Frontrunning: August 30
- Al-Qaeda Links Cloud Syria as U.S. Seeks Clarity on Rebels (BBG)
- Administration Tells Lawmakers of Evidence Linking Assad to Attack (WSJ)
- Director of National Intelligence James R. Clapper to publish numbers of secret spying orders (CBS)
- U.S., Switzerland strike bank deal over tax evasion (Reuters)
- Another Budget Deal Bites the Dust (WSJ)
- Contemplating Summers Drives Investors to Seek Beltway Expertise (BBG)
- Austerity Test Looms in Australia as Abbott Pledges Cuts (BBG)
- Gay Spouses in All States Now Married Under U.S. Tax Law (BBG)
- Shadow banks face limits to securities trading (FT)
- EU's Rehn sees European recovery strengthening in 2014 (Reuters) ... or 2015... or 2022... or never?
- GE Set to Exit Retail Lending (WSJ)
- Singh seeks to calm India’s economic storm ahead of GDP data (FT)
- America’s New Pastime: JPMorgan Investigations (BBG)
- South Africa's Amplats cuts 4,800 jobs (Reuters)
Overnight Media Digest
* British Prime Minister David Cameron lost a preliminary vote on Syria, an early sign of the pushback Western governments may face as they prepare to launch an attack.
* Obama administration presented its case for possible military action against Syria, including evidence from an intercepted phone call, as proof of a government chemical-weapons attack.
* Major emerging market central banks are moving to raise interest rates in an effort to stem an exodus of cash, in a trend that threatens to intensify an economic slowdown across the developing world.
* New technology by Loyal3 Holdings, a San Francisco social-media firm and broker-dealer, marks the latest effort to lure small investors into initial public offerings. Investors who hold accounts at Loyal3 can indicate their interest in buying between $100 and $2,500 of stock. They then receive a number of shares based on how the offering is priced.
* Zurich Insurance Group Chairman Josef Ackermann, one of Europe's best-known finance executives, resigned and claimed he was partially being blamed for the apparent suicide of the company's Chief Financial Officer Pierre Wauthier.
* In the worst selloff for many emerging markets since the global financial crisis, China is standing out as an unlikely star performer. China's largely state-controlled economy is proving resilient to signs roiling markets from India to Brazil that the U.S. Federal Reserve may soon scale back easy-money policies that have flooded the emerging world with cash in recent years.
* Radio broadcaster Cumulus Media is close to acquiring syndicator Dial Global, in a deal that is likely to shake up the radio industry's landscape and Clear Channel's dominance. People familiar with the proposed transaction said it would be for $260 million in cash, part of which would be used to pay off Dial's debt, so that Dial would be debt-free when it came to Cumulus.
* S&P downgraded RadioShack's junk rated debt another notch, adding pressure on the struggling electronics retailer to shore up its finances. The ratings service dropped RadioShack's corporate credit status to triple-C, which is eight steps below investment grade, warning that the retailer could default in less than a year unless its cash situation improves.
* Federal Reserve staffers violated in March the central bank's rules for handling the minutes from policy meetings before their public release, the central bank's inspector general said in a report released Thursday.
British Prime Minister David Cameron lost a parliamentary vote on Thursday night to authorise military strike on Syria, upsetting western efforts to co-ordinate action against the Assad regime.
Verizon Communications is close to finalising a near $130 billion buy out of its stake in Verizon Wireless from joint venture partner Vodafone Group Plc, underlining the shift of power in the telecoms industry from Europe to the Americas.
An independent foundation charged with protecting KPN unexpectedly blocked on Thursday America Movil's proposed 7.2-billion-euro offer for the Dutch telecoms group, citing protection of the interests of stakeholders, employees, customers, trade unions and Dutch society more generally.
Josef Ackermann, the former head of Deutsche Bank AG , resigned on Thursday as chairman of Zurich Insurance Group AG, saying he was under pressure to take some responsibility for the apparent suicide of the Swiss insurer's finance chief.
The "shadow banking" sector is facing tough new restrictions on their ability to temporarily trade securities, after an international regulatory task force unveiled plans on Thursday to curb excessive risk-taking without strangling economic recovery.
Brazilian tycoon Eike Batista, the controlling shareholder of OGX Petróleo e Gas Participacoes SA, sold 1.54 percent of the oil company's stock to pay debts of his EBX group, amid growing fears that an $850 million deal with Malaysia's Petronas will be scrapped.
* Switzerland and the United States reached a watershed deal on Thursday to punish Swiss banks that helped wealthy Americans stash money in hidden offshore accounts, closing the door on an era of bank secrecy and tax evasion.
* Government lawyers have asked the private equity firm headed by the prominent financier Lynn Tilton for information related to its recent hiring of a former Army official, according to people briefed on the matter.
* United States' economic output grew at a much faster rate in the second quarter than originally estimated, buoyed by an increase in exports. Gross domestic product grew in the second quarter at an annualized rate of 2.5 percent in April through June of this year, the Commerce Department reported on Thursday.
* Though the Nasdaq market calls itself home for the stocks of the world's biggest technology companies, the exchange acknowledged on Thursday that a three-hour halt in trading arose from a problem with its software.
* Josef Ackermann, former chief executive of Deutsche Bank and one of Europe's best-known business leaders, abruptly resigned as chairman of the Zurich Insurance Group on Thursday after acknowledging that he might be accused of sharing blame for the apparent suicide of the company's chief financial officer.
* The Blackstone Group has agreed to pay $85 million to settle a lawsuit brought by a group of investors that accused it of misrepresenting some investments ahead of its 2007 initial public offering.
* Harbinger Capital Partners filed to take one of its insurance businesses public on Thursday, just more than a week after the hedge fund agreed to a tougher compromise with the Securities and Exchange Commission over accusations of market manipulation.
* The Apache Corp agreed on Thursday to sell a third of its Egyptian oil and gas business to Sinopec, the big Chinese petroleum company, for $3.1 billion in cash as part of a continued effort to sell off assets and rebalance its portfolio.
* All same-sex couples who are legally married will be recognized as such for federal tax purposes, even if the state where they live does not recognize their union, the Treasury Department and the Internal Revenue Service said Thursday.
SOUTH CHINA MORNING POST
-- Hong Kong signed a new supplement to the Closer Economic Partnership Arrangement (CEPA) with the mainland, giving further preferential access for the city's service sectors across the border.
The new measures relating to securities will allow Hong Kong-funded financial institutions to apply for qualified foreign investor status that will allow them to set up joint venture fund management companies in mainland China.
-- Air China Ltd said it expects the drop in air fares on the mainland to narrow in the second half of the year as demand on domestic routes shows signs of a rebound.
-- China Merchants Holdings (International) Co Ltd Managing director Hu Jianhua said the group's investment in a $500 million mega-port in Colombo, Sri Lanka, which opened earlier this month, would endure start-up losses, but he expected the project to break even in two years.
HONG KONG ECONOMIC TIMES-- Standard Chartered Bank is chasing former chief secretary Rafael Hui for debts amounting to HK$1.2 million ($154,700). The bank becomes the fourth financial institution to sue Hui for unpaid debts.
-- Property developer K Wah International Holdings Ltd chairman Lui Che-woo said local home prices were likely to fall by 10 to 20 percent. However, the company expects home sales in the mainland to be higher-than-expected in the second half.
MING PAO DAILY NEWS
-- Cheung Kong Holdings Ltd and Hutchison Whampoa Ltd sold Metropolitan Plaza, a shopping mall in Guangzhou, to GCREF Acquisitions 22 Ltd, for a total cash consideration of HK$3.03 billion.
SING TAO DAILY
-- China Life Insurance Co expects to set up an e-commerce arm by the end of the year, and has signed a cooperation agreement with Alibaba Group to sell products online, said the insurer's Chairman Yang Ming sheng.
Fly On The Wall 7:00 AM Market Snapshot
Apache (APA) upgraded to Outperform from Sector Perform at RBC Capital
Copa Holdings (CPA) upgraded to Strong Buy from Outperform at Raymond James
Sanchez Energy (SN) upgraded to Outperform from Sector Perform at RBC Capital
Select Comfort (SCSS) upgraded to Buy from Hold at KeyBanc
Joy Global (JOY) downgraded to Hold from Buy at BB&T
Staples (SPLS) downgraded to Neutral from Overweight at JPMorgan
Arlington Asset Investment (AI) initiated with a Market Perform at JMP Securities
Hornbeck Offshore (HOS) initiated with an Overweight from Not Rated at JPMorgan
Radian Group (RDN) announced agreement with Freddie Mac (FMCC)
Apache (APA), Sinopec (SHI) entered upstream oil and gas partnership
Cliffs Natural (CLF), United Steelworkers reached new labor agreement
S&P revised Genesee & Wyoming (GWR) outlook to positive
Salesforce.com (CRM) to reduce headcount by about 200
Companies that beat consensus earnings expectations last night and today include:
ReneSola (SOL), Big Lots (BIG), Bona Film (BONA), OmniVision (OVTI), Mitel (MITL), Salesforce.com (CRM), Splunk (SPLK), Pacific Sunwear (PSUN)
Companies that missed consensus earnings expectations include:
Yingli Green (YGE), Control4 (CTRL), American Software (AMSWA), Krispy Kreme (KKD)
Companies that matched consensus earnings expectations include:
Shoe Carnival (SCVL)
- GE (GE) is preparing to spin off GE Capital, one of its most important financial assets, the unit that issues store credit cards for 55M Americans, as it retreats from one of the high-growth businesses that defined the modern conglomerate, the Wall Street Journal reports
- Verizon Communications (VZ) push to take full control of its U.S. wireless business could spark a new round of mergers across the telecom industry. Verizon's talks with Vodafone Group (VOD), which owns 45% of Verizon Wireless, could soon result in a deal worth as much as $130B, sources say, the Wall Street Journal reports
- America Movil (AMX) remained committed to its $9.5B bid for Dutch group KPN but would abandon it if a foundation prepared to block the deal did not change its stance, Reuters reports
- L'Oreal (LRLCY) CEO Jean-Paul Agon reiterated today that the cosmetics group could sell its stake in drugmaker Sanofi (SNY) to help fund acquisitions, Reuters reports
- American Airlines (AAMRQ) and US Airways Group (LCC) even before they’ve entered court, are fighting the Justice Department over when the government’s antitrust lawsuit to block the airlines’ proposed merger should go to trial, Bloomberg reports
- Natural gas futures rose for a fifth day after reaching a five-week high in New York yesterday on speculation that hotter-than-normal weather in the U.S. will buoy demand from power plants into mid-September, Bloomberg reports
Cempra (CEMP) files to sell 138,797 common shares for holders
Marketo (MKTO) files to sell 6M shares of common stock
Multiband (MBND) requests withdrawal of registration statement
Icahn reports 16.9% stake in Nuance (NUAN), may seek talks with the company regarding a seat on its board
S.A.C. Capital reports 5.5% passive stake in NQ Mobile (NQ)