Today - Monday, November 30, 2015
- UK telecom leader BT Group (NYSE:BT) is trading just under the flat line in U.S. action, -0.2%, amid two opposing analyst takes on the stock.
- On the one hand, Macquarie has reiterated its Underperform rating and holds a price target of 375 pence -- nearly 25% below today's London close of 496.45p.
- On the bullish argument, Barclays reiterated its Overweight rating. That firm has a 600-pence target, implying 21% upside from current prices.
- Shares closed down 0.7% in London.
- The Chinese currency will join the greenback, the euro, cable, and the yen in the basket making up the IMF's Special Drawing Rights.
- The IMF's approval vote was expected and reported on earlier.
- The new basket will launch on Oct. 1, and the yuan will have a 10.92% weighting. The U.S. dollar's weighting will fall to 41.73% from 41.9%, the euro's weighting drops all the way to 30.93% from 37.4%, the pound to 8.09% from 11.3%, and the yen to 8.33% from 9.4%.
- ETFs: CYB, CNY, FXCH
- Discovery Communications (NASDAQ:DISCA) and its Eurosport unit are gearing up for Olympics coverage with some major alignment changes and leadership appointments to go along.
- The company has set up five functional areas and named leadership for three of them: Commercialization will be led by Jean-Thierry Augustin, Operations & Planning will be helmed by David Schafer, and Olympic Relations & Coordination will be led by Geraldine Filiol.
- Schafer and Filiol will report to Eurosport CEO Peter Hutton, while Augustin will report to Discovery Networks International chief JB Perrette. The company will set leaders for Engineering/Technology and Production later on.
- This summer, Eurosport nailed down all European TV/multiplatform rights to the Olympic Games from 2018 through 2024.
- Automobile production in Japan fell 0.5% to 813,110 units in October, according to data from the Japan Automobile Manufacturers Association.
- Sales have now been down for 16 consecutive months after a sales tax increase was initiated by the Japanese government.
- Exports rose during October as demand from Europe continues to improve.
- JAMA release
- Japanese automakers: OTCPK:NSANY, TM, HMC, OTCPK:MZDAY, OTCPK:SZKMY, OTCPK:FUJHY, OTCPK:MMTOF.
- Determined to pursue a bigger role in a hot telecom market, Orange (ORAN -0.8%) is exploring a European expansion that could include a potential tie-up with Telecom Italia (TI -0.5%), Bloomberg reports.
- The company's working with advisers on the matter, sources said, though it had also looked at an internal restructuring.
- Any deal faces big headwinds, as Telecom Italia and Orange are closely tied to Italy and France respectively; Italy considers TI of national strategic interest; and TI's $23B-plus market cap would make for the biggest deal Orange has pursued in 15 years.
- Still, Telecom Italia operates in a single market, presenting an attractive target for companies trying to consolidate across European borders.
- Israeli telecom Partner Communications (NASDAQ:PTNR) is off 2.6% in early going after it acknowledged receiving two lawsuits that plaintiffs are pursuing as class actions against it and its subsidiary 012 Smile.
- The suits charge the companies with requiring customers to purchase specialized equipment to get fixed-line phones to work that's not in accordance with the provision of their licenses.
- If recognized as class actions, the claims against Partner and 012 Smile will be for 116M shekels and 64M shekels respectively -- 180M shekels total, or about $46.5M.
- Chinese automakers are prepping for more demand in China for minivans with the government easing off on the one-child policy in the nation.
- Minivan sales in China are up almost 8% to outpace the broad automobile industry.
- Volkswagen (OTCQX:VLKAY) and Guangzhou Automobile Group (OTC:GNZUY) are both bringing new minivan models to the market in China.
- China Resources Beer (OTC:CRHKF) is lining up investment banks to help it work on options for its share of the Snow Breweries joint venture.
- The company may buy out JV partner SABMiller's (OTCPK:SBMRY) stake in the high-volume brewer. SABMiller needs to sell due to the planned merger with Anheuser-Busch InBev.
- Previously: AB InBev to offload Peroni, Grolsch (Nov. 29 2015)
- Japan -0.69%.
- Hong Kong -0.33%.
- China +0.26%.
- India +0.07%.
- London -0.24%.
- Paris +0.29%.
- Frankfurt +0.40%.
- Bids for one of the world's most lucrative defense contracts, to build Australia's new submarine fleet worth up to A$50B ($36B), were submitted on Monday.
- Ten months ago Australia, under pressure from Germany and France, withdrew plans to award the contract to Japan without a competitive tender.
- Key bidders are Germany's ThyssenKrupp (OTCPK:TKAMY, OTCPK:TYEKF), France's DCNS (privately-held), and Japan's Mitsubishi Heavy Industries (OTCPK:MHVYF) and Kawasaki Heavy Industries (OTCPK:KWHIF, OTCPK:KWHIY).
- Bidders must submit three separate proposals: building the submarine fleet in their own country; building the fleet in Australia; and a hybrid option whereby work is conducted in both countries.
- Australia plans to to announce its partner next year.
- Source: FT - see there for an excellent comparison of the the merits and disadvantages of each bid.
- Japan’s Government Pension Investment Fund (GPIF) is the world’s largest pension fund.
- GPIF was hit hard by this summer’s global stock rout, which wiped out $64B.
- The loss is GPIF’s first (see chart) since doubling its allocation to stocks and reducing debt last October. It highlights the risk of the fund’s more aggressive investment style.
- Fund managers have argued that holding more stocks and foreign assets is a better approach as Japanese Prime Minister Abe seeks to spur inflation that would erode the purchasing power of bonds.
- Source: Bloomberg
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, DFJ, JGBD, DBJP, NKY, JYN, JOF, EZJ, JEQ, JPNL, DXJS, EWV, YCL, SCJ, HEWJ, JSC, JPXN, JGBL, JPP, JGBT, QJPN, FJP, JGBB, JPMV, DXJT, DXJC, DXJR, JHDG, DXJH, DXJF, HGJP, HEGJ, JDG, FXJP, JPN
- Ten companies are expected to begin taking orders for new listings on the Shanghai and Shenzhen stock markets this week, marking China's first IPOs since July, when the government banned new share sales to halt a heavy market selloff.
- The companies are among 28 that are expected to list before the end of the year, part of a backlog of nearly 700 firms.
- Orders for shares must be prefunded under current rules and are expected to temporarily lock up hundreds of billions of dollars in funds, which may have contributed to the Shanghai Composite's 5.5% drop on Friday.
- Upcoming IPOs
- Previously: China to lift IPO ban (Nov. 06 2015)
- ETFs: FXI, ASHR, EWH, CAF, YINN, KWEB, PGJ, GXC, FXP, HAO, YANG, TAO, CHIX, CHN, PEK, CHIQ, CQQQ, MCHI, TDF, QQQC, XPP, YAO, GCH, ASHS, YXI, CN, CXSE, FCA, CNXT, CHNA, CHII, CHIE, ECNS, EWHS, CHIM, KBA, KFYP, FCHI, JFC, FHK, AFTY, XINA, CHAD, ASHX, CHAU
- European Union leaders and Turkey have agreed on measures to help stem the flow of migrants to Europe and other border controls, aided by a pledge to relaunch Turkey's EU membership bid and a €3B aid package.
- The money is intended to raise refugee living standards to persuade more of them to stay in the country instead of attempting perilous crossings to the EU via the Greek islands.
- Problems ahead? Leaders still haven't agreed on the final sum or how much each nation will contribute.
- ETFs: TUR, TKF
Sunday, November 29, 2015
- Leaders from nearly 150 countries are gathering in Paris this weekend to discuss a possible new global agreement on climate change.
- The conference, known as COP21, starts on Monday and will try to craft a long-term deal to reduce greenhouse gas emissions.
- One key problem is what form an agreement will take. The U.S. for instance will not sign up to a legally binding "treaty" as there would be little hope of getting it through a hostile Congress.
- ETFs: XLE, ERX, VDE, KOL, OIH, ERY, DIG, DUG, IYE, FENY, PXJ, RYE, FXN, DDG
- Russian President Vladimir Putin announced additional measures against Turkey on Saturday in response to the recent downing of a Russian bomber on the Syrian border.
- The new sanctions include the suspension of visa-free travel, halting tours and chartered flights to Turkey and a ban on the hiring of Turkish nationals.
- Shortly before the decree, Turkish President Recep Tayyip Erdogan voiced regret over the incident, saying his country was "truly saddened" by the event and wished it hadn't occurred.
- Previously: Russia hits back at Turkey (Nov. 26 2015)
- ETFs: RSX, TUR, RUSL, RUSS, ERUS, RSXJ, RBL, TKF
Friday, November 27, 2015
- Germany's Supreme Court handed a victory to Deutsche Telekom (OTCQX:DTEGY +0.8%) and Telefonica (TEF +0.7%) in a rights case, but left the door open for holding Internet service providers responsible for blocking sites offering illegal music downloads.
- The court dismissed a pair of cases -- one brought by musical-rights society GEMA against Deutsche Telekom, the other brought by music companies against Telefonica's German unit O2 Deutschland -- saying the plaintiffs hadn't done enough to halt copyright violations in the first place.
- But it went on to rule: "The company that offers Internet access will only be held responsible for blocking the site when the copyright holder has first made reasonable efforts to take action against those who have themselves infringed their rights, like the website operators, or those who have enabled the infringement, like the Web hosting providers."
- This summer, a German court had ruled that YouTube was only responsible for blocking infringing videos when they had been brought to its attention, and wasn't expected to scan every video.
- NXP Semiconductors (NASDAQ:NXPI) jumped 4.6% in the short session today, and Freescale (NYSE:FSL) gained 4%, after the two won approval from China's Ministry of Commerce to finish their $40B merger -- a last major hurdle to the deal.
- The EU and U.S. FTC had signed off previously. The companies now expect to close Dec. 7, concurrent with the divestment of NXP's RF amplifier unit.
- The two have predicted $500M in eventual annual cost synergies, and have targeted $200M in cost savings in the first year after closing. NXP expects it to be accretive to EPS and free cash flow.
- Previously: NXP +6%, Freescale +5.5%; U.S. clears NXP's RF amplifier unit sale (Nov. 24 2015)
- Previously: NXP rallies following FBR Top Pick call, takes Freescale with it (Nov. 18 2015)
- In the holiday lull, Chinese game maker KongZhong (KZ -0.4%) said it's approved a sale of most of its stake in Ourgame International to Glassy Mind Holdings, for $30.9M.
- The deal involves selling 39.2M shares of Ourgame at a price of HK$6.1062 -- coming to about $30.9M with about 80% in immediate cash, and the remainder in cash on Sept. 30, 2016.
- KongZhong had held the shares since before Ourgame went public in Hong Kong in June 2014. It will retain a stake of about 2.6% (20.74M shares).
- Turkcell (TKC -2.7%) says it has launched voice and video calls on BiP, its IP-based messaging app.
- BiP has been downloaded for free more than 3.3M times (by Turkcell subscribers and otherwise) in more than 166 countries. The app also features disappearing messages a la Snapchat.
- The voice and video addition is coming along with 1 GB of free data for Turkcell's subscribers, though. The company plans to launch it in Ukraine and Belarus, in local languages with local content.
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