FT : Hedge funds short London luxury homes

Hedge funds short London luxury homes

Hedge fund managers are taking short positions against the biggest listed provider of luxury London homes in a bet that weakening emerging markets will put the once buoyant sector into reverse.
A small group of funds are targeting the shares of Berkeley Group, the main listed proxy for new high-end London property, amid signs that Asian and Russian buyers are deserting the market.

Odey Asset Management, BlueMountain Capital Management and Anchorage Capital took short positions against the FTSE 100 builder in January, worth 2.2 per cent of its share capital, according to data disclosed to the Financial Conduct Authority.
The short positions run against analysts’ consensus that Berkeley is well positioned to continue growing — and indicate the hedge funds believe pricing and transaction levels for luxury London homes have further to fall.
The market for luxury London homes faltered last year after being driven upwards in the previous few years, partly by overseas buyers seeking a bolthole or a safe haven for their cash. Many foreign buyers have suffered from a weakening of emerging market currencies and an increase in stamp duty on expensive homes.
Prices paid per square foot for homes costing more than £1m fell by 2.7 per cent in 2015 after two consecutive years of 10 per cent rises, according to the data provider LonRes.
Anthony Codling, an analyst at Jefferies, the investment bank, said he had spoken to hedge funds looking to bet against Berkeley.
“They think overseas demand is falling away and there are pockets of oversupply in new-build homes, which will reduce selling prices for Berkeley and bring their share price down,” he said.
Berkeley’s shares have risen 25 per cent in the past year, fuelled by rising sales. The company declined to comment.
About 54,000 homes are planned or under construction in the most expensive areas of the capital, with most of these set to be priced at £1m or more, research by LonRes found last year — even though only 3,900 homes worth more than £1m were sold in these areas in 2014.
Mr Codling said he did not agree with the case for shorting Berkeley. The company’s shares are trading at 2.7 times book value after it set out a plan to pay out £16.34 per share in dividends by 2021.
“As long as investors get that cash return I don’t see significant downward pressure on the share price,” said Mr Codling.
Charlie Campbell, analyst at Liberum, said there were concerns that overseas buyers who paid deposits of 10 or 20 per cent on off-plan London flats might struggle to pay the balance on completion if their home currencies have since weakened.
But he noted that Berkeley sold to citizens of 60 different countries in the first six months of its financial year, according to its own trading updates. It may also benefit from increasing appetite for homes among institutionally-funded corporate landlords, who help to finance developments upfront.
“I understand the concerns, but betting against Tony Pidgley and the value he has created over the long term can be fraught with difficulty,” he said. Mr Pidgley, Berkeley’s chairman, served as managing director from the company’s foundation in 1976 until 2009.

>>> Early Elections on Horizon for Greece?

Early Elections on Horizon for Greece?

With Greece in the grip of mass protests against the government’s plans for an overhaul of the country’s pension system and additional austerity measures, the prospect of early elections looms on the horizon.

Greece’s controversial Minister of Defense Panos Kammenos and leader of the right-wing Independent Greeks party has said as much in an interview he gave the other day to a local media news agency.

Kammenos said that if Greece’s official creditors insist on making irrational demands, the Greek people will have again the last word on the matter.

However, this is not a view shared by Greek government officials that belong to the Syriza party.

Government Vice President Yannis Dragasakis rejected the call for early elections in an interview he gave to an Athens radio station, saying that the government has a clear mandate to carry out reforms.

Syriza’s official organ, the daily Avgi, also denounced calls for early elections, saying that this is the preferred option of the corrupt political establishment.

In the meantime, New Democracy’s Vice President Adonis Georgiadis extended an invitation to members of To Potami party to join the ranks of New Democracy, hinting that they have no political future on their own.

Perhaps early elections do loom on the horizon after all.

(The Guardian) Apple says iPhone 'Error 53' is to protect customers' security

Apple says iPhone 'Error 53' is to protect customers' security

{http://www.theguardian.com/technology/2016/feb/06/apple-says-iphone-error-53-is-to-protect-customers-security#_=_}

Security measure is necessary to prevent use of fraudulent parts, says company, after thousands of users affected

Apple has hit back at criticism of its controversial “Error 53” message on iPhones, claiming it is part of measures to protect customers’ security.

On Friday, the Guardian revealed how thousands of iPhone 6 users have had their devices, which cost hundreds of pounds, left useless after encountering the error message.

The problem is related to the smartphone’s home button, which contains a Touch ID thumbprint reader that can be used to unlock the device rather than inputting a four-digit security code.

If the phone is damaged and a non-Apple repairer replaces the button, a subsequent update of the operating system detects a non-standard component and shuts down the device. There is no known way of bringing it back to life.

Many iPhone 6 owners have only become aware of the issue when installing routine updates to iOS, Apple’s operating system for iPhones and iPads. It is unclear exactly how many have been affected.

In a statement released following the publication of the Guardian’s story, an Apple spokesperson said: “We take customer security very seriously and Error 53 is the result of security checks designed to protect our customers. iOS checks that the Touch ID sensor in your iPhone or iPad correctly matches your device’s other components.

“If iOS finds a mismatch, the check fails and Touch ID, including for Apple Pay use, is disabled. This security measure is necessary to protect your device and prevent a fraudulent Touch ID sensor from being used. If a customer encounters Error 53, we encourage them to contact Apple Support.”

However, some users have also encountered Error 53 messages even though their device has not been altered or repaired in any way. That is what happened to US technology writer Mike Wehner last year when his iPhone 6 suffered intermittent problems with the Touch ID sensor.

Although he was able to get a replacement device at an Apple store, thousands of users whose phones have been repaired have not been so lucky. As third-party hardware has been installed on their devices, Apple deems its terms and conditions to have been broken and forced many owners to contribute towards the cost of a new phone.

With many Apple customers left furious at the company’s stance, one Guardian reader comments: “I think they made an after-the-fact adjustment to a poorly conceived and implemented security system on the iPhone. They hadn’t properly considered the implications of third parties substituting parts on the phones, whether these were bonafide alterations or not.

“They didn’t think about the customers at all (Apple are arrogant enough to do this). Or they decided that it isn’t their problem if customers do something other than what they recommend. Surely even Apple now realise it is their problem? They will have to sort it out.”

A reader of the Boing Boing technology blog said Apple should have advertised the fact rather than keeping it hidden.

If they included a warning in the package ‘tamper resistance’ feature that works by non-Apple-authorised repair services may be mistaken for tampering attempts, and lead to the phone being disabled’, then it would be purely a feature ... By concealing the feature prior to sales, and only even revealing it after being repeatedly pressured over it, Apple turned what could have been a feature into a landmine.”

Apple shares have fallen more than 20% in the past three months as investors begin to doubt whether it can maintain the stellar growth posted since the iPhone first went on sale eight years ago. The company relies on the smartphone for about two thirds of its revenue.

Last month Apple said iPhone sales were flat for the three months to December, with about 74.8m devices bought in the quarter. Its most recent device, the Apple watch, has failed to capture consumers’ imagination and iPad sales are also on the slide.

Much is therefore riding on the success of the iPhone 7, expected to be released in September, but slowing global smartphone sales could make that a difficult feat to pull off even for Apple.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: CTSH -7.8%, AVXL -6.9%,L -5.9%, CFCB -3%, QTNT -1.6%

Select EU related names showing weakness: ARMH -5%, DB -5%, PUK-4.2%, SAN -3.9%, ASML -3.8%, CS -3.6%, VOD -3%

Select fan favorites trading lower: TSLA -5.3%, AMZN -4%, FB -3.7%,BABA -3.6%, PYPL -3.5%, RACE -3.5%

Select oil/gas related names showing early weakness: SDRL -9.7%, CHK-7.2%, RIG -4.5%, TOT -3.7%, BP -3.4%, RDS.A -2.7%

Other news: BCRX -64.2% ( announces results from OPuS-2 for the treatment of hereditary angioedema attacks; treatment failed to demonstrate a statistically significantly lower mean attack rate versus placebo), CTIC -50.9% (announces FDA Places Partial Clinical Hold on Pacritinib IND), CLF -5.5% (settles class action suit with Northern District of Ohio), RDUS -4% (still checking), FCX -4% (copper futures trading 1.5% lower this morning)

Analyst comments: DATA -6.3% (downgraded to Equal-Weight from Overweight at Morgan Stanley), NVO -4.7% (downgraded to Sell from Neutral at UBS), HSBC -4.4% (downgraded to Underweight from Equal-Weight at Morgan Stanley), AZN -3.8% (downgraded to Hold at HSBC Securities)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: BWP +3.7%, GOLD +2.2%, CTS+1.5%, WEX +1%, HAS +0.4%

M&A news: APOL +27.3% (to be acquired by a consortium of investors for $9.50/share in cash), OUTR +3.6% ( being targeted by activist investor Engaged Capital, has rebuffed interest from buyout firms, according to Bloomberg), GPRO +2.9% (Barron's profiles view that GoPro (GPRO) might be a possible takeover target)


Select metals/mining stocks trading higher:AUY +4.4%, GG +3.8%, EGO+3.5%, AG +3.1%, SLW +2.7%, ABX +2.2%, RGLD +2%


Other news: GALE +12.7% (announces the USPTO issued a Notice of Allowance for an additional U.S. patent application covering multiple uses of NeuVax), PLAB +6.5% (still checking), SFM +5.1% ( set to join the S&P MidCap 400), SUPN +4.3% (favorable patent count ruling against Allergan (AGN) ), SGMO +0.7% (FDA has cleared the company's investigational new drug application for SB-318)

Analyst comments: KGC +8.3% (upgraded to Outperform from Market Perform at BMO Capital)

>>> US Early premarket gappers

Early premarket gappers
Gapping up: ASTI +34%, BWP +10.7%, CUBE +6.5%, PLAB +6.5%, SFM+4.6%, GPRO +3.9%, RGLD +3.3%, EGO +2.8%, AG +2.8%, AUY +2.6%, KGC+2.6%, SLW +2.3%, GG +1.7%, GOLD +1.2%, WEX +1%

Gapping down: BCRX -59.6%, CTIC -26.8%, SDRL -8.7%, L -7.9%, CTSH-7%, AVXL -5.2%, MT -5.1%, RDUS -5%, ARMH -5%, CHK -4.2%, TSLA-4.2%, ASML -3.9%, DB -3.8%, RIG -3.7%, HSBC -3.7%, NVO -3.6%, AMZN-3.4%, BP -3.2%, TOT -3.2%, PYPL -3.1%, PUK -3%, CFCB -3%, SAN -2.9%,BBVA -2.9%, AZN -2.9%, FB -2.8%, RDS.A -2.7%, RACE -2.7%, CS -2.7%,BABA -2.6%, VOD -2.6%, HOG -2.4%, FCX -2.3%