MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Today - Wednesday, May 23, 2012
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5:19 AM Barclays (BCS) raised a net $5.5B from the divestment of its 19.6% stake in BlackRock (BLK), selling 26.2M shares to money managers for $160 each and 6.38M shares to BlackRock for $156.80. There's also a greenshoe option of 2.6M shares. The sale will increase Barclays' Tier 1 capital ratio by about five basis points as it looks to meet Basel III requirements. Comment!
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4:22 AM BofA (BAC) will buy back $330M of home loans from Freddie Mac (FMCC.OB) after flaws were found in how the loans were created. Though a relatively small re-purchase, the bank's overall costs tied to defective home loans have totaled more than $42B so far. Comment!
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3:13 AM Ahead of its investor conference today, MetLife (MET) outlines its strategic value plan. Highlights: By 2016, increase its ROE to 12-14% from 10.3% last year, grow emerging markets business to 20% or more of operating earnings, shift its product mix toward protection products and away from more capital-intensive products, and re-focus its U.S. business. Comment!
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Tuesday, May 22, 2012
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5:17 PM Massachusetts subpoenas Morgan Stanley over the Facebook IPO amid allegations about leaked negative views. MS -1.4% AH. 11 Comments
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3:18 PM Facing growing losses from its exposure to Greece (an ill-fated 2006 purchase of Emporiki Bank), France's Credit Agricole is again applying for assistance from the Greek central bank. There is little reason, however, to think the BoG will change its stance. Credit Agricole -74% Y/Y. Comment!
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2:56 PM The SEC and Finra look set to launch separate investigations of the Facebook IPO. Finra Chief Rick Ketchum calls allegations analysts for the lead underwriters leaked negative views about FB to select clients ahead of the IPO, "a matter of regulatory concern." 6 Comments
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1:00 PM JPMorgan is sued on behalf of its employees, accused of violating its duties to 401(k) and other retirement plan participants by including JPM as an investment choice and hiding the stock's risk. Also named in the suit are individuals, including Jamie Dimon and Ina Drew. Shares are finally getting a bounce today, +5.3%. 4 Comments
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12:50 PM While not arguing against the reinstatement of Glass-Stegall, Andrew Ross Sorkin looks to explode the "myth" that it would have prevented the financial crisis. Bear Stearns, Lehman, Merrill Lynch, AIG, Fannie Mae and Freddie Mac had nothing to do with Glass Stegall, nor did the provision of lots of dodgy loans. 2 Comments
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12:48 PM With the end of the post-IPO quiet period at hand, analysts are out with calls on Oaktree (OAK). The leading bulls are at Morgan Stanley which says the firm's "countercyclical" strategies make it a "natural complement" to Blackstone. Among the bears is KBW, which calls the stock inexpensive but says the opportunity for Oaktree to profit from distressed strategies "has moderated." 1 Comment
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11:36 AM A bull on mortgage REITs, Dividend Master nevertheless unloads American Capital Agency (AGNC) and American Capital Mortgage (MTGE). AGNC's and MTGE's share prices tower by about 10% over their book values ($29.06 and $21.78 respectively, as of 3/31). Expect secondaries soon to "monetize the premium." 19 Comments
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11:08 AM SEC Chairwoman Mary Schapiro tells the Senate Banking Committee that the agency will look into the "appropriateness and completeness" of JPMorgan's (JPM) financial reporting following its $2B+ trading losses. Schapiro was speaking at hearings to examine implementing derivatives reform. Comment!
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9:41 AM American Express (AXP) expands its push into the Social Network, going after the FarmVille crowd by rolling out a line of co-branded prepaid cards with Zynga. Users won't need a credit check, but will need to sign up for a Serve account, which can be funded from existing bank accounts, or debit/credit cards. Comment!
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9:14 AM Next targets for cost-cutting at MetLife (MET) may be its annuities and U.S. retail life insurance businesses, suggests Macquarie's Sean Dargan. "The company can achieve higher returns elsewhere," he says, and indeed the company appears to be focusing more on growth prospects in emerging markets. Comment!
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8:55 AM No capital has disappeared; JPMorgan's CIO losses just represent a shift in money from one entity to others. Among the those scoring gains either for themselves or clients are Goldman Sachs and Bank of America. Boaz Weinstein's Saba Capital is reportedly +16% in May after publicly recommending buying the security JPM was short. 1 Comment
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8:06 AM Late to the mutual fund game, Wells Fargo (WFC) looks to aggressively grow its $444B unit internationally, taking advantage as European firms pull in their horns. Key, says Morningstar, will be overcoming the perception that bank and insurance-run mutual funds are among the most expensive. 1 Comment
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7:43 AM CME Group has been eliminated from the bidding process to purchase the London Metal Exchange (LME), say sources, leaving just the ICE and Hong Kong Exchanges and Clearing as possible suitors. Comment!
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Monday, May 21, 2012
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6:54 PM Hampton Roads Bankshares (HMPR) is raising up to $95M through a combined $50M common stock private placement and a public rights offering at $0.70 per share. Shares -15.9% AH. 1 Comment
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5:12 PM Property insurer Old Republic (ORI) announces a partial leveraged buyout and planned spinoff of its Republic Financial Indemnity Group's stock which will establish RFIG as a separate publicly-held company. ORI +5.6% AH. 2 Comments
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4:43 PM Spain's banks are likely to have property-related losses in the €216-€260B range, says the IIF, which used the experience of Ireland's banks as a benchmark. The lenders have thus far reserved about €110Bm, and will generate more this year, but could need €50-60B in assistance from the government. 1 Comment
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2:29 PM Goldman Sachs downgrades XL Capital (XL -1%) to Sell, believing XL’s professional liability-heavy book, along with last year's hiring ramp-up, will make it difficult to see margin expansion despite moderately improved pricing. "Margin improvement at XL will lag peers with a lower expense load or without books of business that require fixing." Comment!
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