Gapping down
In reaction to disappointing earnings/guidance:ANF -11.1%, GPS -6.7%, FL -1.9%, AMAT -1.1%,
Select metals/mining stocks trading lower: MTL -6.7% (volatile week in iron ore prices), GOLD -2.9%, SBGL -2.9%, AG -2.9%, AEM -2.5%, CDE -2.4%, HMY -2.4%, HL -2.2%, RIO -2.1%, VALE -2.1%, PAAS -1.9%, IAG -1.9%, MT -1.7%, SSRI -1.5%, BHP -1.4%, TS -1.4%,
Other news:
- KTOS -11.1% (intends to offer and sell shares of its common stock in an underwritten public offering pursuant to an effective shelf registration statement; size not disclosed)
- EMES -5.7% (prices upsized underwritten public offering of 3.4 mln common units representing limited partner interests at $10.00/common unit)
- RGC -4.7% (to sell 13,000,000 shares of Class A common stock by Anschutz Corporation and certain of its affiliates)
- ACRS -2.4% (prices upsized public offering of 4 mln shares of its common stock at $22.75/share)
- NFLX -0.7% (following report Amazon (AMZN) will launch Prime Video worldwide)
Analyst comments:
- FSLR -2.2% (downgraded to Sell from Neutral at UBS)
- CAFD -1.5% (initiated with a Underperform at Credit Suisse)
A merger between advertising group Havas (HAVA.PA) and French media giant Vivendi (VIV.PA) could "make sense", Havas Chief Executive Officer Yannick Bollore said on Friday, underscoring the mutual benefit for a tie-up between the groups.
"It is an assumption that makes sense," Bollore said in an interview on the sidelines of Morgan Stanley's annual Tech, Media and Telecom (TMT) conference in Barcelona. "It would be a development project rather than a cost saving project," he added.
"Big content could bring a lot to advertising and advertising could bring a lot to Vivendi's entertainment world," Bollore said.
Bollore insisted there were no formal talks currently between Vivendi and Havas.
He declined to comment on the form or timetable for such a deal, even though some investors and analysts are continuing to speculate on a tie-up, with Exane BNP Paribas publishing a note on Friday which saw a Vivendi/Havas merger as a possibility for the second quarter of 2017.
Havas, the world's fifth-largest advertising company, is 60 percent-owned by Bollore's father, French tycoon Vincent Bollore. Vincent Bollore owns a stake of more than 20 percent in Vivendi, and is also Vivendi chairman.
Vincent Bollore has repeatedly said that Vivendi and Havas, should work more closely together, with a potential merger down the road.
"Never say never", Vivendi's chief executive Arnaud de Puyfontaine said on Wednesday, in a response to a question on a possible merger with Havas.
Asked about the potential risk of a conflict of interest in a Havas-Vivendi tie-up, Yannick Bollore said that the risk existed, but that it was "minimal".
Vivendi accounts for 0.05 percent of Havas' revenues and Havas' clients represent less than 1 percent of Vivendi's revenues, added Yannick Bollore, who sits on Vivendi's board.
Early pre-market gappers
Gapping up:SYUT +24.4%, DRYS +26.2%, DCIX +21.0%, RCON +17.6%, OGXI +16.9%, SHIP +11.5%, SINO +11.5%, URRE+10.8%, MRVL +9.6%, ESEA +8.7%, PIP +8.6%, FCEL +8.3%, ALBO +7.8%, CRM +7.6%, GLBS +7.1%, RLOG +6.7%, SPLS+5.0%, SCYX +4.2%, ROST +3.0%, VSAT +2.5%, TWLO +2.2%, GFI +2.1%, DB +1.5%, SCTY +1.5%, HTZ +1.4%, BGNE+1.4%, SKX +1.3%, ARRY +1.2%.
Gapping down:KTOS -11.1%, ANF -11.1% GPS -6.7%, MTL -6.7%, EMES -4.4%, VEDL -4.3%, RGC -4.3%, GOLD -2.9%, AG-2.9%, AEM -2.5%, CDE -2.4%, HMY -2.4%, FSLR -2.2%, HL -2.2%, RIO -2.1%, VALE -2.1%, TEF -2.0%, BT -2.0%, PAAS-1.9%, FL -1.9%, BBL -1.9%, NVS -1.5%, CAFD -1.5%, TS -1.4%, ABX -1.3%, GDX -1.2%, AZN -1.2%, BUD -1.2%, NEM-1.2%, NGG -1.2%, FCX -1.2%, UL -1.1%, AMAT -1.1%.
In reaction to strong earnings/guidance:MRVL +9.6%, CRM +7.6%, ROST +3.0%
M&A news:
M&A news:
- SYUT +24.4% (agrees to be taken private for $6.05/share in cash)
- SCTY +1.5% and TSLA +1.4% (Tesla Motors shareholders approve proposed merger with SolarCity)
Shippers seeing continued swings: DRYS +26.2%, DCIX +21.0%, SHIP +11.5%, SINO +11.5%, ESEA +8.7%, GLBS +7.1% (will report Q3 results after the close on Monday, Nov 21), RLOG +6.7%
Other news:
- OGXI +16.9% (ticking higher on light volume; commits to further reduction in its workforce)
- URRE +10.8% (still checking for anything specific)
- HRG +11.5% (HRG Group confirms evaluating potential strategic alternatives to maximize shareholder value; Pres/CEO plans 2017 departure)
- PIP +8.6% (announces a $2.91 special cash dividend)
- FCEL +8.3% (announces a contract with Alberta Innovates for an engineering study on a fuel cell carbon capture application at a Husky Energy-owned heavy oil thermal facility)
- VSAT +2.5% (prices public offering of 6.5 mln shares of its common stock at $69.74/share, before underwriting discounts)
- MNK +1% (modestly rebounding, presented study that addresses possible impact of H.P. Acthar Gel on use of corticosteroids among patients with rheumatoid arthritis, lupus, and dermatomyositis/polymyositis)
Analyst comments:
- SPLS +5.0% (target raised to $9 at Telsey Advisory Group after Q3 results)
Germany’s finance ministry is likely to give a pass to banks that helped foreign investors circumvent capital gains taxes. The news could set off a political firestorm with German states that want tax-avoidance practices curbed.
It’s a controversial move that is drawing the ire of some German states, many of which have aggressively gone after tax avoidance and evasion schemes over the past few years.
The loophole in question has to do with capital gains taxes. Last year it was revealed that German banks have been creating domestic vehicles for foreign investors to claim benefits normally reserved only for German investors.
Both domestic and foreign investors have to pay a tax on dividends, but only local investors are entitled to a tax rebate for the lower value of a stock following a dividend payment. By temporarily lending stocks to a domestic entity, foreign investors were able to enjoy the same tax rebate.
The letter might undermine efforts to fight the tax reducing scheme and prosecute banks and investors to pay damages for past deals.
The finance ministry’s letter, posted November 11, said that when banks make a profit on such deals with foreign investors, the tax authorities will approve of them, according to the letter obtained in a joint investigation from Handelsblatt and the Bavarian broadcasting programs BR Recherche and Report München show.
The letter might undermine efforts to fight the tax reducing scheme and prosecute banks and investors to pay damages for past deals. Germany’s Federal Supreme Financial Court in August last year ruled that the so-called “cum-cum deals” aiding foreign investors were unlawful.
Together with another form of dividend stripping known in Germany as “cum-ex,” which involves short selling around the ex-dividend date, the schemes are thought to have cost German taxpayers upward of €10 billion (around $11.3 billion) over the course of a decade. German law explicitly made cum-ex deals illegal in 2012.
Citigroup’s German unit has reached a settlement with German authorities to pay less than €10 million, or $10.9 million, a fraction of the originally estimated sum, in a dispute over alleged tax evasion by clients in dividend-stripping deals, Handelsblatt learned last week.
Norbert Walter-Borjans, finance minister of the state of North Rhine-Westphalia, is especially irritated by the Finance Ministry letter. He has been at the forefront in Germany to crack down on tax evasion.
“The banks have operated in compliance with existing law.”
Florian Lechner, Tax partner, law firm Linklaters
“We are outvoted, much against our clearly voiced opposition,” Mr. Walter-Borjans told Handelsblatt, adding that he had tried to stop the letter from being sent out but failed to convince his counterparts at the federal level.
“I expect that some states, such as the bank location of the state of Hesse, have warmly welcomed the letter,” he added, referring to the state that includes Frankfurt, Germany’s financial capital, and is home to Deutsche Bank, Commerzbank and many other domestic and international financial institutes.
Commerzbank, Germany’s second-largest bank and partially government-owned, played an active role in helping foreign investors exploit a tax loophole that artificially lowered German tax payments by around €1 billion, or $1.1 billion, a year, research by Handelsblatt and a group of global media publications showed in May.
The financial sector and their advisors applauded the Finance Ministry’s letter. “The banks have operated in compliance with existing law,” said Florian Lechner, a tax partner at law firm Linklaters. “I assume that with the Finance Ministry’s letter, the sound structures of cum-cum businesses by banks will no longer be picked at.”
Gerhard Schick, policial spokesman of the opposition party Greens in the Lower House, said the letter may have been motivated by different concerns: “I’m afraid that those involved in this matter were worried about [the health] of some institutions. We cannot, however, let the tax payer bleed to stabilize banks.”
Mr. Walter-Borjans for his part suggested he’s not going to give up the fight just yet, arguing the ministry had gone over the states’ heads.
The Finance Ministry “has ignored the reservations of the Finance Ministers’ Conference. [They] sent out the letter and created new facts,” Mr. Walter-Borjans said. “Of course, we will not just accept this.”
Thales (Euronext Paris: HO) has entered into exclusive negotiations with the private equity firm Latour Capital with a view to divesting its business that provides ticketing and revenue collection for transport operators as well as road tolling and car park management systems. Presented on November 16th to the Thales Group's European Works Council, the project aims to accelerate the development of this business while creating value for its customers and employees.
Key points
* In 2015, this business generated sales of 155 million euros. It employs
close to 850 people, mainly in France, the Netherlands, Mexico, Hong Kong,
Denmark and Italy.
* The objective is to put in place a business plan to grow this activity
by building on its existing teams, know-how and capabilities, and by
developing innovative technological solutions.
* The divestment project is in line with the Thales strategy of permanent
business portfolio optimisation.
Violent rotation: record inflows to equity ETFs, record inflows to financial sector funds, biggest bond redemptions in 3½ years, record redemptions from EM debt.
“Great Rotation” flows: largest equity inflows in 2 years ($28bn), biggest bond outflows in 3½ years ($18bn); widest weekly disparity between stock & bond flows ever.
- Equities: largest inflows in 2 years ($27.5bn) ($34bn inflows to
- ETFs offset by $7bn outflows from mutual funds)
- Bonds: largest outflows since Jun’13 ($18.1bn)
- Precious metals: largest outflows since Jun’13($2.7bn)
>>> Equity Flows
- EM: largest weekly outflows in 14 months ($5.4bn)
- US: largest weekly inflows in 2 years ($30.7bn)
- Europe: rare $0.8bn inflows (largest in 9 months)
- Japan: $1.0bn outflows (outflows in 3 of past 4 weeks)
By sector: monster inflows to financials ($7.2bn) & healthcare ($3.1bn); largest materials inflows in 3 years ($1.4bn); 7 straight weeks of consumer outflows ($0.8bn)
>>> Fixed Income Flows
- Record outflows from EM debt funds ($6.6bn)
- Largest outflows from muni bond funds since Jun’13 ($3.0bn)
- Largest outflows from Govt/Tsy funds in 12 months ($3.4bn)
- Chunky $3.8bn outflows from HY bond funds (3 straight weeks)
- $2.4bn outflows from IG bond funds
- 23 straight weeks of TIPS inflows ($0.8bn)
- Inflows to bank loan funds in 18 of past 20 weeks ($0.6bn)