MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Saturday, May 25, 2013
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1:25 PM Blackstone (BX) plans to pull a "significant portion" of the ~$550M it has invested with Steve Cohen and SAC Capital in light of the ongoing insider trading investigation, according to a letter from pension consulting firm Russell Investments reviewed by Reuters. Blackstone's redemption request came "sometime before May 15," meaning the asset management firm made the decision prior to SAC's disclosure that it would no longer cooperate unconditionally with authorities and prior to news that Cohen himself had been subpoenaed. 1 Comment
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Friday, May 24, 2013
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3:39 PM Private-equity is taking profits, with this week's 7 offerings pushing the year's total to 86, more than double the amount this time last year, according to Dealogic. The dollar amount of $34B is a triple. In addition to Oaktree (OAK) and Apollo (APO) insiders cashing in some chips this month, Bain sold chunks of Bloomin Brands and Sensata (ST), Carlyle (CG) unloaded part of Wesco Aircraft, and teamed with Blackstone (BX) to sell $1.3B of Nielsen Holdings (NLSN). Comment!
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3:00 PM After a 13% decline over the last two months and now trading about 5% below book value, Invesco Mortgage (IVR) gets its 2nd insider buy in a week, with CIO John Anzalone adding about 9% to his stake in the company with a 2,100 share purchase Wednesday at $19.61 each (previous: CEO's purchase). 2 Comments
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2:49 PM More action from Lloyds (LYG -0.5%) on the asset sale/capital raise front: The bank reportedly plans the sale of about $8.7B in U.S. MBS next week, and will unload another 77M shares of wealth manager St. James Place for about $741M (taking its stake to 21% from 36%). The MBS sale is winning applause for its timing from at least one analyst who says the bank easily could have panicked and sold at much lower prices years ago. Comment!
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2:11 PM There is growing evidence Bank of America (BAC), JPMorgan (JPM), Citigroup (C), and Ally Financial violated the terms of the mortgage servicing abuse settlement, according to NY AG Schneiderman. In a letter to the settlement monitor (obtained by Reuters), Schneirderman says other states "have identified similar recurring deficiencies." The AG considers the letter to have started the clock on a "waiting period" necessary before a lawsuit may be filed. 15 Comments
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2:02 PM Judges in France are questioning the CEO of UBS' French unit in what may be a prelude to a formal investigation regarding investments "designed to cheat the taxman," sources tell Reuters. Comment!
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12:22 PM The pressure on reinsurance pricing isn't set to dissipate anytime soon, says Credit Suisse, after talking with 9 of the firms this week. Faring best will be those with higher exposure to Florida (say ACE) - where price pressure will ease somewhat - as opposed to those with more of a national presence (say RNR). Rated Outperform are Aspen (AHL) - with less than 25% of the portfolio exposed to industry headwinds - and Validus (VR) - trading near book despite a more diverse revenue line. Comment!
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11:54 AM A bit of selling by investors in high-yield ETFs (HYG, JNK) has Wall Street banks stepping in - their holdings of junk paper rising 37% to $7.7B in the last 2 weeks. Also at work suggests JPMorgan's team is banks' - used to being cautious the past few years - becoming a little more comfortable with trading activity. Comment!
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11:03 AM National Bank of Greece (NBG) may have to up its offers after results of tenders for 5 preferred securities show decent, but not fantastic participation, with about €80M of the paper set to still be outstanding after the May 27 settlement date. Shares (and presumably the ADRs) are halted from trading until May 30. (PR) Comment!
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9:19 AM Bank lobbyists cut out the middleman, writing legislation softening financial regulations on their own instead of leaving it to lawmakers to draft the paperwork. A bill exempting broad swathes of trades from new regulation - which cruised through the House Financial Services Committee this month - was essentially written by Citigroup (C), according to emails reviewed by the NYT. Is this even news? Fans of The Aviator have seen it before. 4 Comments
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8:54 AM Morgan Stanley (MS) shakes up its Asia equities team, naming Jerome Leleu and Mille Cheng as co-heads of the business to replace Justin Jaik who's moving to a new role. Cheng is rejoining Morgan from Barclays - where she headed the China equity business since 2011. Comment!
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8:39 AM Gramercy Property Trust (GPT) closes on a $14.5M 5-year mortgage at 3.28% on its recently-acquired (for $27.1M) 540K square foot industrial property portfolio in the Indianapolis area. (PR) 4 Comments
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8:33 AM What's Fannie Mae (FNMA.OB) up to? It's snatching profits away from banks as it increasingly purchases loans directly from lenders, cutting out those used to making good money by packaging mortgages into securities. "We don't play this big of a role because we want to," modestly says CEO Tim Mayopoulos. "(We have) no goal relative to market share, except to reduce it," says another spokesman. The lenders (JPM, WFC) seeing profits vanish aren't so sure. 9 Comments
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8:19 AM There's new life in ING's attempt to sell its South Korean life insurance unit as Kyobo Life Insurance - SK's 3rd largest - says it has made a bid. The country's 2nd largest insurer - Hanwha - is also expected to make a bid, as are at least 2 P-E funds. KB Financial had been lined up to buy the unit for $2.1B last year, but dropped out. Comment!
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7:46 AM Tornados striking the U.S. this week are expected to cause anywhere from $2B-$5B in insured losses, according to Eqecat, obviously with most of the damaged coming from the Moore, OK disaster. At the top end of the range, this week would rank as the 2nd worst ever, behind only the April 2011 tornados in Alabama. TRV, CB, ALL all dropped amid the tornado news early in the week and have held steady since. Comment!
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7:40 AM Bank of America (BAC) is seeking bids for about 40 branches in rural NY and PA, reports Bloomberg. The branches hold about $1B in deposits and could go for $20M-$30M, according to a source. On a cost-cutting drive, BofA has been closing or selling outlets for a couple of years, its branch count now at 5,389 vs. about 6K when Brian Moynihan took over in 2010. Comment!
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7:34 AM Ellington Management hires Steven Abreu from GMAC Mortgage as the MBS specialist (EFC, EARN) founded by Mike Vranos gets into the mortgage origination business. Ellington Financial (EFC) will wade into the market with the purchase of small or medium-sized originators says CFO Larry Penn, but the goal, says Vranos, is to build a top-tier national lender with $20B/year or more in originations. 1 Comment
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7:18 AM Goldman Sachs (GS) has gotten the nod from the Indian government to help it raise money by creating and launching ETFs of state-run companies, according to a senior official. The government initially aims to have 15-20 state-run firms in a basket of ETFs. Remember, this program was only made necessary by the government's inability to interest P-E and other investors in buying stakes. Price matters. Caveat emptor. Comment!
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7:11 AM Remember M&T Bank's (MTB) proposed purchase of Hudson City Bancorp (HCBK)? Regulators have put the merger on ice and it's sending a chill through the executive suites of other regional banks (KRE) who were considering doing deals, but now figure it's not worth the regulatory scrutiny. In the past, conditions such as we're in - slow economy, weak loan growth - have prompted waves of bank mergers (it's happening in community banks). "I am not buying another bank for as long as I can see," sees one unnamed top executive. Comment!
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4:03 AM District Court Judge John Gleeson is reportedly considering rejecting HSBC's (HBC) $1.9B deal with authorities over money laundering charges involving terrorists and drug dealers. Should Gleeson quash the agreement, HSBC could be left open to criminal prosecution and a ban from operating in the U.S., although the DOJ is questioning whether the judge has the authority to reject the deal. We could hear more details at HSBC's annual meeting today. Shares -0.9% in London. 4 Comments
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