WSJ : Sony to Swoop Into Drone Market for Business Customers

Sony to Swoop Into Drone Market for Business Customers

New drone company will offer services such as inspecting infrastructure and surveying land
TOKYO— Sony Corp. is starting a drone subsidiary to serve business customers, a foray into a frontier already crowded with upstarts and technology giants.

Sony said Wednesday it plans to create a drone company called Aerosense in a joint venture with Tokyo startup ZMP Inc., which specializes in autopilot technology. Aerosense will offer services such as inspecting aged infrastructure and surveying land that is difficult for people to access.

Drones, or unmanned flying vehicles, have quickly become a top area of research for Internet and technology companies. Both Amazon.com Inc. and Google Inc. are researching the use of drones for package delivery.

“We’re looking to explore new opportunities beyond our core consumer portfolio in enterprise markets,” said Hiroki Totoki, head of Sony’s smartphone unit, which is providing resources for the drone venture. “The key to driving growth in these areas will be adapting Sony’s innovation in various technologies,” including cameras and sensors, he said.

In Japan, drone technology has gained prominence recently, and not always in positive ways. A man was arrested in April after landing a drone containing trace amounts of radioactive material on the roof of the prime minister’s office. That prompted the government to consider tighter controls.



Aerosense devices will be equipped with Sony image sensors, a core product for the company used in Apple Inc. ’s iPhone and Samsung Electronic Co. ’s Galaxy. Sony is trying to expand applications for its cash cow, including medical uses.
A prototype of a drone that Sony Corp. and partner ZMP Inc. plan to create. ENLARGE
A prototype of a drone that Sony Corp. and partner ZMP Inc. plan to create. Photo: Sony Corp.
.
Competitors to Sony’s drone business in Japan include Yamaha Motor Co. , which has long sold autonomously piloted helicopters for agricultural and other purposes. A startup based at Chiba University, Autonomous Control Systems Laboratory Ltd., has been making drones to inspect infrastructure including nuclear reactors in Fukushima damaged by the 2011 earthquake and tsunami.

Sony and ZMP will each own about half of the drone company. A Sony spokesman said it would sell services using drones but not the drones themselves.

The two earlier teamed up to develop technology for autonomous-driving cars. ZMP is also a partner with videogame company DeNA Co. in developing driverless taxis.

Aerosense is the latest effort by Sony to encourage an entrepreneurial spirit among its engineers after the company went through cutbacks and years of losses. Mr. Totoki, the smartphone unit chief, earlier started Sony’s Internet-banking unit and other entrepreneurial projects. He has said he wants to turn the smartphone group into a “launchpad” for business ideas. Sony has been pushing into service businesses, including real estate and education.

(BN) *ST. JUDE TO BUY THORATEC FOR $63.50/SHR IN CASH


BN 07/22 11:00 *ST. JUDE MEDICAL SEES DEAL ADDING TO '16 ADJ EPS
BN 07/22 11:00 *ST. JUDE TO BUY THORATEC FOR $63.50/SHR IN CASH
BFW 07/22 11:00 *ST. JUDE MEDICAL TO BUY THORATEC FOR $63.50/SHR IN CASH
BN 07/22 11:00 *ST. JUDE TO BUY THORATEC FOR 63.50/SHR IN A CASH
BN 07/22 11:00 *ST. JUDE MEDICAL TO BUY THORATEC FOR $63.50/SHR IN A CASH
BN 07/22 11:00 *ST. JUDE MEDICAL & THORATEC REPORT DEFINITIVE PACT

St. Jude Medical and Thoratec Announce Definitive Agreement
2015-07-22 11:00:00.491 GMT

St. Jude Medical and Thoratec Announce Definitive Agreement

Combination Accelerates Innovation-Based Growth Program and Expands Heart
Failure Franchise

St. Jude Medical Will Discuss Transaction on its Second Quarter 2015 Earnings
Call Scheduled for 8 a.m. EDT (7 a.m. CDT) on July 22, 2015

Business Wire

ST. PAUL, Minn. & PLEASANTON, Calif. -- July 22, 2015

St. Jude Medical (NYSE:STJ) and Thoratec (NASDAQ:THOR) today announced that
the Boards of Directors of both companies have unanimously approved a
definitive agreement under which St. Jude Medical will acquire all of the
outstanding shares of Thoratec for $63.50 per share in a cash transaction
valued at approximately $3.4 billion, net of cash acquired. The all-cash
transaction represents a premium of 40.1 percent compared to $45.34,
Thoratec's volume-weighted average trading price for the 30 trading day period
ending July 17, 2015, and a 35.4 percent premium to the closing price on
Thoratec's last unaffected trading date on July 17, 2015 of $46.89. The
transaction is expected to be completed in the fourth quarter of 2015.

Thoratec is the worldwide leader in mechanical circulatory support (MCS)
technology for the treatment of advanced heart failure (HF), which includes
ventricular assist devices (VADs) that are used for both chronic and acute
patient support. The combination of complementary product lines of St. Jude
Medical and Thoratec will offer the most comprehensive portfolio of products
for the management and treatment of heart failure.

“Thoratec’s strong core business and rich portfolio of new products complement
St. Jude Medical’s innovation-based growth strategy and will benefit patients,
customers, employees and shareholders of both companies,” said Daniel J.
Starks, Chairman, President and Chief Executive Officer of St. Jude Medical.
“The addition of Thoratec’s leading ventricular assist device portfolio
expands and enhances St. Jude Medical’s established presence in heart failure
therapies. We look forward to welcoming Thoratec employees to our company at
such an exciting time in our history.”

This transaction accelerates St. Jude Medical’s growth strategy by adding
Thoratec’s complementary products and technologies to St. Jude Medical’s
industry-leading heart failure portfolio that includes its quadripolar cardiac
resynchronization therapy (CRT), remote monitoring capabilities and
CardioMEMS™ HF System. Together, the combined organization will offer
physicians and their patients innovative solutions across the heart failure
care continuum.

“Thoratec is pleased to join St. Jude Medical as we create a company that’s
uniquely positioned to advance treatment options for patients living with
heart failure,” said D. Keith Grossman, President and Chief Executive Officer
of Thoratec. “By combining the capabilities and leading technologies of both
companies, we will be able to expand access, reduce costs and advance heart
failure therapies on a global basis. Our employees and customers have worked
together tirelessly over many years to create the market leader Thoratec has
become. It is gratifying to see the creation of a combined product platform
and capability with St. Jude Medical that will fulfill the promise of our
products to many, many more patients in the years to come.”

Strategic and Financial Benefits of the Transaction

* Expands Leadership Position in Heart Failure: St. Jude Medical’s strength
in heart failure solutions is based on its portfolio of innovative
solutions that are proven to improve outcomes and reduce costs, including
its Quadripolar CRT-D and CRT-P technologies, MultiPoint™ Pacing CRT
technology, remote monitoring capabilities and CardioMEMS™ HF System.
Thoratec adds HeartMate II^®, the most widely used and extensively studied
left ventricular assist device, as well as the next generation HeartMate
3™ and HeartMate PHP™ and other complementary products to St. Jude
Medical’s portfolio.
* Accelerates St. Jude Medical’s Sales Growth Trajectory: Thoratec is the
global leader in the VAD market, which is currently estimated to be
approximately $750 million, and recently announced CE Mark approval of its
percutaneous heart pump, allowing Thoratec to enter a global market
expected to exceed $300 million in 2016. This acquisition positions St.
Jude Medical to enter new markets totaling more than $1 billion that are
expected to grow approximately 10 percent annually, benefitting St. Jude
Medical’s sales growth profile beginning in 2016.
* Continues Commitment to Innovation: St. Jude Medical’s strong track record
of bringing innovation to the markets it serves represents a significant
opportunity to further strengthen Thoratec’s rich pipeline of new and
next-generation products with the CardioMEMS HF System and its remote
monitoring and electronic health record interface capabilities.
* Provides Opportunity to Leverage Complementary Customer Focus and St. Jude
Medical’s Global Scale: Both companies have strong relationships with
heart failure physicians and cardiac surgeons. St. Jude Medical’s
interventional cardiology relationships will be an important benefit to
commercialize Thoratec’s new percutaneous heart pump, HeartMate PHP, used
in high risk percutaneous coronary intervention (PCI) procedures. In
addition, St. Jude Medical’s global presence can further strengthen and
enhance Thoratec’s international growth as only approximately 20 percent
of Thoratec’s sales currently come from outside of the United States.
* Creates Shareholder Value for St. Jude Medical Shareholders: This
transaction is expected to be accretive to adjusted earnings per share in
2016. St. Jude Medical also expects the combined company to capture
revenue and technology synergies following the completion of this
transaction.

Terms of the Transaction

Under the terms of the merger agreement, Thoratec shareholders will receive
$63.50 in cash, without interest, for each share of Thoratec common stock they
own. The transaction is conditioned upon, among other things, Thoratec
shareholder approval, regulatory approvals and other customary closing
conditions. The transaction is not conditioned on financing. St. Jude Medical
intends to fund the transaction through proceeds from additional bank term
loan debt and senior unsecured notes. St. Jude Medical is committed to
maintaining a strong investment grade rating.

The merger agreement includes a “go-shop” period, during which Thoratec will
actively solicit alternative proposals from third parties for the next 30 days
continuing through August 20, 2015. The merger agreement provides for Thoratec
to pay a termination fee of approximately $30 million to St. Jude Medical if
Thoratec terminates the merger agreement in connection with a superior
proposal that arose during the go-shop period and a termination fee of
approximately $111 million if Thoratec terminates the merger agreement in
connection with a superior proposal that arose following the go-shop period.
There can be no assurance that this process will result in a superior
proposal. Thoratec does not intend to disclose developments with respect to
the solicitation process unless and until its Board of Directors has made a
decision with respect to any potential superior proposal.

Advisors

Bank of America Merrill Lynch is acting as financial advisor to St. Jude
Medical and has also provided fully committed financing. Gibson, Dunn &
Crutcher LLP is serving as legal counsel to St. Jude Medical. Guggenheim
Securities is acting as financial advisor to Thoratec, and Latham & Watkins
LLP is serving as legal counsel. Centerview Partners provided a fairness
opinion to the Board of Directors of Thoratec in connection with the
transaction.

Conference Call, Webcast and Presentation

St. Jude Medical will hold its regular quarterly earnings conference call and
webcast for investors and analysts on Wednesday, July 22, at 8 a.m. EDT (7
a.m. CDT) where its management will also discuss the transaction. A
presentation will also be available for download. This call is being webcast
and can be accessed live at the St. Jude Medical Investor Relations website
(investors.sjm.com), where it will also be archived for 90 days.

About St. Jude Medical

St. Jude Medical is a global medical device manufacturer dedicated to
transforming the treatment of some of the world’s most expensive epidemic
diseases. The company does this by developing cost-effective medical
technologies that save and improve lives of patients around the world.
Headquartered in St. Paul, Minn., St. Jude Medical has four major clinical
focus areas that include cardiac rhythm management, atrial fibrillation,
cardiovascular and neuromodulation. For more information, please visit sjm.com
or follow us on Twitter @SJM_Media.

About Thoratec

Thoratec is a world leader in therapies to address advanced-stage heart
failure. The company's products include the HeartMate II and HeartMate 3 LVAS
(Left Ventricular Assist Systems) and Thoratec^® VAD (Ventricular Assist
Device) with more than 21,000 devices implanted in patients suffering from
heart failure. Thoratec also manufactures and distributes the CentriMag^®,
PediMag®/PediVAS^®, and HeartMate PHP product lines. HeartMate 3 and HeartMate
PHP are investigational devices and are limited by U.S. law to investigational
use. Thoratec is headquartered in Pleasanton, Calif. For more information,
visit the company's website at http://www.thoratec.com.

Thoratec, the Thoratec logo, HeartMate, and HeartMate II are registered
trademarks of Thoratec Corporation and HeartMate 3, HeartMate PHP, and IVAD
are trademarks of Thoratec Corporation. CentriMag and PediMag are registered
trademarks of Thoratec LLC, and PediVAS is a registered trademark of Thoratec
Switzerland GmbH.

Additional Information About the Merger and Where to Find It

In connection with the proposed transaction, Thoratec will prepare a proxy
statement to be filed with the SEC. When completed, a definitive proxy
statement and a form of proxy will be mailed to the shareholders of Thoratec.
THORATEC’S SHAREHOLDERS ARE URGED TO READ THE PROXY STATEMENT REGARDING THE
PROPOSED MERGER BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION. Thoratec’s
shareholders will be able to obtain, without charge, a copy of the proxy
statement (when available) and other relevant documents filed with the SEC
from the SEC’s website at http://www.sec.gov. Thoratec’s shareholders will
also be able to obtain, without charge, a copy of the proxy statement and
other relevant documents (when available) by directing a request by mail or
telephone to Thoratec Corporation, Investor Relations, 6035 Stoneridge Drive,
Pleasanton, California, 94588, telephone: 925-847-8600 or from Thoratec’s
website, http://www.Thoratec.com.

Thoratec and its directors and officers may be deemed to be participants in
the solicitation of proxies from Thoratec’s shareholders with respect to the
proposed merger. Information about Thoratec’s directors and executive officers
and their ownership of Thoratec’s common stock is set forth in the proxy
statement for Thoratec’s 2015 annual meeting of stockholders, Thoratec’s
Annual Report on Form 10-K for the fiscal year dated January 3, 2015, and the
proxy statement and other relevant materials which may be filed with the SEC
in connection with the transaction when and if they become available. Thoratec
shareholders may obtain additional information regarding the interests of
Thoratec and its directors and executive officers in the proposed merger,
which may be different than those of Thoratec’s shareholders generally, by
reading the proxy statement and other relevant documents regarding the
proposed transaction, when and if filed with the SEC.

Forward-Looking Statements

Forward-Looking Statement for Thoratec

This news release contains forward-looking statements within the meaning of
the Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking statements
involve certain risks and uncertainties that could cause actual results to
differ materially from those indicated in such forward-looking statements,
including, but not limited to, the ability of the parties to consummate the
proposed transaction, satisfaction of closing conditions to the consummation
of the proposed transaction, the impact of the announcement of the proposed
transaction on Thoratec’s relationships with its employees, existing customers
or potential future customers, and such other risks and uncertainties
pertaining to the Thoratec’s business as detailed in its filings with the SEC
on Forms 10-K and 10-Q, which are available on the SEC’s website at
www.sec.gov. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date thereof. Thoratec
assumes no obligation to update any forward-looking statement contained in
this news release.

Forward-Looking Statement for St. Jude Medical

This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. Such forward-looking statements include the expectations, plans
and prospects for St. Jude Medical, including but not limited to potential
clinical successes, anticipated regulatory approvals and future product
launches, and projected revenues, margins, earnings and market shares, as well
the anticipated acquisition of Thoratec, the timing of which may change or may
not be consummated at all, and the related benefits of such transaction which
may or may not materialize as expected. The statements made by St. Jude
Medical are based upon management’s current expectations and are subject to
certain risks and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements. These risks
and uncertainties include market conditions and other factors beyond St. Jude
Medical’s control and the risk factors and other cautionary statements
described in St. Jude Medical’s filings with the SEC, including those
described in the Risk Factors and Cautionary Statements sections of the St.
Jude Medical’s Annual Report on Form 10-K for the fiscal year ended January 3,
2015 and Quarterly Report on Form 10-Q for the fiscal quarter ended April 4,
2015. St. Jude Medical does not intend to update these statements and
undertakes no duty to any person to provide any such update except as required
by law.

View source version on businesswire.com:
http://www.businesswire.com/news/home/20150722005639/en/

Contact:

ST. JUDE MEDICAL CONTACTS:
J.C. Weigelt, 651-756-4347
Investor Relations
jweigelt@sjm.com
Candace Steele Flippin, 651-756-3029
Public Relations
csflippin@sjm.com
or
THORATEC CONTACT:
Neil Meyer, 925-738-0029
Investor Relations
neil.meyer@thoratec.com

-0- Jul/22/2015 11:00 GMT

(ZeroHedge) China's Record Dumping Of US Treasuries Leaves Goldman Speechless

--> QE4 soon ?

China's Record Dumping Of US Treasuries Leaves Goldman Speechless http://bit.ly/1HQToYe
On Friday, alongside China's announcement that it had bought over 600 tons of gold in "one month", the PBOC released another very important data point: its total foreign exchange reserves, which declined by $17.3 billion to $3,694 billion.

We then put China's change in FX reserves alongside the total Treasury holdings of China and its "anonymous" offshore Treasury dealer Euroclear (aka "Belgium") as released by TIC, and found that the dramatic relationship which we first discovered back in May, has persisted - namely virtually the entire delta in Chinese FX reserves come via China's US Treasury holdings. As in they are being aggressively sold, to the tune of $107 billion in Treasury sales so far in 2015.

We explained all of his on Friday in "China Dumps Record $143 Billion In US Treasurys In Three Months Via Belgium", and frankly we have been surprised that this extremely important topic has not gotten broader attention.
Then, to our relief, first JPM noticed. This is what Nikolaos Panigirtzoglou, author of Flows and Liquidity had to say on the topic of China's dramatic reserve liquidation


Looking at China more specifically, it appears that, after adjusting for currency changes, Chinese FX reserves were depleted for a fourth straight quarter by around $50bn in Q2. The cumulative reserve depletion between Q3 2014 and Q2 2015 is $160bn after adjusting for currency changes. At the same time, a current account surplus in Q2 combined with a drawdown in reserves suggests that capital outflows from China continued for the fifth straight quarter. Assuming a current account surplus in Q2 of around $92bn, i.e. $16bn higher than in Q1 due to higher merchandise trade surplus,we estimate that around $142bn of capital left China in Q2, similar to the previous quarter.
JPM conclusion is actually quite stunning:


This brings the cumulative capital outflow over the past five quarters to $520bn. Again, we approximate capital flow from the change in FX reserves minus the current account balance for each previous quarter to arrive at this estimate (Figure 2).
Incidentally, $520 billion is roughly triple what implied Treasury sales would suggest as China's capital outflow, meaning that China is also liquidating someother USD-denominated asset(s) at a feverish pace. So far we do not know which, but the chart above and the magnitude of the Chinese capital outflow is certainly the biggest story surrounding the world's most populous nation: what is happening in its stock market is just a diversion.
At this point JPM goes into a tangent explaining what the practical implications of a massive capital outflow from China are for the global economy. Regular readers, especially those who have read our previous piece on the collapse in the Petrodollar, the plunge in EM capital inflows, and their impact on capital markets and global economies can skip this part. Those for whom the interplay of capital flows and the global economy are new, are urged to read the following:


One way that slower EM capital flows and credit creation affect the rest of the world is via trade and trade finance. Trade finance datasets are unfortunately not homogeneous and different measures capture different aspects of trade finance activity. Reuters data on trade finance only aggregates loan syndication deals, which have mandated lead arrangers and thus capture the trends in the large-scale trade lending business, rather than providing an all-inclusive loans database. Perhaps the largest source of regularly collected and methodologically consistent data on trade finance is credit insurers (see “Testing the Trade Credit and Trade Link: Evidence from Data on Export Credit Insurance”, Auboin and Engemann, 2013). The Berne Union, the international trade association for credit and investment insurers with 79 members, includes the world’s largest private credit insurers and public export credit agencies. The volume of trade credit insured by members of the Berne Union covered more than 10% of international trade in 2012. The Berne Union provides data on insured trade credit, for both short-term (ST) and medium- and long-term transactions (MLT). Short-term trade credit insurance accounts for the vast majority at around 90% of new business in line with IMF estimates that the vast majority 80%-90% of trade credit is short term.


Figure 4 shows both the Reuters (quarterly) and the Berne Union (annual) data on trade finance loan syndication and trade credit insurance volumes, respectively. The quarterly Reuters data showed a clear deceleration this year from the very high levels seen at the end of last year. Looking at the first two quarters of the year,Reuters volumes were down by 25% vs. the 2014 average (Figure 4). The more comprehensive Berne Union annual volumes are only available annually and the last observation is for 2014. These data showed a very benign trade finance picture up until the end of 2014. Trade finance volumes had been trending up since 2010 at an annual pace of 8.8% per annum (between 2010 and 2014) which is faster than global nominal GDP growth of 6% per annum, i.e. the trend in trade finance had been rather healthy up until 2014, but there are indications of material slowing this year. This is also reflected in world trade volumes which have also decelerated this year vs. strong growth in previous years (Figure 5).
Summarizing the above as simply as possible: for all those confounded by why not only the US, but the global economy, hit another brick wall in Q1 the answer was neither snow, nor the West Coast strike, nor some other, arbitrary, goal-seeked excuse, but China, and specifically over half a trillion in still largely unexplained Chinese capital outflows.
* * *
But wait, because it wasn't just JPM whose attention perked up over the weekend. This morning Goldman Sachs itself had a note titled "the Curious Case of China's Capital Outflows":


China’s balance of payments has been undergoing important changes in recent quarters. The trade surplus has grown far above previous norms, running around $260bn in the first half of this year, compared with about $100bn during the same period last year and roughly $75bn on average during the previous seven years. Ordinarily, these kinds of numbers would see very rapid reserve accumulation, but this is not the case. Partly that is because China’s services balance has swung into meaningful deficit, so that the current account is quite a bit lower than the headline numbers from trade in goods would suggest. But the more important reason is that capital outflows have become very sizeable and now eclipse anything seen in the recent past.

Headline FX reserves in the second quarter fell $36bn, from $3,730bn at end-March to $3,694bn at end-June. While we estimate that there was a large negative valuation effect in Q1 (due to the drop in EUR/$ on the ECB’s QE announcement), there was likely a positive valuation effect in Q2, which we put around $48bn. That means that our proxy for reserve accumulation in the second quarter is around -$85bn, i.e. the actual “flow” drop in reserves was bigger than the headline numbers suggest because of a flattering valuation effect. If we put that number together with the trade surplus in Q2 of $140bn, net capital outflows could be around -$224bn in the quarter, meaningfully up from the first quarter. There are caveats to this calculation, of course. There is obviously the services deficit that we mention above, which will tend to make this estimate less dramatic. It is also possible that our estimate for valuation effects is wrong. Indeed, there is some indication that valuation-related losses in Q1 were not nearly as large as implied by our calculations. But even if we adjust for these factors, net capital outflows might conceivably have run around -$200bn, an acceleration from Q1 and beyond anything seen historically.
Granted, this is smaller than JPM's $520 billion number but this also captures a far shorter time period. Annualizing a $224 billion outflow in one quarter would lead to a unprecedented $1 trillion capital outflow out of China for the year. Needless to say, a capital exodus of that pace and magnitude would suggest that something is very, very wrong with not only China's economy, but its capital markets, and last but not least, its capital controls, which prohibit any substantial outbound capital flight (at least for ordinary people, the Politburo is clearly exempt from the regulations for the "common folk").
Back to Goldman:


The big question is obviously what is driving these flows and how long they are likely to continue. We continue to take the view that a stock adjustment is at work, although it is clear that the turning point is yet to come. We will look at this in one of our next FX Views. In the interim, we think an easier question is what this means for G10 FX. This is because this shift in China’s balance of payments is sure to depress reserve accumulation across EM as a whole, such that reserve recycling – a factor associated with Euro strength in the past – is unlikely to be sizeable for quite some time.
In other words, for once Goldman is speechless, however it is quick to point out that what traditionally has been a major source of reserve reflow, the Chinese current and capital accounts, is no longer there.
It also means that what may have been one of the biggest drivers of DM FX strength in recent years, if only against the pegged Renminbi, is suddenly no longer present.
While the implications of this on the global FX scene are profound, they tie in to what we said last November when explaining the death of the petrodollar. For the most part, the country most and first impacted from this capital outflow will be China, something its stock market has already noticed in recent weeks.
But what is likely the take home message for non-Chinese readers from all of this, is that while there has been latent speculation over the years that China will dump US treasuries voluntarily because it wants to (as punishment or some other reason), suddenly China is forced to liquidate US Treasury paper even though it does not want to, merely to fund a capital outflow unlike anything it has seen in history. It still has a lot of 10 Year paper, aka FX reserves, left: about $1.3 trillion at last check, however this raises two critical questions: i) what happens to 10 Year rates when whoever has been absorbing China's Treasury dump no longer bids the paper and ii) how much more paper can China sell before the entire world starts paying attention, besides just JPM and Goldman... and this website of course.
Finally, if China's selling is only getting started, just what does this mean for future Fed strategy. Because one can easily forget a rate hike if in addition to rising short-term rates, China is about to dump a few hundred billion in paper on a vastly illiquid market.
Or let us paraphrase: how soon until QE 4?

>>> LG Group says rumor of Google's plan to buy LG Electronics stake 'absolutely

LG Group says rumor of Google's plan to buy LG Electronics stake 'absolutely not true' 

LG Group has denied that the rumor that California-based tech giant Google [NASDAQ:GOOGL] plans to buy a stake in its electronics unit LG Electronics [KRX:066570], Yonhap News reported.

The report cited the LG Group’s response as saying that the rumor is absolute not true.

LG Electronics shares jumped in the morning trading session on a market rumor that Google is planning to buy a 35% stake in the company. The rumored stake purchase would make Google a larger shareholder than LG Group in the electronics firm, as reported.

The report didn’t say where the rumor comes from.
 
Yonhap News

(CS) European E&Ps : Key projects undervalued



Key projects undervalued
European E&P stocks appear to be trading at significant discounts to NAVs, reflecting uncertain crude price trajectory and balance sheets, and the subsequent impact on the development timelines of pre-FID projects. This
report investigates what is priced into current prices in terms of key projects assuming a more conservative longer-term oil price of $75/bbl (vs Credit Suisse at $85/bbl l-t). We think the risk/reward is starting to look favourable for Africa Oil and Tullow Oil (both upgraded to Outperform from Neutral). We downgrade Ophir to Underperform from Neutral because we are sceptical about timelines for EG FLNG in a tough LNG environment. Lundin has the least uncertainty around its portfolio, but is fairly valued. Genel has potentially the biggest upside, but much will hinge on export payments. Our target price changes reflect mostly the rolling forward of NAVs, and reducing risking in some instances as we defer project spend to manage balance sheets.
■ Africa Oil (O/P from N): South Lokichar Basin has a competitive breakeven and, at SKr14/sh, the shares are pricing in a three-year delay to guidance for first oil in ~2020 at $75/bbl long term and no further resource upgrades.
■ Tullow Oil (O/P from N): Kenya and Uganda are key pre-FID projects. A share price of 285p/sh implies $70/bbl l-t, and a three-year delay to a Kenyan/Ugandan development, which we believe is too conservative.
■ Genel (O/P): MBB is a strategic project, but the timeline for FID is uncertain against a tough macro print. Assuming $75/bbl, the current share price assumes MBB will not happen. Export payments will be a key catalyst.
■ Lundin (N): Johan Sverdrup is the key value driver, and operator STL is using its A-team to develop this field. In the context of our more conservative forecast for most of its development projects, which are post-FID, we look at whether Lundin is attractive at $75/bbl Brent – and it appears fairly valued.
■ Det Norske (N): Execution of Ivar Aasen is important, but Johan Sverdrup accounts for 79% of our NAV. The market is currently pricing in $72/bbl for Det Norske, assuming Johan Sverdrup reaches first oil in 2020.
■ Ophir (U/P from N): Removing EG FLNG (a more speculative project) from its portfolio, the value of Ophir is 93p/sh at $75/bbl.
■ Cairn (U/P): Senegal is the key pre-FID project for Cairn, and at 174p, the market is pricing $81/bbl, assuming FID in 2018, and first oil in 2022.

(CS) BT - a closer look at Structural Separation (full note attached)

Ofcom's recently published its Strategy Review of Digital Communications – Discussion document. There has been widespread UK press coverage of the decision by Ofcom to include in the Review the idea of a Structural Separation of Openreach, BT's local access network, as one of a range of options. Ofcom Chief Executive Sharon White confirmed that Ofcom would not have included the option in the strategy document if it wasn’t a serious option.

Press reports describe Ofcom considering whether splitting Openreach from BT may be the best way to improve competition in the sector and follows complaints that the network's performance has often been poor. Sky's public reaction to the news was typical, calling on Ofcom to ask the Competition and Markets Authority to begin a full competition enquiry.

The Strategy review is about much more than just Structural Separation
Ofcom's review is the first in 10 years and is considering how regulation should be shaped
for the next 10 years. It outlines four challenges for regulation:
■ How to encourage Investment and innovation and widespread availability.
■ How to encourage a competitive market
■ Empowering consumers and businesses to take advantage of competitive markets
■ Regulation where necessary, but to deregulate elsewhere

Fast FT : Sage says its books are balanced for full-year

Sage, the UK accounting software company that is racing to reshape its business to compete with web-based rivals, has reassured analysts that it is set to meet full-year earnings guidance.

In a quarterly trading update, the FTSE 100 business said it was confident of achieving a 28 per cent operating margin this financial year, with at least 6 per cent revenue growth.

Such words of reassurance are important for investors in Sage, whose new chief executive Stephen Kelly, who took the top job at Sage last November, has vowed to overhaul the Newcastle based business,

Somewhat like a company that still sells music CDs in the face of competition from Spotify and iTunes, Sage's traditional business of installing software in customers' offices is threatened by nimbler start-ups whose products are web and so-called "cloud" based.

Sage is moving with the times as fast as possible, however. Its online cloud-based accounting and payroll system Sage One had 86,000 paying customers at the end of its last financial year, although this compares with over 1m customers who are still using its traditional, on-premise products.

Mr Kelly has launched a plan to attract millions of new customers with a mobile accounting apps that could allow business owners to do their books on their smartphones.

For the first nine months of this year, Sage said on Wednesday, group revenue increased 6 per cent on an organic basis.

The third quarter growth was 7.5 per cent, year on year, although this was flattered by relatively weak trading in the comparable period last year.

(BN) Goldman’s Currie Sees Gold Dropping Below $1,000 on Dollar (2)


Goldman’s Currie Sees Gold Dropping Below $1,000 on Dollar (2)
2015-07-22 06:04:40.825 GMT


(Updates price in sixth paragraph.)

By Debarati Roy
(Bloomberg) -- Goldman Sachs Group Inc.’s Jeffrey Currie
says the worst is yet to come for gold and that prices could
fall below $1,000 an ounce for the first time since 2009.
“With the more positive outlook on the dollar, and with
debasement risk starting to fade, the demand to use gold as a
diversifying asset against the U.S. dollar becomes less and less
important,” said Currie, who told investors to sell in 2013
before the metal’s biggest collapse in three decades.
Prices this week slumped to the lowest since 2010. The rout
is deepening amid mounting speculation that U.S. interest rates
will climb this year, curbing the appeal of bullion because it
doesn’t pay interest like competing assets. At the same time,
China bought less of the metal than analysts were expecting, and
the dollar keeps getting stronger.
Currie isn’t alone in predicting more declines. ABN Amro
Bank NV’s Georgette Boele and Robin Bhar of Societe Generale AG
say bullion will approach $1,000 by December. Money managers are
holding the smallest net-bullish bet on gold since the U.S.
government data begins in 2006. The metal has led a retreat
among raw materials, as the Bloomberg Commodity Index this week
fell to a 13-year low.
“The risks are clearly skewed to the downside in this
environment,” Currie, Goldman’s New York-based head of
commodities research, said in a telephone interview on Tuesday.
“There is a probability that the market trades below $1,000
this year given our broader commodity view.”

Bullion Drops

Gold for immediate delivery fell 0.8 percent to $1,092.10
an ounce at 2:03 p.m. in Singapore, Bloomberg generic pricing
showed. The metal retreated to $1,086.18 on Monday, the lowest
level since March 2010.
More than $4.4 billion has been erased from the value of
exchange-traded products backed by gold since June 30. Holdings
are the smallest since 2009, data compiled by Bloomberg show.
“In longer term, we definitely like playing this market on
the short side,” Currie said. “We think we are in a structural
bear market, not only in gold, but across the commodity complex,
as the individual commodity stories are reinforcing to one
another, creating a negative feedback loop.”

For Related News and Information:
Gold Leads Commodities ‘Mess’ That Has Many Investors Smarting
Why Buy Gold Baffles Investors as Top Forecaster Sees More Pain
Gold Speculators Least Bullish on Record as Rate Rise Approaches
Top Commodity Stories:CTOP<GO>
Top Metals & Mining: METT <GO>

To contact the reporter on this story:
Debarati Roy in New York at +1-212-617-5307 or
droy5@bloomberg.net
To contact the editors responsible for this story:
Millie Munshi at +1-212-617-5543 or
mmunshi@bloomberg.net
Susan Warren