AT&T exploring Vodafone acquisition. AT&T (T) is reportedly preparing the groundwork for a takeover of Vodafone (VOD) next year in a deal that would create a company with a market cap in excess of $250B and over 500M wireless subscribers. Executives at the U.S. carrier are trying to identify which assets it would retain and who would buy businesses that would be spun off. Any deal, of course, would have to wait until Vodafone closes the sale of its Verizon Wireless stake.
RBS to create internal "bad" bank, losses narrow. RBS's (RBS) shares dropped 3.8% premarket after the U.K. company said it will create an internal "bad" bank that will ring fence £38B of toxic assets. RBS hopes the move will help free up £10-11B of capital, although the bank also expects to take £4-4.5B of impairment charges in Q4. RBS intends to accelerate the IPO of its U.S. Citizens unit and said it's involved with a sector-wide probe of possible forex manipulation. In Q3, RBS's pretax loss fell by more than half to £634M.
Chinese factory activity edges up. China's official manufacturing PMI increased to an 18-month high of 51.4 in October from 51.1 in September and surpassed consensus. However, the reading for big companies rose, while that for smaller ones dropped into contraction territory, highlighting the unbalanced nature of China's economy. HSBC's PMI data edged up to 50.9 from 50.2. Readings for South Korea, Indonesia, Vietnam and Taiwan indicated that manufacturing grew in those countries, although India remained in contraction.
Top Stock News
Barrick Gold plans $3B capital raise, shares slide. Barrick Gold's (ABX) stock-price dived 5.2% premarket after the company unveiled plans for a bought-deal public offering of 163.5M common shares at $18.35 each, enabling the miner to raise a net $2.6B. Shares had already dropped 5.4% in regular trading after Barrick issued Q3 earnings and announced the suspension of construction at its Pascua-Lama project in South America.
AIG net profit climbs 17%. AIG's (AIG) Q3 net profit rose 17% to $2.17B and adjusted EPS of $0.96 beat forecasts, but premium revenue at the insurer's property-casualty business fell 3.7% to $8.43B and the unit continued to pay out more in claims than it took in. Separately, AIG said the sale of its ILFC aircraft leasing unit hasn't yet closed and could still be terminated. AIG's shares fell 3.2% in post-market trading.
Heavyweights square up over Nortel patents.The consortium that bought thousands of Nortel patents for $4.5B in 2011 has sued Google (GOOG), Samsung (OTC:SSNLF, OTC:SSNGY), HTC (OTC:HTCCY), Huawei and four other companies for infringing some of the IP. The group, called Rockstar, is owned by Apple (AAPL), Microsoft (MSFT), BlackBerry (BBRY), Ericsson (ERIC) and Sony (SNE). The patents cited in the suit cover technology that enables targeted advertising on Internet search results - the core of Google's money making machine.
iPad Air goes on sale, iPad mini to launch on November 21. Apple's (AAPL) iPad Air has gone on sale in stores across Asia and Europe, with countries in North America set to follow, although online orders began at midnight. Hundreds of people are reported to have queued up outside shops in Tokyo and Sydney, but the commencement of sales doesn't seem to have generated the media interest that previous Apple devices attracted. The launch date of the new iPad mini will apparently be on November 21.
Hilton hopes to go public in early December. Hilton Worldwide reportedly plans to launch its IPO in the week of December 2, assuming the hotel operator passes a regulatory review in time. Hilton, which is owned by Blackstone (BX), has filed to raise $1.25B in its listing. The IPO would be one of a number that companies in the private-equity firm's portfolio are carrying out. Earlier this week, shopping mall owner Brixmor (BRX) raised $825M.
Top Economic & Other News
Food-stamp payments set to drop. The amount that people can receive in food stamps is due to fall today following the expiration of a 13.6% increase in the program that the government introduced in 2009 as part of its stimulus plan. That increase, as well as the great recession, has helped send spending on the Supplemental Nutrition Assistance Program to a record $78.4B in the fiscal year ending September 30. Retailers who could feel the pinch include Wal-Mart (WMT), Target (TGT) and Kroger (KR).
Alpha-Rich Stock Movers and Great Calls
1) Parker Drilling (PKD) is +12.5% since October 14, when Stephen Simpson called out 25-40% upside. New management continues to perform, the company's rig segment keeps growing and its rental business is getting ready to turn a corner. Read article »
2) Bankers Petroluem (OTCPK:BNKJF) is +20% since August 16, after Devon Shire highlighted the company as undervalued. Read article »
Alpha-Rich Stocks To Watch
1) Financial compliance firm Issuer Direct (OTCQB:ISDR) has made a recent acquisition that the market hasn't registered yet. The pro forma finances suggest 70% upside for the shares. Read article »
2) Salamander Energy (OTC:SALDF) is trading cheaply due to misunderstanding over 2012's results. Value Digger sees triple-digit upside as production continues to grow. Read article »
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In Asia, Japan -0.9% to 14202. Hong Kong +0.2% to 23250. China +0.4% to 2150. India +0.15% to 21197.
In Europe, at midday, London -0.1%. Paris -0.4%. Frankfurt -0.2%.
Futures at 6:20: Dow +0.2%. S&P +0.1%. Nasdaq +0.2%. Crude flat at $96.41. Gold -0.35% to $1318.90.
Ten-year Treasury Yield -1 bps to 2.57%.
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