Middle East and are on opposite sides of violent conflicts in Syria and Yemen. Saudi Arabia is majority Sunni while Iran is majority Shiite.

“If they are going to cut their production, the Saudis don’t want others to replace them,” one OPEC official said.

Oil prices were up on Monday, with Brent crude rising 2.2% to $49.31.

Algerian and Venezuelan oil ministers Noureddine Bouterfa and Eulogio del Pino, respectively, flew to Moscow on Monday to try to bring the Russians on board.

OPEC representatives holed up in the cartel’s Vienna headquarters to hash out issues behind closed doors.

Inside the meeting, Iranian and Iraqi officials said they would consider freezing their output, though it still remained to be seen whether those levels would satisfy the Saudis, said a person familiar with the matter.

Russia wants prices to rise, as it relies on oil and gas for just under half its national revenue. But the country has less room to maneuver than Saudi Arabia, with much of Russia’s oil industry under Western sanctions and oil fields located in icy Siberia where fields could easily be damaged if shut down.

Iran has less incentive to cut production now.


The country is trying to regain the share of the oil-buying market it enjoyed before Western sanctions over its nuclear program crippled its energy industry. Even at low prices, it is useful for Iran to rebuild relationships with European refineries and Asian buyers.

Iran has a more diverse economy than many of its fellow OPEC members. The Islamic Republic relies on crude-oil exports for about 25% of its budget, compared with 70% in Saudi Arabia and more than 40% in Venezuela.

Iran’s “reliance on oil is very small,” said one Iranian oil official.

Iran was part of the OPEC agreement in September in Algiers, but Iranian officials never said they would actually cut themselves and have been working behind the scenes for weeks to avoid any restrictions on their output.

Iranian officials have consistently said they want to return to their old market share before sanctions were instituted in 2012. Defining exactly Iran’s pre-sanctions market share can be tricky.

Iranian officials have said they want to be pumping about 4 million barrels a day before it would consider joining OPEC action on production—either as an agreement to hold output steady or cut it. The country told OPEC this month that it is pumping about 3.92 million barrels a day, though independent sources put its output closer to 3.7 million barrels a day.

Another measure of Iran’s market share is its production relative to what its rivals produce. For instance, in 2005 when OPEC still had production targets for each country, Iran’s target was 4.1 million barrels a day while Saudi Arabia’s was 9.1 million barrels a day. Saudi Arabia’s production is now 10.6 million barrels a day.

A former Iranian oil official, Manouchehr Takin, said Saudi Arabia and Iran were likely to put aside their differences this time because the stakes are higher. Some analysts have said oil prices could again fall below $35 a barrel if OPEC fails to make an agreement this week.

“What you’re seeing now is horse-trading,” Mr. Takin said. ”When there is a crisis, OPEC always come together and take action together.”

FT : US antitrust officials call for careful scrutiny of shipping alliance

US antitrust officials call for careful scrutiny of shipping alliance

US antitrust officials on Monday called for “extreme caution” in reviewing a proposed alliance between major global shipping companies, as the industry attempts to retrench amid low rates and sluggish growth in global trade.

The US Department of Justice’s antitrust division said in a letter to the Federal Maritime Commission – a government agency that overseas maritime transportation – that the proposed deal “raises a number of significant competitive concerns” in the wake of the FMC’s recent approval of the rival Ocean Alliance.
The Alliance would see six shipping companies – Hanjin, Hapag-Lloyd, “K” Line, Mitsui OSK Lines, Nippon Yusen Kaisha and Yang Ming – enter a new strategic relationship regarding east-west trade lanes. Originally announced in May, the alliance would create “one of the leading networks in the container shipping industry,” accounting for about 18 per cent of global container fleet capacity and a total of 620 ships among its members, according to a press release from the group.
Taken together, the strategic tie-ups created with the Ocean Alliance and The Alliance would reduce from four to three the number of major shipping alliances controlling global maritime transportation, Justice Department officials wrote, increasing the possibility of collusion and concentration in an already vulnerable industry.
“Where, as here, an agreement contemplates extensive cooperation among members, extreme caution is warranted,” the letter stated, noting it had raised similar concerns about the Ocean Alliance, which received FMC approval in October.
If left unchallenged by the FMC, conduct covered in the agreement may be immune from enforcement under US antitrust laws, the letter said, urging the commission to seek additional information and thoroughly review the record in order to make sure the agreement was narrowly tailored.
If approved, The Alliance would last for five years and take effect in April 2017, pending approval from multiple regulatory bodies, according to the press release announcing the agreement.

FT : Actelion weighs complex deal to combine with part of J&J

Actelion weighs complex deal to combine with part of J&J
Structured transaction would see Swiss company remain independent

Actelion, Europe’s largest biotech company, is considering a complicated deal to combine with part of Johnson & Johnson, a move that will leave the Swiss company independent from the US drugs giant, people close to the discussions said.

The structured transaction would create a new, larger biotech company uniting the Swiss company with relevant parts of J&J’s pharma business, people involved in the talks said.

J&J would become a major shareholder in the new company and could be asked to add some cash to complete the deal, these people added.

The Swiss group is not actively considering selling itself outright, people briefed about the matter said, and it is working with advisers including at Bank of America Merrill Lynch as it reviews its options. The situation is fluid and positions could change during the talks, these people cautioned.

J&J confirmed on Friday that it was in preliminary talks with Actelion about a transaction but did not give details. It is not clear whether J&J is amenable to such a complex deal, which would force it to cede control of some of its own assets — especially when the cash-rich company has the firepower to buy companies of Actelion’s size outright.

However, according to one person briefed about the situation, J&J had anticipated that Actelion’s chief executive and founder, Jean-Paul Clozel, would not want to sell out and had initiated discussions with a view towards finding some other solution that would be attractive to him and his shareholders.

Since the talks were confirmed, investors have pushed up the share price in anticipation of an outright sale that would see the Swiss company acquired at a significant premium. Over the past three trading days, shares in Actelion have soared 23 per cent, reaching SFr190 in Zurich trading. The company’s market value closed at SFr20.5bn ($20.2bn) on Monday.

Actelion and J&J companies declined to comment. Bank of America also declined to comment.

Since the disclosure, bankers are scrambling to get other large drugmakers to consider making their own approaches to the company.

Swiss drugmaker Roche is often cited as possible acquirer of Actelion, given the close ties between the companies. Mr Clozel was an executive at Roche before founding Actelion with his wife, Martine, and others in 1997.

In 2011, Mr Clozel successfully fended off activist investor Elliott Management, which was pushing the company to explore a sale. The company’s share price has since trebled, helping Actelion executives win credibility with investors.

On an investor call in September, Mr Clozel said he had no desire to retire. He said: “I would say, give me three years, three to four years, to change completely Actelion and to have Actelion at another level as a company.”

Actelion’s drug portfolio is predominantly focused on treating pulmonary arterial hypertension, adding to the US group’s existing pharma franchise. Actelion, which employs about 2,500 people, had sales of SFr2bn in 2015. A growing part of this revenue now comes from its Opsumit drug, as its blockbuster treatment Tracleer has lost its patent protection.