10:56 am Petrobras Brasileiro announces that it has decided to
include tax debits in the Special Installment Program; negative
impact for Q3 results is R$2 bln, net of taxes (
PBR): Since the publication of the
above-mentioned regulatory instruments, Petrobras has been
reassessing its federal tax litigation in order to identify
eventual proceedings that can be included in the REFIS. These
debits refer to the non-collection of Withholding Income Tax on
remittances to the subsidiary Petrobras International Finance
Company in payment for the importation of oil and oil products
between 1999 and 2002, 2004, 2005 and from 2007 to 2012.
The inclusion of these debits, whose updated amount is R$6.0
billion, in the REFIS, will save the Company 50% by reducing the
liability to R$3.0 billion, R$876 million of which will be settled
with tax loss carryforwards. The total disbursement will therefore
be R$2.1 billion, R$1.26 billion of which from the conversion of
the court deposit to be paid definitively and the remainder to be
paid in installments, with disbursement of R$536 million in 2015
and R$ 333 million between 2016 and 2017.
The negative impact on the Company's results for the third
quarter of 2015 will be R$2.0 billion, net of taxes.
The decision to adhere to the program was based on the
potential financial benefits and on an analysis of risk based on
possible unfavorable decisions in both the legal and administrative
spheres. At the reporting date of the 2Q2015 financial statements,
this analysis was not complete, which only occurred on August 13,
2015. In addition, taking the issue to the judicial sphere would
require the constitution of guarantees, as well as a substantial
increase in the amount of the debt over time due to interest and
additional financial charges and the risk of the cancellation of
the Federal Tax Clearance Certificate, which would result in
significant losses for the Company. As the term for including
notified tax debits expires in September 2015, the Company is
continuing to reanalyze the litigation to identify other debits
that can be settled through the Program.
10:56 am Currency Commentary: Volatility Subdues
(:SUMRX):
The
Dollar Indexappeared ticketed for its first test of 96
support since July 9 but was able to bounce at 96.08. The index is
now back to the 96.30 level which is where the 50- and 100-smas
sit. Economic data was generally supportive of the September rate
hike story as PPI was hotter than expected while Industrial
Production outpaced expectations. The forward looking Michigan
Sentiment did undershoot consensus but only by a small margin.
The
eurois lower today but has been able to hold the 1.11 area
and, more importantly, the prior downward trend line. Q2 GDP
numbers have come in weaker than expected which has led to some
softness in the single currency. But the short term trend here
remains upward as the market continues to see signs of a Greek debt
deal getting competed. Greece passed the bill but defections in the
Syriza party are leading many to believe the government will fail a
confidence vote expected later this month. That would lead to snap
elections in the fall. Expectations are the a more centrist
coalition would end up seizing control.
The
poundhas pushed into the 1.56 level and is challenging
resistance levels at the 1.5660 area that has been in place over
the past month. The currency has been in a tight consolidation
range and there has been little in the way of news or sentiment to
change that pattern. So it will have a difficult task breaking out
from here.
The
yencontinues its uneventful ride through the 124 area. The
yen pattern has been pretty much like clockwork over the past two
years. Trade in a tight consolidation range until we get a
convergence of key moving average levels. Once this is hit it has
slipped lower. Right now we are in the consolidating phase which is
likely to continue for the foreseeable future (BONDX, FOREX).
10:52 am PennantPark Floating Rate Capital and MCG Capital (
MCGC) announce their shareholders have approved
the companies' merger agreement; closure expected on August 18,
2015 (
PFLT):
10:49 am American Water Works announces that Moody's has
upgraded its corporate credit rating to A3 from Baa1 (
AWK):
10:49 am Major averages slip further off morning highs, lagging
Nasdaq Comp -9.9 hovering just above its opening low -- Dow +16,
S&P +0.6 (:TECHX):
10:34 am Underperforming Nasdaq Comp -2.3 slips back into the
red but holding above early low (:TECHX): Relative sector
weakness in Semi SMH -1% and Biotech IBB -1% have weighed.
10:11 am S&P +3 trims slide off yesterday's high in half at
2087 and pauses -- Dow +38, Nasdaq Comp +1.2 (:TECHX):
9:54 am Technology Sector Summary: Tech Sector Trades In-line
With Broader Market (:SUMRX): The tech sector --
XLK(+0.2%) -- trades in-line with the broader market.
Semiconductors, meanwhile, display relative weakness as the
SOXindex trades -0.4%. Within the
SOXindex,
AMD(+1.1%) outperforms, while
ASML(-3.1%) lags. Among other major indices, the
SPYis trading 0.2% higher while the
QQQ+0.1% and the
NASDAQ +0.1% follow right behind. Among tech bellwethers,
INTC(+0.2%) has shown some relative strength while
GOOGL(-0.5%) lags.
Notable gainers following earnings:
GLOB(+1.6%) and
YY(+2.4%) reported bottom-line beats and
GLOBguided higher.
Notable laggards following earnings:
AZPN(-14.6%),
KING(-9.9%),
PCTY(-7.9%), and
ANY(-10.0%) despite beating bottom-lie estimates
Gainers on news:
LLNW(+1.1%) despite announcing a loss in a patent
infringement case against
AKAM(-1.0%)
Laggards on news:
AAPL(-0.1%) reportedly plans to delay its live TV service
until 2016
Among notable analyst upgrades:
CYBR(+2.5%) upgraded to Outperform from Market Perform at
Wells Fargo
ADS(+0.7%) upgraded to Overweight from Neutral at JP Morgan
In downgrades:
KING(-9.9%) downgraded to Neutral from Overweight at JP
Morgan
WEX(-0.9%) downgraded to Underweight from Neutral at JP
Morgan
9:52 am Tata Motors reports that global wholesales in July 2015,
including Jaguar Land Rover, were at 73,535 nos., lower by 8%, over
July 2014 (
TTM): Cumulative wholesales for this fiscal
at 3,07,017 nos., remained flat, over last fiscal. Global
wholesales of all Tata Motors' commercial vehicles and Tata Daewoo
range in July 2015 were 30,278 nos., lower by 3%, compared to July
2014. Cumulative commercial vehicles wholesales for this fiscal at
117,040 nos., remained flat, over last fiscal. Global wholesales of
all passenger vehicles in July 2015 were at 43,257 nos., lower by
12%, compared to July 2014. Cumulative passenger vehicles
wholesales for this fiscal at 189,977 nos., remained flat, over
last fiscal.
9:51 am Relatively limited trade persists but indices attempting
to work higher -- Dow +38, S&P +3.4, Nasdaq Comp +4.5
(:TECHX):
9:44 am FEMSA announces it will enter the drugstore business in
South America by confirming it would acquire a majority equity
stake in Grupo Socofar, which operates under the Cruz Verde and
Maicao banners (
FMX): The co announced that it has agreed
to acquire a majority equity stake in Grupo Socofar, a South
American drugstore operator based in Santiago, Chile. Socofar
operates 643 drugstores and 154 beauty stores throughout Chile
under the Cruz Verde and Maicao banners, respectively. In addition,
Socofar controls Farmasanitas in Colombia that operates over 150
pharmacies, in-site pharmacies and dispensary units under the Cruz
Verde/Farmasanitas banners.
The co is acquiring 60% of the equity of Socofar funded from
cash-on-hand.
The enterprise value of the company is $998 million, and for
the last twelve months ended June 2015, Socofar revenues were
$1,836 million.
The current controlling shareholders of the equity of Socofar
will remain as owners of 40% of the equity. FEMSA Comercio will
exercise day to day operating control, and the current controlling
shareholders will appoint two members to the Board, including the
role of Chairman so that they may continue to provide leadership
and operating experience to the organization.
9:42 am Opening Market Summary: Energy Sector Displays Early
Strength (:WRAPX): Equity indices began the trading day just
below their flat lines and they remain near those levels at this
time.
The energy sector (+0.5%) has charged out of the gate amid a
rebound in crude oil that has sent the energy component higher by
1.5% to $42.86/bbl. Meanwhile, the other commodity-related
sector-materials (+0.1%)-also trades in the green while the
remaining groups hover closer to their flat lines.
Elsewhere, Treasuries have extended their losses with the 10-yr
yield now up three basis points at 2.21%.
The preliminary reading of the Michigan Sentiment Index for
August will be released at 10:00 ET (Briefing.com consensus
93.7).
9:41 am Golar LNG announces that Chairman Frank Chapman has
decided not to stand for re-election at the next annual meeting;
the Board nominates Dan Rabun to potentially succeed Chapman (
GLNG): Rabun was, until May 2015, Chairman
of Ensco PLC (
ESV)
9:36 am Mixed bias in the early going -- Dow +4, S&P +1,
Nasdaq Comp -1.5 (:TECHX): Sectors that have helped to underpin
thus far this morning include: Gold Miners GDX, Crude Oil USO, Oil
Service OIH, Silver SLV, Energy XLE, Gold GLD, Social Media SOCL,
Auto.
9:31 am BNC Bancorp signs an agreement to acquire Southcoast
Financial Corporation (
SOCB), in a stock transaction valued at $95 mln
(
BNCN): Southcoast Financial (
SOCB), headquartered in Mt. Pleasant, South Carolina,
operates 10 branches in Mt. Pleasant, Charleston, Moncks Corner,
Johns Island, Summerville, Goose Creek and North Charleston, South
Carolina. As of June 30, 2015, Southcoast reported ~$506 million in
assets, $383 million in loans, and $361 million in deposits. Upon
completion of the transaction, BNC is expected to have
approximately $6.0 billion in assets, $4.5 billion in loans, and
$4.9 billion in deposits.
The transaction is expected to be immediately accretive to BNC's
fully diluted earnings per share and tangible book value per share,
excluding deal costs.
Southcoast shareholders will receive a fixed price of $13.35
for each share of Southcoast common stock, payable in shares of BNC
common stock based upon the 20-day volume weighted average price of
BNC common stock prior to the closing of the merger.
The transaction is expected to close in Q1 of 2016
9:28 am Equinix (
EQIX) to join the MSCI US REIT Index; will take
effect after the close of trading on Monday, August 31, 2015
(:INDXCH):
9:21 am Mylan Labs issues a statement, regarding a report issued
by the proxy advisory firm ISS, relating to its proposed acqusition
of Perrigo (
PRGO) (
MYL): Co noted that other proxy advisory
firms, Glass Lewis and Egan-Jones, earlier in the week issued
reports recommending Mylan shareholders vote in favor of the
Perrigo (
PRGO) transaction.
It stated: "While today's report from ISS repeatedly recognizes
the clear industrial logic and solid business strategy of combining
Mylan and Perrigo, it misunderstands and/or underestimates, without
a meaningful basis, many other key aspects of the transaction.
In particular, ISS fails to comprehend the potential for medium
and long-term value creation for Mylan shareholders, the compelling
synergy opportunity, the potential for meaningful multiple
expansion and the ability to take advantage of the continuing
consolidation in our industry
We remain firm that we expect at least $800 million of annual
pre-tax operational synergies by the end of year four, substantial
free cash flows and meaningful multiple expansion."
9:16 am S&P futures vs fair value: -1.10. Nasdaq futures vs
fair value: -4.10. (:WRAPX): The stock market is on track for a
modestly lower open as S&P 500 futures trade one point below
fair value. Index futures notched their highs around the start of
the European session, but they have headed lower since then.
There was no news associated with the early-morning turn, but
the overnight dynamic has fit right in with the recent choppy
action in the market.
Meanwhile, U.S. Treasuries have notched fresh lows not long ago
after the Producer Price Index for July came in ahead of
expectations (+0.2%; Briefing.com consensus 0.1%). The 10-yr note
holds a slim loss with its yield up two basis points at 2.20%.
Separately, the just released Industrial Production report
pointed to an increase of 0.6% in July, which was better than the
0.3% increase expected by the Briefing.com consensus. Capacity
utilization hit 78.0% which is what the Briefing.com consensus
expected.
One more data point remains with the preliminary reading of the
Michigan Sentiment Index for August scheduled to be released at
10:00 ET (Briefing.com consensus 93.7).
9:11 am xG Technology prices its offering of 2.55 mln Class A
units at $1.00/unit (
XGTI): The co announced the pricing of a
public offering of (i) 2,550,000 Class A Units, at a price of $1.00
per Class A Unit, each of which consists of one share of its common
stock and 0.5 of a Series A Warrant to purchase one share of its
common stock at an exercise price of $1.00 per warrant, (ii)
2,450,000 Class B Units, at a price of $0.99 per Class B Unit, each
of which consists of one pre-funded Series B Warrant to purchase
one share of its common stock and 0.5 of a Series A Warrant, (iii)
2,550,000 Series C Warrants, at a price of $0.01 per Series C
Warrant, which is deemed to be included in the $1.00 price per
Class A Unit, each to purchase one additional Class A Unit at an
exercise price of $1.00, and (iv) 4,950,000 Series D Warrants, at a
price of $0.01 per Series D Warrant, which is deemed to be included
in the $0.99 price per Class B Unit, each to purchase one
additional Class B Unit at an exercise price of $0.99.
The Company expects to receive approximately $5,000,000 in
gross proceeds, before underwriting discounts and commissions and
offering expenses payable by the Company.
9:07 am Applied Micro also reiterates guidance provided for the
September quarter (
AMCC):
Prior guidance: Q2 (Sep) EPS of ~($0.03) vs. ($0.03) Capital
IQ Consensus Estimate; sees Q2 (Sep) revs of ~$39 mln vs. $39.13
mln Capital IQ Consensus Estimate. "We are heartened by our
increasing customer traction and remain confident about
AppliedMicro's growth prospects for the balance of fiscal 2016 and
beyond." (reported earnings late July; next qtr expected late
October)
9:05 am Alico discloses its Board has authorized a repurchase
program of up to 100k shares of its outstanding common stock (
ALCO): The authorization is effective
August 13, 2015 and will expire on August 13, 2016.
9:02 am Ethan Allen: Sandell Asset Mgmt sends a letter to the
company, confirming it is prepared to nominate a slate of directors
for its October 15 annual meeting (
ETH):
The group sent a letter to Farooq Kathwari, the Chairman and
CEO of Ethan Allen. In the letter, Sandell notes its belief that
the Company's stock is trading at a significant discount to its
intrinsic value, which Sandell believes is ~$41 per share, or over
30% above where the stock is currently trading.
Sandell believes that the Company's extensive portfolio of real
estate assets may be worth approximately $450 million, or about $16
per share, and that the Company has the ability to greatly enhance
shareholder value through either a recapitalization and a
monetization of its real estate holdings, or through a sale to a
private equity firm. The group believes that either path would
result in a value of at least $41 per share delivered to
shareholders.
The group stated that Ethan Allen on August 12, responded to
Sandell's overtures to the Company by manipulating the corporate
franchise and advancing the date of its 2015 Annual Meeting of
Shareholders to October 15.
In response, the group announced it is prepared to nominate a
slate of Director candidates to stand for election at the Company's
2015 Annual Meeting, although it hopes to re-engage with the
Company to reach an amicable resolution and avoid a proxy
contest.
9:01 am Baxter and Water Street Healthcare Partners announce FDA
approval of the CEFAZOLIN Injection in GALAXY Container (
BAX): Baxter anticipates launching
CEFAZOLIN injection 2 gram frozen premix in its GALAXY container in
the United States in the fourth quarter of 2015.
10:56 am Petrobras Brasileiro
announces that it has decided to include tax debits in the Special
Installment Program; negative impact for Q3 results is R$2 bln, net
of taxes
9:00 am Nordson increases quarterly dividend 9% to $0.24/share
from...
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