- Vietnam, China trade accusations after Vietnamese fishing boat sinks (Reuters)
- SEC Set to Spur Exchange Trading (WSJ)
- Bank of Japan quietly eyes stimulus exit (Reuters)
- Japan Risks Low Growth Even as Easing Spurs Inflation (BBG)
- Hello Japan: Bond Market Message to Fed: Your 4% Rate Outlook Is Too High (BBG)
- Malaysia, UK firm release satellite data on missing MH370 flight (Reuters)
- Fighting rages in eastern Ukraine city, dozens dead (Reuters)
- Bad Credit No Problem as Balance-Sheet Bombs Rally 94% (BBG)
- Draghi’s Asset-Backed Drive Rouses Academic Skeptics (BBG)
- For-Profit Colleges Face Test From State, Federal Officials (WSJ)
- Boutique bank Sterne Agee imploding (AL)
- Euroskeptic election surge gives EU a headache (Reuters)
- Alarm Raised by Plan to Ease Credit Norms on U.S. Parent Loans (BBG)
- How AstraZeneca escaped Pfizer’s clutches this time (Reuters)
- As His Foundation Has Grown, Gates Has Slowed His Donations (NYT)
Overnight Media Digest
WSJ
* Top U.S. securities regulators are embracing a plan designed to shift more stock trading onto exchanges and away from private trading venues operated by banks and other firms, according to people familiar with the discussions. The move, which could deliver a blow to bank trading operations, is expected to be part of a coming Securities and Exchange Commission pilot program aimed at boosting trading in the stocks of smaller companies. (http://ift.tt/1jXbznI)
* Pfizer Inc dropped its pursuit of British rival AstraZeneca Plc, leaving both drug makers to overcome aging pipelines and market pressures alone. Pfizer had been chasing AstraZeneca since November in an effort to create the world’s biggest pharmaceutical company. (http://ift.tt/1jXbwIK)
* Wal-Mart Stores Inc needs a more independent board in order to improve directors’ handling of a protracted foreign-bribery probe and executive pay, a prominent proxy adviser said. Institutional Shareholder Services Inc, which advises big shareholders like mutual funds how to vote on corporate ballots, is concerned the company has not disclosed which, if any, of its executives might be found culpable in an investigation into alleged bribery overseas. (http://ift.tt/1inxDCu)
* Intuit Inc has agreed to buy bill-payment service Check Inc. for $360 million, according to two people familiar with the situation. The deal was signed on Friday and the two companies plan to announce it Tuesday, one of the people said. (http://ift.tt/1jXbznO)
* Federal and state officials are conducting probes into for-profit colleges over concerns that schools are marketing career-training programs that lack proper accreditation for students in certain fields, according to government agencies and regulatory filings. (http://ift.tt/1inxFKG)
FT
ECB president Mario Draghi warned that credit constraints were adding to disinflationary pressures in stressed countries, and said weak lending risks were derailing the eurozone’s fledgling recovery.
Drugmaker Pfizer officially dropped its bid for UK pharmaceutical giant AstraZeneca on Monday, marking a rare failure for the U.S. company that has made a series of large acquisitions until now.
Rosneft and BP Plc signed an agreement to jointly explore for hard-to-recover oil in Russia, the first major deal for the state-run Russian oil company since the West imposed sanctions over Ukraine in March.
Swedish telecoms equipment maker Ericsson warned that lack of public sector expenditure in next generation networks was resulting in lessening returns on the development the company made in Europe, which is at the risk of falling behind other regions.
Four of Europe’s 10 biggest car manufacturers including General Motors, BMW, Fiat and Hyundai would miss carbon dioxide emission reductions targets, and could face penalty according to an report by think-tank Transport & Environment.
NYT
* On the final day for Pfizer Inc to decide whether to abandon the plan, it said it did not intend to make an offer for AstraZeneca Plc. Last week, the British company rejected what Pfizer had called its final offer. The cash-and-stock bid, which valued AstraZeneca at about $119 billion, would have created the world’s largest drug company. (http://ift.tt/1jXbznQ)
* In a sign of the growing potential under the federal health care law, several insurers that have been sitting on the sidelines say they will sell policies on the new exchanges in the coming year, and others plan to expand their offerings to more states. (http://ift.tt/1inxDCA)
* Martin Lipton, the superlawyer, has advised hundreds of boards of directors in the midst of crises. Now, however, Lipton is grappling with a board governance crisis of his own. As chairman of New York University’s board of trustees, Lipton has been dealing with revelations that the university’s much-heralded new campus in Abu Dhabi might have been the product, in part, of rights abuses of foreign laborers. (http://ift.tt/1jXbwZ6)
* Bill Gates, who as the richest American has become one of the foremost advocates of philanthropy, has reduced the pace of his own giving to the Bill & Melinda Gates Foundation over the last decade. After starting the foundation with gifts of $356 million from 1994 to 1997, Gates, the co-founder of Microsoft Corp, vastly expanded it into the nation’s largest with a burst of gifts totaling $24.6 billion over the next four years. Since then, however, he has dialed back this giving. (http://ift.tt/1jXbznU)
* A law that allows the government to read email and cloud-stored data over six months old without a search warrant is under attack from technology companies, trade associations and lobbying groups, which are pressing Congress to tighten privacy protections. Federal investigators have used the law to view content hosted by third-party providers for civil and criminal lawsuits, in some cases without giving notice to the individual being investigated. (http://ift.tt/1inxDCC)
Canada
THE GLOBE AND MAIL
* Canadian Prime Minister Stephen Harper is under mounting pressure to make the Supreme Court appointment process more transparent and less ideological, after revelations that four of the government’s six candidates were from a court that was ultimately ruled ineligible. (http://ift.tt/1jXbwZa)
* Toronto Mayor Rob Ford is on the sidelines, but the city’s controversial leader remains a strong presence among the candidates who want to replace him, with contenders jockeying for position as the best choice to continue his agenda or move away from it. (http://ift.tt/1inxDCG)
Reports in the business section:
* Rogers Communications Inc’s Chief Executive Guy Laurence believes a new cellular carrier would not have the ability to invest in Canada’s capital-intensive wireless market and succeed. (http://ift.tt/1jXbwZc)
NATIONAL POST
* The Muslim Brotherhood has established a “significant presence” in Canada, says a study released Tuesday that asks whether the government should follow the lead of the United Kingdom and launch an investigation into the group. (http://ift.tt/1inxDSU)
* Fawzi Ayoub was a hijacker, international terrorist operative and senior member of Hezbollah. He was also a naturalized Canadian citizen, but on Monday Lebanese media reported he was dead, killed in an ambush by Syrian rebels. (http://ift.tt/1jXbwZe)
FINANCIAL POST
* Canada’s construction industry faces a major shakeup in the wake of the proposed merger of cement makers Holcim Ltd and Lafarge SA as the country’s competition watchdog eyes forced asset sales that could attract significant interest from bidders. (http://ift.tt/1inxG15)
* Wal-Mart Stores Inc has confirmed it laid off hundreds of employees across Canada earlier this month in a move to rework its management structure. The retailer said it eliminated 750 jobs, which it says represented less than one per cent of staff, after testing a new management structure in select stores. (http://ift.tt/1jXbzEe)
China
CHINA SECURITIES JOURNAL
– The insurance industry’s total assets have exceeded 9 trillion yuan ($1.44 trillion) so far, sources close to the China Insurance Regulatory Commission (CIRC) said. Risk management will be a priority for the regulator for the year.
– Investigations of insider trading in the fund management industry should be formalised despite possible shocks to publicly offered funds, the newspaper said in an editorial.
– Moody’s Investor Service downgraded its outlook on China’s property development sector to “negative” from “stable” amid growing pessimism about the industry among foreign investors.
SHANGHAI SECURITIES NEWS
– The preferred share issuance plan by Shanghai Pudong Development Bank Co Ltd has won shareholders’ approval. The fundraising is aimed at supporting its transformation into a large bank and achieving a more balanced structure involving its wholesale, retail and capital businesses.
SECURITIES TIMES
– China’s central government published its plans and targets for energy saving for this year and the next. Energy-saving services will be regulated under the “negative list”, which explicitly sets business boundaries and opens the gates for a wider range of unlisted companies.
21ST CENTURY BUSINESS HERALD
– New loans of China’s “big four” state-owned banks have only reached 130 billion yuan as of May 25, sources said.
CHINA DAILY
– The U.S. Justice Department indicted five individuals of the People’ Liberation Army, saying they had hacked into the computers of U.S. companies for the benefit of Chinese state-owned enterprises (SOEs). The act is seen as Washington’s attempt to draw a fine line between spying to benefit particular companies, which it regards as illegitimate, and spying to benefit the economy, which it seems to regard as legitimate.
PEOPLE’S DAILY
– As of the first quarter of 2014, 53 SOEs have invested in 685 projects in Xinjiang, with the actual investment amount reaching 590.4 billion yuan.
Britain
The Telegraph
PFIZER BOSS IAN READ HITS BACK OVER ASTRAZENECA
Ian Read told the Telegraph that the rules capping drug prices are discouraging investment in Britain, and are “inconsistent” with the government’s apparent desire to attract research and development.
LLOYDS POISED TO LAUNCH TSB FLOAT
Lloyds Banking Group is poised to fire the starting gun on the highly anticipated stock market flotation of TSB <IPO-TBS.L>, which will try to win the support of retail investors by giving them bonus shares.
The Guardian
VINCE CABLE VOWS GOVERNMENT WILL TACKLE ZERO-HOURS CONTRACT ABUSES
The business secretary, Vince Cable, has said the government will tackle abuses of zero-hours contracts once a fuller picture of the number of employers using the controversial labour-hiring system becomes available.
COLES AND WOOLWORTHS URGE DEREGULATION OF RETAIL TRADING HOURS
The supermarket giants Coles and Woolworths have called on the federal government to lead the states towards a deregulation of retail trading hours, citing bizarre rules that dictate when a shop can or cannot trade.
The Times
ASTRA PINS HOPES ON TRIALS AFTER PFIZER EXIT
(http://ift.tt/1inxDT7) Pfizer’s official declaration that it had withdrawn its offer will shift the spotlight on to Pascal Soriot, the chief executive of AstraZeneca, to justify his reasons for blocking a deal as he is set to attend the unveiling of the trial results of two lung cancer treatments at the American Society of Clinical Oncology this weekend.
TSB SWEETENS THE PILL OF NO DIVIDENDS WITH FREE SHARES
Lloyds Banking Group will promise one free TSB <IPO-TBS.L> share for every 20 bought and held for a year by retail investors as it formally sets out the intention to float announcement.
Sky News
PFIZER WALKS AWAY FROM 69 BLN STG ASTRAZENECA DEAL
U.S. firm Pfizer has confirmed it will not make another offer for British pharmaceuticals group AstraZeneca as a deadline expired for it to lodge a formal bid.
BLACKSTONE IN JOINT BID FOR FRIENDS’ TAX ARM
The private equity giant Blackstone has joined forces with a US-based specialist insurer to table a bid for the tax planning arm of Friends Life, the FTSE-100 financial services group.
Fly On The Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
Domestic economic reports scheduled today include:
Durable goods orders for April at 8:30–consensus down 0.8% for the month
S&P Case-Shiller 20-city composite index for March at 9:00–consensus up 0.7%
FHFA house price index for March at 9:00–consensus up 0.5%
Consumer confidence for May at 10:00–consensus 83.0
ANALYST RESEARCH
Upgrades
AMC Entertainment (AMC) upgraded to Buy from Neutral at B. Riley
Brooks Automation (BRKS) upgraded to Buy from Neutral at B. Riley
Cepheid (CPHD) upgraded to Buy from Hold at Needham
Cinemark (CNK) upgraded to Buy from Neutral at B. Riley
Cisco (CSCO) upgraded to Buy from Hold at Deutsche Bank
Credit Suisse (CS) upgraded to Buy from Hold at Deutsche Bank
Guidewire (GWRE) upgraded to Neutral from Sell at Citigroup
Henkel (HENKY) upgraded to Neutral from Underperform at Credit Suisse
Legacy Reserves (LGCY) upgraded to Neutral from Underweight at JPMorgan
NRG Energy (NRG) upgraded to Conviction Buy from Buy at Goldman
Office Depot (ODP) upgraded to Buy from Neutral at Goldman
Palo Alto (PANW) upgraded to Buy from Neutral at Nomura
Sherritt (SHERF) upgraded to Outperformer from Sector Performer at CIBC
Splunk (SPLK) upgraded to Outperform from Market Perform at Northland
Youku Tudou (YOKU) upgraded to Neutral from Underweight at HSBC
Downgrades
AstraZeneca (AZN) downgraded to Sell from Hold at Societe Generale
Hudbay Minerals (HBM) downgraded to Sector Performer from Outperformer at CIBC
NTELOS (NTLS) downgraded to Hold from Buy at Jefferies
NextEra Energy (NEE) downgraded to Buy from Conviction Buy at Goldman
Oiltanking Partners (OILT) downgraded to Hold from Buy at MLV & Co.
ResMed (RMD) downgraded to Underperform from Market Perform at Northland
Staples (SPLS) downgraded to Sell from Neutral at Goldman
Initiations
Aegerion (AEGR) initiated with a Sell at Goldman
Ares Management (ARES) initiated with a Neutral at Goldman
Ares Management (ARES) initiated with an Outperform at Keefe Bruyette
Ares Management (ARES) initiated with an Overweight at JPMorgan
Burger King (BKW) initiated with an Equal Weight at Morgan Stanley
Gramercy Property Trust (GPT) initiated with a Buy at BofA/Merrill
Oiltanking Partners (OILT) initiated with a Market Perform at Wells Fargo
Papa Murphy’s (FRSH) initiated with a Buy at Jefferies
Papa Murphy’s (FRSH) initiated with an Outperform at RW Baird
Papa Murphy’s (FRSH) initiated with an Outperform at William Blair
Quotient (QTNT) initiated with a Buy at UBS
Sabre (SABR) initiated with a Buy at BofA/Merrill
Sabre (SABR) initiated with a Buy at Deutsche Bank
Sabre (SABR) initiated with a Buy at Goldman
Sabre (SABR) initiated with a Buy at Jefferies
Sabre (SABR) initiated with an Overweight at Morgan Stanley
COMPANY NEWS
Amgen (AMGN) announces FDA approval of Vectibix in combination with FOLFOX
Gentiva Health (GTIV) adopts shareholders rights plan
Pfizer (PFE) confirms it won’t bid for AstraZeneca (AZN) after rejection of proposal
BioCryst (BCRX) announces positive results from OPuS-1, a trial of BCX4161
China Automotive (CAAS) announces special dividend of 18c per share
Stoneridge (SRI) to sell wiring business to Motherson Sumi Systems for $65.7M
Willis Group (WSH) acquires 75% controlling stake in Max Matthiessen for $205M
NEWSPAPERS/WEBSITES
Apple (AAPL) asks court to ban nine Samsung products, Re/code says
Bank of America (BAC) found $4B error after Fed wording change, WSJ reports
Barnes & Noble shares could double, Barron’s says
Canada looks into GM (GM) crashes amid faulty switch complaints, Reuters says
Credit Swiss (CS) tax case sparks probe of 13 other banks, Bloomberg says
Google (GOOG) considering buying connected camera maker, The Information says
Intuit (INTU) to acquire Check Inc. for $360M, WSJ reports
Sears (SHLD) could drop over 50%, Barron’s says
Tyson Foods (TSN) looks appealing, Barron’s says
U.S. regulators back plan to shift trading onto exchanges, WSJ reports
via Zero Hedge http://ift.tt/1wefYGN Tyler Durden