Former Dallas Fed Gov Fisher: Beginning to see some wage pressure as the economy improves - CNBC
- I agree with ECB's Draghi, we are going to see a lot more volatility
- I do not see anything unnatural about equity valuations presently
Greek opposition leader Samaras: Calls on Tsipras not to go to elections, calls for national consensus on bailout talks
JPMorgan upgrades Hong Kong Financial Sector to Overweight from Neutral
- Firm says the bull market in China has improved the outlook for financial services
- Thinks PBoC policy has reduced asset quality risks
- Believes strong capital markets are boosting banks and insurance companies' fee income
--> JOY - no pre-market for now
Joy Global beats by $0.03, reports revs in-line; guides FY15 EPS in-line, revs in-line, at lower end of prior guidance
Reports Q2 (Apr) earnings of $0.59 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.56; revenues fell 12.8% year/year to $810.5 mln vs the $803.05 mln consensus.
"While our operational execution in the quarter was in line with our expectations, the incoming order rate, in particular in the U.S. coal and global copper markets slowed as customers further reduced capital expenditures and deferred maintenance on their mining equipment fleets..."
Guidance
Co issues in-line guidance for FY15, sees EPS of low end of prior guidance $2.50-3.00, excluding non-recurring items, vs. $2.55 Capital IQ Consensus Estimate; sees FY15 revs of low end of prior guidance of $3.3-3.6 bln vs. $3.32 bln Capital IQ Consensus Estimate.
Guidance Commentary:
"Notwithstanding restructuring actions taken in the quarter to reduce our cost position and the acceleration of our manufacturing and service optimization plan, the further step down in our key commodity end markets, in particular with U.S. coal and global copper, has resulted in reduced production forecasts and further deferred maintenance on our installed base of equipment with our customers. We now expect sales and earnings for the year, excluding restructuring, pension settlement and acquisition related charges, to be at the low end of our previous guidance range..."
- Bookings $745 million, down 29 percent from a year ago
- Service bookings $595 million, down 15 percent from a year ago
"While our operational execution in the quarter was in line with our expectations, the incoming order rate, in particular in the U.S. coal and global copper markets slowed as customers further reduced capital expenditures and deferred maintenance on their mining equipment fleets..."
Guidance
Co issues in-line guidance for FY15, sees EPS of low end of prior guidance $2.50-3.00, excluding non-recurring items, vs. $2.55 Capital IQ Consensus Estimate; sees FY15 revs of low end of prior guidance of $3.3-3.6 bln vs. $3.32 bln Capital IQ Consensus Estimate.
Guidance Commentary:
"Notwithstanding restructuring actions taken in the quarter to reduce our cost position and the acceleration of our manufacturing and service optimization plan, the further step down in our key commodity end markets, in particular with U.S. coal and global copper, has resulted in reduced production forecasts and further deferred maintenance on our installed base of equipment with our customers. We now expect sales and earnings for the year, excluding restructuring, pension settlement and acquisition related charges, to be at the low end of our previous guidance range..."
Reports Q2 $0.59 v $0.55e, R$810 v $841Me
- Lowers FY Revenue $3.3B-3.6B (Prior $3.6-3.8B)
- Bookings $745M -29% y/y
- Service Bookings $595M -15% y/y
- Completed acquisition of Montabert for €110M in June
CEO: "The company`s fiscal second quarter results reflect increasing pressure on our end-markets from continued oversupplied conditions and sequentially declining commodity pricing, While our operational execution in the quarter was in line with our expectations, the incoming order rate, in particular in the U.S. coal and global copper markets slowed as customers further reduced capital expenditures and deferred maintenance on their mining equipment fleets. We continue to invest in our service business to respond quickly and more efficiently to our customer`s needs and are taking steps to accelerate the optimization of our global manufacturing and service footprint."
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Playtech is launching a recommended cash offer for Plus500. Under the terms of the Acquisition, Plus500 Shareholders will be entitled to receive 400 pence in cash per Plus500 Share. Completion of the bid is uncertain.
It has been reported that Odey does not intend to vote in favour of the offer (They have 25%) Plus500 share price is down c70pct following a ten page short sell report from some funds including Cable Car Capital. Cable Car Capital believes Plus500 is actually worth a mere 52p
Makor is hosting Cable Car Capital’s portfolio manager Jacob Ma-Weaver in a 45 minute group phone-call from our offices in New York. Jacob will go over his report and where he believes value lies.
Join us for the conference call RSVP Friday 5 June 2015. 3pm London time / 10am New York time
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See Full Invitation Attached
SYNGENTA / MONSANTO - BASF mulling Syngenta offer – sources speaking to Reuters?
UBS note – BASF for the entire Syngenta makes little sense
· We believe BASF would face very challenging antitrust issues in crop protection chemicals but – if anything -would want access to the Seeds business of Syngenta. The latter, Monsanto we think may well offer to BASF in an exclusive first right of refusal arrangement (similar to Akzo divesting the ICI National Starch business on to Henkel right at the time of the announced bid for ICI). Furthermore, BASF has not issued equity since 1865, and we believe would have to break that 'law' if they were to bid for Syngenta as a whole.
· BASF could comfortably finance the Seeds side of this equation. The value estimate for Syngenta Seeds (disposal proceeds estimated at €6-€8bn, UBSe) equates to the 2015 operating cash flow estimate of BASF, or to 0.7x EBITDA. We believe entirely feasible with cash and debt financing if it were to occur.
· Next likely move is a second offer from Monsanto that Syn can hardly ignore. We think the fact that a second bid has yet to be tabled publicly hinges on Syngenta and Monsanto likely discussing break-fees for a deal. We see meaningful risk that competition authorities may look at the combo unfavourably, despite divestment commitments. This as the combined R&D capabilities of Monsanto, Novozymes and Syngenta in Seeds, Traits, Biologics and chemistry are likely hard to replicate for any competitor. Meanwhile, the outlook for the forthcoming Latin American season has deteriorated in the wake of worsening access to credit for growers. Crop prices and emerging market currencies have also not turned in Syngenta's favour.
· Synn rated B, PT 475CHF. For the note click here https://neo.ubs.com/shared/d1GP54mGI2zlQD
Recap from last night
· German chemicals group BASF SE is considering a potential offer for Syngenta AG, its Swiss rival which has received a $45 billion takeover offer from Monsanto Co, people familiar with the matter said on Wednesday. BASF is speaking to investment bankers about the possibility of an offer for Syngenta, though it has made no decision and no bid may materialize, the people said, asking not to be identified because the deliberations are confidential. (Reuters)
· The sale of the Swiss agrochemicals group Syngenta threatens to turn into a bidding war. After the US company Monsanto and the chemical giant BASF has expressed interest: The war chest was 'well stocked'. (Handelsblatt google translated)
Synn/Mon lawyers met last week on regulatory hurdles
· Syngenta has so far spurned Monsanto's overtures citing antitrust hurdles, though lawyers representing the two companies met last week in New York to discuss whether the regulatory obstacles can be overcome, a separate source said. A BASF bid for Syngenta would also likely face significant antitrust issues. (Reuters)
BASF/Mon relationship
· BASF, the world’s largest chemicals group by sales, is also developing improved plant characteristics such as drought tolerability but relies on partners, the biggest being Monsanto, to bring finished seed products to market. (Reuters)
· The move comes as a surprise, since BASF would therefore… possibly endanger the alliance. BASF is working since 2007 with Monsanto in the development of biotechnologically modified crops together. (APA Finance Briefing)
BASF previously mentioned for seeds
· BASF is also a potential buyer of Syngenta's seed business should Monsanto agree to a deal with Syngenta and then sell its seed business to allay antitrust concerns, sources have previously told Reuters.
· BASF had already been mentioned by analysts as the most likely candidate for a purchase of Syngenta's seed division (NZZ google translated)
· BASF has so far does not have a seed business and the offer of Ludwigshafen on pesticides could be usefully supplemented by this resource. (Handelsblatt google translated)
· Syngenta comes with its seed business, whose value is estimated to be six to eight billion dollars, with a market share of eight percent. (AWP Swiss News)
MON potential price, break fee…
· The Americans would have to offer at least a unit price of 500 Swiss francs and also increase the cash portion to more than CHF 200… Supposedly Syngenta charge a fee of around ten percent of the offered purchase price in the event of breakdown in negotiations (Basler Zeitung google translated)
Further consolidation
· Bayer expects regardless of the outcome of the takeover advances from Monsanto consolidation in the crop protection and seed industry: "When, how and with which partners progressing consolidation remains to be seen", explains the head of Bayer's agricultural chemicals business, Liam Condon, in a E-mail to Reuters. (AWP Swiss News google translated)
Euro Stoxx 50 Index
· The Index is trading in a rising channel with channel support standing at 3,532
· Furthermore, the May15 low was 3,484 which is also the 38.2% Fibonacci Retracement level of the 2,921-3,836 rally
· While above 3,532 the trend remains clearly to the upside but a move below 3,484 (daily closing basis) would be negative and shift momentum lower towards the 200dma @ 3,350
· A move above 3,666-72 (recent highs and 55dma) would be bullish and argue for a move higher towards the cycle high at 3,836
Strategy: Buy at mkt price on the open, target 3,836 with a stop at 3,480
Daily chart
Cac40 Index
· The Index shares a similar structure as with the Euro Stoxx 50 Index
· The Index is trading within a rising channel and above the 23.6% Fibonacci Retracement at 4,963
· A move below 4,963 and then below the cycle low at 4,874 would be negative and argue for a move lower - the most reasonable target on a break lower would be the 200dma at 4,594
· On the upside, watch yesterday high and the 55dma at 5,088-95, a sustain move above this level would be bullish and argue for a move higher towards the cycle high at 5,283
Strategy: Short 0.5 unit from 4,996, target 4,765 with a stop on a close above 5,051
Daily chart
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Dax30 Index
· The Index is trading in a rising channel, the channel support is around current levels and while this holds a move higher is likely
· A move below 11,300-400 would be be slightly bearish and argue for a re-test of the May15 low at 11,167
· A sustain move below 11,167 would be negative and argue for a move towards the 200dma at 10,418
· On the upside, will need to see a sustain move above 11,802-11,920 to argue for a move higher towards the cycle high at 12,390
Strategy: Short 0.5 unit from 11,841, target 10,420 with a stop on a close above 11,920
Daily chart
UKX Index
· The Index is unchanged and remians vorlable to the downside while below 7,122
· The bearish wedge pattern which we have been highlighting for a while targets a move to 6,384 but so far there has been no follow through
Strategy: Short 2 units from 6,910, target 6,500 with a stop at 7,125
Daily chart
Technical Ideas 2015