Dow -0.42% S&P -0.36% Nasdaq -0.31% Russell -0.49%
US Market closed lower. A leg lower in oil futures and the weakness in the financial (-0.5%) and technology (-0.5%) groups added to the negative tone. The European Central Bank released its latest policy statement this morning, deciding to maintain its assets purchase program and its interest rate corridor. The decision was largely expected after the Bank of England stated earlier in the month that it was too early to assess the economic impact of the United Kingdom's exit from the European Union. However, ECB President Mario Draghi stated that the central bank is ready to act should the need arise. Materials (-0.6%), energy (-0.9%), and industrials (-1.0%) underperformed while the remaining decliners finished with losses between 0.3% (consumer staples) and 0.5% (technology). Conversely, health care (+0.4%) and utilities (+0.6%) finished above their flat lines. Volume were below average with 803mil shares. US after hours AMD +7.3%, SAM +3% on earnings/guidance... OLN -19.5%, SYK -4%, SBUX -3%, COF -3% on earnings/guidance. Asian equity markets are heading lower, tracking the first declining session in US indices in 10 days. Outside of the less dovish than expected commentary from BOJ Gov Kuroda overnight, there is still little to latch on to in terms of new macro oriented developments, but the US earnings season is ramping up steadily and results are increasingly more mixed. While tech and financials have been generally impressive, consumer discretionary stalwarts have hit a wall - Starbucks, Skechers, Chipotle, Pandora are all down afterhours on their results. On the earngins call, Starbucks CEO went as far as to cite deteriorating global conditions - terrorism, and Brexit included - as driving a cooling in consumer confidence. BOJ Gov Kuroda overnight reiterated that there is neither need, nor possibility of helicopter money in Japan, sending USD/JPY down by over 150pips back below 106. Li called for countries to maintain monetary stability and proactive fiscal policies as part of global economic recovery process. Li said economic structure is optimizing and economy is growing steadily despite continued downward pressure headwinds.
Nikkei -1.32% Hang Seng -0.50% CSI -0.55% Shanghai -0.67%
Eur$ 1.1025 CNH 6.6751 CNY 6.6693 JPY 105.82 GBP 1.3229 CHF 0.9854 RUB 64.3159
S&P -0.05% EuroStoxx -0.57% Dax -0.54% SMI -0.49%
Macro :
- Bank of Italy Said to Get at Least 3 Bids for Rescued Banks:Rtrs
- Apollo, Lone Star Said to Bid for 4 Italy Rescued Banks: Ansa
- LME Investigating Disruption on Electronic Trading: Reuters
- Italy Banks Need EU30b-EU100b; Sell Into Any Strength: Berenberg
Keep an eye on :
- AIR FP : Boeing Sees $2.1b 2Q Charge on 787, 747, Tanker
- CDA FP : Compagnie Des Alpes Confirms Talks to Sell Stake to Fosun: Echos
- DAI GY : Daimler Names Britta Seeger Board Member for Mercedes
- AM FP : Dassault Aviation 1H Sales Beats, Cuts Falcon Delivery Outlook
- EDEN FP : Edenred 1H Rev., Profit Beat Ests., Confirms Issue Vol. Outlook
- EDF FP : EDF Calls July 28 Board Meeting to Decide on U.K. Nuclear Units
- EDF FP : EDF Offices Said Visited by Market Regulator AMF: Le Monde
- EDP PL : EDP to Receive EU600m From Securitization of Tariff Deficit
- ENAV IM : Enav IPO Said to Price at EU3.30/Shr, FT Reports
- ENEL IM : Enel 1H Net Production Falls 8% to 128,178 GWh
- FAGR BB : Fagron Receives Claim of Up to $20m for Anazaohealth Purchase
- FINGB SS : Fingerprint 2Q Operating Profit Beats Ests.; Updates FY Outlook
- FRE GY : Pfizer’s Sale of Pumps to Fresenius Said to Stall on Valuation
- FDPA FP : Fonciere de Paris 1H EPS Falls to EU2.73
- GAM SM : Gamesa Awarded 7 Contracts to Provide Wind Turbines
- GFC FP : Gecina Says 1H Recurrent Net Rose 17%, Maintains FY Target
- HAV FP : Havas 1H Net Rises, Co. Confident of Meeting FY Targets
- IOC US : Exxon to Buy InterOil for $45/Shr Plus Contingent Payment
- LISP SW : Lindt 1H Organic Sales Miss, Earnings In Line, Berenberg Says
- MC FP : L Capital Asia to buy 7% stake in Clio Cosmetics for USD 50m
- MITRA BB : Mithra Gets FDA Nod for Estelle Phase III Clinical Trials
- NXI FP : Nexity 1H Net Rises, Co. Raises FY Operating Profit Target
- P US : Pandora Said to Rebuff $15/Shr Informal Offer from Liberty: DJ
- LIGHT NA : Philips Lighting 2Q Comp. Sales Growth -1.5%; Names CFO, CEO Says European Business Is Growing
- CFR VX : Cartier to Cut Prices in Japan by Avg. 10% From Aug. 5: Nikkei
- SBMO NA : FIL Limited Reports 3.02% SBM Offshore Stake, AFM Filing Shows
- SSABA SS : SSAB 2Q Sales Beat Ests.; Expects Stable Underlying Demand in 3Q
- SKAB SS : Skanska 2Q Operating Profit Tops Estimates, Says Brexit Has Not Yet Had Any Direct Impact
- UHR VX : Swatch CEO Says Watch Industry Isn’t in Crisis: Le Temps
- SYNN VX : Syngenta 1H Ebitda Misses Ests.; Confident on ChemChina Closing, Says Market Conditions ‘More Difficult’ in 2Q
- TFI FP : TF1 Reports 1H Net Loss on Euro 2016 Screening Costs
- HO FP : Thales 1H Revenue Beats Estimate; Forecast Confirmed
- TIE1V FH : Tieto 2Q Sales Misses Estimates, Profit Beats; Outlook Kept
- TOD IM : Tod’s 1H Total Sales, Constant FX Sales Results Beat Ests.
- VIV FP : Vivendi to Close German VOD Service Watchever: Les Echos
- VOW3 GY : Volkswagen Korea to Suspend Sales of Some VW, Audi Cars: Yonhap
- YNAP IM : Amazon Set to Unveil Italy Investment of ~EU500m: Reuters - http://reut.rs/2ahd0g4
- ZIL2 GY : Elringklinger Cuts 2016 Ebit Guidance, Reaffirms Revenue Range
>>> Up
*ALROSA RAISED TO SECTOR PERFORM AT RBC CAPITAL
*CELESTICA RAISED TO BUY AT CANACCORD GENUITY
*CENTRICA RAISED TO OVERWEIGHT AT JPMORGAN
*DIA RAISED TO HOLD AT JEFFERIES
*GAM HOLDING RAISED TO SECTOR PERFORM AT RBC CAPITAL
*KINGSPAN RAISED TO BUY VS NEUTRAL AT UBS
*LEONI RAISED TO NEUTRAL AT JPMORGAN
*MAN GROUP RAISED TO OUTPERFORM AT RBC CAPITAL
*METSO OYJ RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS
*SOMFY RAISED TO BUY VS HOLD AT SOCGEN
*UNIBAIL-RODAMCO RAISED TO NEUTRAL AT GOLDMAN
*WIENERBERGER RAISED TO BUY VS NEUTRAL AT UBS
>>> Down
*ALLIANCE DATA SYSTEMS CUT TO MARKET PERFORM AT BMO CAPITAL
*BANCO POPOLARE CUT TO SELL VS HOLD AT BERENBERG
*ELRINGKLINGER CUT TO HOLD VS BUY AT BERENBERG
*GEORG FISCHER CUT TO SECTOR PERFORM AT RBC CAPITAL
*MARKS & SPENCER CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*NORSK HYDRO CUT TO HOLD AT PARETO SECS
*POP. MILANO CUT TO SELL VS HOLD AT BERENBERG
*SEVERN TRENT CUT TO NEUTRAL AT JPMORGAN
*SSE CUT TO NEUTRAL AT JPMORGAN
*SWATCH CUT TO NEUTRAL AT NATIXIS
*TELE2 CUT TO UNDERPERFORM AT RBC CAPITAL
*UBISOFT CUT TO NEUTRAL AT NATIXIS
*UNILEVER CUT TO SECTOR PERFORM AT RBC CAPITAL
>>> PT Change
>>> Initiation
*GVC RATED NEW BUY AT BERENBERG; PT 730P
*LADBROKES RATED NEW HOLD AT BERENBERG; PT 130P
*PADDY POWER BETFAIR RATED NEW SELL AT BERENBERG; PT 7,500P
*PLAYTECH RATED NEW BUY AT BERENBERG; PT 1,200P
*SAP SE RATED NEW OUTPERFORM AT CREDIT SUISSE
*WILLIAM HILL RATED NEW SELL AT BERENBERG; PT 240P
>>> Call
>> Stock
*TF1 REMOVED FROM CONVICTION BUY LIST AT GOLDMAN; STILL BUY
Asian Mid-session Market Update: Risk rally turns sour as BOJ downplays stimulus expectations; China premier Li calls for countries to maintain accommodative policy stance
***Economic Data***
- (JP) JAPAN JUL PRELIM PMI MANUFACTURING: 49.0 V 48.1 PRIOR (5th consecutive month of contraction)
- (SG) Singapore Q2 final Private Home Prices Q/Q -0.6% v -0.4% prelim; Homes sold 2,256 v 1,419 q/q - URA
- (US) NORTH AMERICA June SEMI BOOK/BILL RATIO: 1.00 V 1.09 PRIOR
- (US) NPD June Video Games Sales -26% y/y at $652.2M
***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.9%, S&P/ASX -0.4%, Kospi flat, Shanghai Composite -0.6%, Hang Seng -0.4%, Sep S&P500 flat at 2,158
***Commodities/Fixed Income***
- Aug gold -0.4% at $1,326/oz, Aug crude oil +0.1% at $44.80/brl, Sep copper -0.6% at $2.24/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 2.1 tonnes to 963.1 tonnes
- (CN) PBOC SETS YUAN MID POINT AT 6.6669 V 6.6872 PRIOR (3rd consecutive firmer fix, strongest setting since July 5th)
- (CN) China MoF sells 30-year bonds at 3.426%
- (CN) PBOC to inject CNY70B in 7-day reverse repos; Injected CNY265.3B for the week v CNY65B drained in prior week
- (JP) Japan investors net ¥1.7T in foreign bonds v ¥2.5T in prior week; Foreign investors net buyers ¥444.6B in Japan stocks v sold ¥306.8B in Japan stocks in prior week
- (JP) BOJ offers to buy ¥1.5T in T-bills
- (AU) Australia MoF (AOFM) sells A$600M in 4.50% 2020 Bonds; avg yield: 1.454%; bid-to-cover: 3.86x
***Market Focal Points/FX***
- Asian equity markets are heading lower, tracking the first declining session in US indices in 10 days. Outside of the less dovish than expected commentary from BOJ Gov Kuroda overnight, there is still little to latch on to in terms of new macro oriented developments, but the US earnings season is ramping up steadily and results are increasingly more mixed. While tech and financials have been generally impressive, consumer discretionary stalwarts have hit a wall - Starbucks, Skechers, Chipotle, Pandora are all down afterhours on their results. On the earngins call, Starbucks CEO went as far as to cite deteriorating global conditions - terrorism, and Brexit included - as driving a cooling in consumer confidence. S&P futures and oil are flat in electronic session, while FX majors were generally rangebound - USD/JPY continues to trade around 106 handle, AUD/USD was down about 40pips from the highs below $0.7470, and NZD/USD traded about 20pips on either side of $0.70.
- Against a buildup of expectations for more policy stimulus from Japan - both fiscal and monetary - BOJ Gov Kuroda overnight reiterated that there is neither need, nor possibility of helicopter money in Japan, sending USD/JPY down by over 150pips back below 106. Speculation over the extent of the fiscal measures remained heavy, with another local press report suggesting fiscal stimulus may be in ¥20-30T range if it includes govt guarantees and other off-budget measures, while adding that PM Abe has recently agreed to increase the package. Cabinet Sec Suga later confirmed that he is working with fiscal authorities on economic stimulus. Japan also produced the only economic datapoint of note in the session, with July preliminary manufacturing PMI improving from the prior month but remaining in contraction for the 5th month in a row. Export orders, input/output prices, and inventories decreased at a faster rate - a poor sign of external demand and price trends - but employment outlook was surprisingly improved. Resident Markit economist also admitted that "beginning of the third quarter signaled worsening operating conditions in the Japanese manufacturing sector."
- In China, Premier Li spoke from the joint press conference after meetings with IMF's Lagarde and World Bank President Jim Yong Kim. Li called for countries to maintain monetary stability and proactive fiscal policies as part of global economic recovery process. On China, Li said economic structure is optimizing and economy is growing steadily despite continued downward pressure headwinds. Also of note, PBOC strengthened Yuan fix for the 3rd straight day, as Goldman Sachs estimated FX outflows in June doubling m/m in explaining the recent trend behind stronger CNY fixes.
***Equities***
- AMD: Reports Q2 -$0.05 v -$0.09e, R$1.03B v $955Me; +7.3% afterhours
- V: Reports Q3 $0.69 v $0.67e, R$3.63B v $3.63Be; Authorizes $5B share repurchase (2.7% of market cap); +0.1% afterhours
- T: Reports Q2 $0.72 v $0.72e, R$40.5B v $40.7Be; -0.9% afterhours
- PYPL: Reports Q2 $0.36 v $0.36e, R$2.65B v $2.59Be; Guides Q3 $0.33-0.35 v $0.36e; R$2.62-2.67B v $2.63Be; -2.1% afterhours
- CMG: Reports Q2 $0.87 v $1.05e, R$998M v $1.04Be; July comp sales trends have improved significantly; -2.1% afterhours
- SBUX: Reports Q3 $0.49 v $0.49e, R$5.24B v $5.35Be; Guides Q4 $0.54-0.55 v $0.55e; SSS +5%; -2.7% afterhours
- COF: Reports Q2 $1.76 adj v $1.86e, R$6.25B v $6.25Be; -3.0% afterhours
- SYK: Reports Q2 $1.39 v $1.36e, R$2.80B v $2.80Be; Guides Q3 $1.33-1.38 v $1.41e; -4.0% afterhours
- FLEX: Reports Q1 $0.27 v $0.27e, R$5.88B v $5.71Be; -5.6% afterhours
- P: Reports Q2 -$0.12 v -$0.14e, R$343M v $352Me; Cuts FY16 Rev $1.385-1.405B v $1.42Be; -7.4% afterhours
- SKX: Reports Q2 $0.48 v $0.51e, R$877.8M v $878Me; Guides Q3 Rev $950-975M v $981Me; -15.3% afterhours
- RRL.AU: Reports Q4 gold production 78.5K oz v 75.7K q/q; AISC A$951/oz v A$856/oz q/q; +6.8%
- OZL.AU: Reports Q2 production: copper 27.4K tons v 24.8K y/y; gold 30.1K oz; +0.7%
- STO.AU: Reports Q2 Production 15.5 MMBOE v 14.3 y/y; Sales 19.6 MMBOE v 15.7 y/y; -1.2%
- OSH.AU, BPT.AU: -1.6% on lower oil prices
- 3323.HK: Issues H1 profit warning; -1.6%
- 1150.HK: Issues H1 profit warning; -4.9%
Nick Hayek: «Swatch Group vend des montres, pas des actions»
Nick Hayek, directeur général du premier groupe horloger du pays, le répète: il n’y a pas de crise. Ce dernier fait le point sur les résultats du premier semestre présentés jeudi, évoque la chute du cours de l'action et répond aux critiques formulées par certains actionnaires
«Il n’y a pas de crise.» Jeudi, le directeur général de Swatch Group Nick Hayek a tenu à répéter que son entreprise n’était pas en crise mais qu’elle traversait une «situation exceptionnelle». Plus tôt dans la matinée, le fabricant des Breguet, des Omega et d'autres Flik Flak a annoncé des ventes en recul de 12% aux taux de change actuels. Le bénéfice net du groupe basé à Bienne a, lui, chuté de 52% par rapport au premier semestre 2015 (263 millions de francs). (Lire Malgré ses résultats en recul, Swatch Group ne modifie pas sa stratégie)
«Le Temps»: Début avril dans ces colonnes, vous disiez qu’utiliser le terme de crise était «non seulement faux mais aussi exagéré». Vous maintenez ces propos?
Nick Hayek: Absolument. Je disais aussi dans cette interview que je ne faisais pas de prévisions pour notre rentabilité car j’ai toujours accepté de gagner moins d’argent à court terme, afin de préserver l’emploi. Notre chiffre d’affaires est certes en recul de 11,4%, mais en monnaies locales nous voyons quantité de pays (Japon, Chine continentale, Thaïlande, Canada, etc.) où nos ventes se développent de manière tout à fait positive. Le problème vient essentiellement de trois pays: Hongkong, la France et la Suisse. Dans le premier cas, les ventes s’améliorent dans nos boutiques en propre (de -10 à +5%) mais avec nos détaillants, on est encore parfois dans des -50%… C’est un problème psychologique; ils ont peur de se réapprovisionner. En France, avec les attentats, il y a eu sans surprise une chute des ventes dans les magasins touristiques. Enfin, en Europe et en Suisse, nous avons un problème avec les visas biométriques que l’on demande désormais aux touristes chinois. Je vous donne un exemple: nous avons un magasin Omega à Lucerne qui réalise habituellement entre 60 et 80 millions de francs de ventes par année. Avec 40% de touristes en moins, nous pouvons faire une croix sur 40% de ces ventes. Bref. Tout cela, ce sont des phénomènes extraordinaires, des situations exceptionnelles.
– Comment prévoyez-vous le second semestre?
– Je suis confiant. Prenez l’exemple de l’Angleterre: depuis que la livre sterling a baissé, ces trois dernières semaines, les ventes à Londres ont explosé. Dans nos boutiques Omega ou Tissot, on constate des ventes de +25%, +30% voire +47% par rapport à juillet 2015! Les taux de change ont un impact immédiat. On sent que nos produits sont demandés. C’est pour cela que l’on conserve nos points de vente et que l’on reste calmes pour être prêts quand la demande repartira de plus belle. Sur le marché chinois, le plus important, les signaux sont aussi très positifs. Même s’il faut faire une croix sur Hongkong, Macao est de nouveau en croissance à deux chiffres… Vous savez, je ne suis pas un optimiste idiot: je suis dans ce groupe depuis quelques décennies et je connais très bien les marchés. La situation actuelle fait apparaître beaucoup plus d’occasions que de risques. Si l’on arrive à faire croître les ventes de 3 à 4% sur la deuxième partie de l’année, on finira peut-être à -4, -5 ou -6% de ventes sur l’année.
– Vous dites dans votre communiqué que vous maintenez tous vos emplois en Suisse. Mais tous les contrats d’intérimaires (qui représentent parfois jusqu’à 10% des employés dans les niveaux de productions de vos usines) ont été dénoncés…
– C’est un courant tout à fait normal en ce qui concerne les contrats intérimaires. Il existe des ajustements perpétuels, même en période de croissance. Et certains départs naturels n’ont pas été remplacés. Mais là aussi, c’est quelque chose de complètement normal. En revanche nous n’avons pas recouru au chômage partiel. On pourrait tout à fait l’introduire à certains endroits, mais alors le Swatch Group devrait recourir à de l’argent de l’Etat et ce n’est absolument pas justifié. Avec les premiers résultats de nos ventes en juillet, les prévisions pour nos sites de fabrication sont encourageantes.
– L’action Swatch Group a perdu environ 53% en trois ans en passant de presque 600 à 260 francs...
– Et alors? Nous vendons des montres, pas des actions. Un jour ça monte, un jour ça descend. C’est le grand casino. Je reçois des courriels d’actionnaires qui me disent: «Bravo pour ce que vous faites, il ne faut pas céder.»
– D’autres actionnaires sont montés au front lors de votre avertissement sur résultat publié la semaine dernière. Dans un article de Bloomberg, ils qualifiaient notamment vos projections «d’irréalistes». Beaucoup en Suisse se demandent aussi quel est votre «plan»…
– Vous croyez qu’on est assis à Bienne à réfléchir à un «plan»? On n’en a pas besoin, nous sommes consistants. Nous appliquons toujours notre stratégie, qui a largement fait ses preuves. Nous avons des marques superbes, des produits fantastiques, nous maintenons le savoir-faire en Suisse et les marchés importants sont en croissance. Nous sommes en train de nous déployer encore davantage sur l’e-commerce, nous sommes verticalisés, nous sommes préparés pour le renforcement du «swiss made» en 2017, nous avons un fort réseau de distribution, nous avons des participations dans de grandes chaînes de distribution en Chine, à Dubaï… La stratégie du groupe n’a pas à changer d’un millimètre parce que notre action recule de 6 ou 7%! Il faut mettre en place un «plan» si l’on a une crise structurelle et ce n’est pas le cas aujourd’hui. Vous attendez quoi? Que j’annonce une restructuration? Vous allez être déçu. Que je baisse mes prix? C’est la bêtise du siècle! C’est juste une manœuvre pour animer le sell-in, pas le sell-out [ndlr: la vente aux détaillants, pas aux clients finaux]. Car si les clients comprennent que vous allez baisser vos prix, ils vont attendre avant d’acheter. Et attendre encore. C’est la spirale de la déflation. La stratégie du Swatch Group de ne pas miser uniquement sur le luxe mais aussi sur tous les segments de prix est forte, constante et va rester inchangée.
– Vous avez déclaré en juin que vous étiez en discussion avec la Commission de la concurrence (Comco) pour «examiner si une certaine libéralisation de l’accord conclu» avec elle était possible, «étant donné les changements structurels du marché du mouvement mécanique». Quels sont ces changements?
– Notre accord avec la Comco implique que nous soyons libres de livrer nos mouvements ETA à qui nous voulons en 2019. Nous constatons maintenant que les commandes de tiers ont tellement chuté que nous ne serons dès lors plus en position dominante à l’horizon 2017. Vu cette nouvelle donne, nous souhaiterions que cet accord entre en vigueur en 2017 déjà. Nous continuerons toujours à livrer les acteurs de l’industrie horlogère suisses, mais en étant libres de nos choix.
After Hours Summary: AMD +7.3%, SAM +3% on earnings/guidance... OLN -19.5%, SYK -4%, SBUX -3%, COF -3% on earnings/guidanceAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: PFPT +14%, STS +7.6% (light volume), AMD +7.3%, EGHT +4.5%, SAM +2.9%, ETFC +2.3%, CLS +2.2%, HA +1.2%, V +0.5% (also PayPal and Visa announce a U.S. strategic partnership; adds $5 bln to buyback)
Companies trading higher in after hours in reaction to news: PBYI +18.4% (submits NDA to the FDA for its lead product candidate PB272 for the extended adjuvant treatment of patients with early stage HER2-overexpressed/amplified breast cancer; announces updated results from the Phase III clinical trial of PB272), EYES +11.8% (announces positive five-year data from Argus II Retinal Prosthesis System), AHP +3.2% (5.66% active holder Weisman Group confirms increased offer to ~$23.65/share), AMID +3.1% (will maintain quarterly distribution of $0.4125 per common unit), CNC +2.1% (Centene awarded Defense Health Agency contract; total potential contract value, including all option periods, is estimated at $17.72 bln), BMRN +1% (announces interim results of open-label, Phase 1/2 study of BMN 270, will be presented; Betaville update discusses Roche speculation), OAKS +1% (thinly traded - Five Oaks Investment to extend by mutual agreement to October 1, 2016 its Master Repurchase Agreement with Barclays Bank for the financing of certain eligible residential mortgage loans), ALGT +0.4% (ticking higher; received a summary letter documenting results of FAA Certificate Holder Evaluation Process; All findings were determined by the FAA 'to be minor'),
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: OLN -19.5%, SKX -15.5%, ATHN -11.5%, QUMU -9%, P -7.5%, FLEX -5.6%, GEL -5%, SWKS -4.1% (also increases quarterly dividend to $0.28/share from $0.26/share, announces new $400 mln repurchase program), SYK -4%, SBUX -3%, COF -3%, ZHNE -2.5%, MXIM -1.9% (also increases dividend by 10%), CMG -1.6%, T -1.1%, PYPL -1%
Companies trading lower in after hours in reaction to news: HTBX -25.2% (announces an underwritten public offering of common stock for an undisclosed amount of shares), CFRX -19.3% (proposed underwritten public offering of common stock and warrants; terminates its sales agreement with Cowen and Company effective August 1, names Steven Gilman, PhD Chief Executive Officer effective immediately), MCF -16% (entered into an agreement with a private oil and gas co to purchase one-half of seller's interests in ~12,100 gross undeveloped acres for up to $25 mln Southern Delaware Basin Acreage; commences 5 mln common stock offering), BLIN -5.8% (discloses entry into a securities purchase agreement to sell an aggregate of 2,100,001 shares of common stock at $0.75/share), GEL -5% (commences registered underwritten public offering of 8 mln common units representing limited partner interests), IM -1.4% (announces that after consultation with the Committee on Foreign Investment in the US; cos continue to expect the transaction to close in the second half of 2016), BIIB -0.5% (light volume; discloses in 10-Q receipt of civil investigative demands from the federal government on July 1), BA -0.4% (will record $2.1 bln in Q2 charges on 787, air cargo and KC-46 programs; reaffirms FY16 sales)
Deutsche Bank could call off pursuit of Postbank transaction
Deutsche Bank (FRA:DBK) could call off its pursuit of a Postbank transaction, according to reports.
The news was first reported by Manager Magazin, which said Deutsche Bank has fading hopes for either a spin-off or sale of the retail bank by next year. Reuters subsequently reported the same information, citing a source close to the situation. That report also cited an unidentified "top 10 investor" in Deutsche Bank who said he would not be opposed to the company retaining Postbank.
As reported, Germany’s largest lender had announced it was considering an IPO or a sale, with the deal being a major component of its plan to improve its leverage ratio and meet its capital targets. It said as recently as February that it still planned to dispose at least 50% of it before 2018.
Depressed equity market conditions in Germany and the absence of any likely buyers to this point are reportedly causing the company to re-evaluate its plan.
GE Shares Shine Too Brightly
Trading at an eight-year high, GE’s energetic shares might be due for a rest.
General Electric Co. may no longer be too big to fail, but its shares might be too rich to keep rallying.
GE’s stock has jumped 9% since late last month when the company was stripped of its designation as a “systemically important” financial institution. That rally seems justified, particularly since the maker of aircraft engines, power generators, and medical devices is no longer susceptible to tighter rules and supervision from the Federal Reserve.
And while GE has shed much of its finance business and strategically shifted back to its industrial roots, it is the conglomerate’s additional financial flexibility that has investors jazzed.
Upon losing the “SIFI” label, GE has discussed borrowing as much as $20 billion for additional stock buybacks. That has already prompted Moody’s Investors Service to warn that GE’s credit rating could take a hit. And while more buybacks and dividends could provide a floor for shares, they alone don’t necessarily translate into an even higher stock price for GE.
Friday’s earnings report will shine a brighter light on GE’s core business. Analysts polled by FactSet estimate GE earned 46 cents a share in the second quarter. Revenue is expected to have increased by 8% to $31.8 billion. On a full-year basis, though, earnings are anticipated to be $1.50 a share. By comparison, this consensus forecast was $1.96 two years ago.
In its most recent quarterly report, GE’s industrial business’s operating profit fell 7% from a year earlier to $3.3 billion. GE chief Jeffrey Immelt has said that industrial orders should pick up in the second half of the year, but that was before Brexit rattled financial markets and potentially disrupted the European economy.
GE, which has rallied more than 20% over the past 12 months and trades at an eight-year high, has finally ascended above the low multiple assigned to financial companies. Fetching 20 times projected earnings over the next 12 months, GE’s shares recently have been valued at their highest since late 2004. The multiple is richer than that of rival Honeywell Inc. and the broader S&P 500 industrials sector, but roughly in line with Caterpillar Inc. and Deere & Co.
This energetic rally might be low on power.