>>> Asian Update Nikkei +2.98% Hang Seng +1.61% Shanghai +0.80%

Asian Mid-session Update: Japan cuts assessment of Industrial Output after surprise decline; Markets rebound on quarter-end short covering

***Economic Data***
- (JP) JAPAN AUG PRELIMINARY INDUSTRIAL PRODUCTION M/M: -0.5% (3rd straight decline) V 1.0%E; Y/Y: 0.2% v 0.8%E
- (JP) JAPAN AUG RETAIL SALES M/M: 0.0% V 0.5%; Y/Y: 0.8% (5-month low) V 1.2%E; LARGE RETAILERS' SALES: 1.8% V 1.3%E
- (JP) JAPAN AUG VEHICLE PRODUCTION Y/Y: -4.7% V -5.9% PRIOR (12th straight negative reading)
- (AU) AUSTRALIA AUG PRIVATE SECTOR CREDIT M/M: 0.6% V 0.5%E; Y/Y: 6.3% (6-year high) V 6.2%E
- (AU) AUSTRALIA AUG BUILDING APPROVALS M/M: -6.9% V -2.0%E; Y/Y: 5.1% (10-month low) V 7.4%E
- (NZ) NEW ZEALAND SEPT ANZ ACTIVITY OUTLOOK: 16.7 V 12.2 PRIOR; BUSINESS CONFIDENCE: -18.9 V -29.1 PRIOR
- (NZ) NEW ZEALAND AUG BUILDING PERMITS M/M: -4.9% V +20.3% PRIOR
- (NZ) New Zealand Aug M3 Money Supply Y/Y: 9.0% v 9.3% prior; 3-month low
- (SG) Singapore Aug M1 Money Supply Y/Y: 2.3% v 2.0% prior; M2 Money Supply Y/Y: 1.8% v 2.6% prior
- (UK) SEPT GFK CONSUMER CONFIDENCE: 3 V 5E (4-month low)

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +1.7%, S&P/ASX +1.0%, Kospi -0.5%, Shanghai Composite +0.6%, Hang Seng +0.8%, Dec S&P500 +0.4% at 1,882

***Commodities/Fixed Income***
- Dec gold -0.2% at $1,124/oz, Nov crude oil -1.0% at $44.77/brl, Dec copper +0.5% at $2.26/lb
- (US) API Petroleum Inventories: Crude: +4.6M v +0.5Me (first build in 3 weeks; largest build since Sept 1st)
- (CN) PBOC: China Aug gold reserves 54.5M oz v 53.9M oz prior
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3613 v 6.3660 prior setting (strongest Yuan setting since Sept 18th)
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, ¥240B in 10-25yr JGBs, and ¥140B in JGBs with maturity over 25-yr

***Market Focal Points/FX***
- The last trading day of the quarter in Asia has finally given way to relief rally, though it remains unclear how much of the buying is due to short-covering and window dressing. US indices also thawed, with S&P500 showing its first marginal rise after 5 losing sessions. S&P500 eminis are up by a more resounding margin, rising about 15pts or 0.8%. In FX, risk-on flows are also helping drive funds out of safe-haven Yen and into the beaten down commodity currencies. USD/JPY is up about 20pips from the lows above 119.90, AUD/USD up nearly 40pips around 0.7020, NZD/USD up about 35pips above 0.6370, and EUR/USD flat around 1.1250.

- Japan industrial output fell for the 3rd straight month against expected sequential improvement, prompting the cabinet office to cut its assessment of production once again. Retail sales were also disappointing, and output of cars is now down for the 12th straight month. Skeptics are increasingly worried over the sustainability and the efficacy of Abenomics, and Japan's Prime Minister continued to take every opportunity to defend his plans with more remarks in the US on Tuesday. Abe's advisors however are calling for more aggressive policy response - Honda said Japan needs more economic stimulus to defend against a shock from China slowdown as Japan is now in static situation, while Takenaka said he prefers to see an extra budget of ¥5T this fall, followed by additional BOJ easing.

- China FX regulator reiterated it would keep Yuan basically stable, anticipating current account surplus to be maintained in H2. SAFE did acknowledge that large volatility in cross-border capital flows should be anticipated for the balance of H2. China official Manufacturing and Non-Manufacturing PMI figures are on tap for release tomorrow.

- Down under, BHP and Rio Tinto borrowed a page from Glencore's playbook, talking up their financial position over the past 24 hours. Fortescue is also up nearly 5% after company CEO said commodity market volatility can be sustained, and that he is looking for an investor to help accelerate debt payment. Australia building approvals was the most notable datapoint for the session, falling by wider than expected margin m/m and also missing expectations for y/y growth. In New Zealand, Fin Min English said he was very concerned about the risks of a housing market crash, just as the latest Building Permits data also showed a contraction.

***Equities***
US equities / ADRs:
- UACL: Guides Q3 $0.27-0.31 v $0.44e, R$283-290M v $296Me ; SCOR +8.5%; RENT +12.9% afterhours
- CLVS: Reaches milestones in the US and Europe for Rociletinib; +4.1% afterhours
- DMND: Reports Q4 $0.23 v $0.22e, R$202M v $205Me; -4.3% afterhours
- CMLS: Confirms names new CEO; effective Oct 13th;-4.6% afterhours
- DCI: Files NT-10K to delay annual report filing; -10.6% afterhours
- CUDA: To acquires Intronis Inc (private); terms not disclosed; -22.3% afterhours

- COST: Reports Q4 $1.73 v $1.66e, R$35.8B v $36.3Be

Notable movers by sector:
- Consumer discretionary: Japan Tobacco 2914.JP -7.5% (confirms asset purchase); Heiwado 8276.JP +4.6% (6-mo result)
- Consumer staples: China Huishan Dairy Holdings 6863.HK -5.3% (acquisition)
- Financials: Goldin Financial Holdings 530.HK +0.7% (FY15 result)
- Industrials: CRRC Corp 1766.HK +2.8% (awarded contracts); Geely Automobile 175.HK +15.1%, BYD 1211.HK +4.7% (China to cut tax for small cars); Mazda Motor 7261.JP +5.8%, Honda Motor 7267.JP +1.6% (Aug Japan auto production)
- Technology: Mesoblast MSB.AU -4.0% (trial update)
- Materials: Fortescue Metals Group FMG.AU +4.8% (CEO comment)
- Energy: AGL Energy AGL.AU -2.3% (FY16 guidance)
- Healthcare: Hua Han Bio-Pharmaceutical Holdings 587.HK +1.1% (FY15 result); Eisai Co 4523.JP +1.4% (adjusts H1 guidance); Avita Medical AVH.AU +18.6% (awarded contract)
- Telecom: China Mobile 941.HK -2.1% (to launch unused data rollover plan); TPG Telecom TPM.AU +5.9% (deals with Vodafone)

>>> AT&T reiterates guidance for FY15 adjusted EPS of $2.62-2.68 vs $2.64 Capita

AT&T reiterates guidance for FY15 adjusted EPS of $2.62-2.68 vs $2.64 Capital IQ Consensus Estimate, double-digit revenue growth, and continued consolidated margin expansion 

* Co reiterated its guidance for full-year adjusted EPS (2.62-2.68 vs $2.64 Capital IQ Consensus Estimate), double-digit revenue growth (Capital IQ Consensus calls for rev growth of 9.9% to $168.1 bln) and continued consolidated margin expansion, even with foreign exchange pressure from the company's international operations. The company also expects capital spending to increase from second-quarter levels and free cash flow (cash from operating activities minus capital expenditures) to be greater than $4.5 billion for the quarter. The Company also reaffirmed all other full-year guidance.
- AT&T's wireless performance includes results from both business and consumer customers. AT&T expects more than 2 million total net adds in the third quarter with gains in every customer category (postpaid, prepaid, connected devices and reseller). The Company also expects positive branded voice net adds in the quarter. As a result, and with a continued focus on efficiency initiatives, the Company expects to maintain momentum in wireless service EBITDA margins.
- AT&T said its early integration efforts with DIRECTV are going well and are in line or better than expectations. The Company expects to report positive U.S. DIRECTV net adds in the third quarter and positive IP broadband net adds. U-verse TV subscribers are expected to decline as the Company continues to focus on satellite and high-value subscribers.
- The Company also said that it is changing the methodology DIRECTV used to count commercial subscribers to conform to AT&T practices. Previously, DIRECTV used a method of counting commercial customers that converted commercial accounts to an equivalent number of residential subscribers based on relative revenues per account. Under the new methodology, the Company will simply count each commercial account as one subscriber. This will reduce DIRECTV's total subscriber count by 918,600 at acquisition close on July 24, 2015. This change has no impact on historical or future revenues, EBITDA or cash flows.
- In International, the Company continues to show great progress in its deployment of 4G LTE in Mexico as the Company invests in that country's wireless network. AT&T is on track with reaching its end-of-year goal of covering 40 million POPs. The Company also continues its work on creating operating efficiencies for its Latin America satellite properties, even with foreign exchange pressure.

>>>> US After Hours Summary: CUDA -22.3%, EXXI -5.5%, DMND -4.3%

After Hours Summary: CUDA -22.3%, EXXI -5.5%, DMND -4.3% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to news: RENT +12.9% (co will merge into subsidiary of comScore (SCOR) in stock-for-stock merger; each share of Rentrak will be converted into the right to receive 1.15 shares of comScore), NVAX +7.6% (announced positive top-line data from RSV F vaccine phase 1 clinical trial; all RSV F Vaccine formulations and regimens were well-tolerated and highly immunogenic), OXGN +6.4% (announced plans for the further advancement of its lead investigational drug, CA4P), RL +3.9% (confirmed that Stefan Larsson has been named Chief Executive Officer, to become effective in November, 2015), TAC +3.8% (announced elimination of 239 positions, primarily at its corporate head office in Calgary; expected to result in an additional cost-savings of ~$25 mln), NRF +3.5% (authorized the repurchase of up to $500 million of its outstanding common stock), FCAU +2.4% (CNBC reporting co's Ferrari offering likely to launch by Friday), TRAK +1.6% (DoJ announced it will require Cox Automotive to divest DealerTrak's automobile dealership full-featured inventory management solution (IMS) business in order for Cox to acquire Dealertrack)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: CUDA -22.3%, EXXI -5.5%, DMND -4.3%

Companies trading lower in after hours in reaction to news: DCI -10.6% (filed to delay Form 10-K citing ongoing investigation and potential financial statement misstatements), CMLS -4.6% (announced that Mary Berner has been named Chief Executive Officer, effective October 13, 2015), USAT -4.0% (filed to delay Form 10-K following identification of deficiencies in both the design and operating effectiveness of the Company's internal control over financial reporting), GPS -3.0% (President of Old Navy left co to become CEO of Ralph Lauren)

WSJ: Ralph Lauren Steps Aside as CEO; Will Remain Design Chief

Fashion designer Ralph Lauren will step down as CEO of Ralph Lauren Corp., but he will remain chairman and design chief.

Ralph Lauren Corp. said it has hired Stefan Larsson, the global president of Gap Inc.’s Old Navy division, as its chief executive, putting in motion a succession plan for one of fashion’s biggest companies.

Ralph Lauren, who will turn 76 on Oct. 14, has been the chief executive and lead designer of the company since he founded it 48 years ago and built it into a global luxury brand. While handing over operational duties, Mr. Lauren will remain at his company as executive chairman and chief creative Officer.

In an interview Tuesday at his Madison Avenue office, Mr. Lauren stressed that the change wasn’t about him stepping aside, but rather about bringing on a partner to help take the company to the next level.


“The company has to change,” Mr. Lauren said. “It’s a public company and we have a responsibility to have the right leadership.”

Mr. Larsson, who is 41 years old, had been in his role at Old Navy since 2012 and is credited with helping revive sales at the casual apparel brand. Previously, he spent 15 years at fast fashion retailer H&M. He will join Ralph Lauren and its board in November.

The move to reach outside for a CEO shows how Ralph Lauren, which had $7.6 billion in sales in its latest fiscal year, is attempting to shore up its business after sales and profits have sagged this year. The company’s share price has fallen about 44% this year through Tuesday’s close, erasing nearly $5 billion in market value.

Mr. Lauren said he had been thinking about bringing on new management for several years. He was introduced to Mr. Larsson through an executive recruiter and the two met face to face for the first time “a while ago” over dinner at Sette Mezzo, an Italian restaurant in New York City.

“We connected in five minutes,” Mr. Larsson said. “Ralph surprised me by being so focused on growth.”

The appointment marks the latest changing of the guard at a big American fashion house. Donna Karan stepped down from the company she founded earlier this year. Oscar de la Renta passed the baton to designer Peter Copping in October 2014 before he died. In those cases, the CEO role was held by an executive.

Mr. Lauren said he isn’t going anywhere. ”I’m excited about my business and I’m not leaving,” he said. “I’m taking on a partner.”

Mr. Lauren’s son, David, who is an executive vice president and was considered by some investors as a potential CEO successor, said in a news release: “I’m excited to welcome Stefan to our team and I look forward to working closely with him.”

Ralph Lauren also said Tuesday that its No. 2 executive, President and Chief Operating Officer Jackwyn Nemerov, will retire in November. She will become an adviser to the company.

Ms. Nemerov, who assumed the president’s role in 2013 after spending about a decade with the company, was in the process of restructuring the company around global brands to make it more nimble, but results have been disappointing. She has faced a host of recent challenges, including the strong dollar, which has made Ralph Lauren’s products more expensive to overseas customers and tourists visiting the U.S.

In February, the company reported an unexpected slowdown in traffic at its retail stores, and heavy discounting by rivals dented sales. In August, the company said quarterly revenue fell 5.3% to $1.62 billion as sales excluding newly opened or closed stores fell 8%.

Mr. Lauren founded his company in 1967 beginning with a line of neckties under the Polo name, and in the years since, it has grown into an empire encompassing men’s, women’s and children’s clothing and home furnishings. It encompasses more than 20 brands at various price ranges, sold in Ralph Lauren stores worldwide and department stores.

Its advertising promoted an affluent and tasteful lifestyle, filled with wholesome-looking sophisticates, preppy Ivy League staples and looks inspired by the American West, Old Hollywood, safari or Navajo. More recently, the company has been putting more emphasis on the luxury side of its business and international expansion.

Mr. Lauren said Tuesday he could foresee entering new lines of business beyond the current mainstays of apparel, accessories and home goods, as it has with the recent opening of the Polo Bar, a restaurant in midtown Manhattan.

“I felt [Mr. Larsson] needed to be CEO to do all the things that need to be done,” Mr. Lauren said.

Mr. Larsson will leave his role at Old Navy on Oct. 2. He will be replaced by Jill Stanton, executive vice president of global product at Old Navy, who will lead the division in the interim. She will report to Gap Inc. Chief Executive Officer Art Peck. A search for a new global brand president is already under way, Gap said.

>>> Mars Films 30% stake acquired by Vivendi

Mars Films 30% stake acquired by Vivendi

Vivendi and CANAL+ are stepping up their role as a major player in the financing and development of the French and international movie industry, in which it already invests close to EUR 800m a year.

Vivendi will take a 30% stake in Mars Films, a French leader in the production and distribution of motion pictures.

Stephane Celerier, chairman of Mars Films, is also appointed vice chairman of STUDIOCANAL. He will head a monthly development committee with film opinion leaders.

Jean-Christophe Thiery, chairman of the CANAL+ Group Management Board, stated: "We are delighted to partner with Mars Films, which will make a great addition to the Group’s already strong movie operations. CANAL+ is the number one support of the French movie industry, and STUDIOCANAL is a major player in Europe. This operation is part of our plan to aggressively invest in content, particularly movies that are more than ever at the core of our strategy. "

Maxime Saada, CEO of the CANAL+ Group, stated: "CANAL+ and STUDIOCANAL welcome the opportunity to combine their already widely recognized know-how in movies with the experience and expertise of Stéphane Célérier. Under his leadership, Mars has become a key distributor of some of the greatest names in cinema, including Woody Allen, as well as critically acclaimed and popular movies (such as Polisse, Des Hommes et des dieux, 12 Years a Slave and Potiche). Mars recently and successfully launched into production with La Famille Bélier. Having him among us will be a real asset. "

>>> US Close Dow+0.30% S&P+0.12% Nasdaq-0.59% Russell-0.61%

Closing Market Summary: Stocks Climb Despite Continued Weakness in Biotechnology

The stock market ended Tuesday on an uninspiring note after surrendering the bulk of its intraday gain. The S&P 500 (+0.1%) added two points after showing an eight-point gain during the opening hour.

Equity indices rallied at the start, but the rebound from yesterday's 2.6% dive in the S&P 500 hit resistance right beneath the 1,900 level, at which point most sectors began backing away from their morning highs. The health care sector (+0.9%) held the lead throughout the day, but the influential group also retreated from its high as market-wide selling pressure grew heavier during the afternoon.

That being said, the sector was able to finish in the green while biotech names showed strength in the early going, but the iShares Nasdaq Biotechnology ETF (IBB 289.48, -1.13) surrendered its gain in the afternoon, settling lower by 0.4% to widen this week's decline to 6.7%. Following today's drop, the former high-flying ETF is down 15.4% for September.

Outside of health care, industrials (+0.6%), financials (+0.4%), and materials (+0.4%) also finished ahead of the broader market while the remaining groups struggled. The consumer discretionary space (-0.3%) underperformed throughout the day amid weakness in apparel retailers and homebuilders. To that latter point, the iShares Dow Jones US Home Construction ETF (ITB 25.71, -0.44) ended lower by 1.7%.

Elsewhere among cyclical sectors, energy (unch) began the day behind health care, but the commodity-related group retreated into the afternoon even though crude oil rose 1.7% to $45.24/bbl.

Also of note, the top-weighted technology sector (-0.6%) traded in-line with the market during morning action, but fell to lows in the afternoon. Shares of Apple (AAPL 109.06, -3.38) were largely responsible for the retreat as the stock fell 3.0%. Meanwhile, other large cap components finished closer to their flat lines while high-beta chipmakers outperformed with the PHLX Semiconductor Index climbing 0.7%.

Taking a look at the bigger picture, the S&P 500 settled 17 points above its low from August 24 with just one trading day remaining in September. The intraday slide from highs invited some demand for volatility protection, but a spike off session lows during the final 30 minutes of the day, pressured the CBOE Volatility Index (VIX 26.54, -1.09) back into the middle of today's range.

Meanwhile, Treasuries held slim losses during morning action, but they rallied intraday to send the 10-yr yield lower by five basis points to 2.05%.

Today's participation was ahead of average with more than 980 million shares changing hands at the NYSE floor.

Economic data was limited to Consumer Confidence and Case-Shiller 20-City Index:

  • The Conference Board's Consumer Confidence Index increased to 103.0 in September from a downwardly revised 101.3 (from 101.5) while the consensus expected a drop to 96.0
    • The September reading hit its highest level since reaching 103.8 in February
    • In a clearly unexpected move, consumers shrugged off the negative effects of the downward-trending stock market and instead focused on lower gasoline prices and a generally improving labor market
  • The Case-Shiller 20-city Home Price Index for July rose 5.0% for the second consecutive month, which is what the Briefing.com consensus expected

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while September ADP Employment Change (consensus 200K) will be reported at 8:15 ET. The day's data will be topped off with the 9:45 ET release of the Chicago PMI for September (consensus 52.9).

  • Nasdaq Composite -4.6% YTD
  • S&P 500 -8.5% YTD
  • Dow Jones Industrial Average -10.0% YTD
  • Russell 2000 -10.1% YTD

FT : M&A keeps record-setting pace as world’s dealmakers get active

M&A keeps record-setting pace as world’s dealmakers get active

M&A quarterly data show record-setting pace

While the activity did not surpass this year’s record-shattering second quarter, the dealmaking marked the first time in 15 years that mergers and acquisitions had topped $1tn in two consecutive three-month periods.
The themes of the surge remained consistent with the activity of the past two years. Organic revenue growth remains anaemic for many companies, so they are generally reluctant to invest additional capital in their own businesses. Instead, executives are turning to mergers and acquisitions to find new opportunities in their industries. The enthusiasm for dealmaking has also been stoked by the availability of historically cheap debt and elevated share prices that make transactions easier to pull off.
The result has been a succession of big and transformational deals.
Warren Buffett, the 84-year-old billionaire investor, made the biggest acquisition of his career when his Berkshire Hathaway agreed to buy US engineering group Precision Castparts for $32.5bn.
Meanwhile, Ace Group struck the largest deal on record in the property and casualty insurance sector with a $28.3bn takeover of rival Chubb.
The two transactions highlighted the speed with which many companies are moving. Berkshire Hathaway and Ace conceived of and reached their deals in a matter of several weeks.

Dealmaking on track for new record
Global dealmaking is on track for an all-time record in 2015. The value of mergers and acquisitions struck over the past nine months has risen 32 per cent on the same period a year ago to $3.17tn.
Dealmakers say companies need to “buy” additional revenue because a relatively moribund global economic environment has made ordinary growth elusive. The level of M&A is set to surpass the levels seen during the credit-fuelled takeover boom of 2007.
Anu Aiyengar, head of North American M&A at JPMorgan, says the total deal values in that region will “definitely beat the all time record of 2007” — although she warns that market volatility could delay some transactions.
“This has been a tremendous year, but the choppiness in the market is affecting some deals,” Ms Aiyengar notes. “Locking in the financing becomes harder during times of market turbulence.”
Merger and acquisition activity has been the strongest in the US and Asia. In both regions, deal values are at their highest year-to-date levels since records began.
Announced transactions in the US stand at $1.5tn so far this year, up 48 per cent from 12 months ago. In Asia, volumes rose 58 per cent to $773bn, compared with the same period last year. In Europe, dealmaking hit its highest level since 2008, rising 6 per cent to $671bn.

Cross-border flavour
The volume of deals involving companies from two different countries has reached its highest quarterly level in the current cycle. A total of $428bn in deals were so-called cross-border transactions, accounting for 42 per cent of activity in the period.
Tax inversions — deals in which an acquirer uses a takeover to relocate its tax base to a country with lower rates — began to reappear with greater frequency despite efforts by the US government to crackdown on companies pursuing those transactions.
US fertiliser producer CF Industries purchased a series of assets for $8bn from its Dutch-listed rival OCI that will allow it to become a top producer of nitrogen fertlizer and also redomicile its tax base to the UK to escape US taxes. By doing so, CF will in effect be able to reduce its corporate tax rate from 35 per cent to 20 per cent.
The prevalence of countries with relatively low corporate tax rates, the weakness of the euro and a more stable economic backdrop made Europe the premier destination for takeovers this year, advisers said.
Severin Brizay, head of M&A for Europe, Middle East and Africa at UBS, says: “Five years ago, Europe was scaring everyone and now that is gone. The market is open and there is very little protectionism.”

Megadeals flourish
The number of deals greater than $5bn in value is on pace to surpass the previous record. A total of 96 so-called megadeals have been struck so far in this year, accounting for 47 per cent of all deal activity.
At a time of low borrowing rates and weak growth, companies are under pressure from investors to do something else with their large cash piles after years of share buybacks.
Anheuser-Busch InBev, the world’s largest brewer, confirmed earlier this month that it intended to make a takeover offer for its nearest rival SABMiller, in what would be one of the six largest deals ever.
Elsewhere, acquisitive cable group Altice struck its latest deal with a $17.7bn takeover of US telecom operator Cablevision.
Paul Stefanick, global head of investment banking coverage and advisory at Deutsche Bank, says: “It is still all about the megadeals. We haven’t seen a huge increase in deals below $5bn. The economy is not growing any faster and large companies searching for growth are getting higher share prices when they announce deals.”

Energy and healthcare lead the way
Large deals in the energy and power industry, together with a record level of M&A activity among healthcare companies, meant that these two sectors accounted for nearly 30 per cent of all dealmaking in the first nine months of the year.
News this week of Energy Transfer Equity’s $38bn acquisition of Williams, an effort to create a leader in the oil and gas pipeline industry, helped lift total M&A in the energy sector to $475bn so far this year — a 23 per cent increase on the same period in 2014.
Analysts say that the Energy Transfer Equity-Williams combination highlighted how low energy prices have been forcing companies in the sector to seek deals, after a period in which buyers were asking for higher prices than sellers were willing to pay.
“People are beginning to reconcile themselves with making deals at lower valuations, which is reflective of a grimmer view of hydrocarbon prices,” explains Skip McGee, founder of boutique advisory firm Intrepid Partners.
Activity among healthcare companies has remained robust, pushing the overall value of deals for the year to date up to $460bn — up 14 per cent from a year ago.
Some bankers admit that the boom in the healthcare sector is likely to slow next year, but most say they expect more deals to be done.
David Kostel, head of healthcare M&A at Credit Suisse, says: “This will be driven by [chief executive] confidence, a need for acquisition growth given slowing organic growth rates, the desire for increased scale to drive cost savings, and the very positive reception from many healthcare mergers over the past several years.”

FT : Equities see worst quarter since 2011

US and global equities are heading for their worst quarterly showing since 2011, with investors rattled by China’s economic slowdown, uncertainty over Federal Reserve policy and growing pessimism about corporate earnings.
Adding to investors’ unease, the International Monetary Fund on Tuesday warned that corporate failures are likely to jump sharply in the developing world, after a borrowing binge in the past decade.

With an array of sectors slumping since the start of July, beyond those directly influenced by the rout in commodity prices, the global equity bull run of recent years is now facing a major challenge.
The S&P 500 has fallen 8.5 per cent, the biggest decline since the third quarter of 2011. Previously high-flying sectors that led the market earlier this year, notably biotech and healthcare stocks, have fallen appreciably in recent weeks.
“The question now is — are investors ready for the first down year since 2011 . . . and the worst year since the ‘bad days’ of 2008,” said Howard Silverblatt, analyst at S&P Dow Jones Indices.
In turn, global stock markets are poised for their worst quarterly showing since 2011, shedding over $10tn in value. The FTSE Emerging Index has tumbled over 21 per cent this quarter, its worst showing since 2011, and the fifth-worst quarter this millennium.
Investors have become increasingly unsettled by signs of weakening global growth and are now questioning the earnings outlook for US companies as the world’s largest economy is preparing to raise rates for the first time in nearly a decade.
The US earnings season, which starts in two weeks, is shaping up as pivotal driver of sentiment, Mr Silverblatt said. Analysts expect quarterly earnings will decline 4.6 per cent year over year in the third quarter, and revenue to decline 3.3 per cent, the third straight quarter of declines for top-line growth, according to the data provider, FactSet.
US and global companies have sold record amounts of debt against the backdrop of a blockbuster year for mergers and acquisitions.
M&A, equity capital markets, debt capital markets and syndicated lending produced fees of $16.5bn in the third quarter, the lowest total since banks billed $16.3bn in the final three months of 2011 when markets were gripped by the eurozone debt crisis.
Under pressure from rising defaults linked to the energy sector, corporate bond prices are signalling broader weakness that reflects the downgrading of global growth prospects, notably for emerging markets.
Expectation of a Fed interest rate rise is not the cause of the recent market turbulence, but it has been a catalyst, said Tony Crescenzi, a strategist at Pimco. “Though it hasn’t happened, the Fed has elicited a typical Pavlovian response, causing markets to shudder at the thought and prompting a very significant chain of events that has rippled throughout global financial markets.”
The decline of the commodities sector has reinforced fears over demand from China. The Bloomberg Commodity Index, a basket of 22 futures contracts, was on Tuesday down 14.8 per cent for the third quarter — setting up potentially the biggest quarterly decline since the fourth quarter of 2008. The broad declines have encompassed commodities including oil, gasoline, soybeans and copper.
Standard & Poor’s warned that the combination of Fed interest rate increases, the Chinese economic slowdown, and the unwinding of domestic credit bubbles meant a “much darker outlook” for emerging markets in the coming years.