Tag Archives: Morgan Stanley

Beam bonds soar on M&A news

NEW YORK, Jan 13,2014 (IFR) – Beam’s bonds ratcheted in by as much as 15 basis points on Monday after Japan’s Suntory Holdings made a USD16bn bid for the US spirits maker.

Beam’s 3.25% June 2023s were trading around 60p bid/55bp offered this morning, from around 70/65bp on Friday. Its 1.75% 2018s tightened to Treasuries plus 30bp mid-morning from around Treasuries plus 45bp at open.

 

The tightening is based on hopes that a successful bid from Suntory will trigger a change of control (CoC) covenant aimed at protecting investors against credit event risk.

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As Canadian M&A Soars on Oil, Goldman Sachs Becomes Top Adviser, edging out JPMorgan Chase, Royal Bank of Canada, Barclays and Citigroup

Mergers and Acquisitions Conference 2015 New York City

Mergers and Acquisitions Conference 2015 New York City

Goldman Sachs was the top investment banking adviser on Canadian mergers and acquisitions in 2014, as oil and gas and cross-border deals drove takeovers to a seven-year high.

According to Bloomberg, Canadian firms were involved in $229 billion worth of transactions through Dec. 29, the highest annual tally since 2007 and up 45 percent from last year, according to data compiled by Bloomberg.

Goldman advised on $61.6 billion worth of those deals, its highest ever in Canada, and narrowly edging out JPMorgan Chase, which advised on transactions valued at $61.3 billion. Royal Bank of Canada slipped to third spot after three consecutive years at No. 1, while Barclays and Citigroup rounded out the top five. The figures and rankings are based on announced date and subject to change as more deals are recorded.

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Goldman Sachs Outdoes Itself With Biggest M&A Lead Since 1998

Like Meryl Streep at the Oscars, Goldman Sachs Group Inc. isn’t lacking acclaim for its merger and acquisition advisory business. It’s finished first in deal volume for five consecutive years and in nine of the last 10.

Even so, Goldman Sachs outdid itself this year. No top firm has had a larger market-share spread over its nearest competitor since 1998. The New York-based bank advised on more than 35 percent of all deals this year by dollar volume, as of Dec. 15, surpassing second-place Morgan Stanley by about 10 percentage points, according to data compiled by Bloomberg. That’s the largest market share lead between the No. 1 and No. 2 financial adviser since Goldman Sachs trumped what’s now called JPMorgan Chase & Co. by 14 percentage points 16 years ago.

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Stock Price

Morgan Stanley: These 2 Banks Are Top M&A Candidates

A new Morgan Stanley report looks at the potential for an acceleration of merger and acquisition (M&A) activity among mid-cap banks in 2015. Analysts give several reasons why they believe a recent modest increase in M&A activity in the financial sector could pick up next year.

Many banks have benefited from cost-cutting measures and reserve releases over the past few years, but analysts believe that the window to continue to benefit is closing.

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World Led by U.S. Poised for Fastest Growth Since 2010

According to Bloomberg,

The world economy is primed for its fastest expansion in four years, with the U.S. propelling the improvement in output.

Global growth will accelerate at least 3.4 percent in 2014 from less than 3 percent this year as the euro area recovers from recession and China and other emerging markets stabilize, according to economists at Goldman Sachs Group Inc., Deutsche Bank AG and Morgan Stanley. The U.K. will be a standout, while Japan risks damping the mood by suffering a mid-year slowdown after an April increase in sales taxes.

“So far it’s been a very bumpy, below-par and brittle expansion,” said Joachim Fels, co-chief global economist at Morgan Stanley in London. “Next year could bring a very important transition: a transition to a sounder, safer and more sustainable recovery.”

The upturn should prove bullish for equities and bearish for bonds. If it boosts corporate confidence in the durability of growth, it could further fuel demand, raising the odds that 2014 will break the pattern of recent years and come in better, rather than worse, than projected.

“An improving global-growth picture is widely forecast but, in our view, also still doubted in the investor community,” said Dominic Wilson, chief markets economist at Goldman Sachs in New York. “We therefore see room for markets to price in a better cyclical story.”

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Penny Pricing for U.S. Stocks Said to Get Scrutinized for Harm

According to Bloomberg,

Securities executives are trying to determine if the 12-year-old decision to narrow the price increments for American stock trading has harmed investors, according to two people with knowledge of the matter.

Representatives from exchanges, brokers, mutual funds and regulatory agencies held two conference calls today to discuss concerns about market structure, said the people, who requested anonymity because the discussions were private. One topic was the U.S. mandate in 2001 to trade equities in pennies rather than eighths or sixteenths of a dollar, they said.

Compressing what traders call tick sizes reduced profits for human market makers and helped drive the ascent of high-frequency traders, which now account for about half of U.S. volume, according to data compiled by Tabb Group LLC. Widening price increments for smaller companies to a five or ten cents could spur trading and prompt more initial public offerings, according to U.S. Representative Sean Duffy, who has sponsored legislation to test such a shift.

“There are a couple of groups that are really driving this and want it to happen, and it seems like everybody else may not be convinced it’ll make a huge difference but feels it should be tried because it probably won’t hurt anything,” said Justin Schack, partner and managing director for market structure analysis at Rosenblatt Securities Inc. He declined to comment on the ICI meetings.

Third Meeting

Today’s talks were the third hosted in 2013 by the Investment Company Institute, a trade group whose members manage $16 trillion, according to two people with knowledge of the matter. This year’s participants have included senior officials from the New York Stock Exchange and Nasdaq Stock Market, mutual fund companies Fidelity Investments and T. Rowe Price Group Inc., broker-dealer Morgan Stanley, and the Securities and Exchange Commission, among others, according to one of the people.

Representatives of those firms declined to comment on the meetings.

Supporters of larger price increments for some stocks argue that it would encourage more volume for small companies by making trades more profitable for market makers.

The Jumpstart Our Business Startups Act, signed into law last year, instructed the SEC to study the impact of penny pricing and mandate a new minimum increment of less than 10 cents for “emerging growth companies” if the regulator found that was warranted.

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U.S. Stocks: Fluctuate on Factory Data Amid Retail Reports

According to Bloomberg,

U.S. stocks fluctuated, following a three-month advance in the Standard & Poor’s 500 Index, as data showed manufacturing unexpectedly climbed last month and investors assessed reports on holiday retail sales.

EBay (EBAY) Inc. climbed 2.7 percent as a report showed online spending on Black Friday rose to a record. Gap Inc. and Best Buy Co. added more than 1.9 percent. Newmont Mining Corp., the world’s second-largest gold producer, slipped 3.2 percent as the precious metal’s price declined. 3M Co. lost 3.2 percent after Morgan Stanley downgraded the stock.

The S&P 500 rose 0.1 percent to 1,807.94 at 1:39 p.m. in New York after earlier sliding as much as 0.2 percent. The Dow Jones Industrial Average dropped 21.77 points, or 0.1 percent, to 16,064.64. Trading in S&P 500 stocks was 17 percent lower than the 30-day average at this time of day.

“The economic data continues to indicate a synchronized global recovery pattern,” Eric Teal, who helps oversee $5 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. “I don’t think that the data is too robust that we’re worried about inflation or premature tapering at this juncture.”

The S&P 500 climbed 2.8 percent last month and has gained 27 percent this year, poised for the best annual performance since 1998, after the Federal Reserve refrained from tapering its third round of economic stimulus. The index ended November with its eighth straight weekly advance, the longest rally in almost a decade, as data on employment and consumer sentiment boosted confidence in economic growth.

Factory Data

The Institute for Supply Management’s factory index rose to 57.3 in November from 56.4 a month earlier, the Tempe, Arizona-based group’s report showed today. The median projection in a Bloomberg survey of 77 economists called for a drop to 55.1. Estimates ranged from 53.5 to 57.5. Manufacturing accounts for about 12 percent of the economy.

A separate report from Markit Economics showed the final November index of U.S. manufacturing increased to 54.7 from 51.8 the previous month. The median forecast in a Bloomberg survey of economists called for no change from the preliminary November reading of 54.3. Other reports showed manufacturing in the euro area, U.K. and China expanded faster than estimated.

The Labor Department’s jobs report on Dec. 6 is forecast to show the U.S. added 180,000 jobs last month and the unemployment rate slipped to 7.2 percent, matching the lowest level in five years. The weakest employment recovery in seven decades is proving a boon to equity markets.

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