Closing Market Summary: S&P 500 Settles Below 100-Day Moving Average
The major averages ended Thursday with modest losses after climbing off their opening lows. The S&P 500 shed 0.2% and settled below its 100-day moving average (2,057) while the Nasdaq Composite (-0.3%) underperformed.
Equity indices could not avoid registering their fourth consecutive decline, but they were able to avoid settling on their lows. Still, the benchmark index will enter the Friday session down 2.5% for the week.
The market began the day under pressure after overnight reports revealed that coalition forces from ten countries, led by Saudi Arabia, carried out air strikes against rebel forces in Yemen. This followed yesterday's reports indicating Yemen's President Hadi fled his country by sea.
The news gave a boost to the dollar, but the yen also rallied against its peers, which signaled caution among participants in the foreign exchange market. The Dollar Index (97.36, +0.38) gained 0.4% as the greenback spiked 0.8% against the euro, sending the single currency from a morning high near 1.1050 to 1.0880. For its part, the dollar/yen pair slipped 0.3% to 119.20 after testing the 118.50 level in the morning.
In addition, the latest developments in the Middle East led to concerns about potential disruptions to the energy market. As a result, crude oil surged 4.6% to $51.43/bbl. However, the energy sector (-0.2%) could not make it out of the red.
Meanwhile, the remaining cyclical sectors ended in mixed fashion. Consumer discretionary (-0.6%) and industrials (-0.3%) underperformed while materials (+0.2%) and technology (+0.1%) registered slim gains.
In the technology sector, large cap names like Apple (AAPL 124.24, +0.86), IBM (IBM 160.59, +1.39), and Oracle (ORCL 42.99, +0.06) gained between 0.1% and 0.9% while Accenture (ACN 94.17, +5.69) and Red Hat (RHT 75.36, +6.91) posted respective gains of 6.8% and 10.1% after beating estimates.
The tech sector managed to turn positive despite notable weakness among chipmakers that sent the PHLX Semiconductor Index lower by 1.4%. The industry group struggled after SanDisk (SNDK 66.20, -14.97) lowered its Q1 revenue guidance below analyst estimates.Elsewhere, another high-beta group—biotechnology—pressured the market in the early going, but was able to return near its flat line by the end of the session. TheiShares Nasdaq Biotechnology ETF (IBB 340.81, -0.49) will enter tomorrow's affair down 6.8% for the week.
Treasuries spent the day in a steady retreat from their early morning highs. The benchmark 10-yr yield spiked eight basis points to 2.01%.
Today's participation was above average with more than 808 million shares changing hands at the NYSE floor.
Economic data was limited to weekly initial claims, which declined to 282,000 from last week's unrevised 291,000 while the consensus expected a reading of 290,000.
After three weeks above 300,000, the 4-week moving average for initial claims has dropped below that threshold, suggesting the claims level is reestablishing a trend below 300,000.
Tomorrow, the third estimate of Q4 GDP will be released at 8:30 ET (consensus 2.4%) while the final reading of the Michigan Sentiment Index for March (consensus 92.0) will cross the wires at 10:00 ET.
- Nasdaq Composite +2.7% YTD
- Russell 2000 +2.3% YTD
- S&P 500 -0.1% YTD
- Dow Jones Industrial Average -0.8% YTD
Special Situations: Fiat Chrysler Automobiles NV (BIT: FCA/NTSE: FCAU)
FCA was issued in the beginning of FY14 following the completion of the merger between Fiat and Chrysler, as the parent company of the group. In October shares commenced trading on the NYSE (NYSE: FCAU) and on the MTA (BIT: FCA).
Investments strategy & catalysts
We consider FCA as one of the most interesting short term and long term stories within the Auto manufactures universe, given a number of potential catalysts we identify and would recommend investors to follow: (1) Implementation of the 5 year business plan that was announced following the merger with Chrysler; (2) Ferrari IPO and spin-off in Q315; (3) further euro/US dollar weakness.
FY14-FY18 business plan – Following the merger with Chrysler, FCA management laid out a detailed 5 year Business Plan with clear strategic and financial targets that should deliver significant earnings growth over FY14-FY18. Management targets a 50% increase in volume units and a significant improvement in margins by FY18, mainly through brand globalization and cost synergies. These goals clearly look aggressive and the street is not expecting FCA to fully meet them, indicating that a better than expected implement will lead to a material upside to the stock.
Ferrari IPO - the expected IPO and spin-off of Ferrari will be in the spotlight of investors as it should unlock hidden value by moving the focus to the sum of FCA’s other brands and geographical segments. We assign to Ferrari a valuation of €7 billion which reflects 28% of total equity value, based on 2.5 EV/Sales multiple which we believe is appropriate given Ferrari’s margins and growth prospect vs. the luxury universe. However, Ferrari IPO could be a positive catalyst if investors are prepared to assign Ferrari a full luxury multiple value.
Euro/US dollar weakness – FCA generates more than half of its revenues and earnings in US Dollar while its functional currency is Euro. Further euro/US dollar weakness should have a positive impact on earnings and balance sheet, and on FCA stock.
Valuation
We value FCA at €16.5 per share using a sum of the parts analysis based on 2015E EV/Sales multiple through the company’s seven reportable segments. Our price target includes pension and OPEB obligations, and full conversion of convertible bonds resulting in approx. 10% upside from current levels. We see additional 10%-15% upside if we assign to Ferrari a higher valuation of €9-€10 billion.
Key risks
Main risks include: (1) unexpected drop in global vehicle demand; (2) poor execution of FCA business plan along with significant capex investments that would result in high debt balance; (3) product recalls and warranty obligations which may result in direct costs; (4) strengthening of the euro/US dollar exchange rate.
For full report and additional data please refer to our new format
https://relayto.com/makor-capital/4ijdTYRv
Regards,
Dafna Yagur | Head of Research (Israel)
Makor Capital
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--> could impact sales on next few months...
Auto dealers and lenders in the US and Canada have been hit with 252 enforcement actions over the past year for deceptive advertising, loan application fraud and misleading add-on fees in a broad crackdown by authorities, including the US Federal Trade Commission.
The charges, announced on Thursday, are part of a wider crackdown on auto sales and lending practices that have also ensnared big banks and the world’s largest auto manufacturers. One focus is on the securitisation of auto loans, which is smaller than the subprime mortgage market that sparked the 2008 financial crisis but is vulnerable to similar abuses.
The financing arms of GM, Toyota and Honda, in addition to JPMorgan Chase, Ally Financial and Santander Consumer USA have disclosed probes by the Department of Justice, the Securities and Exchange Commission and other authorities for alleged auto loan abuses.
In the crackdown, dubbed “Operation Ruse Control”, civil and criminal charges have been filed as part of the 187 enforcement actions in the US and 65 similar cases in Canada.
The FTC’s actions, related to the practice of add-ons for products and services such as extended warranties or payment programmes, are the first since receiving expanded authority over auto dealers under the Dodd-Frank financial reform legislation of 2010.
In the probe, California-based National Payment Network agreed to refund more than $1.5m to consumers and waive another $949,000 in fees for pitching a payment programme that it claimed would save customers money. The FTC says the company had failed to disclose that the charges for that programme often cancelled out any savings.
The National Payment Network did not respond to a request for comment.
“For most people, buying a car is one of the largest purchases they’ll make,” said Jessica Rich, director of the FTC’s consumer protection bureau. “Car ads must be truthful, loan terms must be clear, and dealer practices must be honest.”
Auto dealers in Florida, Alabama and California settled charges for deceptive ads, which touted the benefits of sales, lease or financing options that were actually cancelled out by fine-print disclaimers, which sometimes did not disclose terms such as downpayments.
“Growing fraud and other deceptive practices in auto sales and financing are important issues affecting consumers when they are buying a vehicle,” said Joyce White Vance, US attorney for the northern district of Alabama.
Auto dealers would face more scrutiny under a proposal by the US Consumer Financial Protection Bureau, which wants to supervise large nonbank auto lenders that make, acquire or refinance at least 10,000 loans or leases a year.
The agency estimates that about 38 auto lenders, which originate 90 per cent of nonbank auto loans and leases, would fall under the proposal. The auto finance arms of the largest car manufacturers, like Ford Motor, would also fall under CFPB oversight
Auto dealers are opposed to the plan. However officials say it would help ensure that nonbank auto lenders do not use deceptive tactics to market loans or leases and that consumers understand the terms of such financing.
Adidas Targets Turnaround With New Strategy
Sporting goods company surprised investors with two profit warnings in a year
HERZOGENAURACH, Germany—Adidas AG said Thursday that it aims to lift profit by 15% a year through 2020 as it battles to assuage investors’ concerns after abandoning earlier financial targets.
The world’s No. 2 sporting goods company behind Nike Inc. said it would speed production while increasing its presence in major cities and investing in its core brands
It expects to outperform the sporting goods industry with group sales growing at a “high-single-digit rate” for each of the next five years, it said.
“We will accelerate our growth story and deliver superior returns to our shareholders,” Chief Executive Herbert Hainer said.
Adidas has suffered a number of setbacks lately, surprising investors with two major profit warnings in the course of a year.
The political turmoil in Russia—where Adidas has a strong presence—and the resulting impact on the Russian ruble knocked the shine of the company’s earnings. Sales at its once-booming TaylorMade-Adidas Golf division plummeted.
At the same time, Mr. Hainer failed to achieve his aim to rebuild the company’s position in North America. According to Sterne Agee and SportScanInfo, its U.S. retail market share fell to 7% in 2014 from roughly 18% in 2006.
The company’s previous five-year strategic plan announced in 2010 anticipated sales growth of more than 45% to €17 billion ($18.65 billion), but Adidas said last year that it was unable to meet those targets.
Then his winning streak ended abruptly.
He issued two major profit warnings and slashed the company’s financial goals for 2014 and 2015. The Adidas stock price tumbled 40% last year.
As a result, some Adidas investors have questioned Mr. Hainer’s leadership and recently pushed for his departure. Adidas said last month that it had started looking for his successor.
“I know that we disappointed,” Mr. Hainer said Thursday, adding that the company aims to “come back even stronger than before.”
In the new five-year strategic business plan, named “Creating the New,” Adidas said it would reduce its production lead times. It also plans to expand its e-commerce business to above €2 billion by 2020.
It plans to “over-proportionally” invest in talent and marketing in metropolitan areas around the world. Its key focus will be on six cities: Los Angeles, New York, London, Paris, Shanghai and Tokyo.
“If we win running in New York and Los Angeles, we will win running in the U.S.,” Roland Auschel, Head of Adidas’s global sales said.
Earlier this month, the company reported 2014 net profit of €490 million, down from €787 million the year before on sales worth €14.5 billion.
Ticks higher on chatter it has received EU approval for Contrave weight loss drug - Link being circulated appears to indicate "adoption" dated today of marketing authorization for OREX's naltrexone / bupropion (Contrave)
Egypt Official: Saudi Arabia and Egypt will lead a ground force to intervene in Yemen
- Official notes ground forces will enter by land from Saudi Arabia and by sea via the Red Sea and Arabian Sea.
LM Ericsson: Seeing headlines that ERIC was awarded phone contract by FCC; NSR had the contract since 1997
BN 03/26 14:49 *PSAM RESOLUTIONS TO BE PUBLISHED FOR VIVENDI HOLDER VOTE AT
PSAM Resolutions To Be Published For Vivendi Shareholder Vote At Vivendi Annual General Meeting
2015-03-26 14:49:44.355 GMT
PSAM Resolutions To Be Published For Vivendi Shareholder Vote At Vivendi
Annual General Meeting
PSAM Launches Website for Vivendi Shareholders: www.valuecreationatviv.com
PR Newswire
NEW YORK, March 26, 2015
NEW YORK, March 26, 2015 /PRNewswire/ -- P. Schoenfeld Asset Management LP
("PSAM") today announced that Vivendi (EPA: VIV) (the "Company") shareholders
will be able to vote for the two resolutions (the "PSAM Resolutions") that
PSAM submitted to the Vivendi Management Board at the Company's Annual General
Meeting, to take place on April 17. The Company announced they will publish
the PSAM Resolutions for shareholders to consider on March 27.
As outlined in the Vivendi company bylaws, all Vivendi shareholders who own
physical shares of the Company as of the record date, 11:59PM UTC (5:59PM ET)
on April 14, 2015, will be eligible to vote. PSAM also reminds all Vivendi
shareholders who own shares of the Company via derivatives that they need to
have their holdings in physical form on the Record Date in order to be
eligible to vote at the Annual General Meeting. Shareholders will not be
entitled to vote economic holdings held via derivatives. Shareholders who
have any questions or need assistance in voting should contact their bank or
broker custodian or PSAM's adviser, MacKenzie Partners, Inc. at 212-929-5500.
As PSAM announced on March 23, it believes that Vivendi is significantly
undervalued due to its excessive cash holdings, inadequate capital return
policy and the uncertainty over Vivendi's future use of its capital.
Accordingly, PSAM urges Vivendi shareholders to vote FOR its resolutions,
which propose that Vivendi distribute an aggregate amount of €9 billion (€
6.66 per share) in an effort to close the valuation discount. Specifically,
the PSAM Proposals stipulate that the payment to Vivendi shareholders would be
in the form of a special dividend as follows:
1. An amount equal to €2,857,546,032.35 from distributable profit for
the year ended 31 December 2014; and
2. An amount equal to €6,142,453,967.65 from share issue premium,
merger premium and contribution premium.
For more information, including the white paper that PSAM sent to the Vivendi
management board on March 23, please visit www.valuecreationatviv.com.
About PSAM
PSAM was founded by Peter M. Schoenfeld and has been providing investment
advisory services since 1997, with offices in New York and London. PSAM has
approximately $3.4 billion in assets under management and invests in both
equity and credit securities in global event driven opportunities.
Additional Information
This press release is for informational purposes only and is not intended to
constitute, and should not be construed as, an offer to sell, a solicitation
of any offer to buy, an offer to purchase or a solicitation of consents with
regard to any securities of Vivendi (the "Company", and such securities, the
"Securities").
This release may contain forward-looking statements. Such statements can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "intends," "may," "estimates," "will," "should," "plans" or
"anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy. These forward-looking
statements involve a number of risks and uncertainties that could cause actual
results to differ materially from the suggested by the forward-looking
statements. The information provided in this press release is derived from
PSAM's analysis and subjective views on the Company and its Securities. Other
persons, including the Company, may have different analysis and views on the
information provided herein.
No reliance is accepted on this press release and PSAM disclaims any liability
in relation to this press release. Investors shall only rely on their own
assessment prior to taking any decision in relation to the Company and/or the
Securities. PSAM do not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
For Investor Inquiries:
MacKenzie Partners, Inc.
Dan Burch/Bob Marese
212-929-5500 / +44 20 3026 2807
dburch@mackenziepartners.com / bmarese@mackenziepartners.com
For Media Inquiries:
Image 7
Anne- France Malrieu
Ph : + 33 1 53 70 74 66
C : + 33 6 89 8 761 18
afmalrieu@image7.fr
Estelle Guillot-Tantay
Ph : + 33 1 53 70 74 93
C : + 33 6 87 60 49 58
egt@image7.fr
ASC Advisors
Steve Bruce/Taylor Ingraham
(203) 992-1230
sbruce@ascadvisors.com / tingraham@ascadvisors.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/psam-resolutions-to-be-published-for-vivendi-shareholder-vote-at-vivendi-annual-general-meeting-300056515.html
SOURCE P. Schoenfeld Asset Management LP ("PSAM")
Website: http://www.valuecreationatviv.com
-0- Mar/26/2015 14:49 GMT
2015-03-26 14:49:44.355 GMT
PSAM Resolutions To Be Published For Vivendi Shareholder Vote At Vivendi
Annual General Meeting
PSAM Launches Website for Vivendi Shareholders: www.valuecreationatviv.com
PR Newswire
NEW YORK, March 26, 2015
NEW YORK, March 26, 2015 /PRNewswire/ -- P. Schoenfeld Asset Management LP
("PSAM") today announced that Vivendi (EPA: VIV) (the "Company") shareholders
will be able to vote for the two resolutions (the "PSAM Resolutions") that
PSAM submitted to the Vivendi Management Board at the Company's Annual General
Meeting, to take place on April 17. The Company announced they will publish
the PSAM Resolutions for shareholders to consider on March 27.
As outlined in the Vivendi company bylaws, all Vivendi shareholders who own
physical shares of the Company as of the record date, 11:59PM UTC (5:59PM ET)
on April 14, 2015, will be eligible to vote. PSAM also reminds all Vivendi
shareholders who own shares of the Company via derivatives that they need to
have their holdings in physical form on the Record Date in order to be
eligible to vote at the Annual General Meeting. Shareholders will not be
entitled to vote economic holdings held via derivatives. Shareholders who
have any questions or need assistance in voting should contact their bank or
broker custodian or PSAM's adviser, MacKenzie Partners, Inc. at 212-929-5500.
As PSAM announced on March 23, it believes that Vivendi is significantly
undervalued due to its excessive cash holdings, inadequate capital return
policy and the uncertainty over Vivendi's future use of its capital.
Accordingly, PSAM urges Vivendi shareholders to vote FOR its resolutions,
which propose that Vivendi distribute an aggregate amount of €9 billion (€
6.66 per share) in an effort to close the valuation discount. Specifically,
the PSAM Proposals stipulate that the payment to Vivendi shareholders would be
in the form of a special dividend as follows:
1. An amount equal to €2,857,546,032.35 from distributable profit for
the year ended 31 December 2014; and
2. An amount equal to €6,142,453,967.65 from share issue premium,
merger premium and contribution premium.
For more information, including the white paper that PSAM sent to the Vivendi
management board on March 23, please visit www.valuecreationatviv.com.
About PSAM
PSAM was founded by Peter M. Schoenfeld and has been providing investment
advisory services since 1997, with offices in New York and London. PSAM has
approximately $3.4 billion in assets under management and invests in both
equity and credit securities in global event driven opportunities.
Additional Information
This press release is for informational purposes only and is not intended to
constitute, and should not be construed as, an offer to sell, a solicitation
of any offer to buy, an offer to purchase or a solicitation of consents with
regard to any securities of Vivendi (the "Company", and such securities, the
"Securities").
This release may contain forward-looking statements. Such statements can be
identified by the use of forward-looking terminology such as "believes,"
"expects," "intends," "may," "estimates," "will," "should," "plans" or
"anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy. These forward-looking
statements involve a number of risks and uncertainties that could cause actual
results to differ materially from the suggested by the forward-looking
statements. The information provided in this press release is derived from
PSAM's analysis and subjective views on the Company and its Securities. Other
persons, including the Company, may have different analysis and views on the
information provided herein.
No reliance is accepted on this press release and PSAM disclaims any liability
in relation to this press release. Investors shall only rely on their own
assessment prior to taking any decision in relation to the Company and/or the
Securities. PSAM do not undertake any obligation to publicly release any
revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
For Investor Inquiries:
MacKenzie Partners, Inc.
Dan Burch/Bob Marese
212-929-5500 / +44 20 3026 2807
dburch@mackenziepartners.com / bmarese@mackenziepartners.com
For Media Inquiries:
Image 7
Anne- France Malrieu
Ph : + 33 1 53 70 74 66
C : + 33 6 89 8 761 18
afmalrieu@image7.fr
Estelle Guillot-Tantay
Ph : + 33 1 53 70 74 93
C : + 33 6 87 60 49 58
egt@image7.fr
ASC Advisors
Steve Bruce/Taylor Ingraham
(203) 992-1230
sbruce@ascadvisors.com / tingraham@ascadvisors.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/psam-resolutions-to-be-published-for-vivendi-shareholder-vote-at-vivendi-annual-general-meeting-300056515.html
SOURCE P. Schoenfeld Asset Management LP ("PSAM")
Website: http://www.valuecreationatviv.com
-0- Mar/26/2015 14:49 GMT
Deal Reporter - Omnivision investment rally leaves bid consortium looking at USD 30 p/s offer – source
The Chinese bid consortium for OmniVision Technologies [NASDAQ:OVTI] is considering slightly increasing its USD 29-a-share indicative offer by USD 1 due to a rally in the market value of the image sensor chip designer’s investments since mid-2014, a source close to the bidder said.
Members of the bid consortium, led by Beijing’s Hua Capital Management and including Shanghai Pudong Science and Technology Investment Co (PDSTI), are still discussing their respective levels of investment ahead of tabling a firm offer, the source added without expanding on the timetable.
Omnivision owns a 13.4% stake in China Wafer Level CSP Co Ltd (China WLCSP) [SHA:603005], an image sensor packaging service provider, which has a current market value of CNY 13.1bn (USD 2.11bn), valuing the company's stake at USD 282m. The stake value has increased 47% -- from USD 188m -- since August 2014 when the bidders first tabled the preliminary non-binding proposal.
Based on the implied USD 1.68bn equity value of the proposed acquisition, OmniVision's stake in China WLCSP would equate to USD 3.2 per OmniVision share. Following the rally in China WLCSP's stock price, the stake is now worth around USD 4.7 per share, according to Dealreporter analytics.
The source said that the bid consortium, as a result, is considering a higher offer price than the originally proposed USD 29 per share, but is trying to keep the offer price below or at USD 30 a share, according to the source.
Meanwhile, Xintec Inc [TPE:3374], a Taiwanese chip packaging service provider which is 11.8% owned by OmniVision, is planning to list on Taiwan's GreTai Securities Market at TWD 42.00 per share on 30 March. Along with the new listing, Xintec will issue an additional 10% outstanding shares to raise further capital to repay debt. Omnivision’s stake will subsequently be diluted to 10.7%.
Omnivision’s investment in XinTec has a book value of USD 4.7m. If Xintec’s value is based on the offering price on a diluted basis, the investment would be worth TWD 1.19bn (USD 37.8m) which is about eight times its initial investment value.
Taiwan IC scrutiny
OmniVision’s seat on Xintec's board means the Chinese bid consortium’s offer, if made binding, will face scrutiny from the Taiwan Investment Commission (IC), said a source familiar with the Taiwanese company and a source familiar with the regulator.
Based on Taiwanese regulations, entities controlled by Chinese company/funds are not allowed to own controlling interests in Taiwanese semiconductor makers, including chip designers, wafer fabrication service providers, assembly and testing firms.
Taiwan IC is likely to request from OmniVision a mandatory resignation of its seat on Xintec's board, said the source familiar with the regulator. The source said OmniVision would be able to keep its stake in Xintec in part of a conditional approval. Typically, an IC review takes up to two months.
OmniVision contributed nearly 29% of Xintec's revenue in 2014 and ranked as its second largest customer, after Taiwan Semiconductor Manufacturing Corp (TSMC) [TPE:2330]. TSMC owns a 39% stake in Xintec and contributed 35% of revenue for the year ended 2014, according to Taiwan stock exchange database.
A spokesperson at Xintec said the proposed take-private offer from the Chinese consortium is unlikely to change the business partnership between Xintec and OmniVision given the high entry barrier of the wafer-level packaging technology used to make image sensors.