>>> What to look at today - 4th of February 2016

Dow+1.13% S&P+0.50% Nasdaq-0.28% Russell+0.15% VIX 21.65 (-1.5% after a 30% intraday)
US Market closed higher after a volatile session, mkt sold off after ISM, but bounce back with oil, WTI crude closed its session 8.0% higher at $32.29/bbl. Dudley stated that financial conditions have tightened since December's rate increases and that additional strength from the dollar could have "significant consequences" for the U.S. economy. Commodity-sensitive materials (+3.3%) and energy (+4.0%) were able to top the leaderboard throughout the day while heavyweights financials (-0.1%), consumer discretionary (-0.3%), and technology (-0.4%) underperformed. IBB+1.2%. Volume in line with average at 1bil share. US After Hours GLUU +24.9%, OSUR +22.7%, CPST +17.2%, TBI +13.6%, SEDG +12.5%, GPRO -9.2%, AMBA -2% (in sympathy with GoPro earnings), VHC +88.1% on AAPL Patent payment, VRNG+24.9% on VHC News. Asian equity markets are generally higher with most pronounced gains in Australia and the materials space. Shares of BHP and Rio Tinto are up over 8%, while Woodside Petroleum up over 5%, tracking an abrupt upward inflection in the latter part of the US session. Some of the catalysts discussed include realization that the Fed may not be particularly aggressive, particularly after New York Fed's Dudley said board members will take deterioration in financial markets more seriously if tightening in financial conditions continues. Goldman Sachs also revised view on the next Fed rate hike to June from March. Oil prices were also up nearly 10% on reports that Venezuela, Russia, and Iran have endorsed an emergency meeting. In China, PBOC research bureau chief Lu said the room for monetary policy is relatively small given the risk of cuts in RRR or interest rates fueling financial risk accumulation and outflow pressure. Lu added there were increasing risks in corporate debt space. In Japan, BOJ Gov Kuroda continued to defend the latest negative rate policy, pledging to monitor the bond market while adding there is little risk of negative rate policy thwarting JGB purchases. Kuroda reiterated there was no limit to QQE and that BOJ will not hesitate to ease policy further.

Nikkei -0.85% Hang Seng +1.38% Shanghai +1.56%

Eur$1.1078 CNH 6.6161 CNY 6.5778 JPY 117.95 GBP 1.4580 CHF 1.0062 RUB$ 75.8354 WTI $32.95(+2.05%)

S&P +0.56% Eurostoxx +1.52% Dax +1.59% SMI +1.28%


Macro :
- Hollande Says Doesn’t Want New Talks on UK Demands: AFP
- Brazil Said to Not Rule Out Rate Hikes in Coming Meetings: Rtrs

Keep an eye on :
- ABG SM : Abengoa to Give Banks Debt Plan Details Next Week: Expansion
- MT NA : Vale, Arcelor Given More Time to Appeal in Tubarao Case: Valor
- ATEA NO : Atea 4Q Revenue Rises to NOK8.61b, Dividend NOK6.5 Per Share
- PMI IM : Popolare Milano, Popolare Said to Aim for Deal by March: Ansa
- BNP FP : BNP 2014 Accord Had Possible New Fine Clause: L’Echo
- BKG LN : Berkeley, Land Secs Among Transport for London Property Partners
- BOL FP : Sierra Leone to Get 20% Stake in Bollore Freetown Terminal
- CGG FP : CGG Can Endure Oil Slump Lasting to 2017 After Capital Hike: CEO
- CSGN VX : Credit Suisse Investment Bank Remains ‘Core’ to Strategy: CEO, CS Litigation Items CHF564m, Restructuring Costs CHF355m
- AM FP : Dassault Systemes FY Revenue In Line With Estimates
- DNB NO : DNB 4Q Net Interest Income Rises In Line W/ Est.; Div. Raised
- FINGB SS : Fingerprint Cards Updates Revenue Forecast, Sales Beat Ests.
- GEA GY : GEA Sees 2016 ‘Moderate’ Sales Growth in Reported Terms
- INGA NA : ING Group 4Q Net Income Beats; Plans 2015 Total Dividend 65c
- INW IM : Inwit Will Consider an Extraordinary Dividend in Future: CEO
- SDF GY : Mosaic Seeks to Cut Phosphate Production; Peers May Move
- LHN VX : LafargeHolcim Proposes Divesting Lafarge India as New Remedy
- LAND LN : Berkeley, Land Secs Among Transport for London Property Partners
- LNC FP : Les Nouveaux Constructeurs: Visibility Good as Market Improves
- MAERSKB DC : Dong Refused to Sell Oil Unit as Maersk Bid Too Low: Berlingske
- MOBB BB : Mobistar Sees 2016 Adj. Ebitda EU270m-EU290m; Est. EU288m
- MUV2 GY : Munich Re 4Q Prelim. Operating Result Beats Estimates, Raise dvd to €8.25 (Est.€8) from €7.75
- ORA FP : Orange CEO Sees ‘Positive’ Bouygues Talks: Reuters
- UG FP : Peugeot to Cut 700 Jobs at Poissy Plant on Voluntary Basis: AFP
- RNO FP : Renault Formula One Return to Cost EU300m, Les Echos Says
- ROG VX : Roche Potential PACB Deal Unlikely Until 2H16, 2017: Cantor
- SCYR SM : Sacyr Seen Cutting 350-420 Construction Jobs: Finanzas.com
- SCMN VX : Swisscom FY Net Income Below Ests.; Keeps Dividend Unchanged
- SKAB SS : Skanska 4Q Op. Profit Beats Est.; Dividend Raised
- SDA1V FH : Sponda Buys 6 Properties in Helsinki, Plans Rights Offer
- SHP LN : Baxalta Files to Offer Up to $100m of Stock Via JPMorgan
- STL NO : Statoil 4Q Adj. Net Income NOK1.6B; Est. NOK3.0B, Net Income Misses Estimates; 22c Div Maintained
- TEF SM : Telefonica to Get More Non-Fiber Sharing Cities: Expansion
- TIE1V FH : Tieto Beats Ebit Ex-Items Ests.; Sees Ebit Increasing in 2016
- TRELB SS : Trelleborg Sees 1Q Demand on Par With 4Q or Slightly Weaker
- VOW3 GY : EU Seeks Update From VW, German Minister on Car CO2 Emissions

>>> Europe : Brokers Upgrades & DOwngrades - 4th of February 2016

>>> Up
*ADIDAS RAISED TO BUY VS NEUTRAL AT GOLDMAN, PT EU114
*HANNOVER RE RAISED TO BUY VS HOLD AT HSBC
*INFINEON RATED BUY VS UNDER REVIEW AT BERENBERG; PT EU15
*K+S RAISED TO HOLD VS SELL AT LIBERUM
*NORDAX GROUP AB RAISED TO BUY AT NORDEA
*SNAM RATED NEW BUY AT JEFFERIES

>>> Down
*ANGLO AMERICAN PLATINUM CUT TO NEUTRAL AT JPMORGAN
*AXEL SPRINGER CUT TO HOLD VS BUY AT HSBC
*GAS NATURAL CUT TO NEUTRAL VS OUTPERFORM AT MEDIOBANCA
*GENERALI CUT TO SELL VS NEUTRAL AT CITI
*KESKO CUT TO SELL AT NORDEA
*MAGNIT CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*STMICRO RATED SELL VS UNDER REVIEW AT BERENBERG; PT EU4.50
*SWATCH CUT TO HOLD VS BUY AT EVERCORE; PT CHF325

>>> PT Change


>>> Initiation
*INFINEON RATED BUY VS UNDER REVIEW AT BERENBERG; PT EU15
*LEGAL & GENERAL RATED NEW UNDERPERFORM AT MACQUARIE; PT 189P
*STMICRO RATED SELL VS UNDER REVIEW AT BERENBERG; PT EU4.50

>>> Call

>>> Asian Update

Asian Market Update: Australia leads the rally as materials giants soar; Sharp zooming as it tilts toward improved Hon Hai injection

***Economic Data***
- (AU) AUSTRALIA Q4 NAB BUSINESS CONFIDENCE: 4 V 1 PRIOR
- (TH) Thailand Jan Consumer Confidence: 75.5 v 76.1 prior; Consumer Confidence Economy: 64.4 v 65.1 prior

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -0.2%, S&P/ASX +2.1%, Kospi +1.2%, Shanghai Composite +1.1%, Hang Seng +1.5%, Mar S&P500 +0.6% at 1,920

***Commodities/Fixed Income***
- Apr gold -0.1% at $1,140/oz, Mar crude oil +1.1% at $32.63/brl, Mar copper +0.8% at $2.11/lb
- USD/CNY: *(CN) PBOC SETS YUAN MID POINT AT 6.5419 V 6.5521 PRIOR; strongest setting since Jan 6th; 19th straight firmer setting relative to Close
- (CN) PBoC to inject CNY80B in 14-day reverse repos and CNY70B in 28-day reverse repos
- GLD: SPDR Gold Trust ETF daily holdings rise 4.5 tonnes to 690.1 tonnes; highest since Nov 1st
- SLV: iShares Silver Trust ETF daily holdings fall from 9,622 tonnes from 9,610 tonnes; multi-year low
- (JP) Japan investors sold net ¥85.4B in foreign bonds v bought net ¥475B in prior week; Foreign investors sold net ¥364B in Japan stocks v sold ¥189B in Japan stocks in prior week

***Market Focal Points/FX***
- Asian equity markets are generally higher with most pronounced gains in Australia and the materials space. Shares of BHP and Rio Tinto are up over 8%, while Woodside Petroleum up over 5%, tracking an abrupt upward inflection in the latter part of the US session. Some of the catalysts discussed include realization that the Fed may not be particularly aggressive, particularly after New York Fed's Dudley said board members will take deterioration in financial markets more seriously if tightening in financial conditions continues. Goldman Sachs also revised view on the next Fed rate hike to June from March. Oil prices were also up nearly 10% on reports that Venezuela, Russia, and Iran have endorsed an emergency meeting. USD majors are consolidating across-the-board declines of the US session, with USD/JPY in 117.70-118.20 range, AUD/USD in 0.7150-90 range, and NZD/USD in $0.6640-80 band.

- In China, PBOC research bureau chief Lu said the room for monetary policy is relatively small given the risk of cuts in RRR or interest rates fueling financial risk accumulation and outflow pressure. Lu added there were increasing risks in corporate debt space. Overnight, China State Planner NDRC Chairman Xu reiterated the govt view to maintain economic growth within a reasonable range of 6.5-7.0%, also warning that Q1 GDP is typically slower.

- In Japan, BOJ Gov Kuroda continued to defend the latest negative rate policy, pledging to monitor the bond market while adding there is little risk of negative rate policy thwarting JGB purchases. Kuroda reiterated there was no limit to QQE and that BOJ will not hesitate to ease policy further. He also noted that while he does not think banks will pass on costs of negative rate policy to retail customers, it was impossible to rule out the chance of negative rates on deposits. Earlier, a Nikkei report speculated the BOJ will limit the scope of negative interest rates to ¥30T of banks' current account deposits. Also of note in Japan, shares of Sharp were up over 20% late in the session after a NHK report the company is leaning in favor of a restructuring offer from Hon Hai, speculated to have been increased to ¥700B from ¥650B. Despite the company's aversion, this appears to be a much more attractive offer than that from INCJ, which is only about half the amount and would likely come with conditions of management change. Sharp responded to speculation noting it has not made a final decision, will hold meetings with both, and come to conclusion in the coming weeks.

- Elsewhere, New Zealand central bank's McDermott said NZD needs to be sustainably lower than where it is, sending NZD to session low of 0.6640. McDermott did suggest that while medium-term inflation expectations have fallen, they are still near 2% target. In Korea, Fin Min Yoo said current conditions dont seem to require an extra budget following overnight announcement of a new fiscal stimulus of KRW2T for Q1.

***Equities***
US equities / ADRs:
- VHC: Apple ordered to pay $625.6M over patent infringement - press; +89.8% afterhours
- GLUU: Reports Q4 $0.02 v -$0.03e, R$57.9M v $49.8Me; approves $50M buyback; +29.4% afterhours
- CBS: Promotes CEO Moonves as Chairman; +4.1% afterhours
- BWLD: Reports Q4 $1.32 v $1.47e, R$490.2M v $509Me; +1.1% afterhours
- ALL: Reports Q4 $1.60 v $1.31e, R$8.69B v $8.01Be; +0.6% afterhours
- MOS: Announces phosphate production curtailments, to reduce production by up to 400K (20% quarterly phosphate sales volume); +0.4% afterhours
- YUM: Reports Q4 $0.68 v $0.66e, R$3.95B v $4.00Be; +0.4% afterhours
- MET: Reports Q4 $1.23 v $1.36e, R$17.1B v $17.4Be; -2.3% afterhours
- DHT: Reports Q4 $0.31 v $0.31e, R$80.0M v $78.5Me; -5.4% afterhours
- GPRO: Reports Q4 -$0.08 v $0.01e, R$437M v $455Me; names new CFO effective Mar 11; -8.7% afterhours

Notable movers by sector:
- Consumer discretionary: Wanda Cinema 002739.CN +2.9% (Jan result)
Panasonic Corporation 6752.JP -8.7% (Q3 result); SK Networks 001740.KR +5.4% (Q4 result); Ansell ANN.AU -19.8% (H1 result)
- Financials: Vanke 2202.HK +2.3% (Jan result); Macquarie Group MQG.AU -4.1% (Q3 result)
- Industrials: Guangzhou Automobile Group 2238.HK +5.2% (Jan result); Geely Automobile Holdings 175.HK +2.4% (Jan result); Hitachi Ltd 6501.JP -9.6% (9-month result); Downer EDI DOW.AU +7.8% (H1 result)
- Technology: Lenovo 992.HK +3.3% (Q3 result); Tencent 700.HK +0.5% (partnership with ESPN)
Sharp 6753.JP +13.1% (speculation on choosing Hon Hai's rescue plan); Toshiba Corporation 6502.JP +4.4% (speculation on earnings forecasts); Sumitomo Electric Industries 5802.JP +4.5% (9-month result)
- Materials: South32 S32.AU +15.0% (restructuring plan); Programmed Maintenance Services PRG.AU -34.3% (guidance); CIMIC Group CIM.AU %+4.4% (amended offer)
- Energy: JX Holdings 5020.JP +3.6% (9-month result); AGL Energy AGL.AU +1.4% (strategic decision)
- Healthcare: Eisai Co 4523.JP -0.4% (new agreement); Takeda Pharmaceutical Co 4502.JP -1.9% (9-month result)

>>> US After Hours Summary: GLUU +24.9%, OSUR +22.7%, CPST +17.2%, TB


After Hours Summary: GLUU +24.9%, OSUR +22.7%, CPST +17.2%, TBI +13.6%, SEDG +12.5%, GPRO -9.2%, AMBA -2% (in sympathy with GoPro earnings)

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance:  GLUU +24.9%, OSUR +22.7%, CPST +17.2%, TBI +13.6%, SEDG +12.5%, RRTS +11.2%, HIVE +10.5%, TTWO +8.9%, CDNS +6.5%, PNNT +5%, IMMU +4.7%, LCI +3%, BRKS +2.2%

Companies trading higher in after hours in reaction to news:  VHC +88.1% (confirmed $625.6 mln patent infringement win against Apple (AAPL), VRNG +24.9% (in sympathy with VHC on Apple ruling), VIAB +10.1% (Sumner Redstone steps down as Chairman of CBS, Board is scheduled to meet tomorrow), CPLP +4.7% (secured new time charter employment for the M/V 'Agamemnon' and M/V 'Archimidis'; expect the new charters to commence in April 2016), CBS +4.1% (named Leslie Moonves the next Chair of the CBS Board of Directors), ZHNE +3.6% (Executive Chairman Morteza Ejabat resigns).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: IMPV -12.5%, GPRO -9.2%, NE -7.4%, PMT -6.9%, PACB -5.4%, DHT -5.4%, TWO -4%, SFLY -3.8%, WSTL -2.7%, AMBA -2% (in sympathy with GoPro earnings), MET -2.3%.

Companies trading lower in after hours in reaction to news:  OSIR -15.6% (promoted Dwayne Montgomery to interim CEO (replacing Lode Debrabandere) & Frank Czworka to COO, effective immediately), GGP -9.1% ( CEO indicated that a statement he made concerning Amazon (AMZN) during co's earnings call was not intended to represent Amazon's plans), PACB -5.4% ( to offer and sell up to an aggregate offering price of $30 mln of shares of its common stock through an 'at-the-market' offering), GNMK -2.5% (Clinical Micro Sensors subsidiary amends Development Collaboration and License Agreement with Illumina's (ILMN) Advanced Liquid Logic).

>>> GPRO -21% in after hours on miss & guidance

GoPro (halted) misses by $0.11, rev in-line with warning; guides Q1 revs well below consensus; guides FY16 revs below consensus; names Brian McGee CFO 

* Reports Q4 (Dec) adj. loss of $0.08 per share, $0.11 worse than the Capital IQ Consensus of $0.03; revenues fell 31.1% year/year to $436.6 mln ($448.56 mln Capital IQ Consensus); gross margin 29.6%.
* Warned on Jan 13: Lowered Q4 rev to $435 mln from $500-550 mln; non-GAAP GM to 34.5-35.5% from 45.5-46.5%.
Non-GAAP gross margin was impacted by a charge of ~$57 mln to cost of revenue for excess purchase order commitments, excess inventory and obsolete tooling resulting from the Company's decision to discontinue production of the HERO cameras. This charge is greater than the $30-35 mln that co warned about in January.
* Co issues downside guidance for Q1, sees Q1 revs of $160-180 mln vs. $300.67 mln Capital IQ Consensus; non-GAAP gross margin 35-37%.
* Co issues downside guidance for FY16, sees FY16 revs of $1.35-1.50 bln vs. $1.63 bln Capital IQ Consensus Estimate.
* Brian McGee, a 30-year finance veteran who has served as CFO of two publicly-traded companies and who joined GoPro in 2015 from Qualcomm will succeed CFO Jack Lazar effective March 11.
* Commencing in the fourth quarter of 2015, GoPro has acquired ~1.5 million shares of its Class A capital stock at an average price per share of approximately $23.05.

>>> US Close Dow+1.13% S&P+0.50% Nasdaq-0.28% Russell+0.15%

Closing Market Summary: Indices Rally Off Lows

The stock market ended a volatile Wednesday session on a mixed note as the major averages rallied off their opening lows. Today's advance can be attributed to a lockstep rally in oil, an easing of the strong dollar, and dovish remarks from New York Fed President and FOMC voting member William Dudley. The Dow Jones Industrial Average (+1.1%) finished ahead of the S&P 500 (+0.5%) and the Nasdaq Composite (-0.3%).

Today's session began on a lower note as equities sold off after January's reading of the ISM Service Index showed a faster than expected deceleration in the service sector. Relief from the heavy selling pressure came from an unexpected source, as oil rebounded despite bearish readings from both the API and EIA weekly inventory reports. Oil was able to rally as participants viewed a nosedive in the U.S. Dollar Index to be more beneficial to the commodity than the impact from a larger than expected inventory build. WTI crude closed its session 8.0% higher at $32.29/bbl.

Divergence in monetary policy between central banks had strengthened the U.S. dollar through 2015, but a string of poorer than anticipated economic data has called future rate increases into question. Underpinning this idea were statements from New York Fed President and FOMC voting member William Dudley, who stated that financial conditions have tightened since December's rate increases and that additional strength from the dollar could have "significant consequences" for the U.S. economy. 

Commodity-sensitive materials (+3.3%) and energy (+4.0%) were able to top the leaderboard throughout the day while heavyweights financials (-0.1%), consumer discretionary (-0.3%), and technology (-0.4%) underperformed.

The energy space was able rally as strength from oil pushed the sector higher. Energy giant Exxon Mobil (XOM 78348, +3.89) outperformed in the group with a gain of 5.2% as the company recovered from yesterday's post-earnings sell off. Anadarko Petroleum (APC 42.49, +3.23) was able to continue its strong showing from yesterday's earnings report, climbing 8.2%.

The beleaguered financial sector saw early pressure but was able to shape a nice reversal in the afternoon. Supporting this move was a reversal in money center banks like Bank of America (BAC 13.03, -0.20) and Wells Fargo (WFC 47.60, -0.85), both of which were down more than 3.9% before ending their days with respective losses of 1.5% and 1.8%.

In the heavyweight technology space, Facebook (FB 112.69, -1.92) ended its post-earnings winning streak. The stock lost 2.0% today but remains up 19.3% since last Wednesday's report. Alphabet (GOOGL 749.38, -31.53) continued to struggle to capitalize on its earnings beat, declining 4.0%.

In the health care space (+0.5%), biotechnology showed early weakness but ended the day ahead of the broader sector. The iShares Nasdaq Biotechnology ETF (IBB 264.00, +2.99) ended its day higher by 1.2%.

Today's participation followed recent tradition with more than a billion shares changing hands on the NYSE floor.

Treasuries ended their day on their lows with the yield on the 10-yr note higher by three basis points at 1.88%.

Today's economic data included the weekly MBA Mortgage Index, the ADP Employment Change for January, and January's ISM Services Index:

  • The MBA Mortgage Index showed a seasonally adjusted decrease of 2.6% in mortgage applications from last week's reading of an increase of 8.8%.
  • The January ADP Employment Change showed 205,000 positions were added to private sector payrolls in January (consensus 190,000).
    • The job gains were centered in small and medium-sized businesses, which showed increases of 79,000 and 82,000, respectively.
    • They came almost entirely from the service-providing sector, which produced 192,000 new positions, including 44,000 in the professional and business sector.
  • The ISM Non-Manufacturing Index for January dipped to 53.5 (consensus 55.0) from an upwardly revised 55.8 reading for December (from 55.3).
    • This report is bothersome from a broader standpoint since it lends weight to the notion that the manufacturing slowdown is having a spillover effect on the services side of the economy, which accounts for the vast majority of GDP.
    • The ISM Non-Manufacturing Index has been trending lower since last July when it peaked at 59.6.
    • The January reading is the lowest level for the index since March 2014, yet it still marks the 72nd consecutive month of being above 50.0.
    • The providers of the report indicate that a reading above 48.9 for the ISM Non-Manufacturing Index, over a period of time, generally indicates an expansion of the overall economy, and that the past relationship suggests the January reading of 53.5 corresponds to real GDP growth of 1.8% on an annualized basis.

Tomorrow's economic data includes the 7:30 ET release of the Challenger Job Cuts report while weekly Initial Claims (consensus 275k), the preliminary Q4 Productivity (consensus -1.7%) and Unit Labor Cost (consensus 3.8%) will all be reported at 8:30 ET. The day's data will be topped off with the 10:00 ET release of Factory Orders for December (consensus -2.6%).

  • Russell 2000 -11.1% YTD 
  • Nasdaq  -10.1% YTD
  • S&P 500 -6.4% YTD
  • Dow Jones -6.3% YTD

FT : ChemChina plays down alarm over $44bn Syngenta bid

ChemChina plays down alarm over $44bn Syngenta bid

ChemChina sought on Wednesday to pre-empt political opposition to its $43.8bn bid for Swiss agribusiness, Syngenta, saying China’s biggest overseas takeover in history should not alarm politicians wary of the attempt to shore up its food security.
The takeover by the state-owned chemical group would be the largest ever outbound deal by a Chinese company and the most costly agriculture transaction on record, according to data from Dealogic.

The deal underlines one of the emerging trends of 2016 — four of the five biggest cross-border deals this year have involved Chinese groups bidding for US and European assets worth $61.7bn in total. It also highlights the determination of Chinese companies to secure quality strategic assets.
The companies told investors that ChemChina plans to voluntarily put the deal before the Committee on Foreign Investment United States (CFIUS) to forestall a possible US government challenge, and did not expect a problem.
Although CFIUS has the power to review and block any transaction that may concern US national security, Michel Demaré, Syngenta chairman, said it was “very convinced there is no security issue to be concerned about”.
Beijing does not allow cultivation of genetically-modified crops, but is considering a relaxation of the ban. The Syngenta transaction positions ChemChina for the day when GM corn can be grown domestically, boosting yields in a country that is home to more than 20 per cent of the global population but has less than 10 per cent of the earth’s arable land.
Ren Jianxin, ChemChina chairman, and Mr Demaré appeared jointly in Basel to describe the deal as a long-term investment that would expand Syngenta’s reach further into the Chinese market.
“Everyone benefits,” Mr Demaré said in an interview. “This is not a cost synergies transaction. Syngenta remains Syngenta. They are naturally concerned about the food security of 1.4bn people and this is a good problem for our company to focus on.”
Mr Ren, speaking in Chinese, said: “I was sent to the countryside at [age] 15. I worked alongside farmers. I know what they want and how they work the land.”

The issues likely to be examined are related to food security and the sensitivity of its technology. But lawyers specialising in CFIUS cases said it was not immediately clear whether ChemChina and Syngenta had anything to worry about.
A US Treasury spokesperson declined to comment.
Brian Babin, a Republican congressman whose district includes a Syngenta plant in Houston that produces ingredients and fungicides, foreshadowed potential obstacles ahead. “I believe it is critical that every purchase by China of any company that operates in the United States should be fully reviewed by CFIUS,” he said. “There should be absolutely no exceptions.”
Anne Salladin, a former Treasury department lawyer who until 2013 advised CFIUS, said the deal was likely to face significant scrutiny. “I would expect that they would give it a hard look,” she said.
Ted Moran, a CFIUS expert at the Peterson Institute for International Economics, said the fact that ChemChina was a state-owned company meant that under US law the deal would be subject to an initial 30-day investigation and a secondary 45-day investigation.

Syngenta’s role in the GM seed business in the US “requires serious scrutiny”, Mr Moran said. But “unless the CIA or the NSA finds out that [China] want to sabotage the entire US seed industry I think it is far-fetched to think that this is going to be a concern.”
Past deals have also been rejected because of the proximity of assets to military facilities. In 2012, the Obama administration ordered a Chinese-controlled US company to sell a series of Oregon wind farms that it was developing because they were too close to Navy testing facilities.
ChemChina is offering SFr480 for each Syngenta share, which includes a special dividend payable upon successful completion of the deal. This would give Syngenta an equity value of $43.8bn. The company has net debt of $2.6bn.

Shares in Syngenta rose 3 per cent to SFr404 in Zurich trading.
China’s Citic Securities and HSBC are providing $30bn and $20bn of acquisition financing, respectively, to ChemChina, according to Mr Demaré.
He added that ChemChina would raise the permanent financing for the deal by selling an equity stake in its business and also issuing long-term debt. The two companies will complete due diligence after breaking for the Chinese new year, which begins at the end of this week.
Once the deal is completed, Mr Demaré and three other Syngenta representatives will join a 10-person board of the company, and ChemChina may look to relist Syngenta at a future date.
The deal is a second blockbuster takeover in the chemicals sector in two months, following the agreement in December between Dow Chemical and Dupont on a $130bn merger and plans to subsequently break up into three separate companies.
Syngenta’s future had been uncertain, despite successfully heading off an unsolicited takeover bid by Monsanto last year, its US rival. The company has been bruised by low crop prices and global currency turmoil that saw net income fall by a larger than expected 17 per cent to $1.34bn in 2015.

Syngenta, which has 28,000 employees in 90 countries, has been without a chief executive since October last year, when Mike Mack stepped down following the collapse of the Monsanto bid. John Ramsay, finance director, has acted as interim chief executive.
While the Chinese takeover will create political ripples in Switzerland and across Europe, Syngenta’s directors feared that an acquisition by Monsanto would have led to far greater upheaval at the Basel-based company.
Agricultural assets have been particularly in demand as China looks to secure natural resources beyond its borders. Cofco, the state grain trader, recently agreed to pay $750m for Noble Group’s stake in their farming joint venture, and Shuanghui International bought US pork producer Smithfield Foods for $4.7bn in 2013.

FT : Bain and TPG join suitors for Yahoo unit

Bain and TPG join suitors for Yahoo unit

Bain and TPG are among several private equity firms weighing potential approaches for Yahoo’s core internet business, people familiar with the matter said, after the Silicon Valley group announced it was exploring options for the unit.
Ken Goldman, Yahoo’s chief financial officer, said on Tuesday that “a number of private equity firms” had expressed interest but none had yet made a formal offer. Two people familiar with the matter said the firms’ interest in the troubled tech company was still very early. Verizon has voiced interest in a potential deal, and AT&T and IAC are also believed to be examining the company, people familiar with the matter said.

Marissa Mayer, Yahoo’s chief executive, on Tuesday announced several measures aimed at lifting the fortunes of the company, including laying off 15 per cent of its workforce.
The decision to consider approaches for its core business came after pressure from activist investors, who had been calling for a sale and radical shake-up of the way Ms Mayer ran the group.
People familiar with the matter said the private equity groups looking at Yahoo were grappling with the complicated task of valuing its core business without the 15 per cent Alibaba stake which the US group is seeking to separate via a reverse spin-off.
Yahoo’s stake in the Chinese ecommerce company was worth $24bn on Wednesday, compared to its market capitalisation of $27.4bn. The US company has more than $5bn in net cash and continues to generate positive cash flow.

Several analysts value Yahoo’s core business at $3bn-$4bn, although analysts at Barclays estimate its enterprise value at about $2.5bn. Yahoo has been working to bolster growth in areas such as mobile search and video, but sales have been falling for its core desktop search ads.
Ms Mayer still believes that she can turn Yahoo round, said people close to her, who added that she would rather not sell the company’s namesake asset. However, her latest plan to revive the group’s fortunes failed to convince activists and analysts that it would succeed.
“Yahoo is embarking on yet another turnround plan . . . we are not going to give them the benefit of the doubt on this one,” said Ben Schachter, analyst at Macquarie.
On Tuesday afternoon, Yahoo reported fourth-quarter sales that were slightly stronger than expected, but failed to show growth. Shares in the group were down 6 per cent on Wednesday.
Any potential bid for Yahoo would be likely to gain support from activist shareholders who have been ratcheting up pressure on the board.
Yahoo forecast a decline in revenues in 2016, a surprising move that analysts said could strengthen activists’ hand. “The guidance that they gave is below expectations, so they are giving [activists] everything they need to go after management,” said Youssef Squali, analyst at Cantor Fitzgerald.
Ms Mayer said the company had consulted with shareholders as it drew up its new plan. “We did factor into our current strategic plan, our interactions with various strategic shareholders,” she said.
Bain and TPG declined to comment.