Betaville
Posted: 09 Jun 2016 02:55 PM PDT
Wow - I thought yesterday's piece might ruffle a few feathers but I never expected the torrent of angry banter I received throughout the afternoon.
It sort of reminds me of last year's shenanigans when I broke a series of stories about Slater & Gordon interest in purchasing the majority of Quindell. For several months I was on the receiving end of serious abuse, scepticism and denials (from Slater & Gordon itself) but stuck to my guns. And what happened: Slater & Gordon eventually bought Quindell's professional services division for just under £640 million. Here is a link to my final piece in that series:
http://betaville123.blogspot.co.uk/2015/03/quelle-surprise-quindell-announces-sale.html
Now, I'm not saying it's going to play out the same way with Wirecard (these type of situations rarely follow exactly the same path) but the fervour and fury of those people on either side of the argument is eerily similar to when I broke a series of stories on Quindell...
Golan Telecom interests four investor groups
Four investor groups have shown interest in acquiring the Israeli mobile services provider Golan Telecom, according to a report in Ha'aretz.
The report noted, based on unidentified sources, that the Russian businessperson Roman Abramovich; a group formed between the Israeli businesspeople Shlomo Rodav and Gil Sharon; are two of the investor groups interested in the target.
The report said the bids are all believed to be worth less than ILS 300m (USD 78m), compared with the ILS 1.2bn offer from the Israeli telecommunications company Cellcom.
While none of the bidders are in the telecommunications sector, which would make the Israeli Antitrust Authority less likely to block the deal, Golan said it is planning to contest the regulatory decision to block Cellcom's planned acquisition of Golan instead of entertaining the offers.
Furthermore, among the bidders, Rodav and Sharon are said to be planning to break up the firm, which would make its offer less likely to be accepted by Golan shareholders.
Ha'aretz
Swisscom, Iliad, Digicel submit offers for VimpelcCom and CK Hutchison's Italian mobile telecoms assets; Sky decides against bidding
The telecoms groups Swisscom [VTX: SCMN], Iliad [EPA: ILD] and Digicel [NASDAQ:DCEL] have submitted initial bids for Italian mobile telecoms assets put up for sale by VimpelCom [NASDAQ:VIPNASDAQ: VIP] and CK Hutchison [HKG:0001], according to a newswire report.
A Bloomberg report on Wednesday, June 8 cited people familiar with the matter for the information.
The offers, which are not binding, were submitted to European Union competition commissioner Margrethe Vestager, the people said.
Sky [LON:SKY], a UK-based satellite television broadcaster and internet service provider, has decided against proceeding with discussions, the people added.
VimpelCom’s Wind Telecomunicazioni and Hutchison’s 3 Italia are trying to find buyers for the assets, which include redundant wireless mobile frequencies and approximately 5,000 transmission masts, the item said.
The disposals are part of VimpelCom and CK Hutchison’s attempt to secure regulatory approval for their proposed EUR 21.8bn (USD 24.85bn) merger of Wind Telecomunicazioni and 3 Italia, the item noted.
The item went on to note talk that Vestager is working on objections to the Wind/3 Italia deal. The people cited by the report said the European Commission will give Hutchison and VimpelCom details of the offers within days, but added that the EC will not select a winning bidder.
The EC refused to comment, the article said. Separately, the commission said VimpelCom and Hutchison submitted concessions regarding the proposed merger on 6 June.
Representatives for Digicel, Fastweb, CK Hutchison, VimpelCom and Sky refused to comment, while a spokesperson for Iliad did not comment immediately, the report continued.
The article noted that Xavier Niel is the controlling shareholder in the French mobile operator Iliad, while Denis O’Brien holds a controlling stake in Digicel, a Caribbean-focused mobile operator.
Fastweb is a subsidiary of Swisscom.
Dow +0.37% S&P +0.33% Nasdaq +0.26% Russell +0.76%
US Market continue to hold record levels even in a very quiet session. The World Bank lowered its 2016 global GDP growth forecast to 2.4% from 2.9% and slashing the U.S. growth outlook to 1.9% from 2.7%. The downgrade did not pressure stocks as investors interpreted the news as a sign that domestic and global monetary policy may remain highly accommodative for longer. energy space (-0.2%) jumped out to an early lead, but could not hold its ground even though crude oil climbed 1.7% to $51.23/bbl, settling at a fresh 2016 high. gold (+1.2% to $1262.20/ozt) and silver (+3.7% to $17.00/ozt) also rallied, benefiting from the fourth consecutive decline in the Dollar Index (93.61), which slipped 0.2% to levels from early May. Volume were below average at 870mil shares. US After Hours Eat +7%, DTEA +4%. RH -17%, PSG -14%, TLRD -3% following earnings/guidance, RADA +33%, ACUR +19%. Trifecta of interest rate decisions in the Asia session kept produced some notable surprises and offered some macro volatility, even with markets in China out for the holidays (Dragon Boat Festival). BOJ Dep Gov Nakaso also spoke at length ahead of next week's policy meeting, noting growing downside risks from overseas and commitment to add to easing if needed.
Nikkei -0.77% Hang Seng closed CSI Closed Shanghai closed
Eur$ 1.1398 JPY 106.76 GBP
S&P-0.12% EuroStoxx -0.10% Dax -0.07% SMI -0.10%
Macro :
- Soros Said to Have Directed Recent Big, Bearish Trades: WSJ
- EU Unlikely to Extend Bail-In Rules Beyond Biggest Banks: Rtrs
- Greek Bonds Could Become QE-Eligible Later This Yr: Stournaras
- U.K. Leave Victory Poses Big Downside Risk to Banks, Citi Says
Keep an eye on :
- AIR FP : Airbus Said Close to Selling Rest of Stake in Dassault Aviation
- AF FP : Air France Wants to Transfer KLM Flights to Paris: Telegraaf
- ALU FP : Alcatel Block Trades at EU3.50; Nokia Close to Squeeze Out Level !!!!!
- ALO FP : Alstom Declines as Ex-Petrobras Official Claims Co. Paid Bribes
- AAPL US : Google to Change Revenue Share Model for App Developers: Recode
- AAPL US : Apple to Reduce Its Revenue Cut From Apps After Year: The Verge
- BAYN GY : Monsanto, Bayer Deal Talks Are Continuing, Baumann Says: FOX
- CGG FP : CGG Jumps Most Since 2014 as Seismics Outperform on Oil Gains
- DENERG DC : Dong Energy Shares Priced at DKK235/Shr in IPO
- AM FP : Airbus Said Close to Selling Rest of Stake in Dassault Aviation
- ENI IM : Eni CEO Says No Progress on Versalis Talks With SK Capital: Ansa
- EOAN GY : EON AGM Approves Uniper Spinoff With 99.7 Percent Majority
- ERICB SS : Ericsson Readies Purchase of Abengoa Telecom Unit: Expansion
- GLEN LN : Glencore Sells Agri Stake to Canadian Fund for $625 Million (1)
- MKS LN : M&S Ex-CEO Said to Have Received GBP600k Bonus Last Year: Sky
- KN FP : Natixis to Transfer Some IT Functions to Portugal, Echos Says
- NESN VX : China Orders Milk-Powder Makers to Register by Oct. 1
- ORA FP : France to Remain One of Orange’s Main Shareholders: Hollande
- RL US : Ralph Lauren Said to Hire Coach’s Jane Nielsen as CFO: WSJ
- RCO FP : Remy Cointreau FY Current Oper. Profit In Line With Estimates
- RR/ LN : Rolls-Royce Running Behind on Deliveries, CEO Tells Staff: FT
- RWE GY : RWE Enters Talks With Govt Over Decommissioning: Rheinische Post
- SDRL NO : Seadrill Agrees to Debt-For-Equity Exchange for 2017 Notes
- TIT IM : America Movil May Cut Brazil Investment by 10%-20%: Valor
- TSCO LN : Tesco Starts Offering of 7m Shares Via BofAML
- UBSG VX : UBS to Cut Managers at U.S. Wealth Unit, Recruit Fewer Advisers
- VK FP :
- VOW3 GY : VW Manager Investigated Over Deletion of Emission Files: NDR
>>> Up
*ADMIRAL RAISED TO HOLD VS SELL AT BERENBERG
*ANTERO MIDSTREAM RAISED TO OUTPERFORM VS NEUTRAL AT BAIRD
*DIRECT LINE RAISED TO BUY VS HOLD AT BERENBERG
*ENQUEST RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS
*FEVERTREE RAISED TO BUY VS HOLD AT BERENBERG
*FRESENIUS MEDICAL CARE RAISED TO ’BUY’ AT BAADER-HELVEA
*HANNOVER RUECK RAISED TO BUY VS HOLD AT BANKHAUS LAMPE
*LUNDIN PETROLEUM RAISED TO EQUALWEIGHT AT BARCLAYS
*PREMIER OIL RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*SSAB RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*STADA RAISED TO ’BUY’ AT BAADER-HELVEA
*UBS RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*WOLSELEY RAISED TO OUTPERFORM AT RBC CAPITAL
>>> Down
*ACCOR CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*AFRICA OIL CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*ANTOFAGASTA CUT TO HOLD VS BUY AT CANACCORD
*CREDIT SUISSE CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*DET NORSKE CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*DEUTSCHE BANK CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*ENDESA CUT TO REDUCE AT HSBC
*ESURE CUT TO SELL VS HOLD AT BERENBERG
*GENEL ENERGY CUT TO UNDERWEIGHT AT BARCLAYS
*ITHACA ENERGY CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*STOLT-NIELSEN CUT TO HOLD AT NORDEA
*TELENOR CUT TO EQUALWEIGHT AT BARCLAYS
*UNICREDIT CUT TO EQUAL WEIGHT AT MORGAN STANLEY
>>> PT Change
>>> Initiation
*HASTINGS GROUP RATED NEW BUY AT BERENBERG, PT 210P
*KAZ MINERALS RATED NEW SELL AT CANACCORD, PT 120P
*MELIA HOTELS INTERNATION RATED NEW ’BUY’ AT SOCIETE GENERALE
*NH HOTEL GROUP SA RATED NEW ’HOLD’ AT SOCIETE GENERALE
*RESURS RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT SEK57.5
*RESURS HOLDING RATED NEW NEUTRAL AT GOLDMAN, PT SEK61
>>> Call
Asian Mid-session Market Update: Bank of Korea out with a surprise rate cut; New Zealand and Brazil central banks on hold
***Economic Data***
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES OFFICIAL CASH RATE UNCHANGED AT 2.25%; AS EXPECTED
- (KR) BANK OF KOREA (BOK) CUTS 7-DAY REPO RATE BY 25BPS TO 1.25% (record low); NOT EXPECTED; First rate cut in 12 months
- (BR) BRAZIL CENTRAL BANK (BCB) LEAVES SELIC TARGET RATE UNCHANGED AT 14.25%; AS EXPECTED
- (CN) CHINA MAY CPI Y/Y: 2.0% V 2.2%E (4-month low)
- (CN) CHINA MAY PPI Y/Y: -2.8% V -3.2%E (51st consecutive month of decline, smallest decline since Nov 2014)
- (JP) JAPAN APR MACHINE ORDERS M/M: -11.0% (biggest decline in 5 months) V -3.0%E; Y/Y: -8.2% (biggest decline in 17 months) V -1.8%E
- (JP) JAPAN MAY M2 MONEY STOCK Y/Y: 3.4% (7-month high) V 3.3%E; M3 MONEY STOCK Y/Y: 2.8% V 2.7%E
- (UK) MAY RICS HOUSE PRICE BALANCE: 19% V 35%E
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -1.2%, S&P/ASX -0.5%, Kospi -0.2%, Shanghai Composite closed, Hang Seng closed, Jun S&P500 -0.2% at 2,115,
***Commodities/Fixed Income***
- Aug gold +0.3% at $1,266/oz, Jul crude oil +0.6% at $51.54/brl, Jul copper +0.6% at $2.07/lb
- JGB: (JP) Japan MoF sells ¥2.18T in 0.1% (0.1% prior) 5-year JGBs; Avg yield: -0.232% v -0.225% prior; Bid-to-cover: 4.66x (highest rate since Aug 2014) v 4.15x prior
- (JP) Japan investors bought net ¥894B in foreign bonds v sold ¥549B in prior week; Foreign investors sold net ¥97.8B in Japan stocks v sold ¥175B in Japan stocks in prior week
***Market Focal Points/FX***
- Trifecta of interest rate decisions in the Asia session kept produced some notable surprises and offered some macro volatility, even with markets in China out for the holidays. RBNZ decision was practically a coin flip, and a Neutral Hold sparked a 120pip rally in NZD/USD. Korean central bank cut for the first time in 12 months, calling the policy move "preemptive", while Brazil central bank signaled the recent progress on inflation may soon allow more flexibility with some room to ease. US futures point to a lower open with a 4pt slide below 2,115 as investors note retreat in China inflation data, large declines in Japan's forward looking machinery orders, and reports that George Soros has returned to trading with a large bearish bet on stocks due to concerns over slowdown in global economy. In FX majors, USD/JPY is down about 40pips below 106.60, AUD/USD is at the bottom of a 40-pip range that was capped at technically-pivotal $0.75 level, and NZD/USD seems to defy gravity after spiking to a 1-year highs above 0.7140.
- Although China market were closed for Dragon Boat Festival, Beijing released its May inflation data. As signaled in input price components of the latest PMI figures, inflation eased after several months of steady increases. CPI fell to a 4-month low of 2.0% y/y, as m/m contracted by -0.5% v -0.2% prior. Non-food CPI was unchanged at 1.1%, while food component slowed to 5.9% y/y v 7.4% prior. Wholesale PPI data remains in negative territory for over 4 years, though the declines were the lowest since late 2014.
- RBNZ was on hold at 2.25% but did not signal an imminent rate cut as was speculated even by those analysts who predicted no-change. Instead, RBNZ added that inflation will "strengthen reflecting the accommodative stance of monetary policy, increases in fuel and other commodity prices, an expected depreciation in NZD", and also upgraded its quarterly projections for CPI by 0.2pts for 2016-end and 2017-end to 1.3% and 2.0% respectively. The statement still maintained that further easing may be required, and subsequent comments from Gov Wheeler indicated that another rate cut is still built into projections. However, NZD was bid sharply higher as the central bank sent a message of inflation expectations stabilizing, and even more mentions of potential for more macro-prudential policy easing did little to sway sentiment away from the communicated neutral stance due to discomfort with housing inflation.
- Bank of Korea's 25bp rate cut was a major surprise, considering that last month's decision was unanimous after 2 members called for a cut back in April. Instead, today's decision also saw no dissent, as BOK statement expressed concern with rising household debt, slowdown in inflation (even if it was mainly due to agricultural increase), weakening consumption, and ongoing decline in exports. BOK Gov Lee spoke extensively after the decision, stating that growth projections are now expected to train the latest forecasts in April, economy is yet to show a clear recovery, corporate restructuring poses a threat to labor, and outflows from emerging markets are a risk due to anticipated Fed tightening.
- Brazil central bank was more in line with expectations, but even here there were hints of impending policy change. BCB noted there has been progress in fight against inflation, particularly its 2nd-round effects, suggesting that the high policy rate of 14.25% may finally see some relief.
- BOJ Dep Gov Nakaso also spoke at length ahead of next week's policy meeting, noting growing downside risks from overseas and commitment to add to easing if needed. Nakaso added there was no change to commitment to meet 2% target at earlier time possible, even with increase in monitoring of the health of JGB market in the environment of negative interest rates.
***Equities***
US equities / ADRs:
- EVHC: Said to be in merger discussions with Amsurg; deal may be announced next week - press; +9.1% afterhours
- EAT: Affirms FY16 near low end of $3.55-3.65 v $3.54e; Sees SSS to improve from Q3 but remain negative; Guides FY17 $3.40-3.50 v $3.45e; +5.5% afterhours
- ABM: Reports Q2 $0.31 adj v $0.28e, R$1.26B v $1.25Be; +3.6% afterhours
- SRPT: Announces proposed offering of $37.5M in common stock (~3% of market cap); -0.7% afterhours
- RH: Reports Q1 -$0.05 v $0.05e, R$455M v $459Me; Cuts FY16 guidance; -18.8% afterhours
Notable movers by sector:
- Consumer discretionary: Surfstitch Group SRF.AU -25.9% (guidance)
- Industrials: Amcor AMC.AU -7.9% (guidance); Southern Cross Electrical Engineering SXE.AU +18.6% (acquisition)
- Technology: LG Electronics Inc 066570.KR +4.4% (to become electric car part supplier to VW); Samsung SDI Co 006400.KR +1.4% (may supply batteries to Tesla); Toshiba Corporation 6502.JP +4.4% (Westinghouse confirms deal for nuclear reactors)
- Materials: Itochu Corp 8001.JP -1.4% (acquisition)
- Energy: Liquefied Natural Gas LNG.AU +4.4% (speculation of takeover interest)
- Telecom: Softbank Corp 9984.JP -2.0% (plans to merge certain units); Telstra Corp. TLS.AU -1.3% (considers sale of Autohome stake)