(BFW) Valeant Said to Agree to Buy Salix for $158 a Share in Cash



BN 02/21 19:02 Valeant Said to Agree to Buy Salix for $158 a Share in Cash
BN 02/21 18:54 *VALEANT SAID TO AGREE TO BUY SALIX FOR $158 A SHARE IN CASH

Valeant Said to Agree to Buy Salix for $158 a Share in Cash
2015-02-21 19:04:27.769 GMT


By Ed Hammond and Dan Hart
(Bloomberg) -- Salix Pharma purchase valued at ~$10.1b,
person familiar with the matter said.

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>>> US Close Dow+0,86% S&P+0,61% Nasdaq+0,64% Russell+0,32%

Closing Market Summary: S&P 500 Settles at Fresh Record High

The major averages finished what had been a range-bound week with a Friday rally that helped the S&P 500 (+0.6%) add 0.6% for the week. The benchmark index settled at a fresh record high at 2,110.30 while the Dow (+0.9%) outperformed today, but ended the week just ahead of the benchmark index (+0.7%).

Once again, Friday's main focus was on Greece with the market starting under modest pressure after morning reports dampened hopes for an agreement at today's Eurogroup meeting, the start of which was delayed twice. However, the market spent the morning in a slow climb off its low and the S&P 500 was able to turn positive with help from reports indicating the two sides were able to reach an agreement to extend funding for Greece until the end of June. Per today's accord, the Greek government has agreed to honor current obligations in full and is expected to present a list of reforms on Monday.

The afternoon developments weighed on Treasuries, causing the 10-yr note to surrender its intraday gain and end on its low with the benchmark yield higher by a basis point at 2.12%. Meanwhile, the Dollar Index surrendered its intraday gain, ending little changed.

Nine of ten sectors posted gains with health care (+1.0%) and industrials (+0.9%) ending in the lead. The two sectors outperformed throughout the session with the industrial sector rallying behind a few large components. Deere (DE 92.43, +0.72) added 0.8% in reaction to better than expected earnings and cautious guidance while Dow component Boeing (BA 158.31, +4.56) jumped 3.0% after securing a helicopter delivery contract with the U.S. Army.

Elsewhere among heavily-weighted cyclical sectors, financials (+0.8%) spiked in reaction to the Eurogroup-Greece news while the largest sector by weight—technology (+0.6%)—settled in-line with the broader market.

On the flip side, energy (-0.3%) ended at the bottom of the leaderboard while crude oil fell 1.9% to $50.82. The energy component settled near its low that was reached after the latest Baker Hughes rig count registered its 11th consecutive decline, which indicated the number of active oil and gas rigs declined by 48 to 1310. For its part, the energy sector climbed off its low ahead of the close, but still ended the week lower by 2.4%.

Over on the countercyclical side, consumer staples (+0.3%), telecom services (+0.1%), and utilities (unch) underperformed while the health care sector (+1.0%) was boosted by biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 336.43, +4.44) climbed 1.3% while the broader health care sector ended the week ahead of other groups with a gain of 1.9%.

For the first time in two weeks, trading volume was close to long-term averages, but that was largely due to today's options expiration. As a result, more than 810 million shares changed hands at the NYSE floor.

Investors did not receive any economic data today and Monday's data will be limited to the Existing Home Sales report for January, which will be released at 10:00 ET.
  • Nasdaq Composite +4.6% YTD 
  • S&P 500 +2.5% YTD 
  • Russell 2000 +2.2% YTD 
  • Dow Jones Industrial Average +1.8% YTD 

WSJ : Eurozone Agrees on Four-Month Extension of Greece Bailout


Eurozone Agrees on Four-Month Extension of Greece Bailout
Ministers agreed on extending bailout for Greece by four months, Austria’s finance minister said, under condition that Athens details adequate reforms

BRUSSELS—The eurozone approved a four-month extension on Greece’s bailout Friday, provided Athens submits by Monday details on the reform and budgetary measures it plans to take, Austria’s finance minister Hans Jörg Schelling said.

The four-month extension falls short of the six months Greece had requested Thursday and strengthens the hand of the country’s creditors in negotiations for a follow-up deal.

Greece has to submit a list of proposed measures by Monday, which will then assessed by the European Commission, the European Central Bank and the International Monetary Fund by April, Mr. Schelling said.

Finance ministers will hold conference call Tuesday night to discuss the Greek list of measures.

“This is not about winners and losers,” Mr. Schelling said.

A four-month extension would get Greece past loan repayments to the IMF this spring, but would cut off ahead of almost €7 billion in bonds held by the ECB coming due in July and August. The shorter extension would thus strengthen the negotiation position of Athens’s creditors for any follow-up aid deal.

The €240 billion ($273 billion) rescue deal from the eurozone and the IMF that has kept Greece afloat for almost five years is scheduled to expire at the end of the month. Greek officials have warned that the government risks running out of money in early March, especially if dwindling tax receipts fail to recover.

Jeroen Dijsselbloem, the Dutch finance minister who presides over the talks among his eurozone counterparts, said earlier Friday he had been ferrying between talks with the “key players” at the Brussels meeting, but stressed that the situation remained “very difficult.”

Pressure on Greek authorities to reach a deal with its creditors has been building amid deposit outflows from the country’s banks. The ECB already cut Greek banks off from its regular funding operations earlier this month, forcing them to rely on more-expensive liquidity from their own central bank.

At Friday’s meetings, eurozone finance ministers sought more details from Greece on what measures it is prepared to take in return for continued aid from the rest of the currency union.

Greece on Thursday asked for a six-month extension to its rescue deal, which is due to expire at the end of the month. Making that request was a step the new left-wing government of Prime Minister Alexis Tsipras, who soared to election victory on a promise to scrap the deeply unpopular agreement and some of its tough austerity measures, had resisted for weeks.

Without an extension—and a €7.2 billion aid installment that has been held up since September—the government in Athens risks running out of money within weeks, Greek officials have warned. That would leave it unable to finance public services and repay big loans slices to the IMF in the spring.

Greece and its eurozone creditors are poised for another round of tough negotiations over extending its bailout program, after Germany summarily rejected a request for an extension sent by Athens. Charles Forelle reports. Photo: Getty Images
As he arrived for the meeting with his eurozone counterparts in Brussels, Greek Finance Ministers Yanis Varoufakis said that with the request, his government had taken a big step toward meeting the demands of its creditors and that it was now time for the other side to budge.

“The Greek government has gone not the extra mile, [but] the extra 10 miles,” Mr. Varoufakis said. “Now we are expecting our partners to meet us not half way, but one-fifth of the way.”

Athens has been at odds with other countries, particularly Germany, which rejected the letter as far too vague. Several ministers complained that Greece’s proposal lacked detail on what measures mandated by its existing bailout program it is prepared to implement and what it was planning to offer in return for those it rejects.

Mr. Tsipras has ruled out further reductions to pensions for the poorest retirees and promised to reverse cuts to the minimum wage, arguing that maintaining the current course would plunge his country even further into crisis.

“There is some ambiguity in the letter and there is some contradiction between what is being said in Athens and what is in the letter,” said Michael Noonan, the Irish finance minister.

Greece has frustrated some ministers with what they say are mixed messages and brash claims about the way the existing bailout has worked. Several leaks of confidential documents to the press—sometimes before all ministers had even seen them—has also ruffled feathers.

Valdis Dombrovskis, a vice president of the European Commission who is in charge of the euro, said that the “changing rhetoric of Greek authorities has created a certain erosion of trust.”

The comments came after a meeting between German Chancellor Angela Merkel and French President François Hollande appeared to make little progress at breaking the impasse in the negotiations.

“We have to explain to other European countries what [the extension request] means and for that, there are many technical questions to be clarified,” Ms. Merkel said. “More work is needed and more decisions need to be made.”

Ms. Merkel said eurozone decision makers would continue to do “all we can” to keep Greece within the currency union, but stopped short of Mr. Hollande’s much more confident assurance on Athens’ membership.

“Greece is in the eurozone, it should remain in the eurozone,” Mr. Hollande said.

Wolfgang Schäuble, the German finance minister and one of the most ardent opponents of the antiausterity course taken by the new Greek government, said that the negotiations on Greece weren’t just about what Athens wanted.

“It’s not only about one country, it’s about Europe,” Mr. Schäuble said. “This revolves around whether we can trust each other,” he added.

(BFW) Schelling Says Eurogroup Agreed on 4-Month Extension for Greece



BFW 02/20 19:46 Schelling Says Eurogroup Agreed on 4-Month Extension for Greece
BFW 02/20 19:42 *SCHELLING SAYS EUROGROUP AGREED ON 4-MONTH EXTENSION FOR GREECE
BFW 02/20 19:41 *SCHELLING SAYS GREECE MUST MEET CONDITIONS, GIVE LIST MONDAY
BN 02/20 19:41 *SCHELLING SPEAKS TO REPORTERS IN BRUSSELS AFTER MEETING
BN 02/20 19:41 *SCHELLING SAYS GREECE MUST MEET CONDITIONS, GIVE LIST MONDAY
BN 02/20 19:40 *SCHELLING SAYS EUROGROUP AGREED ON 4-MONTH EXTENSION FOR GREECE

Schelling Says Eurogroup Agreed on 4-Month Extension for Greece
2015-02-20 19:50:41.493 GMT


By Rainer Buergin
(Bloomberg) -- Austrian Finance Minister Hans Joerg
Schelling says “we agreed on four months under conditions”
after euro-area finance ministers met to discuss Greece.
* Deal reached under condition “that Greece submits a list on
Monday and that the institutions check whether the list is
sufficient”
* Schelling speaks to reporters in Brussels


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Rebecca Christie

>>> Gemalto -5.6%

Information regarding a publication mentioning a hacking of SIM card encryption keys 
- A publication reported yesterday that in 2010 and 2011, a joint unit composed of operatives from the British GCHQ (Government Communications Headquarters) and the American NSA (National Security Agency) hacked SIM card encryption keys engraved in Gemalto (Euronext NL0000400653 - GTO) and possibly other SIM vendors' cards. The publication indicates thetarget was not Gemalto per se 
- it was an attempt to try and cast the widest net possible to reach as many mobile phones as possible, with the aim to monitor mobile communications without mobile network operators and users consent. We cannot at this early stage verify the findings of the publication and had no prior knowledge that these agencies were conducting this operation.
- At present we cannot prove a link between those past attempts and what was reported yesterday.

(BofA-ML) The Flow Show : +$6.4bil inflows in Equities ($5.8b in Europe)

>>> Asset Class Flows
* Equities: $6.4bn inflows (note $5.8bn inflows via ETFs)
* Bonds: $7.1bn inflows (7 straight weeks) (Table 1)
* Money-markets: $11.2bn outflows
* Precious metals: $0.3bn outflows (first outflows in 5 weeks; losing momentum)

>>> Equity Flows
* Europe: $5.8bn inflows (6 straight weeks) – the crowded trade
* EM: modest $0.8bn inflows (2 straight weeks) (Table 2)
* US: $1.2bn outflows (outflows in 6 out of past 7 weeks)
* Japan: $0.4bn outflows

>>> Fixed Income Flows
* 61 straight weeks of inflows to IG bond funds ($5.0bn)
* 4 straight weeks of inflows to HY bond funds ($2.1bn) (Chart 4)
* 3 straight weeks of inflows to EM debt funds (albeit small $99mn)
* 32 straight weeks of outflows from bank loan funds (albeit small $95mn)
* 18 straight weeks of inflows to MBS funds ($0.4bn)
* First outflows from muni funds in 23 weeks (albeit small $38mn)

(GS) Strat. : Better growth drives demand for European stocks by both US and Eur

Goldman
Strategy Espresso : Flows: Better growth drives demand for European stocks by both US and European investors

The latest US TIC data for December 2014 shows a small net outflow from European equities of USD 2.0bn; this comes after positive flows in both November and October. The 3-month average buying is still on a rising trend, at USD +5.3bn per month; we think the 3-month average is a better gauge of flows, given the volatility in the monthly data. We had seen sharp outflows by US investors in the late summer/early autumn; these outflows coincided with much weaker European economic data but, in the last three months of the year, flows have been more positive.
The US treasury data is collated on a custodial basis and may reflect flows held in Europe or going through Europe that don't pertain to domestic European equities. We therefore need to be cautious when interpreting the data. We also monitor the AMG/Lipper data, which comes from mutual funds and is timelier and higher frequency than the TIC data (but the universe is far smaller). This shows a sharp spike in flows by US-based investors into European equities, starting towards the end of January, which coincided both with the ECB QE announcement and a pick-up in the European economic data. Indeed, the last 4-weeks have seen the strongest inflows by US mutual funds into European equities since June last year. The chart below shows the sharp spike upwards since the beginning of the year - although the rise in inflows is small compared to the flows in 2013 and early 2014.
European investors are also swinging into equities. Aggregated Flows data from individual European equity funds (via Bloomberg) shows a sharp tick-up in flows in January, after being weak in the latter half of last year. Chris Turner also highlighted this turn in fund flows in European Flow Monitor: QE boosts demand for European assets; equity funds see inflows, February 2, 2015.
Have the fund flows been excessive versus the data? No, the flows have picked up with the improvement in the economic data and in our view remain relatively modest (see chart). For US funds, we highlighted in the previous month that the relative moves in the US and European PMIs were starting to favour Europe. This move in the PMIs has been strongly correlated with the flows into Europe. The level of economic growth still favours the US but the delta favours Europe; by 4Q15, we expect sequential qoq annualised growth of 2.2% for the Euro area versus 1.2% in 1Q15, whereas the US is expanding at 3.0% pace throughout the year on our forecasts. We discussed the relative improvement in economic and earnings data for Europe in Strategy Espresso: Europe to continue outperforming the US, February 12, 2015.
Where is positioning now, in our view? US investors were very under-positioned in European equities in 2012, so, when growth improved and risks diminished in 2013, there was a need for positioning to 'catch up' with the data improvement and Europe enjoyed a sharp uptick in flows into equities by US investors. We track the buying of US investors cumulatively over time and compare this to the trend of buying seen since the late 1970s. The rise in buying from 2013 through to early 2014 lifted cumulative investment into European equities above its long-run trend (see chart below). The net outflows since the summer of last year took them back to around the trend investment line, now they are hovering just below. We see this as just a rough approximation of positioning and, while we no longer see US investors as under-positioned in European equities as they were in 2012 or 2013, we similarly don't regard positioning as aggressive in European equites, despite the recent inflows.
What drives the flows from here? For US investors, we've found that they have historically been most sensitive to changes in the pace of growth and to risks, and not so sensitive to valuation. So, the fact that the European market has risen as earnings estimates have moved downwards, pushing up the forward P/E to above 15x - a 10-year high - , is not in our view an obstacle to flows from US-based investors. The correlation between US monthly flows into European equities since 2002 and the change in the ERP has been -43% (so higher ERP means lower flows), with the change in the Euro area manufacturing PMI it's been +39% (higher growth sentiment, higher flows) but, with 12m forward consensus P/E at the outset, the correlation is zero. We continue to argue therefore that economic improvement and continued contraction of the ERP are synonymous with continued flows from US investors. We see a spike in the risk premium as the main risk to flows, potentially triggered by, say, an exit of Greece from the EMU or by further escalation of the conflict in Ukraine.
Are we seeing a switch from bonds into equities? Historically, US flows into both European equities and European bonds have been correlated - so US investors are either buying or selling European assets and some goes into equities and some to bonds. But more recently we find that US investor flows into European bonds were negative through the end of last year whereas there is a clear jump upwards in equities, in our view, reflecting both the stretched valuation of European bonds and the greater gearing to a growth improvement available in equities.