Dow+0.47% S&P+0.53% Nasdaq+0.84% Russell+0.42% VIX 24.37
US Market closed higher after a shaky start..S&P finished thu. session +2.4% up on the week. Tech & Healthcare were strong and helped mkt to hold levels. Energy (+0.5%) and financials (+0.5%) settled with gains while the remaining sectors struggled to keep pace with the market. Con-way (CNW 47.55, +12.02) was the big story in the bellwether complex as the stock surged 33.8% after agreeing to be acquired by XPO Logistics (XPO 30.24, -3.75) for $47.60/share or $3 billion. Volume were just below average with less than 800mil shzres traded, with again lighter volume on Up day than down day. US After Hours ZSPH +28% after Actelion confirmation of approach, ACET +5.1%, RH +2.3%, CHKE -32.4%, ZUMZ -19.1%, FNSR -12.1% following earnings/guidance, PGI +21.6% (to be acquired by Siris Capital Group for $14.00/share in cash, or ~$1 bln; deal includes a 45-day 'go-shop' period), Japan Q3 BSI Manufacturing data saw some notable improvement, sending USD/JPY pair to session lows below 120.60 just before the Tokyo open. Among speakers, Econ Min Amari reiterated calls on corporations to pass through improving profitability to higher CapEx and wages. Earlier in the day, local press reported Japan govt is considering a partial refund of consumption tax in some of the food components when it rises to 10% in Apr 2017. Recall the last increase in consumption tax to 8% resulted in a protracted slowdown in consumption. Ahead of the weekend release of key economic data in China ( ), state planner NDRC warned the economy still faces significant downward pressure, even though it is still in reasonable range. NDRC also noted investment growth is weak but stable, and forecast Aug YTD fixed-asset investment to be similar to Jan-July rate.
Nikkei +0.01% Hang Seng +0.86% Shanghai -0.07%
Eur$ 1.1285 CNY 6.3735 JPY 120.81 BRL 3.8496 RUB$67.51 WTI $45.69
S&P +0.33% EuroStoxx +0.21% Dax +0.21% SMI +0.32%
Macro :
- Brazil’s Loss Is Levy’s Gain as Cut to Junk Favors Austerity (1)
- Brazil’s Real Leads World Declines as Bonds Tumble After S&P Cut
- BOJ Stimulus Odds Increase for Next Month in Economist Survey
- Puerto Rico Seen Trying to Avert Defaults One Bond at a Time
- Goldman Cuts Crude Forecasts as ~$20 Oil Seen Possible on Glut
Keep an eye on :
- ATLN VX : Actelion Said to Consider Buying ZS Pharma in $2.5 Billion Deal
- ADS GY : Adidas Said Preparing to Take Rights to NHL Jerseys: DJ via CNBC
- ALU FP : Combes May Be Ready to Reduce His Alcatel Pay-Off, Echos Says
- ALV GY : Allianz Demands EU7.5M From Germanwings Co-Pilot’s Estate: Bild
- ALD LN : AnaCap Funds, Tosca Sell 50.9m Aldermore Shrs at 286p/Shr (15% stake)
- BO DC : B&O Searching for Partners in TV Operations, Borsen Says
- CON GY : Continental Removes China Tire Sales Team on Compliance Issue
- EDEN FP : Edenred Names Bertrand Dumazy Chairman and CEO; CFO to Leave
- OGzd LI : Gazprom May See Lower 2016 Revenues Over Gas Prices: Kommersant
- GLEN LN : Glencore Intl Outlook Lowered to Negative From Stable at Moody’s
- GWI1 GY : Gerry Weber 3Q Sales, Profit Miss; Co. Sticks to Outlook
- IT IM : Italcementi sale to Heidelberg Cement may close in 1H16 - Milano Finanza daily edition
- JLF LN : Marsh & McLennan Offers to Buy Jelf Group Plc for 215p/Shr
- NESN VX : Nestle’s Bulcke Sees Threats to Swiss Competitiveness: Le Temps
- OHL SM : OHL Mexico Files Criminal Complaint Against Infraiber
- SCR FP : Scor of France Cleared to Enter Kenyan Reinsurance Market: Daily
- TEMN SW : Temenos Raises 2015 Outlook After Signing Deal With Nordea
- UL FP : Unibail-Rodamco Plans to Invest EU630M in La Defense
>>> Up
*ACACIA MINING PLC RAISED TO BUY AT HSBC
*AMLIN RAISED TO NEUTRAL VS SELL AT UBS
*BP RAISED TO NEUTRAL VS SELL AT GOLDMAN SACHS
*CAMBIAN RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*DEUTSCHE EUROSHOP RAISED TO BUY FROM HOLD AT BANKHAUS LAMPE
*ENEL RAISED TO BUY VS HOLD AT BERENBERG {NSN NUI0GQ6JIJUZ<Go>}
*KINGFISHER RAISED TO BUY FROM NEUTRAL AT UBS
*MAUNA KEA TECHNOLOGIES RAISED TO BUY AT SOCIETE GENERALE
*MERSEN RAISED TO BUY VS NEUTRAL AT ODDO
*REPSOL SA RAISED TO HOLD AT JEFFERIES
*RIO TINTO RAISED TO BUY VS NEUTRAL AT UBS
*SKF RAISED TO OVERWEIGHT AT BARCLAYS
*STADA RAISED TO BUY AT KEPLER CHEUVREUX
*SYNGENTA RAISED TO OUTPERFORM VS MARKET PERFORM AT BERNSTEIN
*TOTAL RAISED TO BUY VS NEUTRAL AT GOLDMAN SACHS (note attached)
*TULLOW OIL RAISED TO HOLD AT JEFFERIES
*WACKER NEUSON RAISED TO BUY VS REDUCE AT HSBC
*ZODIAC AEROSPACE RAISED TO BUY VS NEUTRAL AT UBS
>>> Down
*BP CUT TO HOLD AT JEFFERIES
*DRAX CUT TO SELL VS NEUTRAL AT GOLDMAN SACHS
*E.ON CUT TO SECTOR PERFORM VS OUTPERFORM AT RBC
*FALKLAND OIL & GAS CUT TO UNDERPERFORM AT JEFFERIES
*GRENKELEASING CUT TO HOLD VS BUY AT BERENBERG
*LAFARGE AFRICA PLC CUT TO HOLD AT RENAISSANCE CAPITAL
*LINDT & SPRUNGLI CUT TO NEUTRAL VS BUY AT GOLDMAN
*OPHIR ENERGY CUT TO HOLD AT JEFFERIES
*STATOIL ASA CUT TO UNDERPERFORM AT JEFFERIES
>>> PT Change
>>> Initiation
*ARM HOLDINGS RATED NEW OUTPERFORM AT MACQUARIE, PT $54
*DS SMITH REINSTATED AT BUY AT BOFA
*GENUS RATED NEW BUY AT HSBC
*GERRESHEIMER RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT EU60
*REPSOL RATED NEW SELL AT GOLDMAN SACHS
*SMURFIT KAPPA REINSTATED AT BUY AT BOFA
*STORA ENSO REINSTATED AT UNDERPERFORM AT BOFA
*THULE GROUP RATED NEW HOLD AT JEFFERIES
*UPM REINSTATED AT UNDERPERFORM AT BOFA
>>> Call
>> Stock
*PEUGEOT ADDED TO GOLDMAN SACHS CONVICTION BUY LIST
*DAIMLER REMOVED FROM GOLDMAN SACHS CONVICTION BUY LIST
*TOTAL ADDED TO GOLDMAN SACHS CONVICTION BUY LIST
* BAT, Centrica, Philips Added to Credit Suisse Europe Top Picks
>> Sector
*EUROPE INTEGRATED OIL SECTOR RAISED TO NEUTRAL AT GOLDMAN SACHS
*GOLDMAN CUTS WTI FCAST TO $48.1/BBL FOR 2015, $45 FOR 2016
China’s BAIC in talks over Daimler stake
The Chinese group BAIC Motor is in talks with Daimler about taking a stake in the German carmaker, Daimler’s chief executive said on Thursday.
Dieter Zetsche, who has run the German group since 2006, said in an interview with Reuters that any stake would have to be structured in such a way as to avoid diluting the interests of existing Daimler shareholders.
But he added that while the duo were looking at “possible mechanisms” to do this, whether or not “concrete steps” followed the negotiations depended on BAIC.
A deal would represent the latest foray abroad by China’s car industry, where there has been a growing trend for the biggest carmakers to acquire interests in recognised western brands.
The country’s car manufacturers have so far failed to make a dent in their own right in the global automotive stage, even though it is more than three decades since Volkswagen set up one of the country’s first big joint ventures.
The talks between Daimler and BAIC come 18 months after Dongfeng acquired a 14 per cent stake in PSA Peugeot Citroën of France for €800m. Geely, China’s first non-state owned carmaker, has since 2010 acquired both Sweden’s Volvo and the London Taxi Company, maker of the British capital’s black cabs.
Meanwhile, General Motors sold a $500m stake in its 2010 initial public offering to Shanghai Auto, its Chinese partner.
Daimler already has close ties with the Chinese car industry. It has a 10 per cent stake in BAIC, the listed arm of Beijing Automotive Group, as well as a joint venture with BAIC to sell Mercedes-Benz cars in the country.
Mr Zetsche reiterated on Thursday that Daimler had “said from the start” that its stake in BAIC, which it took in 2013, could one day lead to a cross-shareholding.
Xu Heyi, BAIC chairman, said at the time that the two companies “will never be able to live apart from each other”, as Daimler opened its first fully fledged engine factory outside Germany.
Daimler’s largest shareholders are the Kuwait Investment Authority, which has a 6.8 per cent stake, and Renault-Nissan, with which the German company has a cross-shareholding agreement.
In the past the German car group has issued new shares to allow big investors — such as Abu Dhabi’s Aabar Investments — to buy into the company. Shares in Daimler, which are up 16 per cent so far this year, closed down 0.4 per cent at €73.90.
Italcementi sale to Heidelberg Cement may close in 1H16 - Milano Finanza daily edition
Italcementi, the listed Italian cement group, could close its sale to listed German company Heidelberg Cement in 1H16, Milano Finanza reported. A contact would be made in the next few weeks with the various bodies whose approval is needed for the sale to go ahead, the Italian-language daily reported citing Carlo Pesenti, the CEO of Italcementi. Consob, Italy's securities regulator, would be one of the bodies contacted, Pesenti noted.
The sale had previously expected to close at the end of 2016, the report noted.
Italcementi has a market cap of EUR 3.487bn
Milano Finanza daily edition
Asian Mid-session Update: Volatility coils before more China data; BOK on hold as expected
***Economic Data***
- (JP) JAPAN Q3 BUSINESS SURVEY INDEX (BSI) LARGE ALL INDUSTRY Q/Q: +9.6 V -1.2 PRIOR; BSI LARGE MANUFACTURING Q/Q: +11.0 V -6.0 PRIOR
- (KR) SOUTH KOREA CENTRAL BANK (BOK) LEAVES 7-DAY REPO RATE AT 1.50% (as expected)
- (PE) PERU CENTRAL BANK (BCRP) RAISES REFERENCE RATE BY 25BPS TO 3.50% (not expected)
- (NZ) NEW ZEALAND AUG BUSINESS MANUFACTURING PMI: 55.0 V 53.7 PRIOR
- (NZ) NEW ZEALAND AUG FOOD PRICES M/M: -0.5% V +0.6% PRIOR (1st decline in 4 months)
- NPD: Aug US total video game sales $548M, -2% y/y
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.1%, S&P/ASX -0.1%, Kospi -0.7%, Shanghai Composite -0.1%, Hang Seng +1.1%, Sept S&P500 +0.3% at 1,956
***Commodities/Fixed Income***
- Dec gold +0.1% at $1,111/oz, Oct crude oil -0.4% at $45.73/brl, Dec copper +0.4% at $2.45/lb
- (JP) BOJ offers to buy ¥70B in JGBs with maturity less than 1-yr, ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, and ¥1.5T in T-bills
- (AU) Australia MoF (AOFM) sells A$800M in 3.25% 2018 Bonds; avg yield: 1.8738%; bid-to-cover: 3.23x
- (US) Weekly Fed Balance Sheet Total Assets for week ending Sept 9th: $4.48T v $4.48T prior; M2 y/y change: 5.9% v 5.8% prior; M1 y/y change: 7.4% v 7.3% prior
***Market Focal Points/FX***
- After some wild swings at the start of the week, US equity markets were notably less volatile in today's session, and Asian indices are tracking in suit. Korea's Kospi is underperforming while Hang Seng is higher than its key peers and US S&P futures are bid up by about 7pts. Singapore markets were closed due to national elections. In USD majors, EUR/USD traded in a 30pip range just below $1.13, USD/JPY popped up some 40pips but was repelled by 121 handle, and AUD/USD was contained to a 20pip range below $0.7080 after some brief selling on a bearish research note from Goldman Sachs.
- Bank of Korea left rates on hold at 1.50% as widely expected in a unanimous decision. BOK reiterated inflation would remain low, adding that Fed policy change and China turmoil pose risks, just as domestic demand continues to recover. BOK Gov Lee stated the current rate is supportive of the economy, which led some analysts to tone down expectations of more BOK easing in the short run. Lee added the economic growth is unlikely to slow to 2%, but that there might be some flexibility around the 2015 GDP "forecast" of 2.8% since exports appear to have weakened.
- AUD/USD saw its worst level of the day after Goldman Sachs cut its 2016 Australia GDP target to 2.0% from 2.25%. Goldman added it expects another 25bp RBA rate cut this November and also forecast AUD decline through 0.67 in the next 6 months. While Australia barely managed to avoid a contraction in its latest quarterly GDP data, Goldman said there's still 1 in 3 chance of a recession in the next 12 months.
- Japan Q3 BSI Manufacturing data saw some notable improvement, sending USD/JPY pair to session lows below 120.60 just before the Tokyo open. Among speakers, Econ Min Amari reiterated calls on corporations to pass through improving profitability to higher CapEx and wages. Earlier in the day, local press reported Japan govt is considering a partial refund of consumption tax in some of the food components when it rises to 10% in Apr 2017. Recall the last increase in consumption tax to 8% resulted in a protracted slowdown in consumption.
- Ahead of the weekend release of key economic data in China, state planner NDRC warned the economy still faces significant downward pressure, even though it is still in reasonable range. NDRC also noted investment growth is weak but stable, and forecast Aug YTD fixed-asset investment to be similar to Jan-July rate.
***Equities***
US equities / ADRs:
- PGI Announces agreement to be acquired by Siris Capital Group for $14.00/shr for $1B in all-cash deal; +21.7% afterhours
- PBYI Announces publication of PB272 in HER2 non-amplified metastatic breast cancer with a HER2 mutation; +2.9% afterhours
- RH Reports Q2 $0.85 v $0.83e, R$507M v $503Me; +2.1% afterhours
- RUN Reports Q2 net $7.5M v -$18M y/y, R$72.7M v $51.9M y/y; -4.2% afterhours
- FNSR Reports Q1 $0.23 v $0.26e, R$314M v $318Me; -10.5% afterhours
- ZUMZ Reports Q2 $0.12 ex charge v $0.12e, R$179.8M v $180Me; -20.3% afterhours
Notable movers by sector:
- Consumer discretionary: BAIC Motor Corp 1958.HK +1.4% (in talks for Daimler stake); Sekisui House 1928.JP -1.1% (H1 result)
- Financials: Ping An Insurance 2318.HK +1.8% (Aug result); Dalian Wanda Commercial Properties 3699.HK -1.0% (Aug result, agreements); China Resources Land 1109.HK +2.4% (Aug result)
- Industrials: China State Construction Holdings 3311.HK -1.9% (Aug result)
- Technology: Toshiba Corporation 6502.JP -3.4% (SESC to probe); Pegatron Corp 4938.TW +1.9% (Aug result); Quanta Computer 2382.TW -0.6% (Aug result); Taiwan Semiconductor Manufacturing 2330.TW +1.2% (Aug result)
- Materials: Maanshan Iron & Steel 323.HK +1.1% (new agreements); Atlas Iron AGO.AU +3.1% (Aug result); Doray Minerals DRM.AU +2.4% (FY15 result)
- Energy: Oil Search OSH.AU -0.9% (speculation to reject request for exclusive talks)
- Telecom: Softbank Corp 9984.JP +2.8% (speculation to take private)
After Hours Summary: ACET +5.1%, RH +2.3%, CHKE -32.4%, ZUMZ -19.1%, FNSR -12.1% following earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings: ACET +5.1%, RH +2.3%
Companies trading higher in after hours in reaction to news: PGI +21.6% (to be acquired by Siris Capital Group for $14.00/share in cash, or ~$1 bln; deal includes a 45-day 'go-shop' period), ZSPH +5.9% (co confirmed it has participated in preliminary discussions with Actelion (ALIOY) regarding a potential strategic transaction), NVAX +3.8% (announced that the full data set from its clinical trial of RSV F-protein recombinant nanoparticle vaccine candidate in women of childbearing age were published in the Journal of Infectious Disease), RLYP +3.8% (higher following reports that peer coming ZS Pharma has received takeover interest), MIXT +1.9% (announced its Board has approved a share repurchase programme under which the Company may repurchase up to 1.6 mln ADSs through March 15, 2016), KKD +0.6% (signed development agreement with Agape Coral, SAC, to open 24 Krispy Kreme shops throughout Peru over the next five years)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings: CHKE -32.4%, ZUMZ -19.1%, FNSR -12.1%, RUN -5.9%, USAT -2.2%, VISI -0.6%
Companies trading lower in after hours in reaction to news: EFOI -7.6% (announced that it and selling stockholders are commencing a public offering of common stock), TRVN -4.1% (announced a proposed underwritten offering of common stock; size and terms not disclosed), NEE -1.3% (announced that it intends to sell $700 million of equity units, with each equity unit to be issued in a stated amount of $50), AKBA -0.3% (announced changes to senior management team; Teresa Compton, PhD joins as Senior Vice President and Chief Scientific Officer)