Chesapeake could spin off or sell oil-services division. Chesapeake Energy (CHK) is pursuing strategic alternatives for its oilfield- services division, including selling the unit or spinning it off to the company's shareholders. Chesapeake Oilfield Services (COS) generated revenue of $2.2B in 2013. The company's move follows speculation last week that 10%-owner Carl Icahn is seeking a cash bid of up to $40 a share for Chesapeake, whose stock closed at $26.57 on Friday to give it a market cap of $17.67B.
HSBC profit increases 9% but misses forecasts; shares slump. HSBC's (HSBC) 2013 pretax profit rose 9% to $22.56B but fell short of consensus of $24.6B. "The miss is driven by revenue softness and costs not falling as much as expected," says analyst Ian Gordon. Underlying revenue grew to $63.3B from $61.6B, although overall revenue dropped to $64.6B from $68.3B, while underlying operating costs fell 6% to $38B. The bank warned of "choppy markets" this year as emerging economies adjust to "changing economic circumstances and sentiment." Shares were -3.2% premarket.
Ukraine pleads for $35B in aid after ousting president. Ukraine has said it needs $35B in foreign aid over the next two years and has called for a donor's conference that will involve the EU, the U.S. and the IMF. The plea for a bailout comes after parliament ousted President Viktor Yanukovych over the weekend. A warrant has been put out for Yanukovych's arrest after he fled the capital before his removal. Acting President Oleksandr Turchinov said yesterday that Ukraine was close to default, with the economy facing an abyss.
Top Stock News
Netflix to pay Comcast for smoother streaming. In what could be a landmark pact for its dealings with other broadband providers, Netflix (NFLX) has agreed to pay Comcast (CMCSA) to ensure that its shows stream smoothly to the cable operators' customers. While some big content companies had begun paying telecom providers for faster access, Netflix had been a holdout. The agreement could pave the way for similar deals with the likes of Verizon (VZ), AT&T (T) and Time Warner (TWC).
Deutsche Bank to cut U.S. balance sheet by up to 25%. Deutsche Bank (DB) intends to slash its U.S. balance sheet to $300B from $400B in order to meet tough new capital and leverage requirements from the Federal Reserve. The figure doesn't include $200B that Deutsche holds at its U.S. branch and doesn't fall under the new rules. The German bank will implement the changes mainly by reassigning some operations that are located outside the U.S. to other parts of the business.
Mobile World Congress gets underway. The World Mobile Congress has kicked off in Barcelona, with the appearance of speakers such as Mark Zuckerberg and Jan Koum emphasizing the intersection of computing and mobile. Nokia (NOK) is launching three low-cost Android phones even though the company's handset unit is being sold to Microsoft and the latter is looking to facilitate cheaper Windows phones. Meanwhile, Samsung (OTC:SSNLF) has introduced the first two smartwatches that are based on its Tizen operating system rather than on Android.
Shanda to sell main businesses to Alibaba for $3.2B+ - BrightWire. Alibaba is planning to buy Shanda Interactive and Shanda Games' (GAME) main business for at least $3.2B, BrightWire reports. The acquisition may include Shanda literature, Shanda games and Ku6. In January, Shanda Games received an offer to take it private that valued it at $1.9B; the bid came from controlling shareholder Shanda Interactive Entertainment and from an affiliate of Primavera Capital.
Las Vegas Sands ready to invest $10B in Japan. Las Vegas Sands (LVS) is prepared to invest $10B in Japan, which apparently has the potential to become Asia's second-largest casino market. "We will spend whatever it takes," said CEO Sheldon Adelson. However, Japan first has to pass a law that ends a ban on casinos.
Top Economic & Other News
Eurozone consumer prices tumble. Eurozone CPI dropped a record 1.1% on month in January after rising 0.3% in December, with the fall much sharper than the 0.4% decline that was expected. The index was dragged down by a tumble in the cost of non-energy industrial goods. On year, inflation was +0.8%, as in December. The steep monthly fall in CPI comes amid concerns about deflation in the eurozone, although the ECB has so far been sanguine.
German corporate optimism increases again. The German Ifo Institute's business climate index has increased to its highest level in 2 1/2 years, rising to 111.3 in February from 110.6 in January and topping consensus that was also 110.6. The current-situation reading rose and exceeded forecasts, although the expectations print slipped. "The German economy is holding its own in a changeable global climate," says Ifo.
Torrid Chinese housing sector cools a bit. The average price of a new home in China rose 9% on year in January, although that represents the first slowdown for a year. December's increase was 9.2%. The slight deceleration comes amid attempts by the People's Bank of China to cool the real-estate market and rein in lending by tightening monetary policy. Meanwhile, a report said that Industrial Bank and other major banks have squeezed lending to the sector. Concerns about the property market helped send the Shanghai Composite 1.75% lower.
Top Ideas: Movers and Great Calls
1) On February 12, Western Investor projected 50-125% upside at Fission Uranium (OTCQX:FCUUF), as impressive results and low costs had left the stock undervalued. Shares are +10.6% since. Read article »
2) In October, Inflection Point Investing recommended wireless-networking provider Ubiquiti Networks (UBNT), seeing near-term gains coming on the back of "beat and raise" quarterly results. After two straight earnings beats, the stock is +42.5% since Inflection Point Investing's call. Read article »
Top Ideas To Watch
1) The multi-bidder contest for Time Warner Cable (TWC) and overstated regulatory fears have set up an attractive merger arbitrage play, writes fund manager Chris DeMuth Jr. Read article »
2) Ariana Research writes that theater operator Digital Cinema Destinations (DCIN) offers investors access to a classic middle-market roll-up - without the private equity fees. Read article »
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In Asia, Japan -0.2% to 14838. Hong Kong -0.8% to 22389. China -1.75% to 2077. Hong Kong -0.9% to 22367.
In Europe, at midday, London -0.4%. Paris +0.1%. Frankfurt -0.2%.
Futures at 6:20: Dow flat. S&P flat. Nasdaq +0.1%. Crude -0.2% to $102. Gold +0.8% to $1333.80.
Ten-year Treasury Yield flat at 2.73%.
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