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Frontrunning: March 10

  • Dollar at 12-year peak versus euro, emerging markets spooked (Reuters)
  • CIA sought to hack Apple iPhones from earliest days (Reuters)
  • Draghi Urged Greece to Allow Troika Back Before It’s Late (BBG)
  • Brent crude dips below $58 on strong dollar and supply (Reuters)
  • Credit Suisse replaces CEO Dougan with Prudential's Thiam (Reuters)
  • More "distressed" energy M&A: Verisk buys Wood Mackenzie for £1.85bn (FT)
  • Prepare for a surge in defaults: Investors Are Buying Stocks and Bonds From Energy Producers Amid Oil Price Drop (WSJ)
  • Private equity executive ordered to pay £72m to ex-wife (FT)
  • Democratic donors unfazed by Hillary Clinton's use of private email (Reuters)
  • Expensive Hepatitis C Medications Drive Prescription-Drug Spending (WSJ)
  • 'ISIS Hackers' Almost Certainly Not ISIS Hackers (NBC)
  • 1MDB Makes Payment on Dollar Bonds, Price Slumps to Record Low (BBG)
  • Republican letter takes aim at Iran talks (FT)
  • Denmark Lifts Euro-Peg ‘Tsunami Warning’ as Speculators Defeated (BBG)
  • Hermès Designer Steps Out of the Shadows (WSJ)
  • BlackRock Plays China, India Growth Story Through Corporate Debt (BBG)

 

Overnight Media Digest

WSJ

* Credit Suisse Group is poised to replace long-serving Chief Executive Brady Dougan with Tidjane Thiam, the current CEO of Prudential Plc. (http://nyti.ms/1KO6iwr)

* The battle between Congress and the White House over U.S.-led nuclear talks with Iran got nastier Monday as Obama chastised Senate Republicans who wrote directly to Iran's leaders to criticize U.S.-led nuclear talks. (http://on.wsj.com/1F5CWoF)

* General Motors Co's decision to spend $5 billion on share repurchases after pressure from hedge funds shows the tensions between managers and prominent investors over the best use of corporations' rising cash balances. (http://on.wsj.com/1CYhm5Z)

* Simon Property Group Inc, the largest mall owner in the United States, launched a $16 billion unsolicited bid for one of its biggest rivals, Macerich Co, as it seeks to gain scale amid an oversupply of retail space and changing habits of U.S. shoppers. (http://on.wsj.com/1NCOl33)

* The stress-test process is being integrated into the U.S. Fed's year-round supervision of banks, rather than being squeezed into a monthslong sprint each year, Fed officials say. (http://on.wsj.com/197AzWz)

* Apple Inc showed off its much-anticipated smartwatch at an event Monday, highlighting the product's look and features, as the tech giant searches for its new growth driver. (http://on.wsj.com/1BrmDzK)

* Hermes International SA's new designer, Nadège Vanhee-Cybulski, made her debut at Paris fashion week. Focusing on clothes instead of cultivating her personality, she is very much in line with the upper-crust label. (http://on.wsj.com/1C3r6fr)

* Alibaba Group Holding Ltd is shuffling the top ranks at its Chinese shopping platforms amid challenges the e-commerce giant's marketplaces have faced with counterfeit goods and other problems. (http://on.wsj.com/1HrCeRS)

 

FT

Prudential PLC Chief Tidjane Thiam is slated to replace Credit Suisse Group AG's Brady Dougan as Chief Executive, according to people familiar with the matter.

U.S. regulators are insisting several Commerzbank AG executives resign as part of a $1.45 billion settlement for anti-money laundering breaches and sanctions laws.

British Labour Party's Public Accounts Committee chair Margaret Hodge urged Rona Fairhead to quit as BBC Trust chairwoman, accusing her of being either "incredibly naive or totally incompetent" in her role at HSBC Holdings Plc over Swiss tax evasion scandal.

Barclays Plc is assigning some of its post-trade processing and regulatory reporting obligations to SunGard, in a deal that the IT service provider said the bank would benefit from about 20 percent of cost cuts.

 

NYT

* Facing Western sanctions and low oil prices, Russian companies are lining up for subsidies from the government. But the demand for bailouts is quickly outstripping the supply of money, raising the prospect of an economic crisis (http://nyti.ms/18wSgNV)

* Brady Dougan is preparing to step down as chief executive of Credit Suisse Group, people briefed on the matter said on Monday, ending his tenure as one of the longest-serving chieftains of a global banking powerhouse. (http://nyti.ms/1MndTxs)

* HBO has linked with Apple Inc for the start of its much-anticipated Internet streaming service. Called "HBO Now," the service does not require a traditional TV subscription and will be available exclusively on Apple devices when it makes its debut in early April, the companies announced on Monday. (http://nyti.ms/1GyxVqm)

* Eric Schneiderman, the New York State attorney general, announced Monday that his office had reached a sweeping settlement with credit reporting agencies to overhaul their approach to fixing errors and their treatment of medical debts on consumers' reports. (http://nyti.ms/1KOIVTv)

 

Canada

THE GLOBE AND MAIL

** The International Monetary Fund is raising red flags about Canada's housing market, warning that moves by Ottawa in recent years to tighten mortgage lending standards and boost oversight of the country's financial system haven't gone far enough. (http://bit.ly/1NDxg93)

** Ontario Premier Kathleen Wynne is crafting a plan to sell shares in Hydro One Inc, a high-stakes privatization manoeuvre that goes beyond anything her government has previously considered in its bid to raise billions of dollars to build new infrastructure. (http://bit.ly/1EwYuLS)

** From copper miners to the oil patch, plunging commodity prices are taking a toll on employment in Western Canada, a trend employers see persisting for at least another three months. While most Canadian companies expect relatively steady hiring in the next quarter, miners in Western Canada are more likely to cut staff, the latest Manpower Inc employment survey shows. (http://bit.ly/187oQGi)

NATIONAL POST

** The world's biggest bond manager, Pacific Investment Management Co said on Monday it is selling off Canadian government bonds, in favour of provincial bonds, amid growing frustration with the Bank of Canada's unpredictable interest rate policies. (http://bit.ly/1MnWuVx)

** Calling the Ontario government's campaign against sexual violence "sexist," a men's issues group unveiled a new billboard paid for by the Canadian Association for Equality in downtown Toronto on Monday in an attempt to draw attention to male victims of domestic abuse. (http://bit.ly/1C1hcJK)

** The federal government has carried through on its promise to appeal a court ruling that invalidated a policy forbidding women from covering their faces when being sworn in as citizens. In a notice filed on Monday with the Federal Court of Appeal, lawyers for the minister of citizenship and immigration said a federal judge committed several errors in fact and law, including "misapprehending, misconstruing or failing to consider the evidence before the court." (http://bit.ly/1xa8pPP)

 

Hong Kong

SOUTH CHINA MORNING POST

-- A high-ranking Macau prison officer accused of taking lavish bribes from a inmate in return for special protection behind bars has become the latest victim of Beijing's campaign to clean up the city. The chief prison officer was showered with gifts for allegedly "turning a blind eye" to prisoner's "illegal acts", according to Macau's Commission Against Corruption. (bit.ly/1F24yuU)

-- Guangdong Free Trade Zone will be launched on March 18, soon after the National People's Congress, a government backed trade association and a source close to the matter said. Guangdong Cross-Border E-Commerce Association said on its official microblog that Communist Party head of Guangdong Hu Chunhua and the province's governor Zhu Xiaodan would attend the unveiling ceremony. (bit.ly/1wUQ9zk)

-- Ping An Bank, a unit of the mainland's insurance giant Ping An Insurance (Group), is looking to set up a subsidiary in Hong Kong by hiring up to 60 people, as part of the group's expansion plan to become China's HSBC. (bit.ly/196YVzN)

THE STANDARD

-- China's commerce minister has hit out at parallel traders for taking advantage of cheaper goods in Hong Kong for resale in the mainland. Zhang Mao, who heads the State Administration of Industry and Commerce, said parallel trading has adverse effects on Hong Kong people and mainland retailers, and departments will be cooperating to resolve the situation. (bit.ly/1BkOO4t)

-- Cathay Pacific Airways and the International Air Transport Association both agree that the "users-pay" principle is the way to go on funding construction of the third runway at the Hong Kong airport - but oppose any advance charges until the project is completed. (bit.ly/1BkQ9sh)

HONG KONG ECONOMIC JOURNAL

-- Chinese People's Political Consultative Conference Standing Committee member Henry Tang proposed loosening restrictions on cross-border yuan remittances at China's annual parliament meeting, allowing Hong Kong residents to remit yuan through their own accounts in the mainland as well as accounts of the others.

-- Mobile online games developer ICC Inc said it proposed to transfer listing of its shares to the main board in Hong Kong from the Growth Enterprise Market in a bid to enhance its profile and public recognition and to increase the trading liquidity of the shares.

Britain

The Times

QUIT OR BE SACKED, HODGE TELLS BBC HEAD

The head of the BBC's governing body, Rona Fairhead, faced calls to quit after she was accused of being "either incredibly naive or totally incompetent" when she was a non-executive director of HSBC Holdings Plc.(http://thetim.es/1Bqtb1G)

PUBLIC SECTOR HIRING SPREE BEFORE ELECTION

The public sector is hiring at the highest levels in four years as the government strengthens frontline services before May's general election. Strong jobs growth in health and education is planned over the next few months in a "pre-election hiring spike", according to ManpowerGroup Inc, the recruitment company.(http://thetim.es/1BqtI3A)

The Guardian

HSBC CHIEF ADMITS HIS TAX AFFAIRS 'FURTHER DAMAGED BANK'S REPUTATION'

HSBC Holdings Plc's chief executive, Stuart Gulliver, conceded in front of MPs that his personal tax and banking affairs are further damaging the reputation of the scandal-hit bank.(http://bit.ly/1Bquqh8)

BARCLAYS BOARD MEMBER TOLD TO RESIGN BY UK'S LARGEST INVESTOR BODY

The call for the immediate departure of Sir John Sunderland, who is chairman of Barclays PLC's remuneration committee, is being made by the Local Authority Pension Fund Forum (LAPFF) - which unites 64 public sector pension funds with combined assets of 150 billion pounds ($226.61 billion).(http://bit.ly/1BqvAJM)

The Telegraph

APPLE CONFIRMS RELEASE DATE AND PRICES FOR APPLE WATCH

Apple Inc's long-awaited Watch Sport, Watch and Watch Edition will go on sale in the UK on April 24, Apple has announced, and will be available for pre-order from April 10, with prices starting from 299 pounds ($452), 479 pounds ($724) and 8,000 pounds ($12,086) respectively. (http://bit.ly/1BqwrtV)

DEFIANT GREECE AT DAGGERS DRAWN WITH EU CREDITORS

Relations between Greece and Europe's creditors are dangerously close to a breaking point. Both sides have issued ultimatums, each insisting angrily on fixed positions and lashing out at each other with barely concealed animosity.(http://bit.ly/1HqnTVX)

Sky News

U.S. CHIEF WELLS IS THE NEW 'MAN FROM THE PRU'

Mike Wells, who is president and CEO of Jackson National Life Insurance, has been chosen by the board of Prudential PLC to replace Tidjane Thiam later this year.(http://bit.ly/1BqA7M1)

HSBC TAX SCANDAL: ARGENTINA WANTS $3.5 BLN

Argentina has stepped up its tax evasion row with HSBC Holdings Plc by demanding it repatriate $3.5 billion (2.32 billion pounds) of cash allegedly moved to its Swiss private bank.(http://bit.ly/1HqkXIS)

The Independent

LLOYDS SHARE SALE EARNS TREASURY £500M

The Treasury has sold off taxpayer-owned shares in Lloyds Banking Group Plc during the past fortnight to earn 500 million pounds ($755.35 million). Lloyds said the Treasury's holding is now just below 23 percent

 

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
NFIB small business optimism index for February at 9:00--consensus 98.9
JOLTS job openings for January at 10:00--consensus 5.05M
Wholesale trade inventories for January at 10:00--consensus down 0.1%

ANALYST RESEARCH

Upgrades

ARRIS (ARRS) upgraded to Overweight from Equal Weight at Barclays
HP (HPQ) upgraded to Buy from Neutral at UBS
HSBC (HSBC) upgraded to Buy from Neutral at Goldman
Ixia (XXIA) upgraded to Buy from Hold at Wunderlich
Manpower (MAN) upgraded to Outperform from Neutral at Macquarie
NVIDIA (NVDA) upgraded to Buy from Neutral at BofA/Merrill
Orbital ATK (OA) upgraded to Overweight from Equal Weight at Barclays
Springleaf (LEAF) upgraded to Buy from Neutral at BofA/Merrill
Supervalu (SVU) upgraded to Buy from Hold at Deutsche Bank
Urban Outfitters (URBN) upgraded to Buy from Neutral at Janney Capital
XO Group (XOXO) upgraded to Buy from Hold at Stifel

Downgrades

AcelRx (ACRX) downgraded to Hold from Buy at Jefferies
Bitauto (BITA) downgraded to Hold from Buy at Brean Capital
Electronic Arts (EA) downgraded to Hold from Buy at Needham
Intrexon (XON) downgraded to Neutral from Buy at Mizuho
Lincoln Electric (LECO) downgraded to Hold from Buy at BB&T
MGM China (MCHVF) downgraded to Sell from Hold at Deutsche Bank
Melco Crown (MPEL) downgraded to Sell from Buy at Deutsche Bank
Sands China (SCHYY) downgraded to Sell from Hold at Deutsche Bank
Wynn Macau (WYNMF) downgraded to Sell from Hold at Deutsche Bank
Ziopharm (ZIOP) downgraded to Neutral from Buy at Mizuho

Initiations

AECOM (ACM) initiated with an Outperform at Credit Suisse
Affymetrix (AFFX) initiated with a Neutral at UBS
Agilent (A) initiated with a Neutral at UBS
Arcam (AMAVF) initiated with a Neutral at Piper Jaffray
Avalanche Biotechnologies (AAVL) initiated with a Buy at SunTrust
Bazaarvoice (BV) initiated with an Outperform at Northland
Becton Dickinson (BDX) initiated with a Neutral at UBS
Bruker (BRKR) initiated with a Neutral at UBS
Foundation Medicine (FMI) initiated with a Neutral at UBS
Genomic Health (GHDX) initiated with a Neutral at UBS
Hologic (HOLX) initiated with a Buy at UBS
Illumina (ILMN) initiated with a Buy at UBS
MGIC Investment (MTG) initiated with a Buy at BTIG
Mettler-Toledo (MTD) initiated with a Buy at UBS
Myriad Genetics (MYGN) initiated with a Sell at UBS
Nevro (NVRO) initiated with a Buy at CRT Capital
Nexvet Biopharma (NVET) initiated with an Outperform at Cowen
Pall Corp. (PLL) initiated with a Neutral at UBS
PerkinElmer (PKI) initiated with a Buy at UBS
QEP Resources (QEP) initiated with a Neutral at SunTrust
QIAGEN (QGEN) initiated with a Buy at UBS
Radian Group (RDN) initiated with a Buy at BTIG
Stonegate Bank (SGBK) initiated with a Buy at Wunderlich
Synaptics (SYNA) initiated with an Outperform at Northland
Thermo Fisher (TMO) initiated with a Buy at UBS
VWR (VWR) initiated with a Neutral at UBS
Waters (WAT) initiated with a Neutral at UBS

COMPANY NEWS

Credit Suisse (CS) confirmed CEO Brady Dougan to step down from position, Prudential (PUK) CEO Tidjane Thiam has been appointed as the company's new CEO
Qualcomm (QCOM) increased quarterly dividend 14% to 48c per share and the board authorized the company to repurchase up to $15B of its common stock
Facebook's (FB) FriendFeed to shut down on April 9
Verisk Analytics (VRSK) to acquire Wood Mackenzie for $2.8B
Western Alliance (WAL) to acquire Bridge Capital (BBNK) for $425M
Skyworks (SWKS) to replace PetSmart (PETM) in S&P 500 as of March 11 close

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
CytRx (CYTR), Atento (ATTO), Surgical Care Affiliates (SCAI), Landauer (LDR), Qihoo 360 (QIHU), Atlas Financial (AFH), Global Brass and Copper (BRSS), XO Group (XOXO), Alexza Pharmaceuticals (ALXA), Millennial Media (MM), Primo Water (PRMW), ImmunoCellular (IMUC), Casey's General Stores (CASY), Urban Outfitters (URBN)

Companies that missed consensus earnings expectations include:
U.S. Auto Parts (PRTS), Mindray Medical (MR), Titan reports preliminary Q4 ex-items EPS (23c), Limoneira (LMNR), Westport (WPRT), United Natural Foods (UNFI), AcelRx (ACRX), Regional Management (RM)

Companies that matched consensus earnings expectations include:
iKang Healthcare (KANG), Korn/Ferry (KFY)

AECOM (ACM) backs FY15 adjusted EPS $2.75-$3.35, consensus $2.88
Qihoo 360 (QIHU) sees Q1 revenue $375M-$380M, consensus $374.03M
Limoneira (LMNR) sees FY15 EPS 42c-46c, consensus 45c
United Natural Foods (UNFI) now sees FY15 adjusted EPS $2.90-$2.99, consensus $2.97
Korn/Ferry (KFY) sees Q4 EPS 44c-50c, consensus 47c

NEWSPAPERS/WEBSITES

Safety agency to announce course of action for Lumber Liquidators (LL), NY Post reports
Twitter (TWTR) acquires live-video firm Periscope, Re/Code reports
Guy Wollaert to leave Coca-Cola (KO) at end of month, WSJ reports
Alibaba (BABA) names Jeff Zhang as head of marketplace websites, Reuters reports
Airbus (EADSY) considering new engines for A380 jet, WSJ reports

SYNDICATE

American Assets Trust (AAT) enters $8.1M common stock purchase agreement
BioScrip (BIOS) files rights for up to 200,000 units at $100 per unit
Callon Petroleum (CPE) files to sell 9M shares of common stock
Calumet Specialty Products (CLMT) files to sell 6M common units
Carnival (CCL) files automatic mixed securities shelf
CommunityOne files to sell 12.39M shares of common stock for holders
ContraVir Pharmaceuticals (CTRV) files $200M mixed securities shelf
EZCORP (EZPW) files $250M mixed securities shelf
Enbridge Energy (EEP) files to sell 8M Class A common units for limited partners
Imperva (IMPV) files to sell 3M shares of common stock
Main Street (MAIN) announces plan to offer shares of common stock
PS Business Parks (PSB) files automatic mixed securities shelf
Pinnacle Foods (PF) files to sell 14.3M shares of common stock for holders
Portola Pharmaceuticals (PTLA) files to sell $100M of common stock
Rosetta Resources (ROSE) files to sell 12M shares of common stock
Tetraphase (TTPH) announces offering of 3.5M shares of common stock
UIL Holdings (UIL) files automatic mixed securities shelf
West Corp. (WSTC) files to sell 11M shares of common stock
Zayo Group (ZAYO) commences follow-on offering of 16M shares
Zendesk (ZEN) files to sell $200M of common stock