China Suffers Biggest Dollar Bond Default By State-Owned Company in Two Decades

(Bloomberg) -- A major Chinese commodities trader became the biggest dollar bond defaulter among the nation’s state-owned companies in two decades, in a moment of reckoning for Beijing as it struggles to contain credit risk in a weakening economy.Tewoo Group Corp. announced results of its unprecedented debt restructuring, which saw a majority of its investors accepting heavy losses. This is expected to reshape investors’ perceptions about government-owned borrowers whose identity has for years offered a relatively strong sense of security.It’s also seen offering a road-map for resolving similar debt crises in the future as the prospect of more failures by state-backed firms looms.The one-time Fortune Global 500 company from the northern port city of Tianjin said dollar bond investors representing 57% of the the total $1.25 billion have agreed to be paid just 37 to 67 cents on the dollar, depending on the maturity of the debt. Bondholders representing 22.6% of these bonds voted to exchange their debt for new bonds with sharply lower coupons to be issued by Tewoo’s offshore debt manager, a state asset manager from Tianjin.“This is one form of default based on our definition,” said Ivan Chung, a Hong Kong-based analyst at Moody’s Investors Service, noting that the debt revamp has resulted in losses for investors.The debt restructuring plan, first of its kind for a Chinese state-run enterprise in the dollar bond market, came ahead of $300 million dollar bond maturity on Dec. 16, one of the four notes covered by Tewoo’s debt restructuring plan. Tianjin State-owned Capital Investment and Management, its offshore debt manager, said on an investor call late last month that Tewoo is very likely to default on this paper.For investors who turned down the offers, their dollar bonds will be grouped into a comprehensive debt plan involving Tewoo’s onshore debt, according to Tianjin State-owned Capital.Tewoo said settlement of the debt restructuring offers are expected to be on or about Dec. 17.Tewoo’s failure in the dollar bond market, the biggest for a Chinese SOE since the collapse of Guangdong International Trust and Investment Corp. in 1998, is a sign that the worst economic slowdown in three decades is limiting Beijing’s capacity to bail out its weaker state firms. As a result, the authorities appear increasingly willing to use a more market-oriented approach to clean up the mess.“Tewoo’s default is a landmark case, and demonstrates a growing tolerance for defaults by distressed SOEs,” Cindy Huang, an S&P Global Ratings credit analyst said in a note.Tianjin “is not an exception” and other local governments with deteriorating fiscal conditions might also see eroding support for their less competitive SOEs, it said.Setting PrecedentTewoo’s crisis came as a wake-up call for investors.“This is a poor outcome for investors that bought the bonds at par. That said, there is now some track record as to the severity of loss for an SOE-related entity,” said Charles Macgregor, head of Asia at Lucror Analytics.“Hopefully, these types of restructures will bring more discipline to the market and result in investors properly pricing for the apparent risk,” he added.Tewoo is owned by the Tianjin government and operates in a number of industries including infrastructure, logistics, mining, autos and ports, according to its website. It also has footprints in countries including the U.S., Germany, Japan and Singapore.The trader ranked 132 in 2018’s Fortune Global 500 list, higher than many other conglomerates including service carrier China Telecommunications Corp. and financial titan Citic Group Corp. It had an annual revenue of $66.6 billion, profits of about $122 million, assets worth $38.3 billion, and more than 17,000 employees as of 2017, according to Fortune’s website.(Updates with chart on China SOE bond defaults)\--With assistance from Denise Wee.To contact Bloomberg News staff for this story: Shen Hong in Singapore at hshen87@bloomberg.net;Ina Zhou in Hong Kong at hzhou179@bloomberg.net;Tongjian Dong in Shanghai at tdong28@bloomberg.netTo contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Shen Hong, Neha D'silvaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

This is how dangerous ‘dollar-cost ravaging’ can be for your retirement

Dollar-cost averaging is a popular strategy in which an investor purchases an asset at regularly timed intervals to mitigate the risk of buying high. But what about “dollar-cost ravaging?”

Explainer: Just Eat caught up in 5 billion pound festive food fight

AMSTERDAM/LONDON (Reuters) - The battle for Britain's Just Eat, which pits investment giant Prosus against Dutch food ordering service Takeaway.com, is set to roll on through the Christmas holidays. Both suitors are seeking to woo shareholders in the British company and secure a deal that will be pivotal for the future of the fast expanding food delivery industry. Prosus, a Dutch-listed business spun out of South Africa's Naspers, raised its cash bid on Monday to 740 pence per share, from 710 pence per share, valuing Just Eat at 5.05 billion pounds ($6.5 billion).

• Takeaway.com gets acceptances for 13.53% of Just Eat Shares, Extends Offer

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• Naspers boosts offer for Just Eat to £5bn as it seeks to clinch deal

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Nestle Sells U.S. Ice Cream Brands

Dec.12 -- Nestle SA is selling its U.S. ice cream business to a joint venture with private equity firm PAI Partners. It’s valued at $4 billion. The deal aims to create a stronger challenger to Unilever. Bloomberg Intelligence’s Duncan Fox discusses the deal on “Bloomberg Markets: European Open.”

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  Nestlé selling its US ice cream business for $4 billion to create world's largest ice cream market

  USA TODAY
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  Nestle sells U.S. ice cream brands to joint venture Froneri in $4 billion deal

  Reuters

Disney sued for using these three words on ‘Frozen 2’ merch

The company claims Disney is illegally infringing on its slogan.

What's the Difference Between Retirement in Canada and America?

American and Canadian governments provide many of the same types of services for those in retirement, but the subtle differences between the two countries are worth noting.

Analysts: The 11 Top Stocks You'll Want To Own In 2020

Analysts are picking their favorite S&P; 500 stocks for 2020. Most are beat-up stocks. But some of these top picks for next year are true leaders.

• Analyst Names Facebook, Twitter Top Online Media Stock Picks For 2020

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• Here's What Could Take the Bottom Out of Stocks for 2020

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3 “Strong Buy” Picks from Legendary Investor Cliff Asness

To say Cliff Asness is a smart guy is an understatement. He earned his PhD in finance from University of Chicago – while building up the quantitative investment team at Goldman Sachs. He built a successful quant team, even though he won’t describe himself as a fan of that investment strategy.In 1997, after leaving Goldman, Asness founded AQR Capital Management with a somewhat different approach. AQR aims to build diverse portfolios containing as many stocks as possible. Some would say this is foolhardy, but the unorthodox approach has paid off handsomely. In its last 13F filing, AQR showed $84.9 billion in managed securities – some one-third of its total assets under management. A firm that size can be many things, but foolhardy is not one of them.It’s hard to pin down any one factor as a key to Asness’ success. One of his consistent views, however, has been to avoid value stocks. These are equities that look cheap, with an oversized upside, and give the appearance of being a smart investment – but as Asness points out, they have underperformed the market in the last decade. It’s not that he won’t buy them; rather, he suggests caution on them.Last month, Asness started breaking his own rule. In comments on market conditions, he said it may be time to add “a modest extra amount” of weight to the value factor. He adds, referring to buying up value stocks, “It is indeed time to ‘sin a little."So, when Cliff Asness sins, which stocks does he sin with? We found three in his last 13F that showed major purchases. Asness and AQR went big on them, to a tune of nearly $1 billion. According to the TipRanks database, all three hold Strong Buy ratings and show solid upside potential. Let’s delve a little deeper and find out why Wall Street Agrees with Cliff Asness on these stocks.Electronic Arts (EA)Gaming is big business. Gamers – of all stripes – are notorious for their loyalty to favored games, and their quickness to upgrade, especially in the video game segment. They’re a prickly customer base, but a company that engages their loyalty will be well-rewarded. Electronic Arts has managed this and grown to be the second largest gaming company in the US and Europe, with a market cap of $30 billion and annual revenues exceeding $5 billion.For fiscal Q2 2020, the company reported earnings 78 cents per share compared to the 85-cent estimate. Year-over-year, EPS was down 6%. Despite the earnings miss, top-line revenues were up almost 5% yearly, to $1.35 billion. Investors were nervous at first about the EPS drop, but reassured by the top-line gains. EA stock is up 29% in 2019, slightly ahead of the S&P gain of 25%.The overall picture for Electronic Arts is of a company with a solid base – and room to grow. Both aspects drew in Asness, whose firm picked up more than 1.1 million shares of the stock. It was a 65% increase in AQR’s holding, boosting the total to 2,806,027 shares.Writing on EA from Credit Suisse, 5-star analyst Stephen Ju is optimistic about the stock’s mid-term horizon. After a series of investor meeting with the company’s Chief Studios Officer, Ju notes, “1) EA has implemented a more agile development process to its non-sports franchises to ensure quality and rapid adjustments throughout the development cycle; 2) this new development process is supported by a more centralized technology platform… with the aim of providing more user-friendly tool sets for developers; 3) mobile remains a key area of attention … given the potential for global audience expansion.”Shedding the industry-specific shop talk, Ju sums up the bottom line for EA’s future: “These factors in the aggregate do present a different picture of self-directed efforts to improve product quality versus what investors may have seen/concluded as creative talent drain away from the company.”Ju backs his belief in EA’s potential with a Buy rating and a $118 price target, suggesting a 15% upside to the stock. (To watch Ju’s track record, click here)The analyst consensus on EA is a Strong Buy, based on no less than 20 ratings. These include 16 Buys against 4 Holds, indicating that there is a slight caution toward this stock in an otherwise strong picture. Shares sell for $101, and the $111 average price target suggests a 9% upside. (See Electronic Arts stock analysis on TipRanks)Norwegian Cruise Line (NCLH)Along with gaming, cruise lines are a leisure niche. The current rising economic tide in the US has given them a general boost recently. It’s a highly competitive industry, however, as evidenced by Norwegian’s position. The company is the world’s third largest cruise line – but controls only 9% of the market. That market share still translates to a lot of money, as the company saw over $6 billion in revenue in calendar year 2018.In the recent third quarter, Norwegian beat the forecast with total revenues of $1.91 billion. EPS also beat the estimates, coming in a $2.23 against a forecast of $2.15. Year-over-year saw an EPS drop of 4 cents. That hasn’t phased investors -- like EA above, Norwegian has posted 29% share appreciation this year.It's clear that Asness saw value in Norwegian as he purchased 2,585,517 shares in Q3. His firm spent over $132 million on the buy-up, and increased the holding by 111% to over 4.9 million shares.A pair of 4-star analysts have given Norwegian positive reviews recently. Tim Conder of Wells Fargo stated, “We reiterate our Outperform rating as NCLH should benefit from ongoing rotation into value names. NCLH should continue to aggressively, but opportunistically, repurchase shares in Q419, but could also initiative a token quarterly dividend in early 2020 to broaden its investor base.” Along with his Buy stance, Conder gives NCLH a $70 price target, suggesting a 28% upside. (To watch Conder’s track record, click here)Barclays analyst Felicia Hendrix is even more bullish on NCLH. Reviewing the stock last week, she wrote, “We believe shares of NCLH are undervalued and do not reflect the company's strong positioning for 2019 and beyond. Our upside case is based on a 100bps upside to our current net yield assumptions for each 2019 and 2020…” That upside case includes and Buy rating and a price target of $73, implying an upside of 33%. (To watch Hendrix’ track record, click here)Norwegian’s Strong Buy consensus rating is unanimous – 12 analysts have given the stock positive reviews in the past few weeks. It’s a clear sign of confidence in the company and the stock. NCLH currently trades for $54, and the $65 average price target implies room for 18% growth on the upside. (See Norwegian Cruise Line stock analysis on TipRanks)United Airlines (UAL)Airlines frequently get a bad rap, with (admittedly, frequently justified) accusations of poor service, crowded flights, and price gouging clouding the industry’s reputation. That said, the airlines also operate in a difficult niche, with enormous overhead and thin margins. For the successful companies, however, the air travel industry can bring in great profits, too. United, the world’s largest airline company, demonstrated that in October, when it beat Q3 earnings estimates and revised full-year guidance upward.By the numbers, UAL showed a 23% gain in net income for the quarter, to $1.02 billion, with revenues of $11.38 billion. EPS, at $4.07, was 10 cents higher than the $3.97 forecast. The gains came even as the airline continues to feel pressure from the long-term grounding of Boeing 737 MAX aircraft.Shares in UAL have been volatile this year, ranging from $78 to $95, and the stock has recorded a year-to-date gain of only 3.3%, but that hasn’t stopped Asness from making it the largest purchase of the stocks in this list. AQR bought more than 3.53 million shares of the stock. On a percentage basis, it was a 249% gain in the firm’s holding of UAL. AQR’s total holding in UAL is 4,957,369 shares, worth $428.9 million.Asness must have seen the same upside to UAL that Wall Street sees. 5-star analyst Myles Walton of UBS has recently initiated coverage of UAL, noting “We view improving op performance with load factor growth, on-time performance, and cancellation rates converging to and/or eclipsing industry averages as a positive…”Looking ahead, Walton sees up to 20% upside over the next five years. Backing up his Buy rating, Walton gives UAL a $110 price target, implying a robust 26% upside potential in the next 12 months. (To watch Walton’s track record, click here.)Overall, UAL has inspired faith from Wall Street analysts. The stock has a consensus rating of Strong Buy, based on 5 Buys and 1 Hold. The average price target of $111 implies a 29% premium from the current share price of $86. (See United Airlines stock analysis on TipRanks)

Saxo Bank's ‘Outrageous’ Predictions for 2020

Dec.12 -- Steen Jakobsen, chief economist and chief investment officer at Saxo Bank A/S, talks about his "outrageous" predictions for 2020. He also discusses the market implications of the U.K. election. He speaks with Juliette Saly and Rishaad Salamat on "Bloomberg Markets: Asia."

Gold is going to $2,500, $3,000 an ounce: investment expert

Demand for physical gold is peaking sending prices.

Silver Miners Pinpoint the Precious Metals’ Outlook

Very little happened in the precious metals market both yesterday and in today’s pre-market trading – at least so far. We will take this opportunity to discuss something that we haven’t done in a while – silver stocks.

Aramco Surges 10% in Trading Debut

Dec.11 -- The world’s biggest company gets even bigger. Saudi Aramco had surged by the limit of 10% in its trading debut. Bloomberg’s Yousef Gamal El Din reports on “Bloomberg Markets: European Open.”

• 
  Saudi Aramco will exercise 15% greenshoe option in whole or part during first 30 days of trading: statement

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  Saudi Aramco shares rocket on debut after record IPO

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‘He took my jewelry and never saved a penny’ — how can I stop my husband from getting his hands on my IRA and bank accounts in our divorce?

While living in Indiana before ever marriage, I set up a 401(k) and put a good amount of money into it. After leaving that job, it was rolled over into a traditional IRA. Would the courts look at my IRA money and bank accounts more as mine given that my husband never contributed to them?

Why this Berkshire Hathaway shareholder isn't frustrated Warren Buffett won't spend nearly $130 billion in cash

Long-time Berkshire Hathaway shareholder Bill Smead is just fine with Warren Buffett sitting on billions in cash. Here's why.

Millionaires sour on US economy; their views at lowest level since before recession

Millionaires grow more cautious about the direction of the U.S. economy and their finances.

New Age Beverages (NBEV): A Beaten-Up Pot Stock Worth Considering

It’s safe to say things aren’t so rosy for New Age Beverages (NBEV) stock. Shares have plummeted around 65% year-to-date in line with the trajectory of the cannabis industry in general.The company’s latest earnings report was a mixed affair. Q3 revenue increased from $13.2 million in the same period last year to $69.8 million, though the figure came in slightly below the Street’s $69.95 million estimate. The net loss, though, of $10.7 million, or $0.14 per share was bigger than the Street’s estimate of -$0.04 per share.The pertinent question right now is: Has NBEV stock bottomed out?Compass Point’s Rommel Dionisio remains bullish on NBEV’s prospects. The 4-star analyst notes that a combination of an expanding distribution platform in both the traditional retail and direct-to-consumer channels, new product introductions driving organic sales growth, and successful acquisitions such as the recent Morinda transaction, have all contributed to NBEV’s status as “one of the fastest growing beverage companies in the US in recent years.”The analyst also notes the company’s growing offerings of CBD related products as “a major near-term growth opportunity.” Dionisio concluded, “By leveraging the company's traditional retail channels in North America as well as Morinda's direct sales force in Asia, and with rapidly growing consumer acceptance around the world of the potential benefits of CBD, New Age Beverages appears well positioned to generate significant top and bottom line growth in upcoming quarters, especially once the FDA provides guidelines permitting the sale of CBD beverages and edibles.”Fittingly, Dionisio reiterates a Buy rating on NBEV alongside a bullish price target of $9.00 which could provide enormous gains of 390% from current levles. (To watch Dionisio’s track record, click here)On the other hand, Northland’s Mike Grondahl sounds a more cautious note, saying, “Morinda acquisition integration sounds fine, however, Morinda sales in China continue to be down significantly y/y due to government restrictions on MLM industry and this will probably take China from ~$80M in 2018 to ~ $50M in 2019 but September y/y were up 5% for first month of growth this year.” Furthermore, "NBEV noted WMT and 7-11 were performing below expectations. It sounds like while both retailers have blessed NBEV products, but getting products on the shelf has been challenging and that will remain a work-in-progress. It sounds like this is not a catalyst for NBEV."The 5-star analyst reiterated a Market Perform rating on NBEV, alongside a price target of $3.50. Interestingly, due to the stock’s horror of a year, the target represents a substantial upside potential of about 90%. (To watch Grondahl’s track record, click here)There is only one other analyst (from Roth Capital) currently chipping in with a view on the beverage company’s prospects, adding a further Buy rating. The consensus marks the stock as a Moderate Buy, with an average price target of $6.83, providing the risk tolerant investor massive potential gains of 272%. (See NBEV price targets and analyst ratings on TipRanks)To find good ideas for cannabis stocks trading at fair value or better, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

• Analyst: No Near-Term Catalysts Ahead For Consumer CBD

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  PURA - Puration To Expand Cannabis Beverage Market Reach In 2020

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