MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Tuesday, May 21, 2013
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6:12 PM Four companies ignoring their shareholders' votes, according to Theo Francis: Impax Labs (IPXL), where three directors were retained despite failing to reach 50% approval; Occidental Petro (OXY), which counted 55M non-voting shares as voting against a proposal; Hecla Mining (HL), which left open a say-on-pay vote for an extra month; and NYSE Euronext (NXY), which continues to thwart the right to call special shareholder meetings. Comment!
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3:55 PM WisdomTree (WETF) plans a Wednesday launch for its U.S. Dividend Growth Fund (DGRW) - tracking a fundamentally-weighted index of about 300 dividend payers with annual cost of 0.28%. Among the eligibility requirements: Regular dividends for 12 consecutive months and market cap of at least $2B. Individual security weighting is capped at 5%, with sector allocation capped at 20%. Among the large selection of other dividend funds: VIG, PFM, DHS, DTN. More here. Comment!
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2:56 PM A good deal of MetLife's (MET -0.9%) investor day presentation (webcast) (slides) focuses on limiting risk in variable annuities. The insurer's biggest lever to lower cost of equity capital, says CEO Steve Kandarian is addressing VA risk - among the steps is reducing VA sales ($28B in 2011 to $10B-$11B expected in 2013). The company also plans to merge 3 life insurance subsidiaries and one foreign reinsurer into a larger, well-capitalized, more transparent company that also satisfies Dodd-Frank rules. 1 Comment
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1:32 PM CME Group plans additional cuts to its giant board, according to Executive Chairman Terry Duffy, speaking ahead of the annual meeting. At 30 members, the board is more than twice as large as those at ICE (11 now, but 15 after NYSE merger), and Nasdaq OMX (11). The large size reflects the CME's long history as a member-owned operation as opposed to today's public company. Comment!
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12:24 PM Low rates and sluggish loan growth will continue to pressure profits of the big banks in 2013, writes Credit Suisse. At the top of the list of those best-positioned to grow revenue, manage expenses, and deploy capital: Citigroup (C), JPMorgan (JPM), and U.S. Bancorp (USB). JPMorgan has already tipped that trading results are looking good in Q2. Look to upcoming investor conferences for more pre-earnings clues. Comment!
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11:49 AM As leaked earlier, Jamie Dimon will keep both jobs at JPMorgan (JPM +2.1%) as the vote to separate the Chairman and CEO roles receives only about 32% support (got 40% last year). Additionally, all board members are re-elected, including risk-committee member Ellen Futter, who got 53.1% of the vote. 6 Comments
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11:06 AM Citigroup (C) looks to enhance its Latin American commercial card business, launching its Global Issuing platform for that region. Puerto Rico will be the first to adopt the new technology, making Citi the first local issuer with a chip card solution for that market. Further countries will soon roll it out. (PR) Comment!
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11:00 AM I've got 25 years in the business and sometimes I can't figure out what's going on with a $2T bank balance sheet, says Mike Mayo at the JPMorgan (JPM +1.1%) annual meeting. What about your risk committee gives it the experience to do the proper job, he asks Jamie Dimon. Passing on a chance to respond with a zinger (that's why you're an analyst, not banker), Dimon notes it's the same committee that helped steer the bank before and during the financial crisis. 2 Comments
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10:37 AM MetLife (MET -0.7%) says (8-K) a continuation of the current low interest rate regime could cost the company's variable annuity business about $2.5B after 3-5 years. For perspective, the insurer made about $2.3B in the last 12 months. 1 Comment
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10:22 AM The JPMorgan (JPM +1.1%) annual meeting is underway (webcast) (blog). Following an introductory movie, Jamie Dimon is speaking about bank performance. A tell? Director Ellen Futter - who's drawn plenty of scrutiny over her qualifications to sit on the risk committee - is a no-show. Comment!
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9:46 AM China's official non-performing loan data ($86B in bad debt in Q1) "greatly understates" the extent of the problem, says Carson Block, believing the unwind will force Beijing to recapitalize a number of banks. Block's Muddy Waters recently made headlines with a short of Standard Chartered (SCBFF.PK, SCDRF.PK) - a U.K. bank earning most of its profit in Asia. China Financial ETF (CHIX) +32% Y/Y. Comment!
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9:11 AM Bank of America (BAC) looks to save some money, launching a preferred stock offering with proceeds set to redeem outstanding Series J (7.25%), Series 6 (6.7%), and Series 7 (6.25%) preferreds. Shares +0.3% premarket. (PR) 2 Comments
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8:59 AM The effort to split the Chairman and CEO jobs at JPMorgan (JPM) appears to have failed, reports the NYT, citing sources who have seen the early tallies. The 3 members of the board's risk committee also look to have survived (an earlier leak says the 3 may be going no matter the vote outcome). The annual meeting begins at 10 ET. Shares +0.9% premarket. 1 Comment
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7:43 AM Prospect Capital (PSEC) receives a distribution of $66M after portfolio company Wolf Energy sells some oil and gas assets in Texas. Prospect estimates the cash has boosted NAV by more than $0.06/share. Had the cash flows been received in Q1, it would have cut Prospect's loan assets on non-accrual to just 0.2% from 1.3% reported. (PR) 7 Comments
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7:36 AM JPMorgan (JPM) plans a shake-up of its board even if every director wins reelection and Jamie Dimon keeps his dual role, reports the WSJ. If the story is to be believed, it could mean Ellen Futter, David Cote, and Jim Crown - who sit on the bank's risk policy committee and who barely squeaked by last year - are on their way out. The 3 are notable for either having litte or negative bank risk-management experience on their resumes. Annual meeting begins at 10 ET. 2 Comments
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7:27 AM KKR sells its entire 12% stake (about $260M) in Australian TV network Seven West Media. Seven West Chairman Kerry Stokes believes funding pressures brought on by the high aussie dollar was a factor behind the sale. Seven West shares fell 3.4% in Sydney. Comment!
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7:23 AM BlackRock (BLK) fills a void, purchasing P-E property investment advisory firm MGPA ($12B AUM) to boost its Asian real estate business. The transaction - price undisclosed - is expected to close in Q3 and won't materially affect EPS, says BlackRock. Comment!
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7:14 AM InterContinentalExchange (ICE) formally applies for EU regulatory approval for its NYSE Euronext (NYX) purchase. It was 15 months ago Deutsche Boerse's buy of NYX was denied, but ICE feels it won a victory last month when the EU said it would rule on the purchase, as opposed to each of the state regulators having a say. Comment!
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7:06 AM Deutsche Bank (DB) slides 1% in the premarket after a downgrade to Hold at JPMorgan, the analysts citing concern about regulatory capital. Deutsche's shares are up about 15% since the announcement and execution of a $2B capital raise late in April. Comment!
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