* So half way through the year and no disasters (except Carlsberg). But what are the key messages and takeaways from the European Consumer Staples companies?
* Organic growth is modest by long term standards at 3-4%. But the Q2 trends in practice were not materially different from those seen in Q1 bar a bit of weather or timing of Easter.
* Emerging Markets growth little changed: Organic growth in Emerging Markets has halved from the highs of 2 years ago, and been running 5-6% now for 5 quarters. However important to note that most of the growth in these regions is now price, volume growth has fallen from 6%+ to 1%. Latin American pricing has reached eye-watering levels of 20%+ in some quarters and accounts for over half the group organic growth of some companies.
* Emerging Markets still volatile: Even as we went through reporting season there was another sell-off in the Emerging Market currencies – which will likely mean volume growth in those markets remains under pressure.
Between first and last company reporting the Rouble fell 15% (versus the Euro), while the Real was down 11%, and there were several others that took a hefty step down (Turkey -10%, Mexico -5%, S Africa -5%). The FX tailwind that was getting on for 10% at the half way mark is now looking like mid/low single digits for the year (for a Euro reporter).
* Margins – mixed news: There may not be a lot of top line, but against a very benign input cost environment it is shaping up to be a good year for margins in Food/HPC in particular. Marketing cuts in the spirits stocks are helping offset negative mix pressures on gross margins, whilst investment step-ups and transactional currency headwinds in beer meant that margin expansion was modest relative to expectations.
* Forecasts & ratings: Given these FX moves we once again run through all our estimates with typically a 2-5% cut to 2016 earnings (based on Friday night FX rates), which we mirror in our price targets.
* Stock Calls: Going in to H2 it is the tobacco companies that look the best value to us. All are highlighting better pricing and stabilising markets, while comparatives get easier. Their valuations look relatively cheap versus staples as well. The flip-side of this is the companies dependent on Emerging Markets for growth are those we mainly steer clear of – SABMiller, Unilever and Danone.
We forecast deteriorating fundamentals for the European Chemicals sector in H2 2015 as
1) overearning/margins from cheaper oil are passed to the customer,
2) China demand downturn, and
3) oversupply and competitive pricing accelerates.
We retain our key investment theme for 2015 (link), "buy pricing power/sell commodities", and reiterate our relative preference for AKZO/AKE over BASF/EVK. Additionally, we highlight an emerging theme of divergence in staples markets and we reiterate our preference for CRDA over NZYM.
BN 08/25 06:03 *RSA HAS AGREED TO EXTENSION OF RELEVANT DEADLINE TO 22 SEPT.
BN 08/25 06:02 *RSA WILLING TO RECOMMEND OFFER AT LEVEL OF POSSIBLE OFFER
BN 08/25 06:02 *RSA POSSIBLE OFFER IS CONDITIONAL ON DUE DILIGENCE
BFW 08/25 06:02 *RSA GETS REVISED PROPOSAL FROM ZURICH AT 550P/SHR CASH
BN 08/25 06:02 *RSA GETS REVISED PROPOSAL FROM ZURICH AT 550P/SHR CASH
BFW 08/25 06:00 *RSA RECEIVED A REVISED PROPOSAL AT 550P PER ORDINARY RSA SHR
BN 08/25 06:00 *RSA HOLDERS RETAIN RIGHT TO GET 3.5P INTERIM DIV
BN 08/25 06:00 *RSA RECEIVED A REVISED PROPOSAL AT 550P PER ORDINARY RSA SHR
BN 08/25 06:00 *RSA RECEIVED A REVISED PROPOSAL FROM ZURICH INSURANCE
BN 08/25 06:00 *RSA INSURANCE GROUP STATEMENT RE POSSIBLE OFFER
BN 08/25 06:02 *RSA WILLING TO RECOMMEND OFFER AT LEVEL OF POSSIBLE OFFER
BN 08/25 06:02 *RSA POSSIBLE OFFER IS CONDITIONAL ON DUE DILIGENCE
BFW 08/25 06:02 *RSA GETS REVISED PROPOSAL FROM ZURICH AT 550P/SHR CASH
BN 08/25 06:02 *RSA GETS REVISED PROPOSAL FROM ZURICH AT 550P/SHR CASH
BFW 08/25 06:00 *RSA RECEIVED A REVISED PROPOSAL AT 550P PER ORDINARY RSA SHR
BN 08/25 06:00 *RSA HOLDERS RETAIN RIGHT TO GET 3.5P INTERIM DIV
BN 08/25 06:00 *RSA RECEIVED A REVISED PROPOSAL AT 550P PER ORDINARY RSA SHR
BN 08/25 06:00 *RSA RECEIVED A REVISED PROPOSAL FROM ZURICH INSURANCE
BN 08/25 06:00 *RSA INSURANCE GROUP STATEMENT RE POSSIBLE OFFER
RSA: RSA Insurance Group Plc: Statement re Possible Offer
2015-08-25 06:00:00.279 GMT
RSA: RSA Insurance Group Plc: Statement re Possible Offer
UK Regulatory Announcement
LONDON
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY (IN WHOLE
OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER
UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND
THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE.
FOR IMMEDIATE RELEASE
25 August 2015
RSA Insurance Group plc
Update regarding Possible Offer for RSA Insurance Group plc (“RSA” or the
“Company”)
The Board of RSA (the “Board”) announces that it has received a revised
proposal from Zurich Insurance Group (“Zurich”) regarding a possible all cash
offer for the Company at 550 pence per ordinary RSA share (the “Possible
Offer”). In addition, under the terms of the proposal, RSA ordinary
shareholders retain the right to receive the 3.5 pence interim dividend
announced by RSA on 6 August 2015. The Possible Offer is conditional on,
amongst other things, due diligence and the recommendation of the Board.
The Board has indicated to Zurich that it would be willing to recommend an
offer at the level of the Possible Offer to RSA shareholders subject to the
satisfactory resolution of the other terms of the offer. Accordingly, the
Board is in discussions with Zurich in relation to these terms.
As required by Rule 2.6(a) of the Code, Zurich is required, by not later than
5.00 p.m. on 25 August 2015, to either announce a firm intention to make an
offer in accordance with Rule 2.7 of the Code or announce that it does not
intend to make an offer. With the consent of the Takeover Panel, RSA has
agreed to an extension of the relevant deadline under Rule 2.6(c) of the Code
until 5.00pm on 22 September 2015 to enable the parties to conclude their
ongoing discussions. This deadline may be extended further with the consent of
the Takeover Panel, at RSA's request, in accordance with Rule 2.6(c) of the
Code.
Zurich has reserved the right to make an offer for RSA at any time, with a
value less than 550 pence per ordinary RSA share (less any dividends declared,
made or paid, other than the 3.5 pence interim dividend announced by RSA on 6
August 2015):
* with the agreement or recommendation of the RSA board;
* if a third party announces a firm intention to make an offer for RSA
pursuant to Rule 2.7 of the Code, which, at the date Zurich announces a
firm intention to make an offer for RSA, is valued at a lower price than
the equivalent of 550 pence per ordinary RSA share (less any dividends
declared, made or paid, other than the 3.5 pence interim dividend
announced by RSA on 6 August 2015); or
* following the announcement by RSA of a whitewash transaction pursuant to
the Code.
There can be no certainty that any firm offer will be made. This statement is
being made by RSA with the consent of Zurich.
Enquiries:
Analysts Press
Rupert Taylor Rea Louise Shield
Tel: +44 (0) 20 7111 7140 Tel: +44 (0) 20 7111 7047
Ryan Jones Kaidee Sibborn
Tel: +44 (0) 20 7111 7243 Tel: +44 (0) 20 7111 7137
Adviser contacts:
Goldman Sachs International +44 (0) 20 7774 1000
Karen Cook
Paul Miller
Robey Warshaw +44 (0) 20 7317 3900
Simon Robey
Simon Warshaw
Bank of America Merrill Lynch +44 (0) 20 7628 1000
Michael Findlay
JP Morgan Cazenove +44 (0) 20 7742 4000
Tim Wise
Important notices
Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting for RSA and no one else
in connection with the matters referred to in this announcement and will not
be responsible to anyone other than RSA for providing the protections afforded
to clients of Goldman Sachs International, or for giving advice in connection
with the matters referred to in this announcement or any matter referred to
herein.
Robey Warshaw LLP, which is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, is acting as financial adviser exclusively
for RSA and no one else in connection with the matters referred to in this
announcement and will not regard any other person as its client in relation to
the matters referred to in this announcement and will not be responsible to
anyone other than RSA for providing the protections afforded to clients of
Robey Warshaw LLP, nor for providing advice in relation to the matters
referred to in this announcement.
Merrill Lynch International, a subsidiary of Bank of America Corporation,
which is authorised by the Prudential Regulation Authority and regulated by
the Financial Conduct Authority and the Prudential Regulation Authority in the
UK, is acting exclusively as financial adviser for RSA and no one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than RSA for providing the protections afforded to
its clients or for providing advice in relation to the matters referred to in
this announcement.
J.P. Morgan Limited, which conducts its UK investment banking activities as
J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively as financial adviser
to RSA and no one else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than RSA for
providing the protections afforded to its clients or for providing advice in
connection with the contents of matters referred to in this announcement or
any other matters referred to herein.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror, save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
About RSA
With a 300 year heritage, RSA is a multinational quoted insurance group. RSA
has core operations in the UK, Scandinavia, Canada, Ireland, and Latin
America, and has the capability to write business in around 140 countries.
Focusing on general insurance, RSA has around 19,000 employees and, in 2014,
its net written premiums were 7.5 billion.
Publication of this announcement
A copy of this announcement will be available, subject to certain restrictions
relating to persons resident in restricted jurisdictions, at www.rsagroup.com,
by no later than 12 noon (London time) on 26 August 2015. The content of the
website referred to in this announcement is not incorporated into and does not
form part of this announcement.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20150824005920/en/
Contact:
RSA Insurance Group Plc
-0- Aug/25/2015 06:00 GMT
2015-08-25 06:00:00.279 GMT
RSA: RSA Insurance Group Plc: Statement re Possible Offer
UK Regulatory Announcement
LONDON
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY (IN WHOLE
OR IN PART) IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE
A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
THIS ANNOUNCEMENT IS NOT AN ANNOUNCEMENT OF A FIRM INTENTION TO MAKE AN OFFER
UNDER RULE 2.7 OF THE CITY CODE ON TAKEOVERS AND MERGERS (THE "CODE") AND
THERE CAN BE NO CERTAINTY THAT AN OFFER WILL BE MADE.
FOR IMMEDIATE RELEASE
25 August 2015
RSA Insurance Group plc
Update regarding Possible Offer for RSA Insurance Group plc (“RSA” or the
“Company”)
The Board of RSA (the “Board”) announces that it has received a revised
proposal from Zurich Insurance Group (“Zurich”) regarding a possible all cash
offer for the Company at 550 pence per ordinary RSA share (the “Possible
Offer”). In addition, under the terms of the proposal, RSA ordinary
shareholders retain the right to receive the 3.5 pence interim dividend
announced by RSA on 6 August 2015. The Possible Offer is conditional on,
amongst other things, due diligence and the recommendation of the Board.
The Board has indicated to Zurich that it would be willing to recommend an
offer at the level of the Possible Offer to RSA shareholders subject to the
satisfactory resolution of the other terms of the offer. Accordingly, the
Board is in discussions with Zurich in relation to these terms.
As required by Rule 2.6(a) of the Code, Zurich is required, by not later than
5.00 p.m. on 25 August 2015, to either announce a firm intention to make an
offer in accordance with Rule 2.7 of the Code or announce that it does not
intend to make an offer. With the consent of the Takeover Panel, RSA has
agreed to an extension of the relevant deadline under Rule 2.6(c) of the Code
until 5.00pm on 22 September 2015 to enable the parties to conclude their
ongoing discussions. This deadline may be extended further with the consent of
the Takeover Panel, at RSA's request, in accordance with Rule 2.6(c) of the
Code.
Zurich has reserved the right to make an offer for RSA at any time, with a
value less than 550 pence per ordinary RSA share (less any dividends declared,
made or paid, other than the 3.5 pence interim dividend announced by RSA on 6
August 2015):
* with the agreement or recommendation of the RSA board;
* if a third party announces a firm intention to make an offer for RSA
pursuant to Rule 2.7 of the Code, which, at the date Zurich announces a
firm intention to make an offer for RSA, is valued at a lower price than
the equivalent of 550 pence per ordinary RSA share (less any dividends
declared, made or paid, other than the 3.5 pence interim dividend
announced by RSA on 6 August 2015); or
* following the announcement by RSA of a whitewash transaction pursuant to
the Code.
There can be no certainty that any firm offer will be made. This statement is
being made by RSA with the consent of Zurich.
Enquiries:
Analysts Press
Rupert Taylor Rea Louise Shield
Tel: +44 (0) 20 7111 7140 Tel: +44 (0) 20 7111 7047
Ryan Jones Kaidee Sibborn
Tel: +44 (0) 20 7111 7243 Tel: +44 (0) 20 7111 7137
Adviser contacts:
Goldman Sachs International +44 (0) 20 7774 1000
Karen Cook
Paul Miller
Robey Warshaw +44 (0) 20 7317 3900
Simon Robey
Simon Warshaw
Bank of America Merrill Lynch +44 (0) 20 7628 1000
Michael Findlay
JP Morgan Cazenove +44 (0) 20 7742 4000
Tim Wise
Important notices
Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting for RSA and no one else
in connection with the matters referred to in this announcement and will not
be responsible to anyone other than RSA for providing the protections afforded
to clients of Goldman Sachs International, or for giving advice in connection
with the matters referred to in this announcement or any matter referred to
herein.
Robey Warshaw LLP, which is authorised and regulated in the United Kingdom by
the Financial Conduct Authority, is acting as financial adviser exclusively
for RSA and no one else in connection with the matters referred to in this
announcement and will not regard any other person as its client in relation to
the matters referred to in this announcement and will not be responsible to
anyone other than RSA for providing the protections afforded to clients of
Robey Warshaw LLP, nor for providing advice in relation to the matters
referred to in this announcement.
Merrill Lynch International, a subsidiary of Bank of America Corporation,
which is authorised by the Prudential Regulation Authority and regulated by
the Financial Conduct Authority and the Prudential Regulation Authority in the
UK, is acting exclusively as financial adviser for RSA and no one else in
connection with the matters referred to in this announcement and will not be
responsible to anyone other than RSA for providing the protections afforded to
its clients or for providing advice in relation to the matters referred to in
this announcement.
J.P. Morgan Limited, which conducts its UK investment banking activities as
J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom
by the Financial Conduct Authority, is acting exclusively as financial adviser
to RSA and no one else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than RSA for
providing the protections afforded to its clients or for providing advice in
connection with the contents of matters referred to in this announcement or
any other matters referred to herein.
Disclosure requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of
any class of relevant securities of an offeree company or of any securities
exchange offeror (being any offeror other than an offeror in respect of which
it has been announced that its offer is, or is likely to be, solely in cash)
must make an Opening Position Disclosure following the commencement of the
offer period and, if later, following the announcement in which any securities
exchange offeror is first identified.
An Opening Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant securities
of each of (i) the offeree company and (ii) any securities exchange
offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a)
applies must be made by no later than 3.30 pm (London time) on the 10th
business day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th business day
following the announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of the
offeree company or of a securities exchange offeror prior to the deadline for
making an Opening Position Disclosure must instead make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1%
or more of any class of relevant securities of the offeree company or of any
securities exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any securities
exchange offeror. A Dealing Disclosure must contain details of the dealing
concerned and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree company and
(ii) any securities exchange offeror, save to the extent that these details
have previously been disclosed under Rule 8. A Dealing Disclosure by a person
to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London
time) on the business day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or understanding,
whether formal or informal, to acquire or control an interest in relevant
securities of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree company and by
any offeror and Dealing Disclosures must also be made by the offeree company,
by any offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4).
Details of the offeree and offeror companies in respect of whose relevant
securities Opening Position Disclosures and Dealing Disclosures must be made
can be found in the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of relevant
securities in issue, when the offer period commenced and when any offeror was
first identified. If you are in any doubt as to whether you are required to
make an Opening Position Disclosure or a Dealing Disclosure, you should
contact the Panel's Market Surveillance Unit on +44 (0)20 7638 0129.
About RSA
With a 300 year heritage, RSA is a multinational quoted insurance group. RSA
has core operations in the UK, Scandinavia, Canada, Ireland, and Latin
America, and has the capability to write business in around 140 countries.
Focusing on general insurance, RSA has around 19,000 employees and, in 2014,
its net written premiums were 7.5 billion.
Publication of this announcement
A copy of this announcement will be available, subject to certain restrictions
relating to persons resident in restricted jurisdictions, at www.rsagroup.com,
by no later than 12 noon (London time) on 26 August 2015. The content of the
website referred to in this announcement is not incorporated into and does not
form part of this announcement.
View source version on businesswire.com:
http://www.businesswire.com/news/home/20150824005920/en/
Contact:
RSA Insurance Group Plc
-0- Aug/25/2015 06:00 GMT
Global Blue data +32% in July
July’s Global Blue data recorded a strong +31.9% y/y increase in global tourism spending with Chinese tourism showing another impressive +73.6% while Russian spending further declined -32.4% and we estimate the other nationalities saw +c23%. Europe increased 27.5% (vs. June +42.6%) driven by Chinese spending, which suggests that the positive trends seen in H1 have continued. A highlight of the Q2 results was the very robust performance in Europe that was the main driver of growth for the sector with tourism a key factor. We expect this to continue to be a theme in H2. This strong global spend has more than offset a large decline in Hong Kong/Macau as well as limited growth in the mainland. Louis Vuitton commented that the overall Chinese consumer globally was up ‘slightly above 10% in H1’ with Q2 up low double digits. Burberry also commented that sales to Chinese globally were up low to mid single digit in like for like growth despite under-representation in Japan.
>>> Up
*CNH INDUSTRIAL RAISED TO OUTPERFORM VS NEUTRAL AT MEDIOBANCA
*CORESITE REALTY RAISED TO BUY VS HOLD AT JEFFERIES
*DEUTSCHE BOERSE RAISED TO BUY AT HSBC
*NATIONAL EXPRESS RAISED TO BUY AT HSBC
*RED ELECTRICA RAISED TO OUTPERFORM VS NEUTRAL AT MEDIOBANCA
*SOLVAY RAISED TO HOLD VS SELL AT BERENBERG
>>> Down
*DKSH CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*EDENRED CUT TO SELL VS BUY AT CITI
*HOME RETAIL CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*STAGECOACH GROUP CUT TO HOLD AT HSBC
*TELEFONICA CUT TO UNDERPERFORM AT MACQUARIE
*TELECOM ITALIA CUT TO UNDERPERFORM AT MACQUARIE
>>> PT Change
>>> Initiation
*DEUTSCHE PFANDBRIEFBANK RATED NEW NEUTRAL AT CITI, PT EU12
*DEUTSCHE PFANDBRIEFBANK RATED NEW BUY AT BERENBERG, PT EU13.10
*EURONAV RATED NEW OUTPERFORM AT WELLS FARGO
>>> Call
>> Stock
*HENKEL REPLACES HELLA IN BANKHAUS LAMPE LARGE-CAP ALPHA LIST
Dow-3.58% S&P-3.93% Nasdaq-3.82% Russell-3.56% VIX 40.74 +45.34%
US Market closed lower after a very volatile day (open with 5.3% loss), Nasdaq opened with a 8.8% loss. Aisan & European market were lower on concern of economic growth. Comments from PBoC & new law on Pension Funds were not enough to change the sentiment. France's CAC, Germany's DAX, and UK's FTSE losing between 4.7% and 5.4%, extension of recent selling in the DAX resulted in the index widening its slide from record highs to 22.0%, representing bear market territory. CBOE Volatility Index (VIX 40.03, +12.00) did not produce any quotes during the first 30 minutes of the session, but once quotes resumed, the index soared past levels seen during the May 2010 flash crash. The VIX notched its high just below 53.50%, but retreated into the 40.00% area by the close. Energy was a heavy loser with creude tumbling 5.4% to $38.25/bbl Volume were way way above average @ 1.6bil shares. Asian equity markets are trading mixed Tuesday. It has been a very volatile trading session, with most markets opening sharply lower before recovering. There has been no specific driver behind the turnaround, although there is some thought it was a reflection of markets being previously oversold. Mainland Chinese markets opened with heavy losses and while off the lows, are still in negative territory. There have been no major updates regarding the announcement of fresh policy support measures. The Nikkei has turned higher with the yen weakening against the dollar. Abe adviser Hamada repeated his call for the BoJ to be ready to ease further. There was some attention to the agreement between North and South Korea, with the KOSPI swinging higher. The ASX 200 is outperforming the region, with the recovery being driven by a strong turnaround in the major banks.
Nikkei -1.94% HangSeng -0.69% Shanghai -5.83%
Eur$ 1.1570 JPY 118.98 GBP 1.5766 CNY 6.4101 RUB$ 70.69 WTI $38.83
S&P +0.98% EuroStoxx+1% Dax+1.45% SMI -0.32%
Macro :
- BlackRock Sees Europe Buying Opportunity as Share Rout Overdone
- DAX Is ‘Sharp Falling Knife’, Stay Away From It, SocGen Says
- Japan’s Aso Says China’s Policies Stirring Concerns in Markets
- Japan PM Abe's advisor Hamada: BOJ should consider extra easing if Yen currency rises sharply
- France’s Royal Says China Doesn’t Threaten French Recovery
Keep an eye on :
- AIR FP : Airbus Mulls Response to Losing Out On Japan Helicopter Deal: FT
- BP/ LN : BP Skips Iran Trip by U.K.’s Hammond on Sanctions Concern: FT
- BMPS IM : BMPS fails to secure written manifestations of interest from potential merger partners
- CVAL IM : Creval Considering Potential Merger With Other Bank: MF
- CARLB DC : Carlsberg to Cut Jobs, Reduce No. of Ex-Com Members: Berlingske
- CA FP : Carrefour Enters Talks to Buy Altarea Cogedim’s E-Commerce Unit
- FLU AV : Flughafen Wien Offers Up to EU63m for Malta Airport Stake
- LNZ AV : Lenzing 1H Ebitda EU126.5m vs EU91.9m
- LUX IM : Luxottica Co-CEOs Say Chinese Mkt Exposure Limited
- RSA LN ; RSA Shares Gain as Deadline for Zurich’s Bid Approaches
- SALM NO : SalMar 2Q Net Misses Estimates; Maintains 2015 Harvest Guidance
- TEF SM : Telefonica Brasil Says Buying Sky Would Be ’A Long Shot’: CFO
- TEL2B SS : Tele2’s New CEO Has No Divestment Plans, Dagens Industri Reports
After Hours Summary: QUNR +3.7%, PINC +3.4% following earnings/guidance
After Hours Gainers:Companies trading higher in after hours in reaction to earnings: QUNR +3.7%, PINC +3.4%
Companies trading higher in after hours in reaction to news: ACOR +31.1% (announced that the Patent Trials and Appeal Board denied both inter partes reviews of AMPYRA patents), SCTY +2.6% (10% owner, Elon Musk, disclosed purchase of 123,510 shares at $34.82-45.35 worth ~$5.0 mln (transaction date today) -- now up about 3.6% on light aftermarket trade), FLEX +1.3% (announced shareholder approval to purchase up to 20% of its outstanding shares; additionally, co's Board authorizes mgmt to purchase up to $500 mln in common stock), ITEK +1.1% (Point72 Asset Management discloses 5.2% passive stake in 13G filing)
After Hours Losers:
Companies trading lower in after hours in reaction to news: NAVI -1.3% (disclosed its subsidiary received a Notice and Opportunity to Respond and Advise ('NORA') letter from the CFPB; CFPB is considering legal action against the company), HD -0.8% (announced the completion of its acquisition of Interline Brands), INOV -0.4% (to acquire Avalere Health for $140 mln, deal estimated to be mildly accretive in 2015)
Closing Market Summary: Stocks Plunge Amid Persistent Macro Concerns
Global equity markets began the last full week of August with a broad-based tumble that began overnight in Asia and continued into the U.S. session. When the dust settled, the S&P 500 ended lower by 3.9% after opening with a 5.3% loss while the Nasdaq Composite lost 3.8% after starting the day with an 8.8% decline.
The Monday retreat began unfolding shortly after Asian markets opened for action with continued concerns about global economic growth weighing on investor sentiment. China's Shanghai Composite paced the overseas weakness, plunging 8.5%, after the weekend went by without direct policy intervention from the People's Bank of China. Instead, pension funds managed by local governments were allowed to invest in the stock market, but that development was all but ignored.
There was no respite during the European session as equity indices across the old continent faced daylong pressure with France's CAC, Germany's DAX, and UK's FTSE losing between 4.7% and 5.4%. Notably, an extension of recent selling in the DAX resulted in the index widening its slide from record highs to 22.0%, representing bear market territory.
Once the U.S. session got going, a chaotic first hour ensued, featuring wide spreads, low liquidity, and a mad dash for volatility protection. In fact, the CBOE Volatility Index (VIX 40.03, +12.00) did not produce any quotes during the first 30 minutes of the session, but once quotes resumed, the index soared past levels seen during the May 2010 flash crash. The VIX notched its high just below 53.50%, but retreated into the 40.00% area by the close.
Today's selling was far-reaching with just 136 NYSE listings ending in the green while 3079 names posted losses. Given that dynamic, it wasn't surprising to see all ten sectors end the day in negative territory with losses ranging from 3.1% (telecom services) to 5.2% (energy).
The energy sector finished the day behind other groups, widening its Q3 decline to 20.5% as crude oil contributed to the persistent weakness.The energy component was clipped by the overarching global macro concerns, tumbling 5.4% to $38.25/bbl.
Crude was unable to draw support from greenback weakness even as the Dollar Index fell 1.7%. Most notably, the dollar slid 2.8% against the yen (118.60) and surrendered 1.8% to the euro (1.1595) as the unwinding of carry trades took a toll on the dollar. Meanwhile, Treasuries rallied overnight, hitting their best levels around 9:30 ET before retreating from those highs. The 10-yr note ended the day with a gain, sending its yield lower by four basis points to 2.04%.
The intraday retreat in Treasuries occurred as stocks attempted a recovery, but the market met renewed selling and returned into the lower half of its trading range by the close.
Monday's aggressive selloff invited above-average participation with more than 1.6 billion shares changing hands at the NYSE floor.
Investors did not receive any economic data today, but a few reports will be released tomorrow. The Case-Shiller 20-city Index for June (consensus 5.1%) and the June FHFA Housing Price Index will both be released at 9:00 ET while July New Home Sales (consensus 511K) and August Consumer Confidence (expected 93.1) will be reported at 10:00 ET.
- Nasdaq Composite -4.4% YTD
- Russell 2000 -7.6% YTD
- S&P 500 -8.0% YTD
- Dow Jones Industrial Average -10.9% YTD
Dennis Lockhart said "Consistent with the picture of moderate growth, Lockhart expects the normalization of monetary policy—that is, interest rates—to begin sometime this year,and to proceed gradually, in an environment of low rates for quite some time."