COFCO chairman says Glencore not selling stake in agriculture assets
COFCO Chairman Ning Gaoning said on Tuesday commodities firm Glencore PLC was not planning to sell its stake in its agricultural assets.
"It's not really in the market. It's a rumour. They're not selling," Gaoning, the chairman of state-run commodities firm, told Reuters on the sidelines of the APEC meeting.
MAR's acquisition of HOT creates by far the world’s largest hotelier, with significant cost savings, accelerating expansion, and large cash returns planned. This deal seems to have caught everyone by surprise, & could encourage IHG to reconsider its recent announcement not to consider a sale/merger.
see full note attached
Global Fund Manager :
The Big November FMS takeaway is...
...most vulnerable trade heading into the Dec Fed hike is "long dollar", and associated
positions: long discretionary, Eurozone, banks, Japan, short EM, resources, commodities
(Exhibit 1). We are sellers of risk SPX 2050-2100, DXY>100. Terror/geopolitics can keep
ZIRP for longer, but bullish FMS indicates big EPS needed for sustained new risk highs.
81% expect the Fed to hike in December...
...up from 47% last month as growth expectations bounce (in China to 15-month highs)
and perceptions of market liquidity rise from 3-year lows. Fed hike acceptance causes
largest MoM drop in utilities allocation in 5 years. But Nov bounce in profit expectations
notably flaccid and margin expectations weakest in 3 years.
4.9% cash levels, down from 5.1%...
...but higher than post "taper tantrum" avg of 4.7%...BofAML Risk Index jumps to 7-
month high.
The big FMS positioning extremes...
...biggest long DM versus EM ever; 2nd highest Eurozone OW ever; 3rd biggest EM UW
ever; 2nd largest tech OW ever; 3rd largest banks OW ever; long of industrials at 3-year
low; US$ is 2nd most "overvalued" in 6.5 years; largest ever US equity "overvaluation"
versus RoW (EM/Europe/Japan).
Brand new question on Investment Style
Net 61% expect high-quality stocks to outperform low-quality; net 34% expect "highdividend
yield" to outperform; net 33% expect large-cap to beat small-cap; net 21%
expect high-yield bonds to outperform high-grade bonds.
Nov FMS contrarian trades
Long EM-short Eurozone; long staples-short discretionary; long industrials-short banks;
l ong commodities-short REITs.
European Fund Manager :
European investors’ sentiment towards Eurozone growth on a 12-month horizon
improves sharply: net 54% expect strengthening, up from net 25% last month. Profit
expectations on a 12-month view also improved this month, while the proportion
expecting stronger inflation is constant at net 46%. Despite the incremental
improvement in macro expectations, European fund managers are hugging the
benchmark on sector positioning - the lack of extreme OWs/UWs means there are no
contrarian sector trades this month (<-40% or >30% net OW). The sense of caution is
also seen in investment style preferences: net 39% expect high Quality to outperform
low Quality over the next 12 months, up from net 14% last month.
* The directional call…liquidity and growth
In the US, financial conditions are tightening. The corporate’s sector’s utilisation of debt
is soaring as the financing gap deteriorates. And the corporate debt maturity calendar
looks onerous in 2016. The risk is spreads move materially higher again. Given the
reliance on debt funded buybacks this has direct, and negative, equity market
implications.
In EM, the debate over whether there is a mini-cycle forming may continue near term.
But the structural issues are not improving. Corporate debt lies at the root of the
problem. The NPL cycle is only just beginning. And in China we have real concern on
the Banks’ capital resilience. Impaired financial intermediation points to sustained
pressures on domestic liquidity and, by extension, growth. Equity negative.
For once, Europe offers a stronger story. A central bank that stands ready to escalate
monetary policy support, and a domestic economy that is showing some momentum.
For us, it is the one major region where macro conditions look supportive of equity
markets. This should favour domestic stocks and underpin a relative trade. But we
suspect that global influences are likely to weigh on the aggregate indices.
Valuations are clearly elevated. Considering the capital structure, rather than just the
equity, and European ratings have only been higher through the TMT bubble. The
European CAPE is often mis-used – remove the structurally changed sectors and the
rating is again at the top of the range. But perhaps the greatest mis-perception relates
to dividends. Yields may look attractive against credit, but capex is extremely
depressed and payout ratios close to historic highs. Even in a benign world, as these
factors normalise, future dividend growth will materially lag earnings. Buying equities
requires investors to stomach rather than embrace valuation.
Dow+1.38% S&P+1.39% Nasdaq+1.15% Russell+0.83% VIX 18.16 (-9.56%)
US market start the week on +ve note. Overnight, it was reported that the Japanese economy has re-entered recession for the second time in as many years as Q3 GDP contracted 0.2% quarter-over-quarter (expected -0.1%; last -0.3%),but this news boost hope for more monetary support from BOJ. Energy leaded the move(+3.3%), aided by a 2.5% spike in crude oil, which put a sizable dent into last week's 8.2% decline. For its part, the energy sector was able to erase almost half of its 5.5% drop from last week. Volume were in line with average @ 830mil shares. US After Hours HOTR +11.5%, NUAN +7%, TGLS +4.1%, URBN -11.5%, SPHS -9%, A -1.4% following earnings/guidance, OCRX +26.6% on Positive phase 1, HERO+2% on Soros 7% Passive stake. Traders have attributed the rebound to clear signs of willingness to step up offensive against the militants and also the rising possibility of more easing by the ECB along with a potential delay to liftoff at the Fed. Hang Seng and Shanghai are among the strongest markets, with the PBoC reportedly announcing an additional targeted RRR cut of additional 50 bps for the Bank of Beijing to 14% so as to help lending to rural sector of the economy. In Jap., Econ Min Amari did acknowledge that an extra budget may now be called but added fiscal consolidation remains critical. Going into the BOJ meeting this week, reports of fiscal stimulus in the pipeline will likely temper already slim expectations of an announcement of expansion of QE by Japan's central bank.
Nikkei +1.22% Hang Seng +1.49% Shanghai +0.26%
Eur$ 1.0671 JPY 123.39 CNY 6.3763 GBP 1.5177 CHF 1.0113 RUB $65.5219 WTI $ 41.69 (-0.02%)
S&P +0.10% EuroStoxx +1.43% Dax +1.29% SMI +1.29%
Macro :
- China Investors Go Missing From Hong Kong Stock-Trading Link
- Treasury Volatility Falls to 2015 Low as Consensus on Fed Grows
- Global Economic Cost of Terrorism at Highest Since Sept. 11
- French Defense Ministry: IS Command, Training Centers Destroyed
Keep an eye on :
- ABI BB : AB InBev CEO Brito Sells EU22.6m Stock After Exercising Options
- BALN VX : Baloise 9m Solvency 1 Ratio 341%; Sticks to Outlook
- CLLS US / ALCLS FP : Cellectis 3Q Total Rev. & Other Income EU9.98m
- CWC LN : Liberty Global Says Deal Values CWC at Equity Value $5.3b
- AM FP : Liberty Global Says Deal Values CWC at Equity Value $5.3b
- GEN DC : Genmab/J&J Cancer Drug Approved by FDA More Than 3 Months Early
- IBE SM : Iberdrola to Get $34m From Bolivia on 2012 Nationalizations:Rtrs
- ITP FP : Interparfums Sees 2016 Sales of EU340m, Up Almost 8%
- SBMO NA : SBM Receives Formal Invitation to Tender for Sepia, Libra FPSOs
- SHP LN : Shire Entry Point Seen Attractive After Sector Pullback: Leerink
- HOT US : Hyatt Said to Have Made Last-Minute Bid for Starwood, DJ Says
- UBSN VX : UBS Agrees to Buy Santander Private Banking Italia Unit
- UTDI GY : United Internet 3Q Ebit Beats Ests.; Keeps Outlook Unchanged
- VIV FP : Vivendi Had No Contact With Niel Or Other Parties Re Tel Italia
- VOW3 GY : *VW’S OCTOBER EUROPEAN MARKET SHARE FALLS TO 25.2% FROM 26.1%
>>> Up
*ACOMO RAISED TO ACCUMULATE AT SNS SECURITIES
*AUTONEUM RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*CENTAMIN RAISED TO BUY VS HOLD AT INVESTEC
*CENTRAL ASIA METALS CUT TO SELL VS HOLD AT INVESTEC
*DEUTSCHE EUROSHOP RAISED TO ACCUMULATE VS NEUTRAL AT EQUINET
*HANNOVER RAISED TO OVERWEIGHT VS UNDERWEIGHT AT JPMORGAN
*OPHIR ENERGY RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*PREMIER OIL RAISED TO HOLD VS SELL AT CANACCORD
*SHIRE ADS RAISED TO OUTPERFORM AT LEERINK, PT $239
*TECNICAS REUNIDAS RAISED TO NEUTRAL VS SELL AT CITI
*TESCO RAISED TO BUY VS NEUTRAL AT CITI
>>> Down
*ADIDAS CUT TO SECTOR PERFORM AT RBC CAPITAL
*ALLIANZ CUT TO HOLD VS BUY AT BANKHAUS LAMPE
*DRAX CUT TO NEUTRAL VS OUTPERFORM AT MACQUARIE
*E.ON CUT TO HOLD VS BUY AT SOCGEN
*LAFARGEHOLCIM CUT TO UNDERPERFORM FROM NEUTRAL AT DAVY
*MORRISON CUT TO SELL VS BUY AT CITI
*NOVAE CUT TO ADD VS BUY AT PEEL HUNT
*PEAB CUT TO HOLD VS BUY AT PARETO
*RWE CUT TO HOLD VS BUY AT SOCGEN
*SAINSBURY CUT TO NEUTRAL VS BUY AT CITI
*SIG PLC CUT TO NEUTRAL VS BUY AT CITI
*TALKTALK CUT TO SELL VS HOLD AT SOCGEN
*TRELLEBORG CUT TO HOLD VS BUY AT KEPLER CHEUVREUX
>>> PT Change
>>> Initiation
*TUI AG REINSTATED NEUTRAL AT GOLDMAN
*UBISOFT ENTERTAINMENT RATED NEW BUY AT JEFFERIES
>>> Call
>> Sector
*GLOBAL BANKS SECTOR CUT TO UNDERWEIGHT AT HSBC
*SEMICONDUCTORS SECTOR RAISED TO NEUTRAL AT HSBC
After Hours Summary: HOTR +11.5%, NUAN +7%, TGLS +4.1%, URBN -11.5%, SPHS -9%, A -1.4% following earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings: HOTR +11.5%, NUAN +7%, TGLS +4.1%, RLGT +1.1%, NOAH +0.6%
Companies trading higher in after hours in reaction to news: OCRX +26.6% (announced positive results from the Phase 1 study of OCR-002), GOV +5.1% (announced the declaration of a pro rata distribution of approximately half of the shares of Class A Common Stock of The RMR Group Inc), HERO +2.0% (Soros Fund Management discloses 7.02% passive stake in 13G filing), OHI +0.9% (filed for offering of common stock for selling stockholders), TNGO +0.7% (Vector Capital IV disclosed 10.05% active stake in 13D filing)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings: URBN -11.5%, SPHS -9%, A -1.4%, CLLS -0.6%, NWL -0.6%, VSLR -0.5%, SMCI -0.2%
Companies trading lower in after hours in reaction to news: XCO -1.8% (shareholders approved amendment to effect reverse split; Board has deferred decision after regaining NYSE compliance for continued listing standards), JCP -0.8% (expanded revolving line of credit; plans to retire outstanding principal amount of its $500 mln Term Loan), FLEX -0.4% (announced agreement to acquire Wink; terms not disclosed)
Asian Mid-session Update: Japan officials hint at more fiscal stimulus; RBA minutes show further concern over China
***Economic Data***
- (NZ) NEW ZEALAND Q4 2-YEAR INFLATION EXPECTATION: 1.85% V 1.94% PRIOR; 1-YEAR EXPECTATION: 1.51% (1-year high) V 1.46% PRIOR
- (JP) JAPAN Q3 HOUSING LOANS Y/Y: 2.4% V 2.4% PRIOR
- (A) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 115.9 v 116.6 prior
- (SG) SINGAPORE OCT ELECTRONIC EXPORTS Y/Y: -3.2% v -2.2%e; NON-OIL DOMESTIC EXPORTS M/M: +1.1% v -2.7%e; Y/Y: -0.5% v -3.0%e
***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +1.5%, S&P/ASX +1.5%, Kospi +1.2%, Shanghai Composite +1.4%, Hang Seng +2.1%, Dec S&P500 +0.1% at 2,050
***Commodities/Fixed Income***
- Dec gold -0.2% at $1,081/oz, Dec crude oil flat at $41.73/brl, Dec copper -1.4% at $2.08/lb
- SLV: iShares Silver Trust ETF daily holdings rise to 9,867 tonnes from 9,801 tonnes; Highest since Oct 6th
- JJC: Dec Copper contract falls over 1.5% to $2.08; multi-year lows
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3724 v 6.3750 prior; First firmer Yuan setting in 11 sessions
- JGB: (JP) Japan MoF sells ¥2.29T in 0.1% coupon 5-year JGB bonds; Avg yield: 0.037% v 0.053%prior; Bid-to-cover: 4.11x v 2.79x prior
***Market Focal Points/FX***
- Global equity markets have staged a rally just 24 hours after retreat on concerns over geopolitical risk following deadly attacks in Paris on Friday. Traders have attributed the rebound to clear signs of willingness to step up offensive against the militants and also the rising possibility of more easing by the ECB along with a potential delay to liftoff at the Fed. Hang Seng and Shanghai are among the strongest markets, with the PBoC reportedly announcing an additional targeted RRR cut of additional 50 bps for the Bank of Beijing to 14% so as to help lending to rural sector of the economy.
- In the wake of Japan returning to recession for the 2nd time in as many years, local press speculated the cabinet may be forced into a supplementary budget even though officials denied plans to take more fiscal steps in recent weeks. The latest report suggests a supplementary budget of over ¥3T to be announced next week. Econ Min Amari did acknowledge that an extra budget may now be called but added fiscal consolidation remains critical. Chief Cabinet Sec Suga also said there were no further details for budget size speculation. Going into the BOJ meeting this week, reports of fiscal stimulus in the pipeline will likely temper already slim expectations of an announcement of expansion of QE by Japan's central bank.
- RBA minutes largely reiterated the script from Nov 2nd when the central bank engineered a balancing act between lower inflation and mortgage hikes by lenders to remain on hold at 2.00%. In hindsight and with the added assurance of the latest strength in Australia jobs data, that decision now appears to be quite prudent. RBA minutes saw AUD continue to adjust to commodity price decline, expected spare capacity to remain for some time, inflation risks balanced to the downside, and outlook for China posing an uncertainty for Australia. Separately, BHP remains closely scrutinized in the markets following the Samarco disaster over a week ago, with some press speculation that the company could reconsider its dividend policy. Lastly, RBNZ put out its projections for inflation, GDP, and unemployment. 1-year CPI expectation rose to a 1-year high, but forecast for unemployment also rose to a 2-year high, and 90-day bill rate view was also reduced to a 2-year low of 2.79.
- Among USD majors, USD/JPY hit a 1-week high above 123.40, EUR/USD extended losses to 6-month lows of 1.0660, AUD/USD rallied on the minutes release above 0.71, while NZD/USD fell about 20pips on RBNZ expectations to a 6-week low below $0.6460.
***Equities***
US equities / ADRs:
- OCRX: Announces Positive Phase 1 Results for Oral OCR-002 in Development for the Prevention of Chronic Hepatic Encephalopathy; +22.8% afterhours
- NUAN: Reports Q4 $0.41 v $0.35e, R$504M v $504Me; +9.1% afterhours
- A: Reports Q4 $0.50 v $0.47e, R$1.03B v $1.04Be; -2.2% afterhours
- URBN: Reports Q3 $0.42 v $0.42e, R$825.3M v $871Me; -10.0% afterhours
Notable movers by sector:
- Consumer discretionary: Tingyi Cayman Islands Holding Corp 322.HK -0.3% (Q3 result); Tatts Group Ltd TTS.AU +2.5% (talks with Tabcorp)
- Consumer staples: Ruralco Holdings RHL.AU -2.2% (FY15 result); A2 Corp. ATM.NZ +6.6% (raises guidance)
- Financials: PICC Group 1339.HK +2.2% (YTD result); QBE Insurance Group QBE.AU -3.8% (Q3 result); KB Financial Group Inc 105560.KR +1.2% (9-month result); Woori Bank 000030.KR +2.3% (Q3 result); Select ISU.AU -1.4% (guidance)
- Industrials: CRRC 1766.HK +2.4% (enters into contracts); China Airlines 2610.TW +1.4% (Q3 result); Monadelphous Group MND.AU +2.9% (revises guidance)
- Technology: Hon Hai Precision Industries 2317.TW +2.7% (Q3 result); Brambles Limited BXB.AU +1.5% (reaffirms guidance); ZTE 763.HK +3.2% (awarded contracts)
- Energy: China Shenhua Energy Co 1088.HK +2.6% (Oct result); China Coal Energy 1898.HK +2.7% (Oct result)
- Utilities: AusNet Services AST.AU +5.0%(H1 result)
Glenview Capital Management discloses updated portfolio positions in 13F filing: New Positions- A, AAPL, CP, CHTR; CLosed Positions- BKFS, CRI, DHR, ENDP, FMC
Highlights from 2015 Q3 filing as compared to 2015 Q2 filing:
- New positions in: A (~4.6 mln shares), AAPL (~0.3 mln), CP (~0.2 mln), CHTR (~0.2 mln)
- Increased positions in: BKD (to ~17.6 mln shares from ~11.6 mln shares), CI (to ~4.6 mln from ~2.8 mln), CFG (to ~3 mln from ~1.2 mln)
- Decreased positions in: AIG (to ~1.3 mln shares from ~2.2 mln shares), ABG (to ~0.6 mln from ~1 mln), BK (to ~0.6 mln from ~1 mln), DG (to ~2.4 mln from ~3.9 mln), EBAY (to ~2.3 mln from ~3.3 mln)
- Closed positions in: BKFS (from ~0.5 mln shares), CRI (from ~0.3 mln), DHR (from ~1.9 mln), ENDP (from ~8.8 mln), FMC (from ~4.8 mln)