- Secret Path Revealed for Chinese Billions Overseas (BBG)
- Traders Flood U.S. With $3.4 Trillion of Bond-Auction Demand (BBG)
- Just in time to cover bad earnings in a massive $3.8 billion “one-time charge”: Citi says to pay $7 billion to settle securities investigation (Reuters)
- Troubled Epirito Santo family loosens grip on Portugal’s BES (Reuters)
- BES puts in place new executives after central bank push (Reuters)
- Bank of China-CCTV drama may reveal power struggle in Beijing (SCMP)
- Portugal speeds up Banco Espírito Santo management changes (FT)
- Russia Vows to Respond After Shelling From Ukraine (BBG)
- Dark pool probe builds pressure on Barclays boss (Reuters)
- Ukraine forces end rebel airport blockade (Reuters)
- Obama Contends With Arc of Instability Unseen Since ’70s (WSJ)
- Oil Hedging Seen in Decline as Banks Exit Commodities (BBG)
- Renaissance Probed by Senate Panel on Tax Maneuver (BBG)
- North Dakota oil groups strike $6bn deal, Kodiak Oil acquired below its Friday closing price (FT)
- Investigators Probe the Ways a Swiss Broker Courted Libyan Business (WSJ)
Overnight Media Digest
* Thousands of Palestinians in the northern Gaza Strip fled their homes for UN shelters after the Israeli military warned residents to evacuate ahead of an intensified offensive. (http://on.wsj.com/U90kO2)
* As big banks with large trading operations report second-quarter earnings results this week, investors and analysts will be trying to find out whether the slowdown is a temporary funk or a lasting shift. (http://on.wsj.com/1m92WSB)
* Chinese prosecutors indicted a foreign husband-and-wife investigation team for illegally obtaining private information on Chinese citizens, in a case that has drawn attention to their work with U.K. drug giant GlaxoSmithKline and to China’s judicial system. (http://on.wsj.com/1nm2rF6)
* Spanish banks say a modest decline in bad loans marks a post-crisis turning point. But analysts warn that a more comprehensive measure of the banks’ health points to a longer road to recovery. (http://on.wsj.com/1n0rpzF)
* Central-bank economic models failed to foresee the storm that devastated the global economy in 2008. Stephen Poloz, the head of Canada’s central bank, is trying an alternative approach he thinks will have better foresight: actual human beings. (http://on.wsj.com/1r9BxYq)
* A $7 billion deal between Citigroup and the Justice Department expected to be unveiled Monday nearly fell apart one day last month. Government officials, frustrated by months of back-and-forth haggling, warned the bank that a lawsuit would be filed the next day. But hours before the deadline expired, the Justice Department put its plans on hold. (http://on.wsj.com/1oy2Jd0)
* General Motors Co Chief Executive Mary Barra returns to Capitol Hill this week for what may be her last and toughest hearings with U.S. lawmakers over the auto maker’s botched response to a faulty ignition switch that has landed GM in hot water with federal regulators and the Justice Department. (http://on.wsj.com/1oVcNjv)
* U.S. and U.K. investigators who are examining how Western investment firms won business in Gadhafi’s Libya are looking at Tradition Financial Services and parties that it held for Libyan officials in Marrakesh. (http://on.wsj.com/1q998lN)
* The U.K. government said it would stiffen laws governing foreign takeovers of British companies, potentially raising new hurdles for overseas acquirers. (http://on.wsj.com/1tGno6V)
Prosecutors from the U.S. Department of Justice are offering immunity deals to junior traders in London as they continue to investigate the alleged rigging of foreign exchange rates by banks and senior traders, according to sources.
Boeing said it was unlikely to increase revenue at its defence business before the end of the decade due to spending cuts by western governments, but vowed to compete aggressively for new U.S. military contracts that could provide growth after 2020.
North Dakota-based Whiting Petroleum said it would buy Kodiak Oil and Gas in an all-stock deal worth about $6 billion including debt.
The Bank of England has been lobbying for the easing of global capital requirements for small banks, concerned that the rules could make it harder for them to compete with larger rivals when offering mortgages and small business loans.
Some of the Bank of Cyprus customers whose deposits were seized as part of an extraordinary move to rescue the island from financial collapse are selling stakes in the bank at a discount.
* Sotheby’s, the blue-chip auction house, and eBay Inc plan to announce Monday that they have formed a partnership to stream Sotheby’s sales worldwide. (http://nyti.ms/WbEqeJ)
* On Monday, Illinois is expected to become the first state to bring legal action against debt settlement companies in connection with their student loan practices, contending in two separate lawsuits that Broadsword Student Advantage and First American Tax Defense duped vulnerable borrowers into paying for help that never arrived. (http://nyti.ms/1zAjYmP)
* BitTorrent, a purveyor of file-sharing technology that is widely used to gain free access to music and films, has come up with a bold proposition for its tens of millions of daily users: Spend $9.95 to help finance a planned new science fiction series and gain viewing rights to its eight episodes. Or fail to pay up, and the shows will never be made. (http://nyti.ms/U8XCYV)
* Swiss chocolate maker Chocoladefabriken Lindt & Spruengli AG is closing in on a deal to acquire Russell Stover Candies, the storied American boxed-chocolate maker, according to a person briefed on the matter. Earlier this year, another person briefed on the process said Russell Stover was expected to sell for about $1 billion. (http://nyti.ms/1yfblMN)
* Whiting Petroleum Corp on Sunday said it would buy Kodiak Oil & Gas Corp for $3.8 billion in stock, and assume $2.2 billion of Kodiak’s debt. (http://nyti.ms/1nvKrgg)
* The head of Boeing Co’s commercial aircraft division said on Sunday that he was optimistic that the United States Congress would ultimately agree to reauthorize funding to the Export-Import Bank, which guarantees billions of dollars in loans to foreign buyers of its airplanes. (http://nyti.ms/1nmeTol)
THE GLOBE AND MAIL
** The Canadian government has given itself broad new powers to share Canadian immigration files and other information with foreign governments – a practice that could have far-reaching implications for individuals who cross borders. (http://bit.ly/1jqqfMZ)
** Power has been restored to the remaining homes and businesses in Nova Scotia affected by a powerful post-tropical storm, but thousands of New Brunswickers remained without power more than a week after the system hit the Maritimes. (http://bit.ly/1kUfsWj)
Reports in the business section:
** Canada’s airlines and airports are gearing up to fight Ontario’s plan to more than double the tax on aviation fuel, arguing it will increase the number of Canadians traveling out of U.S. airports where taxes and fees are substantially lower. (http://bit.ly/1oVn4Ms)
** Carleton University journalism professor Allan Thompson will announce Monday that he wants to run as a Liberal candidate in the next federal election. Thompson, who covered federal politics during his 17-year career with the Toronto Star, will seek the Liberal nomination in the rural Ontario riding of Huron-Bruce, where he grew up. (http://bit.ly/1qXxqx2)
** Terrorists are deliberately placing people in the path of an Israeli offensive aimed at stopping rocket attacks from Gaza, says Prime Minister Stephen Harper. Harper says there is evidence that Hamas, listed by Canada as a terrorist organization, is using human shields in its attempts to stave off the Israeli offensive. (http://bit.ly/W2P0El)
** Royal Bank of Canada, which was looking to raise C$750 million ($698.6 million), ended up receiving orders of C$1-billion of 10-year Basel-111 compliant debt that can be called after five years. (http://bit.ly/1nwB8fY)
CHINA SECURITIES JOURNAL
– New local-currency loans extended by Chinese banks are expected to reach around 10 trillion yuan this year, up from 8.89 trillion yuan in 2013, as the government takes measures to boost China’s slowing economic growth, analysts forecast.
– Nobel laureate Thomas Sargent, while speaking at a global asset management conference in eastern Chinese city of Hangzhou, said he is still optimistic about the prospects of China’s economy despite the recent slowdown in its growth.
SHANGHAI SECURITIES NEWS
– China’s property market will not crash but is in a normal corrective period after a decade of rapid growth, said Qin Hong, head of the policy research institute at the Ministry of Housing and Urban-Rural Development.
– The luxury vehicle sector in China continued to expand in the first half of the year despite worries about a drop in sales due to the government’s frugality campaign.
– Police nationwide have arrested 108 Internet football gamblers and confiscated 18 billion yuan ($2.9 billion) in illegal assets during the FIFA World Cup in Brazil, the Ministry of Public Security said.
– Chinese President Xi Jinping on Sunday vowed to further enhance the comprehensive strategic partnership with Greece in a meeting with Greek Prime Minister Antonis Samaras. Xi stopped off in Greece on his way to South America, the second high-level visit to the southern European country in a month.
BANKS CASH IN AS MOUCHEL TAKES 500 MLN STG ROAD TO MARKET
Mouchel, the road repairs and outsourcing company, is believed to have appointed investment bank Rothschild to explore a stock market flotation or trade sale.
The company, swallowed by its banks during the financial crisis, is plotting a comeback that could value it at up to 500 million pounds.
BESTWAY EMERGES AS FAVORITE FOR CO-OP GROUP’S PHARMACIES
Bestway Group is expected to be named the preferred bidder this week for the 700 pharmacies put up for sale by the Co-operative Group. Bestway, which was competing against the likes of Lloyds Pharmacy, Alliance Boots and Carlyle, could pay about 600 million pounds.
GERMANY DRAWS UP DOSSIER TO CURB POWER OF GOOGLE, OTHERS
Germany’s Federal Cartel Office has drawn up a 30-page document with proposals that would muzzle Google if Berlin judged it too influential.
ARRIVA TO JOIN BATTLE FOR EAST COAST RAIL LINE
Arriva, the international arm of Germany’s Deutsche Bahn, has submitted plans for a new service linking West Yorkshire and Lincolnshire to London.
LLOYDS-OWNED TECH COMPANY EYES AIM LISTING
ULS Technology, 38-percent owned by the buyout unit of Lloyds Banking Group, is working with stockbrokers Numis on a possible AIM listing that could value it at up to 50 million pounds.
PATRON CAPITAL IN TALKS TO BUY PETROL STATIONS
Patron Capital, owner of the Powerleague football chain, is in talks to buy 450 Murco petrol stations across Britain for up to 200 million pounds.
PRIORY IN BID TO BUY RIVAL VOYAGE CARE FOR 400 MLN STG
Priory Group, owner of a chain of clinics known for treating celebrities’ addictions, is in talks to buy its smaller rival Voyage Care for about 400 million pounds.
PAYDAY FIRMS FACE CAP AS REGULATOR ACTS TO CURB PROFITS
Britain’s financial regulator, the Financial Conduct Authority, is preparing to impose a cap on the amount of interest charged by payday lenders in a bid to ease fears about profits in the sector. As early as Tuesday, the watchdog will set out details of an industry consultation which will lead to a cap being in place by the start of next year.
FRANCE HAS OPTION TO UP STAKE IN EUROSTAR
France has an option to buy the UK government’s 40 percent holding in Eurostar if a process to find another buyer is inconclusive, it has emerged.
Mail on Sunday:
CO-OP GIVES BANK 100 MLN STG TO HELP FILL 1.5 BLN SHORTFALL
The Co-operative Bank has received a 100 million pound cash injection from its former parent as part of attempts to fill a 1.5 billion pound black hole.
BRITISH BUSINESS BANK TO PUT UP 10 MLN STG VIA PEER-TO-PEER LENDER
The government-owned British Business Bank will next week begin lending 10 million pounds through peer-to-peer lender RateSetter.
FIRSTGROUP RULES OUT BREAKUP
FirstGroup PLC Chairman ruled out a break-up of the UK-based bus and rail group, saying the demands from U.S. activist investor Sandell Asset Management lacked financial logic.
OPPENHEIMER EUROPE CONSIDERS ADVISORY ROLE
The European arm of U.S. financial services group Oppenheimer & Co is considering entering the market for independent corporate advice.
$3.5 BILLION PULLED OUT OF FIDELITY FUNDS
Fidelity and Capital Group, the largest active fund managers, are losing market share to index trackers and niche rivals as changing investor demands reshape the $30 trillion mutual fund industry.
BOE EYES CURBS ON USE OF COCO BONDS
The Bank of England said it may limit the ability of a bank to use coco bonds when calculating its leverage ratio, or even prevent their use in the ratio altogether.
JIGSAW PLOTTING INTERNATIONAL EXPANSION
British fashion retailer Jigsaw, owned by the Robinson family, plans to open three international stores this year as part of its plan to expand in Asia, Europe and the Middle East.
CARE UK PLANNING 170 MLN STG INVESTMENT
Care UK, owned by private equity firm Bridgepoint, is investing more than 170 million pounds in building 26 new care homes, which will create more than 1,000 new jobs, as part of major expansion plans.
BT TO RING THE CHANGES BY RE-ENTERING MOBILE PHONE MARKET
British Telecom is set to return to the mobile phones market after a 13-year gap when it unveils its plans for a business-focused service on Thursday.
Fly On The Wall 7:00 AM Market Snapshot
No major domestic economic reports scheduled for today.
AllianceBernstein (AB) upgraded to Outperform from Market Perform at Keefe Bruyette
Apple (AAPL) upgraded to Overweight from Equal Weight at Barclays
Avago (AVGO) resumed with a Buy from Neutral at Citigroup
Brinker (EAT) upgraded to Overweight from Neutral at JPMorgan
Informatica (INFA) upgraded to Overweight from Equal-Weight at Evercore
Lear (LEA) upgraded to Overweight from Equal Weight at Barclays
NASDAQ (NDAQ) upgraded to Overweight from Equal-Weight at Evercore
NIC Inc. (EGOV) upgraded to Strong Buy from Outperform at Raymond James
Reynolds American (RAI) upgraded to Outperform from Sector Perform at RBC Capital
Signature Bank (SBNY) upgraded to Buy from Neutral at Sterne Agee
WhiteHorse Finance (WHF) upgraded to Buy from Hold at Wunderlich
Artisan Partners (APAM) downgraded to Market Perform from Outperform at Keefe Bruyette
Calamos (CLMS) downgraded to Underperform from Market Perform at Keefe Bruyette
Continental Building (CBPX) downgraded to Sector Perform at RBC Capital
Covidien (COV) downgraded to Neutral from Overweight at Piper Jaffray
Dana Holding (DAN) downgraded to Neutral from Buy at Goldman
DreamWorks Animation (DWA) downgraded to Neutral from Buy at B. Riley
E2open (EOPN) downgraded to Neutral from Buy at BofA/Merrill
FMC Corporation (FMC) downgraded to Hold from Buy at Jefferies
TripAdvisor (TRIP) downgraded to Neutral from Buy at Nomura
USG (USG) downgraded to Sector Perform from Outperform at RBC Capital
Visteon (VC) downgraded to Equal Weight from Overweight at Barclays
Wells Fargo (WFC) downgraded to Neutral from Overweight at JPMorgan
Ardelyx (ARDX) initiated with a Buy at Citigroup
Ardelyx (ARDX) initiated with an Outperform at JMP Securities
Charles Schwab (SCHW) initiated with a Buy at Jefferies
E-Trade (ETFC) initiated with a Hold at Jefferies
Foresight Energy (FELP) initiated with a Buy at Citigroup
Foresight Energy (FELP) initiated with a Buy at Stifel
Foresight Energy (FELP) initiated with a Neutral at Goldman
Foresight Energy (FELP) initiated with a Neutral at JPMorgan
Foresight Energy (FELP) initiated with an Overweight at Barclays
Foresight Energy (FELP) initiated with an Overweight at Morgan Stanley
Global Logistics Properties (GBTZF) initiated with an Overweight at Barclays
Intercept (ICPT) initiated with a Buy at Deutsche Bank
MTS Systems (MTSC) initiated with a Buy at Needham
Markit (MRKT) initiated with a Buy at BofA/Merrill
Markit (MRKT) initiated with a Buy at Deutsche Bank
Markit (MRKT) initiated with a Neutral at Citigroup
Markit (MRKT) initiated with a Neutral at Goldman
Markit (MRKT) initiated with a Neutral at JPMorgan
Markit (MRKT) initiated with a Neutral at UBS
Markit (MRKT) initiated with an Equal Weight at Barclays
Markit (MRKT) initiated with an Equal Weight at Morgan Stanley
Parnell (PARN) initiated with a Buy at Jefferies
Parnell (PARN) initiated with an Outperform at JMP Securities
Parnell (PARN) initiated with an Overweight at Piper Jaffray
TD Ameritrade (AMTD) initiated with a Hold at Jefferies
Veritiv (VRTV) initiated with an Overweight at Barclays
Viper Energy (VNOM) initiated with an Outperform at Wells Fargo
Viper Energy (VNOM) initiated with an Overweight at Barclays
Yelp (YELP) initiated with an Underweight at Evercore
ZS Pharma (ZSPH) initiated with an Outperform at BMO Capital
ZS Pharma (ZSPH) initiated with an Overweight at JPMorgan
Citigroup © reached $7B settlement to resolve mortgage probe
Shire (SHPG) said willing to recommend AbbVie’s (ABBV) GBP53.20 per share takeover offer
Whiting Petroleum (WLL) to acquire Kodiak Oil & Gas (KOG) in $6B transaction
AECOM (ACM) Technology to acquire URS (URS) for $56.31 per share
Abbott (ABT) to sell developed markets generics pharmaceuticals business to Mylan (MYL) in all-stock transaction valued at about $5.3B
Boeing (BA) selected as preferred bidder for Monarch Airlines fleet replacement
Yahoo (YHOO) acquired Israeli video startup RayV, terms not disclosed
AECOM backs FY14 EPS view in lower range of $2.50-$2.60, consensus $2.49
Platinum Group (PLG) reports Q3 EPS C(2c), one estimate 0c
Schmitt Industries Inc (SMIT) reports Q4 EPS (5c) vs. (12c) a year ago
Flexible Solutions (FSI) reports Q2 top-line revenue $4.08M, one estimate $4.1M
J.C. Penney (JCP) CEO successor search faces setback, WSJ says
YouTube (GOOG) mulls funding production to add premium content, Reuters reports
Sotheby’s (BID), eBay (EBAY) to stream auctions, NY Times reports
Boeing (BA) “comfortable” with range amid Airbus (EADSY) overhaul plan, Reuters says
Apple (AAPL) assures China iPhone no security risk, Bloomberg reports
ABI Research: Over 24M cars to be fitted with Apple (AAPL) CarPlay, DigiTimes reports
Lockheed Martin (LMT) to invest on offshoot of joint strike fighter program, WSJ says
Dover (DOV) shares could rise another 10%-15%, Barron’s says
GoPro (GPRO) could be vulnerable to smartphones, Barron’s says
OmniVision (OVTI) could see improvement after Apple (AAPL), Barron’s says
Orange SA (ORAN) shares could return 30% in next year, Barron’s says
Rayonier Advanced Materials (RYAM) could reward investors, Barron’s says
Johnson Controls (JCI) shares could rise 20%, Barron’s says
GameStop (GME), TJX (TJX), Staples (SPLS), Bed Bath & Beyond (BBBY), Whole Foods (WFM) look cheap, Barron’s says
Alcoa (AA) files $5B mixed securities shelf
Applied Genetic (AGTC) files to sell 2M shares of common stock
Memorial Production (MEMP) to offer additional 1.29M common units
inContact (SAAS) files to sell 4.26M shares for holders