(Bus. insider) Traders are betting on stocks with tons of borrowed money

Traders are betting on stocks with tons of borrowed money

The New York Stock Exchange publishes end-of-month data for margin debt on the NYXdata website, where we can also find historical data back to 1959. Let's examine the numbers and study the relationship between margin debt and the market, using the S&P 500 as the surrogate for the latter.
The first chart shows the two series in real terms — adjusted for inflation to today's dollar using the Consumer Price Index as the deflator. I picked 1995 as an arbitrary start date. We were well into the Boomer Bull Market that began in 1982 and approaching the start of the Tech Bubble that shaped investor sentiment during the second half of the decade. The astonishing surge in leverage in late 1999 peaked in March 2000, the same month that the S&P 500 hit its all-time daily high, although the highest monthly close for that year was five months later in August. A similar surge began in 2006, peaking in July 2007, three months before the market peak.
Debt hit a trough in February 2009, a month before the March market bottom. It then began another major cycle of increase.
The Latest Margin Data
Unfortunately, the NYSE margin debt data is about a month old when it is published. The latest debt level is 0.17% below its nominal high set one year ago. However, real (inflation-adjusted) debt rose 4.07% month-over-month and is hovering a mere 0.14% off its record high set in February 2014.
The next chart shows the percentage growth of the two data series from the same 1995 starting date, again based on real (inflation-adjusted) data. I've added markers to show the precise monthly values and added callouts to show the month. Margin debt grew at a rate comparable to the market from 1995 to late summer of 2000 before soaring into the stratosphere. The two synchronized in their rate of contraction in early 2001. But with recovery after the Tech Crash, margin debt gradually returned to a growth rate closer to its former self in the second half of the 1990s rather than the more restrained real growth of the S&P 500. But by September of 2006, margin again went ballistic. It finally peaked in the summer of 2007, about three months before the market.
After the market low of 2009, margin debt again went on a tear until the contraction in late spring of 2010. The summer doldrums promptly ended when Chairman Bernanke hinted of more quantitative easing in his August, 2010 Jackson Hole speech. The appetite for margin instantly returned, and the Fed periodically increased the easing. Now that QE over, it will be particularly interesting to watch debt levels in the months ahead.
NYSE Investor Credit
Lance Roberts of STA Wealth Management analyzes margin debt in the larger context that includes free cash accounts and credit balances in margin accounts. Essentially, he calculates the Credit Balance as the sum of Free Credit Cash Accounts and Credit Balances in Margin Accounts minus Margin Debt. The chart below illustrates the mathematics of Credit Balance with an overlay of the S&P 500. Note that the chart below is based on nominal data, not adjusted for inflation.
Here's a slightly closer look at the data, starting with 1995. Also, I've inverted the S&P 500 monthly closes and used markers to pinpoint the monthly close values.
As I pointed out above, the NYSE margin debt data is a several weeks old when it is published. Thus, even though it may in theory be a leading indicator, a major shift in margin debt isn't immediately evident. Nevertheless, we see that the troughs in the monthly net credit balance preceded peaks in the monthly S&P 500 closes by six months in 2000 and four months in 2007. The most recent S&P 500 correction greater than 10% was the 19.39% selloff in 2011 from April 29th to October 3rd. Investor Credit hit a negative extreme in March 2011.
There are too few peak/trough episodes in this overlay series to take the latest credit-balance data as a leading indicator of a major selloff in U.S. equities. But we'll definitely want to keep an eye on this metric in the months ahead.


Read more: http://www.businessinsider.com/nyse-margin-debt-feb-2015-2015-3#ixzz3Vy9cKwQ3

(TheStreet) Genfit's French Fans Fume Following Failure of Fatty Liver Drug

BOSTON (TheStreet) -- French investors holding shares of Genfit (GNFTF) are having trouble coping with the failure of the company's fatty liver disease drug GFT505. I know this because many of them (it feels like all of them!) have reached out to me via Twitter (TWTR) in the past few days to express their outrage over my bearish analysis of last Friday's GFT505 study results in NASH.
This is the first time I've been Twitter trolled in French. I like it. Much classier.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: GV -22.8%, CLDN -6%, SPU -4.7%,AMCO -3.8%, ARGS -2.8%, ATOS -1%, APA -0.8%

M&A news: TCK -7.7% (Antofagasta (ANFGY) confirms that it is not in discussions with Teck Resources about a potential merger), LO -2.9% (NYPost details news that FTC may file lawsuit to block RAI / LO merger), PHG -2.1% (to sell majority interest in combined LED components and Automotive lighting business to consortium led by GO Scale Capital), RAI-1.9% (NYPost details news that FTC may file lawsuit to block RAI / LO merger)

Select metals/mining stocks trading lower: BHP -1.9%, RIO -1.7%, FCX -1.5%, AA-0.9%

Select oil/gas related names showing early weakness: SSL -3.5%, SDRL -2.4%, STO-2%, BP -1.8%, TOT -1.6%, RIG -1.4%, CHK -0.9%, HAL -0.8%, .

Other news: EGY -20.8% (provides update on operations offshore Angola), SNTA -17.2% (commenced an underwritten public offering of shares of its common stock), ICPT -5% ( announces that it is commencing an underwritten public offering of 1.2 mln shares of its common stock), INSM -4.7% (announces proposed public offering of common stock),INSM -4.7% (announces public offering of 10 mln shares of common stock), CONE -3% (commenced the public offering of 12,200,000 shares of its common stock), GRPN -2.6% (Reuters details news that KKR (KKR) and other firms may be discussions to purchase stake in South Korea Groupon (GRPN) unit), RPTP -2.3% (commenced an underwritten public offering of $75 million of shares of its common stock), NBG -2.3% (cont uncertainty in Greece), CHRS -1.6% (announces proposed public offering of common stock worth ~$100 mln), ICON -1.5% (disclosed that on March 24, 2015, CFO Jeff Lupinacci notified of his intention to resign, with 60 days' notice, to pursue another business opportunity), PRTK-0.8% (discloses update to previously announced patent infringement trial)

Analyst comments: DB -1.9% (downgraded to Neutral at Credit Suisse), SLB -1.4% (downgraded to Market Perform from Outperform at Wells Fargo)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: EVK +30.2%, SORL +24%, GOL +8.3%,SMTX +7.1%, DANG +6.9%, MOV +5.4%, BAMM +3.6%, CPHI +3.1%, AUPH +2.9%, SAIC+2.3%, CONN +1.2%

M&A news: CHTR +8.5% (Reuters report that company will soon acquire Bright House Networks), MRH +3.5% (to be acquired by Endurance Specialty Holdings (ENH) for $40.24 per share in cash and stock deal), JCI +1.7% (reached a definitive agreement for the sale of its Global WorkPlace Solutions business to CBRE Group (CBG) for $1.475 bln), .

Other news: OXGN +9% (Frigate Ventures disclosed 8.4% passive stake in 13G filing),BCRX +6.8% (awarded contract by BARDA for continued development of BCX4430 as potential treatment for diseases caused by RNA pathogens), ATRS +5% (announces that Ferring Pharmaceuticals has received FDA approval of a name change enabling its newly acquired recombinant human growth hormone to be marketed in the U.S. as ZOMACTON),DRYS +4.9% ( announces agreement to sell tanker fleet for an en-bloc sales price of $245 mln), GWPH +4% (initiates first Phase 3 pivotal trial for Epidiolex to treat Dravet Syndrome), AKAO +2.5% (to host webcast/teleconference providing an update on plazomicin tomorrow March 31 at 4:30pm ET), RDHL +1.2% (acquires Phase II Oral Small Molecule SK2 inhibitor From Apogee Biotech)

Analyst comments: CNDO +4.2% (upgraded to Buy from Hold at MLV & Co), HZNP +3.8% (upgraded to Overweight from Neutral at Piper Jaffray), IMGN +3.3% (upgraded to Buy from Hold at Cantor Fitzgerald), JCP +2.8% (target raised to $14 from $13 at Piper Jaffray),OVAS +1.5% (Science Magazine discusses the controversy around OVAS's AUGEMENT Fertility Treatment), PCLN +1.3% (upgraded to Buy from Hold at Stifel), MXPT +0.7% (initiated with an Outperform at Pacific Crest)

>>> Global Healthcare - March deals roundup

Global Healthcare - March deals roundup

This is a roundup of the largest pending deals in the healthcare sector over the last month, where targets are global, according to Mergermarket data. The date shows the last update published by this news service. This list does not take into account deals that may have been completed but have not yet been made public.

Stallergenes / Greer Laboratories (30/03/2015)

Stallergenes [EPA:GENP] announced on 3 March 2015 that it had received a proposal from its majority shareholder Ares Life Sciences, which sought to bring together the activities of Stallergenes and US company Greer Laboratories to form the global leader in allergy immunotherapy. Ricol Lasteyrie Corporate Finance has been appointed as independent expert. Stallergenes has also hired Lazard to assist in the analysis of the terms and conditions of the proposed transaction. Ledouble is the official Court-Appointed Valuation Expert.

Primary Health Care (29/03/2015)

Several commercial lenders are said to be involved in financing discussions to support a leveraged buyout of Primary Health Care [ASX:PRY], a health group, the Australian Financial Review reported. Primary is not yet believed to have received an approach but funding talks indicate that a buyer may be getting serious about making an offer. Primary has a market capitalisation of AUD 2.57bn (USD 2.02bn).

Bayer’s blood glucose meter business (28/03/2015)

Panasonic Healthcare, a Japanese maker of medical equipment, will make a JPY 100bn (USD 836m) offer to Bayer [ETR: BAYN] to acquire its blood glucose meter business in an auction, the Nihon Keizai Shimbun reported. Bayer will run an auction to sell the business, which has annual revenue of about JPY 100bn. Other companies are also expected to make bids.

BioMarin Pharmaceutical (27/03/2015)

Shire [LON:SHP] is interested in merging with California-based BioMarin Pharmaceutical [NASDAQ:BMRN], the Betaville blog reported. Shire recently approached BioMarin regarding a deal, though it is unclear if there have been any further developments. Lazard and Morgan Stanley are advising Shire and the latter has been named as the leader in financing for the deal. BioMarin is believed to have drafted financial advisers as well, including Centreview Partners or Evercore, to defend it against a larger predator. Shire might not be the lone suitor interested in the target, as Roche was also reported to have been interested in BioMarin a few years ago.

Aspen Pharmacare (26/03/2015)

GlaxoSmithKline [LON:GSK] could look to sell the rest of its stake in Aspen Pharmacare Holdings [JSE:APN] to gain more liquidity, Mergermarket reported. Given that GSK has committed to paring back to its core products, it would most likely be a seller of the Aspen stake in the long term. It could do so as soon as the lock-up period expires and could also be looking at other non-core stakes to sell down.

Amoun Pharmaceuticals (26/03/2015)

Amoun Pharmaceuticals, the Egypt-based drugs group, has replaced Jefferies Group, the sale adviser it appointed in 2014, with Goldman Sachs, according to the Washington Post. The paper cited Amoun CEO Mohamed Roushdy. Amoun shareholders are also open to a possible initial public offering. Amoun’s owners include Capital Group, Concord International Investments, and the Rohatyn Group, who acquired the veterinary and human drugs maker in 2006. The company is now worth around USD 700m-USD 800m.

Smith & Nephew (26/03/2015)

Smith & Nephew [LON:SN] Chief Executive Olivier Bohuon has downplayed the prospects of the UK-based medical devices manufacturer getting involved in industry consolidation, the Financial Times reported. Bohuon said Smith & Nephew has no wish to take part in further consolidation due to low growth in the medical devices sector. As previously reported, Stryker [NYSE:SYK] disclosed last year that it had considered bidding for Smith & Nephew. Johnson & Johnson [NYSE:JNJ] was also reportedly interested in making a takeover bid.

Becton Dickinson (25/03/2015)

Becton Dickinson, a Franklin Lakes, New Jersey-based medical-devices and services company, is working with advisers on the potential sale of its respiratory-devices business in a deal that could command USD 1.5bn - USD 2bn, according to a newswire report. It cited a Becton Dickinson spokesperson who confirmed the company was conducting a strategic review of all of its assets, but said it hasn't decided on any specific strategy.

Patterson Companies’ rehabilitation supply business (18/03/2015)

Patterson Companies [NASDAQ:PDCO] is working with BofA Merrill Lynch to divest its rehabilitation supply business, as the medical supplies distributor hones in focus on its dental segment, according to Mergermarket. The carveout is expected to fetch a valuation of at least 9x EBITDA, or around USD 585m.

Salix Pharmaceuticals (17/03/2015)

Valeant Pharmaceuticals International [NYSE:VRX] could ask shareholders Bill Ackman and Jeff Ubben to help finance its increased takeover bid for Salix Pharmaceuticals [NASDAQ:SLXP], the Financial Times reported. Valeant on 16 March announced that it had increased its takeover offer for Salix from USD 158 (EUR 149) per share to USD 173 per share, an increase of USD 1bn. The increased bid values Salix at USD 15.8bn. Earlier in March Endo International [NASDAQ: ENDP] had also submitted a USD 175 per share proposal to acquire Salix, but later withdrew its offer.

Laboratoires Nutrition et Cardiometabolisme (11/03/2015)

French private equity group Seventure Partners has mandated Ferghana Partners to sell its portfolio company Laboratoires Nutrition et Cardiometabolisme (LNC), according to Mergermarket. The sale process is underway and a few CDAs have been signed with interested parties. Bidders in the medical nutrition space that are interested in clinically validated products could include players such as Nestle [VTX:NESN]. An independent payor's study has shown that the product has reimbursement potential in the US and EU with a USD 1bn (EUR 952m) market value.

Synlab (06/03/2015)

Synlab, a German laboratory group, may be sold, with potential suitors including Fresenius Medical Care [ETR:FME], according to a newswire report. Fresenius was mentioned along with private equity players. BC Partners is considering selling the laboratory operator and is thought to be working with investment bank Rothschild with regard to the possible divestment. BC Partners bought Synlab in a EUR 618m deal in 2009.
Mergermarket is a portfolio company of BC Partners.

Mindray Medical International (05/03/2015)

Mindray Medical International [Mai Rui Yi Liao; NYSE: MR] is a logical take-private target as it has been undervalued by US investors despite being one of China’s largest medical device companies, Mergermarket reported. Mindray has been approached by private equity firms for a take-private deal, including Citic PE. Discussions with Citic PE have been ongoing from last year. Mindray expects FY 2014 net revenue to reach around USD 1.3bn.

Genfit (04/03/2015)

Genfit [EPA:GNFT], a French drug developer, is looking to sell and has had early-stage talks with potential buyers, according to Bloomberg. A definitive decision has yet to be made and the EUR 1.5bn market cap company may opt not to sell. Shire [LON:SHP], Novartis [NYSE:NVS] and Sanofi [EPA:SAN] are some of the drugs companies that might be keen on acquiring Genfit. Earlier Mergermarket reported that Genfit could attract significant takeover interest in March if its lead pipeline product GFT505 produces favourable Phase IIb data.

(BFW) EDF Has to Stop ‘Bleeding Cash,’ CEO Levy Tells Conference

BFW 03/31 12:15 EDF Won’t Enter Into Purely Capitalistic Plans With Areva: CEO
BN 03/31 12:06 *EDF CEO SAYS THAT WORK IS ONGOING ON AREVA
BN 03/31 12:06 *EDF CEO: WON'T ENTER INTO PURELY CAPITALISTIC PLANS WITH AREVA
BN 03/31 12:04 *EDF, AREVA HAVE STARTED JOINT WORKING GROUPS, CEO SAYS
BN 03/31 12:04 *EDF CEO SAYS WHAT IS HAPPENING AT AREVA `WORRIES' EDF
BN 03/31 12:03 *EDF CEO: AREVA IS A CENTRAL ISSUE FOR UTILITY
BN 03/31 12:02 *EDF WILL DO WORKS TO EXTEND NUCLEAR REACTOR LIVES TO 50-60 YRS
BN 03/31 12:01 *EDF PLANS TO LOWER COSTS OF BUILDING EPR REACTORS, CEO SAYS
BN 03/31 11:59 *EDF DEBT IS HIGH AND FRENCH POWER RATES ARE RELATIVELY LOW: CEO
BFW 03/31 11:59 *EDF CEO REITERATES GOAL OF POSITIVE CASH FLOW IN 2018
BN 03/31 11:58 *EDF HAS TO STOP `BLEEDING CASH,' CEO LEVY TELLS CONFERENCE
BN 03/31 11:58 *EDF CEO REITERATES GOAL OF POSITIVE CASH FLOW IN 2018
EDF Has to Stop ‘Bleeding Cash,’ CEO Levy Tells Conference
2015-03-31 12:23:17.193 GMT


By Tara Patel
(Bloomberg) -- EDF CEO Jean-Bernard Levy reiterates goal of
positive free cash flow in 2018 and says utility has to balance
spending needs to refurbish nuclear reactors with relatively low
power rates in France compared with neighboring countries.
* It’s a “delicate equation,” CEO tells conference in Paris

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tpatel2@bloomberg.net

>>> Comcast to invest USD 4bn in new strategic company led by Michael J. Angelak

Comcast to invest USD 4bn in new strategic company led by Michael J. Angelakis (Full agreement attached

Comcast Corporation announced today that it has entered into an agreement with the Company’s Vice Chairman and Chief Financial Officer, Michael J. Angelakis, to establish a new, strategic company that will focus on investing in and operating growth-oriented companies, both domestically and internationally.

"This is a time of tremendous change and opportunity in our core technology and media industries, as well as in adjacent business areas. We believe the ability to establish entrepreneurial ventures that partner with and participate in the growth of innovative companies can be an important driver of strategic and financial value creation for our company," said Brian L. Roberts, Chairman and Chief Executive Officer of Comcast.

"As Comcast approaches the completion of the Time Warner Cable merger and related transactions, and the integration plans are well advanced, Michael is ready and excited to turn his attention to the next phase of his career and relationship with Comcast," Mr. Roberts added.

Mr. Angelakis will serve as the Chief Executive Officer of the new company and bring his strengths of investing in and operating companies, with benefits accruing to Comcast shareholders. He will lead this new company with a mandate and the resources to pursue new areas of growth and diversification for Comcast.

The new company will have total capital commitments of up to $4.1 billion, of which $4.0 billion will be invested by Comcast, at least $40 million will be invested personally by Mr. Angelakis, with the remainder coming from other senior members of the new company’s management team. This new company will have an exclusive, 10-year partnership with Comcast as sole outside investor.

Comcast will immediately commence a search for a successor Chief Financial Officer, and following the appointment of the new CFO, Mr. Angelakis will then serve as a Senior Advisor to Comcast. Mr. Angelakis will assist with the transition to the new CFO and begin the integration process for the Time Warner Cable and related transactions.

"I am thrilled that Michael will be leading this new initiative. His broad and deep experience in a variety of leadership roles within different industries will be a tremendous asset to the new company. He is an extraordinary leader and strategic partner, and has helped transform Comcast into the media and technology company that we are today," said Mr. Roberts. "His work to structure the NBCUniversal and Time Warner Cable transactions has been invaluable in laying the successful financial groundwork for Comcast. In the past, Comcast has made substantial investments in companies like QVC, Comcast Cellular and SpectrumCo, which have generated tremendous strategic and shareholder value. I couldn’t be more excited about the future and Michael’s role in building this new company."

"As we enter the final phase of the Time Warner Cable transaction, this is a great time to begin a transition and I am excited to start this new, entrepreneurial company," said Mr. Angelakis. "Our industry is dynamic and I am very excited and optimistic about the many opportunities available to Comcast. Comcast is a remarkably well-positioned company and it has been an honor to serve as the Company's Vice Chairman and CFO. I look forward to closing the Time Warner Cable and related transactions and commencing the integration process. As part of our new company, I am very pleased to continue the partnership with my current colleagues and to contribute to Comcast’s future growth and success."

Mr. Angelakis is the Deputy Chairman of the Federal Reserve Bank of Philadelphia and is a Trustee of Babson College. Prior to joining Comcast, Mr. Angelakis was a Managing Director and Member of the Investment and Management Committees at Providence Equity Partners, one of the leading, global private equity firms investing in technology, media and communications companies. Before joining Providence Equity Partners in 1999, Mr. Angelakis was President and Chief Executive Officer of State Cable TV Corporation and Aurora Telecommunications. He also served as a Vice President of Manufacturers Hanover Trust Company in New York, where he oversaw one of the bank’s media and communications portfolios. Additionally, Mr. Angelakis spent several years in London developing Manufacturers Hanover’s acquisition finance and merchant banking activities throughout Western Europe.

A more detailed description of the arrangements between Mr. Angelakis and Comcast is set forth in Comcast’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission. The binding agreement for the arrangements will be attached to that filing.

FT : CBRE buys Johnson Controls unit for $1.47bn

CBRE buys Johnson Controls unit for $1.47bn

Corporate real estates are hot properties nowadays and so are the companies that service them.

CBRE Group, the world's largest commercial real estate services company by revenue, has agreed to acquire Johnson Controls' facilities management business for $1.47bn.

The division — called Global WorkPlace Solutions — provides on-site maintenance services for more than 1.8bn square feet of corporate real estate and had $4bn in revenue for the year to September 2014.

For CBRE, the deal would add more scale to its own real estate service business.

For Johnson, which will be the preferred provider of HVAC equipment, building automation systems to the portfolio of real estate and corporate facilities managed by CBRE and GWS, the deal is expected to generate up to $500m a year worth of new revenue for its building efficiency business.

Alex Molinaroli, chairman and CEO of Johnson Controls said:

This agreement with CBRE is a great step for both companies that will allow each of us to build upon our core strengths to create new sources of value for our customers.

In addition, the new strategic partnership provides another new, strong channel for Johnson Controls to serve CBRE and its clients around the world with our full portfolio of buildings technologies and services.

Shares of Johnson rose 3.6 per cent to $49.83 in pre-market trading.