TheChek News Flow

In reaction to strong earnings/guidance: RGDX +18.8%, PGN +16.6%, PERY +16.4%, CTRP +13.9%, SHAK +6.8%, NTES +4.7%, MXPT +4%, TGB +3.6%, YOD +3.2%, EYES +2.8%, VIPS +1.8%, MSLI +1.7%, TNK +1.5%, CAAS +1.4%, STOR +1.2%, BCLI +1.1%, TCON +1.1%, JD +0.7%, JACK +0.6%, MORE +0.6%, VWR +0.6%

M&A news: ISSI +6.9% (Cypress Semiconductor (CY) sent letter to the Board of Integrated Silicon Solution offering to acquire 100% of its outstanding shares of common stock for $19.75 per share in cash), CY +2.8% (Sends Letter To Board Of Directors Of Integrated Silicon Solution, offers to purchase ISSI for $19.75 per share )

Select metals/mining stocks trading higher: MT +6.9%, AKS +2.8%, NOR +2.3%, X +2%, CLF +1.9%, SLV +1.5%, GOLD +1.1%, SLW +1%, AG +1%

Other news: CYRN +19.3% (agreement with Dell that adds CYREN's antimalware technology to Dell SonicWALL Email Security appliances, software, virtual appliances and hosted services), ACRX +19.3% (discloses entry into an award contract supported by the United States Army Medical Research and Materiel Command), ONTY +15.5% (Two abstracts related to ONT-380 for the treatment of breast cancer published), VBLT +11% (to present positive Phase 1/2 data for VB-111 in recurrent platinum-resistant Mullerian cancer at ASCO), WLT +9.6% (disclosed that on May 7, 2015, Brian M. Chopin, Assistant Corporate Controller was appointed Acting Corporate Controller and Chief Accounting Officer, effective May 20, 2015), DSCO +9.6% (reports top line data from its AEROSURF Phase 2a clinical trial), NVGN +5.9% (announces that it has confirmed that drug candidate, Anisina, is an effective monotherapy against human melanoma in an animal model), QIWI +4.4% (announces entrance into an agreement with Otkritie Financial Group to acquire its Contact money transfer and Rapida payment processing systems ), NOG +4.3% (priced its private offering of $200 mln in 8% senior notes due 2020 at 95% of par), TGTX +3.6% (announced clinical data presentations at ASCO; shares up ~3.6% in after hours trade), NBG +3.6% (optimistc tone from Greece Fin Min in comments today), MNKD +3.3% (still checking), SAM +2.1% (increases limit for stock repurchase program by additional $50 mln, bringing total limit to $400 million ), SAM +2.1% (increased limit for stock repurchase program by additional $50 mln, bringing total limit to $400 million), REN +2.1% (cont strength), STM +1.9% (CY/ISSI peer), SHPG +1.8% (still checking), NICE +1.7% (cont strength), INFN +1.6% (CY/ISSI peer), ASML +1.4% (CY/ISSI peer), SGMO +1.3% (will consolidate development plans for its zinc finger nuclease-mediated genome editing programs ) COWN +1.1% (prices offering of $105 million of shares of 5.625% Series A Cumulative Perpetual Convertible Preferred Stock), SPB +0.9% (priced 5,405,405 shares of common stock $92.50 per share)

Analyst comments: AKBA +5.1% (initiated with a Buy at Brean Capital), TSEM +4.5% (target raised to $28 from $24 at Ascendiant Capital Markets; also announced they have collaborated w UCSB to demonstrate the first 256-element), CWST +3.5% (upgraded to Outperform from Mkt Perform at Raymond James), ATML +2.7% (upgraded to Overweight from Equal Weight at a boutique firm), EURN +2.3% (initiated with a Outperform at Credit Suisse), KATE +1.7% (initiated with a Outperform at Wedbush), LLTC +1.6% (upgraded to Neutral from Underweight at JP Morgan), KMX +1.1% (initiated with a Buy at Sterne Agee CRT), DD +1% (upgraded to Neutral from Underperform at BofA/Merrill)

Shell has said its cash reserves are limited after the $70 billion deal announced on April 8, the first major energy industry merger in more than a decade that will bolster Shell's global presence and increase its proven oil and gas reserves by 20 percent.

Still, the London-based major will consider smaller deals in North American basins where it already operates, including the Permian Basin in Texas and New Mexico, the Utica in Appalachia, and Western Canada. Shell's North America business accounts for 15 percent of its global oil and gas production.

The BG deal "doesn't make us shy away from a bolt-on," Odum said, even though "it is hard to believe there is something big out there that is compelling."

Any deals will be in locations where Shell already has operations, Odum said, which likely rules out the Eagle Ford basin in South Texas, for example, where Shell sold its acreage to Sanchez Energy Corp (SN.N) for $639 million last year, part of a company plan to cut capital spending.

A sharp drop in oil prices since last summer has led to a slowdown in the U.S. oil industry as companies idled rigs to save cash, pushing down the value of oil assets such as wells and leases, creating potential bargains.

U.S. oil prices have rebounded back toward $60 since hitting a low near $40 a barrel in February, but hard times are expected to continue for drillers and oil service firms, Odum said. The prices that firms can charge for drilling and fracking services have fallen by 30 percent since last year, in some cases more, Odum said, which is squeezing revenues.

"It is happening dramatically and happening quickly," Odum said.

Shell does not disclose its specific oil price forecasts, but is still investing to take advantage of longer-term projects, Odum said.

Even though investment remains strong in the U.S. energy sector, and prices have bounced higher in recent weeks, it could be a while before the outlook brightens for many firms.

"We don't see costs coming back yet," Odum said. "The supply side is still stressed."

While Shell carries a conservative balance sheet and says it can continue to fund energy production in a downcycle, certain projects may not be approved and investments could be cut if oil prices stay depressed over a span of years, he said.

DEAL REPORTER

Monsanto [NYSE:MON] is likely to line up a buyer for Syngenta’s [SIX:SYNN] seeds business if it succeeds in taking over the Swiss agrochemicals group, according to several sector bankers.

While unlikely to make a counterbid for the whole of Syngenta, several players may be interested if its seeds business is up for sale, they said. China National Chemical (ChemChina), German chemicals groups BASF [FRA:BAS] and Bayer AG [ETR:BAYN] as well as US chemicals firms Dow Chemical [NYSE:DOW] and E I DuPont De Nemours [NYSE:DD] were all named as potential buyers. French seeds firm Groupe Limagrain, Germany’s KWS Saat, Land O' Lakes of the US, and private equity were also suggested by one of the bankers as possible buyers.

On 8 May, Syngenta confirmed it had received a USD 45bn takeover approach, which it rejected as inadequate. Monsanto said in a statement that it believed combining the two companies would create “an integrated global leader in agriculture with comprehensive and complementary product portfolios.”

Monsanto’s plan is to buy Syngenta’s chemical business and have someone else buy the seeds business, two bankers believed. It was possible that Monsanto could join forces with the acquirer of the seeds business to launch a joint bid for Syngenta, a second banker said. But, the first and third banker said, it would be cleaner and make more sense for Monsanto to launch a bid and then carve out the seeds business.

“You usually see this (joint bid) when there’s a funding issue,” the first banker pointed out. “But in this instance, selling assets where there are overlaps is the best options to get a deal through.”

A sale of at least part of the seeds business would be required for European and US competition clearance of the deal, bankers said.

For 2014, Monsanto reported net sales of USD 15.86bn. Of this, its seeds and genomics segment contributed USD 10.74bn, or 67.7% of the total. Of the segment's total sales, 40.37% is from its corn seeds business, 13.26% from soybean seed, 4.19% from cotton seed, 5.47% from vegetable seed, and 4.45% from other seeds. The rest of its revenues came from its agricultural productivity, representing 32.26%, according to the company’s FY14 results.

Meanwhile, Syngenta attributed 20.72% of its FY14 revenue to its seeds business segment. The remaining 79.28% of its revenue was attributed to Crop Protection and Lawn and Garden.

In 2013, Monsanto had a 26% share of the global seed market, making it the number one player, according to ETC research. The second player, Dupont Pioneer, had an 18.2% market share, while number three player, Syngenta, had 9.2%.

But, in the US, some 85% of corn acreage is planted with Monsanto traits, while around 90% of soybean acres are planted with Monsanto traits. Therefore, US regulators could require the sale of Syngenta’s US seed business, which is almost all corn, said the second banker.

The seeds business could attract a large number of buyers but a rival bid for the whole of Syngenta is unlikely, bankers agreed. Dow and Dupont both have activists on their boards and their shareholders would be unlikely to back an acquisition of Syngenta, said the third and fourth bankers. For BASF, an acquisition of Syngenta would be contrary to its core strategy. The German firm isn’t looking to be a seeds player but remains a provider for seeds players.

Meanwhile, Bayer isn’t in a position to make a significant acquisition as it is tied up with its recent deal with Bio Crop Science, and is now expected to focus on its pharma operations.

ChemChina could be looking at Syngenta, but this would be a financially significant acquisition for them with very few synergies, said the third and fourth bankers, who pointed out the Chinese company has its hands full at the moment with its acquisition of Pirelli [BIT:PC].

{http://www.lejdd.fr/Economie/Un-krach-financier-en-septembre-octobre-selon-l-economiste-Marc-Touati-732254}

Depuis 1973, c'est le cas en effet. 1973, c’est le premier choc pétrolier. En 1980, c’est le deuxième choc pétrolier. En 1987, on a le krach boursier. En 1994, il y a un crack obligataire. 2001, c’est le 11 septembre qui fait chuter les marchés. Et en 2008, c’est la chute de Lehman Brothers. La coïncidence est troublante. Quand on voit cette déconnexion entre la réalité boursière, obligataire et la réalité économique, on peut clairement identifier une bulle ces dernières semaines.

"L’Europe n’a plus de cartouches dans sa mitraillette"

Vous prédisez donc un krach cette année sur les marchés boursiers?

Je pense malheureusement qu'on aura en septembre-octobre prochain un krach financier obligataire et boursier. Aujourd’hui, les marchés boursiers ont trop augmenté par rapport à la réalité économique. Tout ça parce que la Banque centrale européenne a mis beaucoup de liquidités sur les marchés. Mais comme nos rouages sont grippés, il n'y a pas assez de croissance pour justifier cette augmentation boursière. Le problème c’est qu'en cas de crise à la rentrée prochaine, l’Europe n’a plus de cartouches dans sa mitraillette. Elle ne pourra plus forcément faire de quantative easing pour relancer la machine.

Pourquoi ne croyez-vous pas à la reprise de la croissance en France?

Il s’agit d’une croissance de rattrapage après la faiblesse des années passées. On a eu un "alignement des planètes" ces derniers mois puisque les prix du pétrole et des matières premières ont baissé, l’euro s’est affaibli par rapport au dollar et les taux d’intérêts sont très faibles. Tout cela a permis de soutenir l’activité. Dernier point : sur les 0.6% de croissance, 0.5 point vient uniquement de la formation de stock. Cela ne reflète pas l’état intrinsèque de l’économie française. La croissance aujourd’hui est artificielle. Comme le pétrole et l’Euro remonte, on risque en plus d’avoir un nouveau ralentissement de la croissance dès les 2e et 3e trimestres. Pour faire redémarrer la croissance, il faut donc des réformes structurelles, il faut baisser les impôts des ménages et des entreprises ainsi que les charges qui pèsent sur le marché du travail. Il faut aussi fluidifier le marché du travail.