Asian stocks rose for a third day, as optimism grew that central-bank stimulus will boost profits. The MSCI Asia Pacific rose 0.9% and was headed for a five-year record close. The Nikkei was 0.8% higher, the Hang Seng rose 0.6% and the Kospi was flat. Earlier, the Dow closed above 15,000 points for the first time. (Bloomberg)(Wall Street Journal)
“China’s export growth unexpectedly accelerated in April even as shipments to the US and Europe fell, spurring renewed skepticism of data under investigation by the government. Shipments abroad rose 14.7 percent, the General Administration of Customs said today in Beijing, compared with the 9.2 percent median forecast of analysts surveyed by Bloomberg News. Imports advanced 16.8 percent, while the trade surplus of $18.2 billion was higher than projected.” (Bloomberg)
A second shareholder advisory group recommended JP Morgan CEO and chairman Jamie Dimon be stripped of his dual role, just weeks ahead of a crucial shareholder vote on the matter. On Tuesday Glass Lewis followed ISS, both shareholder advisory firms, in calling for investors to vote for splitting the roles. The fate of the vote could rest with a third firm, Governance for Owners, which votes on behalf of the bank’s biggest shareholder, BlackRock. (Financial Times)NYT DealBook)
Santander car finance unit IPO planned: “Santander and a trio of private equity firms are planning to list the US automotive finance unit of the Spanish banking group in the coming months in a deal that could value the company at between $7bn and $9bn, people familiar with the matter say… Santander owns about 65 per cent of the finance company and its founder, Tom Dundon, holds roughly 11 per cent. The remaining shares were bought by Centerbridge Partners, KKR and Warburg Pincus for a total of $1bn.” (Financial Times)
German finance minister Wolfgang Schaeuble struck a more conciliatory tone on European banking union, saying it was a “priority project” and governments should coordinate policies on closing banks, in contrast to previous comments that the EU needed to consider treaty change due to the “doubtful legal basis” for such a union. (Reuters)
Qatar has sounded out International Airlines Group about buying a 12% stake held by Bankia, the troubled Spanish bank. Two people familiar with the situation said Qatar had made an informal approach to IAG to ask whether the airline group would welcome the Gulf country shareholder. One of the people, plus a third source, said enquiries were made a few months ago, and the CEO of state-controlled Qatar Airways said his company was not interested in buying Bankia’s stake. (Financial Times)
Coty’s IPO investor roadshow is expected to kick off in the coming weeks, with Bank of America Merrill Lynch, JPMorgan Chase and Morgan Stanley leading the share offering. (Financial Times)
Revenues at Alibaba surged by 80% in the final three months of 2012, keeping the Chinese ecommerce company on track for what could turn out to be one of the biggest stock market debuts by a tech company either later this year or early next. The growthwas revealed in a quarterly regulatory filing by Yahoo, which owns 24% of the Chinese company. Expectations for a blockbuster IPO have been a major factor underpinning Yahoo’s own stock market value, which has jumped by more than 70% since last August. (Financial Times)
Portugal’s first bond issue since its bailout two years ago saw strong demand, with the 10-year debt that raised €3bn over-subscribed by three times according to finance minister Vitor Gaspar. He said the country’s financing needs for this year were already met and yesterday’s issue was “pre-financing” for 2014. The yield was fixed at the midswaps market rate plus 400bps, offering a return of about 5.7%. (Financial Times)
“Walt Disney Co reported a 32 percent increase in profit that beat Wall Street expectations, boosted by higher spending and attendance at U.S. theme parks, and the movie box office success of “Oz the Great and Powerful.”" (Reuters)
Institutional funds’ ETF use grows: 18% of US institutional funds now use ETFs, up from 14% in 2012, according to 970 institutional investors surveyed by Greenwich. (Financial Times)
“Prince Alwaleed bin Talal is prepared to offer more shares in his Kingdom Holding investment company to fund a big acquisition to expand his sprawling banking-to-hotels empire. The prince, who has owned 95 per cent of Kingdom since an initial public offering in 2007, said he would never sell his shares in the market, but would be comfortable allowing his stake to be diluted if he found the deals to justify doing so.” (Financial Times)
COMMENT AND CURIOS:
- Martin Wolf: Forcing the rest of eurozone to mimic Germany’s adjustment will make stagnation likely. (Financial Times)
- Most celebrated hedge funds have mixed record on conference investment tips. (Financial Times)
- Nat Rothschild rues his ‘terrible mistake’ with Bumi. (Bloomberg)
- Samsung’s Apple-like cash pile problem. (Wall Street Journal)
OVERNIGHT MARKETS:
Asian markets
Nikkei 225 up +100.39 (+0.71%) at 14,281
Topix up +5.20 (+0.44%) at 1,194
Hang Seng up +144.00 (+0.62%) at 23,191
US markets
S&P 500 up +8.46 (+0.52%) at 1,626
DJIA up +87.31 (+0.58%) at 15,056
Nasdaq up +3.66 (+0.11%) at 3,397
European markets
Eurofirst 300 up +3.31 (+0.27%) at 1,221
FTSE100 up +35.84 (+0.55%) at 6,557
CAC 40 up +14.28 (+0.37%) at 3,921
Dax up +69.70 (+0.86%) at 8,182
Currencies
€/$ 1.31 (1.31)
$/¥ 98.94 (98.96)
£/$ 1.55 (1.55)
Commodities ($)
Brent Crude (ICE) down -0.04 at 104.36
Light Crude (Nymex) up +0.21 at 95.83
100 Oz Gold (Comex) up +5.50 at 1,455
Copper (Comex) up +1.65 at 331.70
10-year government bond yields (%)
US 1.78%
UK 1.81%
Germany 1.29%
CDS (closing levels)
Markit iTraxx SovX Western Europe -1.04bps at 89.43bp
Markit iTraxx Europe -2bps at 89.52bp
Markit iTraxx Xover -6.79bps at 370.92bp
Markit CDX IG -1.78bps at 68.84bp
Sources: FT, Bloomberg, Markit