Frontrunning: December 5
- Apple, China Mobile Sign Deal to Offer iPhone (WSJ)
- Japan approves $182 billion economic package, doubts remain (Reuters)
- Volcker Rule Won't Allow Banks to Use 'Portfolio Hedging' (WSJ)
- He went, he saw, he achieved nothing: Biden's Trip to Beijing Leaves China Air-Zone Rift Open (WSJ)
- Britain announces sharp upward revision to growth forecasts (Reuters)
- U.S. Airlines to Mortgage-Backed Debt Top List of Best ’14 Bets (BBG)
- Thaksin's homecoming hopes dashed as Thai crisis reignites (Reuters)
- Age of Austerity Nearing End May Boost Global Economy (BBG) - or it may expose that it was just corruption and incompetence at fault all along
- China aims to establish network of high-level FTAs (China Daily)
- Moody’s Boosts Spain’s Credit Rating Outlook on Growth Prospects (Bloomberg)
- ECB Unlikely to Spring Another Rate Surprise (WSJ)
- GM Pulls Chevy From Europe After Decade as Opel Expands (BBG)
Overnight Media Digest
* Americans with chronic illnesses - who are expected to be among the biggest beneficiaries of the health law - face widely varying out-of-pocket drug costs that could be obscured on the new insurance exchanges.
* Vice President Joe Biden told Chinese President Xi Jinping that Washington didn't recognize a Chinese air-defense zone over the East China Sea and was looking to Beijing to reduce regional tensions.
* China Mobile signed a long-awaited deal with Apple to offer iPhones on its network, an arrangement that would give the U.S. technology giant a big boost in the world's largest mobile market.
* In a defeat for Wall Street, the "Volcker rule" won't allow banks to enter trades designed to protect against losses held in a broad portfolio of assets.
* Vikram Pandit, former CEO of Citigroup, is helping to fund an upstart in the peer-to-peer lending industry, joining a growing movement trying to disrupt the traditional banking model.
* Six financial institutions were fined $2.32 billion by European regulators for colluding to try to manipulate key interest rates.
* General Motors is severing its ownership ties with lender and former subsidiary Ally Financial by selling its remaining stake in a private placement worth about $900 million.
* AT&T Inc is considering a bid for a block of spectrum licenses held by Verizon Wireless, setting up a potential contest for the airwaves with smaller rival T-Mobile US Inc people familiar with the matter said.
* Qantas Airways Ltd forecast a steep first-half loss, potential asset sales and deep spending cuts that will include the axing of another 1,000 jobs, as it warned of immense challenges in the aviation sector.
European Commission charged four biggest global banks such as Deutsche Bank, Societe Generale, JPMorgan and Citi with a 1.7 billion euros penalty in currency rigging scandal.
Energy major Gazprom is pushing for peace with Brussels to settle an antitrust probe in Europe. The company's official told The Financial Times that the Russian and the European Commission had agreed to "try to find a mutually acceptable solution".
Renewable Energy Systems, which has 21 onshore wind farm projects in the UK, warned of cancelling some of its projects blaming subsidy cuts announced by the British government.
London-listed Standard Chartered on Wednesday issued a profit warning and said it expected full-year revenue to be broadly flat compared with 19 billion pounds last year. The bank has been experiencing losses in Korea, a slowdown in its key Asian markets and tougher regulations.
New British lender Metro Bank is set to expand in the UK and said it intends to raise 387.5 million pounds via private capital raising from its investors. The bank is aiming to have 200 branches by 2020.
A London-based tribunal on Wednesday urged the Competition Commission's to review its decision to force French transport firm Groupe Eurotunnel to pull out of the cross-channel ferry market. The company hailed the tribunal's decision calling it a victory for the consumer.
* After surveillance by the National Security * Treasury * More than two dozen of the nation's * As fast-food workers plan yet another * * China Cinda Asset * The * General
Agency, major Internet companies like Microsoft and Yahoo have moved to
strengthen protections of users' data.
Secretary Jacob Lew will assert on Thursday that the Obama
administration's vast overhaul of the financial system is close to
accomplishing its goal of shielding society from the dangers posed by
biggest corporations, including the five major oil companies, are
planning their future growth on the expectation that the government will
force them to pay a price for carbon pollution as a way to control
round of one-day strikes on Thursday in cities around the country, labor
leaders, economists and industry officials continue to debate the
potential effects of raising wages at companies that often assert that
such increases would raise consumer prices and shrink the work force.
Jon Horvath's memory failed him again during the insider trading trial
of his former boss, Michael Steinberg, once a top trader at the hedge
fund SAC Capital Advisors.
Management, one of the biggest "bad banks" set up by the Chinese
government to absorb deadbeat loans from the rest of the financial
system, raised about $2.5 billion in a Hong Kong share sale on Thursday,
according to a person familiar with the deal.
Securities and Exchange Commission said Wednesday that it had settled
with Fifth Third Bancorp and its former chief financial officer, Daniel
Poston, in a case involving improper accounting for soured mortgages
around the time of the financial crisis.
Motors plans to sell the last of its holdings in Ally Financial, its
onetime financing arm, through a private placement of shares, a person
briefed on the matter said on Wednesday.
* After surveillance by the National Security
* More than two dozen of the nation's
* As fast-food workers plan yet another
* China Cinda Asset
THE GLOBE AND MAIL
* A trove of police wiretap evidence replete with allegations of extortion attempts, threats and boasts of numerous photographs of Toronto Mayor Rob Ford using illegal drugs is revealing the extent to which the mayor's behaviour exposed his public office to criminal elements.
* The government is blocking attempts to call on key figures in the Senate spending scandal to explain their role in the audit of Senator Mike Duffy's expenses.
Reports in the business section:
* The Bank of Canada says deep discounting by retailers is spreading disinflation - a byproduct of more consumers crossing the border to shop and the arrival here of U.S. chains such as Target Corp.
* National Bank of Canada continues to churn out solid profits from its core operations, but must iron out wrinkles created by one-time items.
* Toronto Mayor Rob Ford may have offered C$5,000 and a car to two men trying to sell a video of him smoking what appears to be crack cocaine seven weeks before the video was revealed in the media, according to newly revealed portions of a police document.
* John Thornton has laid out his vision for Barrick Gold Corp - a more diversified mining company that can tackle big projects by accessing capital and partners in Asia.
* CGI Group Inc appeared to weather the storm following a sizable sell-off in October related to its role in the troubled new U.S. health care insurance website, but the stock has fallen on hard times again after a solid run higher in November as questions resurface about the impact the botched site will have on the company's future prospects.
SOUTH CHINA MORNING POST
-- Hong Kong Exchanges and Clearing and Singapore Exchange, rivals for decades, have agreed to co-operate in developing yuan products. The partnership, coming after many years of fierce competition for new listings and products, surprised market observers. (link.reuters.com/gat25v)
-- Hong Kong-listed Samsonite International, the world's largest travel luggage maker, plans to open more new stores in Asia and the United States next year in a bid to capture the growing number of travellers in these regions. (link.reuters.com/hat25v)
-- Hong Kong Broadband Network plans to ratchet up the competition in fixed-line and Wi-fi services for Hong Kong residential and corporate markets, following strong revenue growth in its first year after a management buyout. (link.reuters.com/kat25v)
-- A further disclosure of interest in Sun Hung Kai Properties showed a 6.32 percent stake transfer to a private banks' trust from the original family. After the transfer, Clariden Leu Trust - a private bank under Credit Suisse - increased its stake to 7.24 percent from 0.92 percent.(link.reuters.com/zys25v)
-- Billionaire Cheng Yu-tung's Chow Tai Fook Group is committed to subscribing to the shares of China Creative Home Holding, the third IPO investment by the local tycoon in the fourth quarter. (link.reuters.com/cat25v)
-- Mainland and Hong Kong regulators have reached the final stage on mutual recognition of fund products sold in the two jurisdictions. Under the framework, qualified fund products from Hong Kong are to be sold in the mainland and vice versa, said a senior manager at China Securities Regulatory Commission. (link.reuters.com/fat25v)
HONG KONG ECONOMIC JOURNAL
-- China Huiyuan Juice Group Ltd is selling 75 million new shares, raising HK$382.5 million ($49.34 million) for general working capital and to repay debt.
MING PAO DAILY NEWS
-- Chinese department store operator Golden Eagle Retail Group Ltd had on Nov 29 increased its stake in rival Parkson Retail Group Ltd by four million shares at HK$2.41 per share, raising the shareholding to 4.64 percent, according to a disclosure from the Hong Kong bourse.
AUTUMN STATEMENT 2013: GEORGE OSBORNE TO AVOID BIG GIVEAWAYS
George Osborne will resist the temptation for big giveaways in today's Autumn Statement, as he sets out a long-term plan that will involve "unpopular decisions" to turn the economy around.
CENTRICA'S 2 BILLION POUNDS WIND FARM PLAN SNUBBED BY MINISTERS
Centrica's plan for a 2 billion pounds wind farm off the coast of Norfolk has been snubbed by ministers, who rejected a request for it to qualify as one of the first wave of new energy projects.
GOLDMAN SACHS THREATENS TO LEAVE LONDON IF BRITAIN LEAVES EU
Goldman Sachs has said it would move much of its European business out of London if Britain leaves the European Union. The warning from the world's most powerful investment bank comes as political pressure for Britain to leave the EU mounts.
BRITAIN COULD OPERATE WITH FEWER MOBILE NETWORKS, SAYS THREE CHIEF
The number of mobile network operators in Britain could soon drop from four to three, according to the chief executive of the UK's smallest carrier. "Under the right circumstances the UK could operate competitively with three or with five," said Three chief executive David Dyson, predicting a round of consolidation in Europe from 2014.
OSBORNE PLANS TAX BREAK FOR PEER-TO-PEER LENDERS
Investors in small businesses through peer-to-peer lending websites are to be offered tax breaks by the Chancellor to help to improve access to credit for cash-starved companies.
RBS FINED 391 MILLION POUNDS FOR INTEREST RATE-RIGGING
Royal Bank of Scotland was among six global financial institutions fined 1.7 billion euros by the European Commission yesterday for forming illegal cartels to rig benchmark interest rates.
ROYAL MAIL AND UNION REACH DEAL ON PAY
A proposed deal has been agreed between the Royal Mail and union leaders on pay, pensions and other issues linked to the privatisation of the postal group. The Communication Workers Union (CWU) held off calling strikes so talks could be held.
METRO BANK RAISES 385 MILLION POUNDS AFTER BUOYANT DEMAND
Metro Bank plans to raise about 400 million pounds from a combination of existing and new investors following buoyant demand for shares in Britain's first new high street lender for more than 100 years.
Fly On The Wall 7:00 AM Market Snapshot
Celgene (CELG) upgraded to Buy from Neutral at UBS
CF Industries (CF) upgraded to Neutral from Sell at Goldman
Kohl’s (KSS) upgraded to Buy from Neutral at BofA/Merrill
Spirit AeroSystems (SPR) upgraded to buy from Hold at Canaccord
Tiffany (TIF) upgraded to Conviction Buy from Neutral at Goldman
Union Pacific (UNP) upgraded to Strong Buy from Outperform at Raymond James
Alkermes (ALKS) downgraded to Neutral from Buy at UBS
Citigroup (C) downgraded to Hold from Buy at Deutsche Bank
Exxon Mobil (XOM) downgraded to Outperform from Strong Buy at Raymond James
J.M. Smucker (SJM) downgraded to Underperform from Market Perform at Wells Fargo
Morgan Stanley (MS) downgraded to Hold from Buy at Deutsche Bank
Arris (ARRS) initiated with a Buy at Brean Capital
Boston Scientific (BSX) initiated with a Hold at Benchmark Co.
CommVault (CVLT) initiated with an Outperform at BMO Capital
Covidien (COV) initiated with a Buy at Benchmark Co.
Lumos Networks (LMOS) initiated with a Buy at Canaccord
Radian Group (RDN) initiated with a Buy at Goldman
Spirit AeroSystems (SPR) initiated with a Buy at Citigroup
GM (GM) announced European brand strategy, to expand Cadillac brand in EU
Credit Suisse (CS) to sell German private banking unit to ABN AMRO
Disney (DIS) raised annual dividend 15% to 86c per share
Aeropostale (ARO) sees closing 40-50 stores in FY14
TD Bank (TD) declared effective 2-for-1 stock split
Hershey (HSY) to launch Jolly Rancher brand in India
Companies that beat consensus earnings expectations last night and today include:
JoS. A. Bank (JOSB), Verint Systems (VRNT), Mavenir Systems (MVNR), Avago (AVGO), Korn/Ferry (KFY), Synopsys (SNPS), Guess (GES), Exa Corp. (EXA)
Companies that missed consensus earnings expectations include:
Aerie Pharmaceuticals (AERI), New York & Co. (NWY)
Companies that matched consensus earnings expectations include:
Royal Bank of Canada (RY), Flow International (FLOW), Wet Seal (WTSL)
- In a defeat for Wall Street, the "Volcker rule" won't allow banks to enter trades designed to protect against losses held in a broad portfolio of assets, or portfolio hedging, sources say, the Wall Street Journal reports
- To win more corporate and government clients, Samsung Electronics (SSNLF) has to build a customer-service network to work with enterprises as well as a robust security platform that can meet the needs of the world's most-security-conscious network managers, the Wall Street Journal reports
- JPMorgan Chase (JPM) is warning some 465,000 holders of prepaid cash cards issued by the bank that their personal information may have been accessed by hackers who attacked its network in July, Reuters reports
- GM (GM) will drop the Chevrolet brand in Europe by the end of 2015 and focus resources on pushing its Opel and Vauxhall brands, Reuters reports
- The SEC is considering whether proxy advisers have grown so influential in corporate elections that regulators should impose rules to make their business more transparent, Bloomberg reports
- For Volkswagen (VLKAY), auto sales in India are headed for their first annual drop since 2002, as the German carmaker has captured only a third of the 10% market share it’s targeting and factories are producing about 40% of the cars they are capable of making, Bloomberg reports
American Realty (ARCP) files to sell $150M of convertible senior notes due 2018
American Realty (ARCP) files to sell $225M of convertible senior notes due 2020
Celldex (CLDX) 7M share Secondary priced at $24.50
Del Frisco's (DFRG) 5.39M share Secondary priced at $19.50
Lehigh Gas (LGP) files to sell 3.1M common units representing limited partners
Physicians Realty Trust (DOC) files to sell 8.3M common shares of beneficial interest
Proofpoint (PFPT) files to sell $150M of convertible senior notes due 2018
Regional Management (RM) 2.04M share Secondary priced at $31.00
Skystar Bio-Pharma (SKBI) files $35M mixed securities shelf
US Ecology (ECOL) 2.6M share Secondary priced at $34.00
Archie Bennett, Jr. reports 6.7% passive stake in Ashford Hospitality(AHP)
Gabelli raises stake in Nathan's Famous (NATH) to 13.26% from 12.4%
Icahn raises stake in Nuance (NUAN) to 18.72% from 17%
Jana lowers stake in Safeway (SWY) to 4.1% from 6.2%
Montgomery J. Bennett reports 7.1% stake in Ashford Hospitality (AHP)
Teng Yue reports 6.8% stake in iSoftStone (ISS), opposes 'wholly unacceptable' offer