|Bid||203.66 x 800|
|Ask||203.83 x 800|
|Day's Range||202.92 - 204.89|
|52 Week Range||151.70 - 234.06|
|Beta (3Y Monthly)||1.34|
|PE Ratio (TTM)||8.55|
|Earnings Date||Oct 15, 2019|
|Forward Dividend & Yield||5.00 (2.50%)|
|1y Target Est||234.95|
(Bloomberg) -- Private equity firm Thoma Bravo agreed to buy Sophos Group Plc for $3.8 billion, taking the British cybersecurity firm private in the biggest takeover of a U.K. technology firm this year.Thoma Bravo will pay $7.40 a share in cash, or 583 pence per share, representing a premium of 37.1% to its last closing price, the buyout firm said in a statement Monday. Shares jumped as much as 38% in London on Monday and traded at 576 pence at 10:34 a.m.The deal would be among the largest take-privates in the U.K. technology industry in recent years and marks the latest firm snapped up by a foreign buyer. Both semiconductor designer ARM and Imagination Technologies -- once flagship U.K.-listed companies -- have been bought by foreign investors.A weak U.K. pound has also fed into foreign buyers targeting local companies. Cross-border deals for U.K. companies jumped 66% in the third quarter compared to the same period in 2018, according to data compiled by Bloomberg.Thoma Bravo made an initial non-binding proposal in June 2019, Sophos Chief Executive Officer Kris Hagerman said in an interview after the announcement. Sophos hasn’t received any other offers, and the Thoma Bravo bid is the one that’s been presented and the one that the board is recommending to shareholders, he said.“We’ve been impressed with both their knowledge of the space and their experience with software and in cyber security,” Hagerman said. “That track record and that experience and that judgment of how do you partner with management teams” is a “compelling fit,” he said.Hagerman said the company is likely to continue with a similar strategy under their new ownership.Sophos also posted details on its financial performance for the first half of the year on Monday, and expects to report 9% constant currency billings growth for the six months to the end of September. In January, Sophos had blamed a challenging prior-year comparable for a “subdued” performance, causing the Abingdon, England-based company’s stock to sink to its lowest level in almost two years.The firm provides IT security to a range of clients as small as dentists and neighborhood stores. Its products are aimed at mid-market businesses with as many as 5,000 employees, but customers also include smaller companies that need to protect against cyberattacks.Thoma Bravo, which specializes in technology deals, bought Sophos’s rival Barracuda Networks Inc., in late 2017 in a deal valued at$1.6 billion.JPMorgan Chase & Co., Lazard Ltd. and UBS Group AG advised Sophos while Goldman Sachs Group Inc. worked for the bidder.(Adds CEO comments starting in the fourth paragraph.)To contact the reporters on this story: Giles Turner in London at firstname.lastname@example.org;Kit Rees in London at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Amy Thomson, Dinesh NairFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The huge and growing financial sector in China makes it a tempting target for U.S.-based firms eager to expand their global footprints.
, created to wean traders off Bloomberg’s chat function, will not go public until it is profitable, chief executive David Gurle told the Financial Times, outlining a timetable that rules out a listing until late 2021.
The coming week’s docket of economic reports and earnings releases comes just following the Trump administration’s announcement of a partial trade deal with China late last week.
Earnings expectations for Morgan Stanley and Goldman Sachs have been sharply pared back ahead of this week’s results, after a torrid run of stock market listings and a slowdown in M&A activity weighed on investment banking performance. Analysts surveyed by Bloomberg have slashed their third-quarter earnings estimates for Goldman by more than 15 per cent in the past four weeks, while their forecasts for Morgan Stanley have come down by almost 10 per cent. Goldman has not revealed the size of its stake in WeWork or the valuation method it uses, but Betsy Graseck, an analyst at Morgan Stanley, last week estimated the hit at $264m.
This will be a key week for Brexit because Boris Johnson will need to ask Brussels for an extension on the UK’s withdrawal from the EU under the terms of the Benn Act if parliament has not approved either a deal or no-deal exit by Saturday. The European Council meets in Brussels on Thursday and Friday, where any deal reached will need to be signed off. Mr Johnson’s team is believed to be drawing up plans to fudge the most controversial issue dogging negotiations with Brussels: whether Northern Ireland should be part of the EU customs union to avoid the need for a hard border with the Irish Republic.
With Wall Street banks to kick off the upcoming earnings season, financial sector exchange traded fund investors shouldn’t keep their hopes too high as many expect weak results following the round of interest ...
The stock market may be on a trade-talk induced high, but market analysts say a sustainable rally can’t be supported without fundamental strength in earnings.
With most blue-chip companies earnings scheduled over the coming weeks and sentiments being mixed, investors should closely monitor the movement of the Dow ETF and grab an opportunity that arises from a surge in any of the 30 stocks.
The expert who called the 2008 financial crisis says a repeat of the December meltdown in 2018 is inevitable. Before you know it, we’re hitting the holidays and maybe some uneasy flashbacks to last year’s December stock meltdown. A repeat of that rout may be unavoidable, warns our call of the day from former (GS) alumnus Raoul Pal.
(Bloomberg) -- Malaysia widened its budget deficit target for next year, giving the government space to support growth as it seeks to lure foreign investment amid the U.S.-China trade war.Finance Minister Lim Guan Eng revised the 2020 deficit goal to 3.2% of gross domestic product from 3% previously, projecting a decline in revenue next year. All 10 economists in a Bloomberg survey predicted the new fiscal target.Even with the upward revision, the deficit is seen narrowing from this year’s expected 3.4%. Lim pledged to bring the fiscal gap down to 2.8% of GDP in the medium term.As the trade war forces companies to re-evaluate their China footprint, Lim said Malaysia can take advantage to woo overseas investment. The government will give incentives to firms -- including a 10-year tax break for the electronics sector -- provide special perks for Fortune 500 companies and may create a special channel for investment from China, Lim said.‘Unique Opportunity’“The protracted trade war creates a unique opportunity for Malaysia to again be the preferred destination for high value-added foreign direct investments,” the minister said. Foreign direct investment into Malaysia surged 97% in the first half of 2019 from the same period a year earlier, he said.The benchmark FTSE Bursa Malaysia KLCI Index added to its gains after Lim started speaking and closed up 0.3%, the most since Oct. 1. The ringgit rose 0.1% to 4.1865 per dollar.The government expects Malaysia’s economy to grow 4.8% in 2020, up from a revised estimate of 4.7% this year. The central bank had forecast growth of 4.3%-4.8% for this year.Lim is slowly raising some spending after slashing expenditure this year to rein in ballooning debt worsened by the 1MDB state investment-fund scandal. He’s planning to increase development spending for transport, energy and utilities as well as trade and industry, while reducing the state’s operating expenditures. Lim added that the government is ready with contingency steps to support growth if needed.Moderate Belt-tighteningAnalysts said the wider deficit target wasn’t reason for concern.“Widening of the budget deficit to 3.2% is nothing to lose sleep over given that it has only stretched, not derailed, fiscal consolidation goals,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank Ltd. in Singapore. “With the uncertainties from the U.S.-China trade conflict, it will be misguided to obsess over belt-tightening.”The wider deficit target comes on the back of a 7.1% drop in revenue to 244.5 billion ringgit ($58 billion) next year. State oil firm Petroliam Nasional Bhd., known as Petronas, is expected to cut its dividend payout to 24 billion ringgit next year, after doubling its contributions this year to help with state revenue.Not everyone was so sanguine.“While the headline figures point to a modest loosening, fiscal policy is likely to act as a major drag on growth next year,” Capital Economics senior Asia economist Gareth Leather wrote in a research note that predicted GDP growth of just 4.0% in 2020. “The fiscal drag, combined with slowing consumer spending and weakening exports, means growth is likely to slow sharply.” Lim said the government had no intention to reintroduce a Goods and Services Tax, reiterating recent comments from Prime Minister Mahathir Mohamad. Mahathir scrapped the tax in June 2018, fulfilling a campaign pledge but putting state revenues under pressure. The government is promising more subsidies and social assistance as part of Mahathir’s election pledge to lower living costs.Here are some key details from the speech and various budget documents released Friday:Incentives10-year, 70% income-tax break for solar sector, tax breaks for green techTax break for Sukuk issuance, task force for Islamic finance250 million ringgit to improve rural connectivity, 50 million ringgit for 5G ecosystem, 500 million ringgit guarantee for women entrepreneurs, 550 million ringgit for automationSpendingTransport allocation up 8.8% to 12.2 billion ringgit to fund projects such as the Kuala Lumpur mass rapid transit project and Pan Borneo HighwayState operating spending cut by 8.1%, mostly from asset acquisitions and other expenditure, while supplies and services to cost 28% moreSubsidies and social assistance will rise 2.6% to 24.2 billion ringgit due to cash hand outs and welfare assistance, fuel and agriculture related subsidies, toll compensation and education-related assistanceEconomic OutlookGovernment sees inflation picking up next year to 2%, after remaining at 1.5% or below so far this yearMonetary policy is set to remain accommodative and supportive of growth in 20201MDB, CorruptionThe government will “leave no stone unturned” to recover stolen funds and assets from around the world; as of July, international authorities had returned about 1.45 billion ringgitRestitution efforts include “pursuing Goldman Sachs as well as their 17 directors for their complicity in the 1MDB scandal”Government will add 100 people to its anti-graft agency next year(Adds analyst comment in 13th paragraph)\--With assistance from Liau Y-Sing.To contact the reporter on this story: Anisah Shukry in Kuala Lumpur at email@example.comTo contact the editors responsible for this story: Yudith Ho at firstname.lastname@example.org, ;Nasreen Seria at email@example.com, Michael S. ArnoldFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Before the financial crisis, the term “high-yield savings account” would have been considered an oxymoron.Today, such products are thriving. After the Federal Reserve dropped its benchmark lending rate to near-zero in late 2008, big U.S. banks paid virtually nothing to anyone who parked money with them. That presented an opportunity for new, mostly online entrants to swoop in and offer much more. After years of getting zero, customers viewed a 2% interest rate with backing from the Federal Deposit Insurance Corp. as a bonafide steal.Their popularity only grew as the Fed raised interest rates. Even Goldman Sachs Group Inc. got into the game in 2016 with its consumer bank under the brand Marcus. Higher yields fueled the online cottage industry that tracked the best interest rates available each month. A quick search of “best savings account” includes articles updated monthly from NerdWallet, Bankrate, the Balance, SmartAsset and LendingTree’s MagnifyMoney, among others. Fast-forward to the present. With the Fed having cut interest rates twice since the end of July, and possibly lowering them again this month, it’s hardly surprising that these savings accounts have adjusted lower as well. Yet it’s almost comically difficult to find how the various savings rates have changed over time because the entire online ecosystem updates so frequently. One of my editors told me the rate on his Marcus account fell to 1.9% on Oct. 4, the third time that’s happened since he opened it in March. Fortunately, Greg McBride, chief financial analyst at Bankrate.com, sent over some historical data:Clearly, no two banks reacted to the change in Fed trajectory quite the same way. Goldman Sachs’s Marcus and Barclays Plc, for example, clearly anticipated interest-rate cuts and gradually lowered their savings rates ahead of the central bank’s announcements. Ally Financial Inc., by contrast, slashed its rate by 30 basis points in the week after the Fed’s July rate cut. Colorado Federal Savings has only had to drop its promised interest rate once since March because it remained comfortably below the fed funds rate. And then there’s HSBC Holdings Plc’s HSBC Direct, which stubbornly kept its rate elevated until this week, when it made a 25-basis-point reduction.At this point, regardless of the past several months, each bank is running out of room to maneuver after the Fed’s persistent rate cuts. Barclays, as of the most recent Bankrate data available, is offering just 2 basis points less than the upper bound of the fed funds target rate. Marcus was in a similar bind for a couple of weeks but swiftly lowered its rate by an additional 10 basis points. HSBC, for now, seems determined to offer higher rates than the competition, though by a shrinking margin.For those not steeped in financial markets and listening to every word from Fed speakers, it sure might seem like “high-yield savings accounts” aren’t living up to the hype. Round numbers might be purely psychological, but it’d be hard to fault people who balk at interest rates dropping below 2%. Nerdwallet’s Q&A section asks: “What do the best savings accounts look like?” Its answer: “The best savings account interest rates are close to 2.00% or higher.”Obviously, the terms of these savings accounts allow for changes to interest rates at any time. With 10-year Treasury yields at 1.66%, it’s simply not sustainable for banks, even those without brick-and-mortar locations, to offer the same payouts they once did. Some institutions that require high minimum opening balances still offer juicy rates, like 2.4% at Popular Inc.’s Popular Direct, but those seem destined to fall eventually.To be sure, it could be a lot worse for American savers. In Europe, a growing number of German banks are passing on the region’s negative interest rates to their customers as costs become too high to bear. Bigger lenders like Deutsche Bank AG and Commerzbank AG have signaled they’re warming to the idea as well.All of this serves as a backdrop for the Fed’s interest-rate decision on Oct. 30. Wall Street is convinced that after a wave of weak economic data, the Fed will lower rates yet again, even though Chair Jerome Powell has insisted the central bank is not on a preset course and minutes from the central bank’s September meeting revealed that policy makers are sharply divided about the path forward. While Chicago Fed President Charles Evans said he “wouldn’t mind another cut,” notable hawks Kansas City Fed President Esther George and Boston Fed President Eric Rosengren said further lowering the fed funds rate isn’t justified yet because consumer spending, which accounts for 70% of the U.S. economy, remains so strong.If the post-crisis era has taught markets and economists anything, it might just be that lower-for-longer interest rates don’t necessarily get people to raid their savings and spend. Rather, it might be just the opposite — without any hope of earning anything on what they save, consumers may decide to hoard additional cash for a rainy day or to meet their retirement goals. Since mid-2005, the U.S. personal savings rate as a percentage of disposable income has generally trended higher, to about 8% from as low as 2.2%, according to Commerce Department data.Given that U.S. consumers appear to be one of the few bright spots in an otherwise slowing global economy, the Fed should be careful not to make any moves that would slow their momentum. Certainly, one more quarter-point rate cut isn’t going to suddenly break Main Street. According to the latest data from the FDIC, retail deposits at the nine largest institutions increased by more than 2% from a year earlier, to $5.2 trillion, even though more than one-fourth of deposits pay no interest. In other words, many patrons of big banks have become accustomed to getting paid nothing on their checking or savings account balances.And yet, if enough savvy savers become convinced that the Fed will abandon its projections and drop interest rates at just about every meeting, it’s easy to envision a scenario in which money that would have gone into high-yield savings accounts instead gravitates toward fixed-rate bonds or certificates of deposit to lock in a reliable stream of income. That sets up an additional hurdle for those consumers to access their cash and spend to keep the economy afloat.Powell has long said that the central bank will act as appropriate to sustain the economic expansion. Lately, that’s meant cutting interest rates at every turn, to the delight of stock markets. But the Fed would do well to spare a thought for savers as well. It’s easier to spend when it’s clear how much interest your bank account will pay tomorrow.To contact the author of this story: Brian Chappatta at firstname.lastname@example.orgTo contact the editor responsible for this story: Daniel Niemi at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Brian Chappatta is a Bloomberg Opinion columnist covering debt markets. He previously covered bonds for Bloomberg News. He is also a CFA charterholder.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Donald Trump isn’t the only leader with a sense of drama.The timing of China’s announcement that it will remove foreign ownership caps on financial services firms next year is no accident. It arrives as the climactic day of trade talks is about to get under way in Washington, and presents a challenge to the U.S. president’s efforts to limit portfolio flows to his geopolitical rival. Just as the U.S. is telling Americans not to invest in China, President Xi Jinping is welcoming them with open arms. Certainly, China’s offer is tempting. The biggest online brokerages in the U.S. are entering a bloody price war, eliminating trading commissions on stocks and options. China remains the last major market on Earth where traders can still make money. And the stock market is significantly cheaper than its U.S. counterpart.Asset management, in particular, can be lucrative. Unlike much of the world, where passive indexing is on the rise, investors in China still have faith in active managers. Star investors can attract billions of dollars and are able to charge handsome management fees.Moreover, foreigners can be comforted that China is serious about luring portfolio inflows. As we’ve written, the country is edging dangerously close to twin deficits in its fiscal and current accounts. So it needs as much foreign capital as it can get — even in the form of hot portfolio flows — to keep control over the balance of payments and avoid a further buildup of debt.Lurking behind the open invitation, though, are many unanswered questions.For instance, how will foreigners make money from plain-vanilla securities brokerage? While advanced technology has eroded commission fees in the U.S., China’s brokers can’t charge a penny either. That’s for a different reason — an extremely crowded field. With more than 100 players, the return on equity for publicly traded Chinese brokers is just 2.5% compared with 7.8% globally.The biggest can make money by lending to credit-strapped China Inc. Fidelity Investments is adopting a similar model by expanding into the field of alternative credit. Whether foreign institutions will want to wade into the murky world of China’s shadow banking is debatable, though.There’s also the challenge of overcoming entrenched local rivals that dominate the market. Foreign institutions already active in China are candid that even having 100% control of their operations won’t be a game-changer in the near term.Chinese securities firms will fight to defend their turf. Foreign firms will have to pay up to hire staff and build out offices, and then face a time-consuming wait to obtain licenses. Winning deals won't be easy. So far this year, the top 19 underwriters on Chinese domestic IPOs are all mainland firms. Goldman Sachs Group Inc. was the highest-ranking foreign firm, in 20th place.For all that, China has shown that it’s delivering on plans to open its financial markets further. The message for U.S. trade negotiators sitting down in Washington on Friday is not to expect a comprehensive deal. Even as China seeks an end to the trade tensions, it’s moving ahead with Plan B. To contact the authors of this story: Shuli Ren at firstname.lastname@example.orgNisha Gopalan at email@example.comTo contact the editor responsible for this story: Matthew Brooker at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. She previously wrote on markets for Barron's, following a career as an investment banker, and is a CFA charterholder.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Investing.com -- Deals are in the air everywhere: there's the scent of at least a temporary and partial de-escalation between the U.S. and China, "promising signals" of a deal to ensure a smooth Brexit (according to the EU) and banks are set to put a price on the deal of the decade: Saudi Aramco's initial public offering. The bad news? An Iranian oil tanker has reportedly been attacked in the Red Sea, sending oil prices sharply higher. Here's what you need to know in financial markets on Friday, 11th October.
(Bloomberg Opinion) -- The reason it was even conceivable for Dyson Ltd. to make an electric car may also have been why its project was doomed to fail: They’re simply too easy to make. The British company, best known for its expensive vacuum cleaners, has now abandoned its 2 billion-pound ($2.5 billion) plan to branch out and take on the likes of Tesla Inc. and Volkswagen AG. Whereas cars with a combustion engine need about 30,000 components, an electric vehicle needs just 11,000 parts, according to research from Goldman Sachs Group Inc. That reduction in complexity has lowered the barriers to entry for the automotive market, and caused a surge in the number of new carmakers.Dozens of startups have entered the fray over the past few years, from Tesla and Lucid Motors Inc. in the U.S., to Byton Ltd. and NIO Inc. in China. Since 2011, electric vehicle startups have raised $18 billion in funding, and announced 43 models and the capacity to make 3.9 million vehicles a year, according to Bloomberg New Energy Finance. That’s a lot of competition.While Dyson’s 1.1 billion pounds of Ebitda in 2018 gave the relatively small British manufacturer some money to play with, standing out from the electric vehicle crowd would have been quite the challenge.And those earnings are a drop in the ocean compared to the wealth of the automotive giants who are waking up to the epochal shift away from dirty combustion engines. Volkswagen alone has announced plans to invest $52 billion in electrification as it targets production of at least 2 million electric vehicles a year by 2025. Its existing network of dealerships in 153 countries will make it considerably easier to sell those cars.Dyson would also have needed a faster return on its investment than the established carmakers to keep the project going. The small size and embryonic nature of this market would have made that difficult. Just 575,000 electric vehicles were sold globally in the three months through June. That’s 3.7% of the overall automotive market.The ambitions of the British company, controlled by the billionaire inventor James Dyson, won’t be the last to fall by the wayside. Others are struggling. Shares in NIO, a Shanghai-based firm backed by Tencent Holdings Ltd. and Baidu Inc., have fallen 86% from a post-IPO peak last year as its losses have deepened. Faraday Future, a Chinese-backed, U.S.-based rival, teetered on the brink of insolvency before clawing itself back from the edge.Given the brutal environment, Dyson’s retreat looks wise. Such projects often have a detrimental effect on the rest of the business, which in Dyson’s case includes hand- and hairdryers. After Apple Inc. started its own project to build a car back in 2015, it had to carefully control how many software engineers moved from its iOS team (which makes the all-important operating system for iPhones and iPads) to join the secretive project.For Dyson, the car risked becoming a similar distraction. In a letter to employees, he admitted he saw no way to make a car “commercially viable.” Better to concentrate resources on his core competencies. A failure at a later date would have been much more painful, and potentially ruinous. To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Goldman Sachs reports 2019 third quarter earnings next Tuesday October 15 before the New York market open. Financial stocks in particular have been in the firing line as the FED interest rate path continues to point south and worries surrounding global growth escalate.
Financial stocks hitched a ride to lead the broader market higher as Treasury yields caught a bid on rising optimism over a progress on a U.S. and China trade deal thanks to President Donald Trump confirming that he would meet with Chinese Vice Premier Liu He on Friday. In the hours leading up to the trade talks, traders had to contend with a wave of conflicting reports, which had suggested the potential for progress on this week’s talks was murky at best. Rising Treasury yields are seen as a boon for banks, letting them boost their net interest margin, the difference between the interest income the banks generate and the interest they pay out.
Stocks are lower today after a report that China wants more trade talks, and major banks are set to report earnings tomorrow. Portfolio Manager at Diamond Hill Capital Management John McClain and Chief Market Strategist at Miller Tabak & Co Matt Maley join Yahoo Finance's Brian Sozzi and Scott Gamm to discuss.
JPMorgan Chase and 3M are among a list of stocks investors should consider buying ahead of the start of earnings season next week and a potential U.S.-China trade deal, Kramer Capital Research's Hilary Kramer tells Reuters' Fred Katayama