Europe's biggest biotech firm and rare disease medication specialist Actelion has confirmed that it is in early discussions with U.S. healthcare firm Johnson & Johnson regarding a possible takeover of the company which could be worth upwards of $25 billion.
A spokeswoman for the company said there was no guarantee that any deal would go through and talks are at a “below executive” level at this time.
J&J have been on the ropes in the past year as its biggest selling product Remicade, a popular arthritis medication, faces stiff competition from a cheaper Pfizer alternative.
In response to the takeover news, Actelion stock jumped nearly 20 percent to a record high of 187.52 Swiss francs in early trading on Friday. Closing price was up 17 percent at 184.55, its best performance of the year by far.
Regulators have been getting tough on medication pricing certifications over the past few years, but those companies specializing in rare diseases have been largely exempt from scrutiny, making them a very attractive target in M&A.
Actelion's focus on lung disease puts them in that category and many analysts say that due to the industry’s appetite for businesses such as these, the final bid for the company’s shares could be as high as $250 per share.
Sales forecasts put the firm’s operating profits from their lung medication at around $5 billion in the next 4-years. Actelion's Opsumit and Uptravi medication relieve high blood pressure in the lung region which sometimes proves fatal, especially in young children.
“J&J are looking for some diversification and to boost their drug pipeline with a focus on Europe and the U.S.,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management. “We’ve just seen them purchase Abbott Laboratories' eye care business for around $4 billion and they’ve had their eye on Actelion for a while.”
One major sticking point in the deal could be Actelion’s founder and CEO Jean-Paul Clozel who has said on numerous occasions that he would like to see the company remain autonomous. Clozel holds a 4 percent stake and has previously called on shareholders to block attempts by activist investor groups to sell the firm, and since then the company’s shares have quadrupled in value.
J&J could face tough competition on the bid by Swiss rival Novartis AG, however a spokesman for the group said they have not entered the bidding process.
Friday, November 25, 2016
Monday, November 21, 2016
U.S. stocks plateau while Nasdaq reaches new peak
U.S. Federal Reserve officials sent out their clearest message yet that they would hike interest rates next month as the Dow and S&P 500 remained near their all time highs and the Nasdaq recorded its highest ever level at the end of the week.
Janet Yellen, Fed chair, mentioned last Wednesday that the central bank would change interest rates “in the not too distant future” and according to Thomson Reuters reports, traders are now pricing in an 80 percent chance of a hike before the year is out.
Some other Fed officials, like St. Louis Fed President James Bullard, have also said that the focus is now very much on the central bank’s course of action regarding rates in 2017, further enhancing the probability that they will hike rates next month.
Since republican candidate Donald Trump pulled off a surprise triumph in his bid to secure the White House, U.S. stocks have been on a whirlwind rally based on his pledges to boost fiscal spending, especially on infrastructure projects within America, and reduce corporate and private taxes.
Those factors are seen to be strong plus points for the U.S. economy, but the stellar U.S. stock performance levelled off slightly this week as investors waited for Trumps announcements in relation to his appointments to administrative posts.
“We’re advising clients to hold off at the moment and await some clarity on many of the President-elect’s policies,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management in an email to investors yesterday.
“We need to be aware that this sudden spurt in growth, especially with financials, may just be a knee jerk high based on flimsy perceptions of what might happen under a Trump administration. Caution is required at this point in time.” Poulson added.
The Nasdaq hit a record high of 18,879.46 today and it closed yesterday just 3 points lower from that historic figure, while the Dow Jones Industrial average lost 23.98 points, or 0.12 percent. The S&P 500 hit a record peak this time last month and closed slightly down on that high at 2,193.80.
Janet Yellen, Fed chair, mentioned last Wednesday that the central bank would change interest rates “in the not too distant future” and according to Thomson Reuters reports, traders are now pricing in an 80 percent chance of a hike before the year is out.
Some other Fed officials, like St. Louis Fed President James Bullard, have also said that the focus is now very much on the central bank’s course of action regarding rates in 2017, further enhancing the probability that they will hike rates next month.
Since republican candidate Donald Trump pulled off a surprise triumph in his bid to secure the White House, U.S. stocks have been on a whirlwind rally based on his pledges to boost fiscal spending, especially on infrastructure projects within America, and reduce corporate and private taxes.
Those factors are seen to be strong plus points for the U.S. economy, but the stellar U.S. stock performance levelled off slightly this week as investors waited for Trumps announcements in relation to his appointments to administrative posts.
“We’re advising clients to hold off at the moment and await some clarity on many of the President-elect’s policies,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management in an email to investors yesterday.
“We need to be aware that this sudden spurt in growth, especially with financials, may just be a knee jerk high based on flimsy perceptions of what might happen under a Trump administration. Caution is required at this point in time.” Poulson added.
The Nasdaq hit a record high of 18,879.46 today and it closed yesterday just 3 points lower from that historic figure, while the Dow Jones Industrial average lost 23.98 points, or 0.12 percent. The S&P 500 hit a record peak this time last month and closed slightly down on that high at 2,193.80.
Friday, November 18, 2016
Iranians considering new OPEC deal, nearer to agreement
According to sources close to the Organization of the Petroleum Exporting Countries (OPEC), the cartel is getting closer to finalizing an agreement that will put a freeze on crude production for the first time in eight years, and most members are prepared to grant concessions to the only country that is holding up the deal, Iran.
Tehran has been suffering from decreased capital inflow since Western sanctions started, but the restrictions were eased at the start of this year. However, the second largest Middle-East oil producer wants an exemption from the OPEC output cap in order for the country to continue its recovery.
Some of the larger crude producing nations in OPEC, including Saudi Arabia, feels Iran is already running at full capacity and that giving only them concessions would be unfair.
Gulf sources previously reported that OPEC asked Tehran to cap its production at 3.7 million barrels per day, but the Iranians put forward a figure of between 3.9 and 4.3 million bpd. At the sidelines of a gas forum in Doha last week, OPEC eventually offered an updated figure of 3.8 million bpd but have yet to receive a reply from the Iranian energy minister Bijan Zanganeh.
The Islamic republic is currently producing around 3.9 million bpd, so the latest OPEC offer would not give the country much room for growth while restrictions are in place.
Interested parties are hoping OPEC can come to some form of agreement soon, and all eyes will be on its next official meeting in Vienna at the end of the month.
Saudi Arabia's Khalid al-Falih said the gas forum meeting went as expected but declined to comment further.
“A fast conclusion to this saga would be beneficial to the OPEC nations because they would then be able to involve some of the bigger oil producing countries who are not part of the group, like Russia,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management in a phone interview for Reuters.
“The Kremlin has been very positive about supporting the output cap but their interest could dwindle if disagreements and infighting continue,” Poulson continued.
Alexander Novak, Russian Energy Minister, mentioned at last week’s meeting that many non-OPEC nations would be interested in taking pro-active measures to manage issues in the world’s oil market.
Tehran has been suffering from decreased capital inflow since Western sanctions started, but the restrictions were eased at the start of this year. However, the second largest Middle-East oil producer wants an exemption from the OPEC output cap in order for the country to continue its recovery.
Some of the larger crude producing nations in OPEC, including Saudi Arabia, feels Iran is already running at full capacity and that giving only them concessions would be unfair.
Gulf sources previously reported that OPEC asked Tehran to cap its production at 3.7 million barrels per day, but the Iranians put forward a figure of between 3.9 and 4.3 million bpd. At the sidelines of a gas forum in Doha last week, OPEC eventually offered an updated figure of 3.8 million bpd but have yet to receive a reply from the Iranian energy minister Bijan Zanganeh.
The Islamic republic is currently producing around 3.9 million bpd, so the latest OPEC offer would not give the country much room for growth while restrictions are in place.
Interested parties are hoping OPEC can come to some form of agreement soon, and all eyes will be on its next official meeting in Vienna at the end of the month.
Saudi Arabia's Khalid al-Falih said the gas forum meeting went as expected but declined to comment further.
“A fast conclusion to this saga would be beneficial to the OPEC nations because they would then be able to involve some of the bigger oil producing countries who are not part of the group, like Russia,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management in a phone interview for Reuters.
“The Kremlin has been very positive about supporting the output cap but their interest could dwindle if disagreements and infighting continue,” Poulson continued.
Alexander Novak, Russian Energy Minister, mentioned at last week’s meeting that many non-OPEC nations would be interested in taking pro-active measures to manage issues in the world’s oil market.
Monday, November 14, 2016
U.S. banking sector could continue to see gains under Trump
With the expectation that a Trump presidency would see lighter regulations in the banking sector and the prospect of a gentle rise in interest rates starting next month, many analysts believe the post election rally in the industry is just the start of a major upswing.
Optimism is hitting new heights as a prolonged dip in the sector may finally be coming to an end. Banks have been suffering under ultra-low rates and tougher rules after the world economic crisis of 2007-2009.
Following Trump’s shock victory, the S&P 500 bank subsector jumped 10.3 percent, posting its best figures in over seven years.
Shares for some of America’s biggest financial houses climbed over 10 percent, and investors say the increases are not even close to their ceiling yet.
“Bank shares have a long way to go before they can be considered expensive,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management. “If we see the expected hike from the Fed before the end of the year and if the Trump administration gives some indications as to how regulations are going to be altered then the current upswing in shares can most definitely go higher.”
One of the more notable regulations that Trump might change is the minimum asset threshold for so called “too big to fail” financial institutions. The level is currently set at $50 billion. If the government raised this to $300 billion, for example, it could offer a lot more flexibility to banks operating at that kind of level.
Mr. Trump is due to make announcements regarding his administration postings in the next month and the financial community will be eager to learn what kinds of personalities the President-elect will put in charge of The Treasury and the Department of Commerce.
Kevin Baker, Piper Jaffray chief analyst, said, “It’s going to be a very interesting few months as Trump takes over the reins of power. I don’t think anyone is certain how many of his pledges he will deliver on but certainly the expectation of his economic policies is having a positive effect on the markets at this moment in time.”
Trump has already made clear that he will not be forging ahead with a free trade agreement involving Pacific-rim nations.
Optimism is hitting new heights as a prolonged dip in the sector may finally be coming to an end. Banks have been suffering under ultra-low rates and tougher rules after the world economic crisis of 2007-2009.
Following Trump’s shock victory, the S&P 500 bank subsector jumped 10.3 percent, posting its best figures in over seven years.
Shares for some of America’s biggest financial houses climbed over 10 percent, and investors say the increases are not even close to their ceiling yet.
“Bank shares have a long way to go before they can be considered expensive,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management. “If we see the expected hike from the Fed before the end of the year and if the Trump administration gives some indications as to how regulations are going to be altered then the current upswing in shares can most definitely go higher.”
One of the more notable regulations that Trump might change is the minimum asset threshold for so called “too big to fail” financial institutions. The level is currently set at $50 billion. If the government raised this to $300 billion, for example, it could offer a lot more flexibility to banks operating at that kind of level.
Mr. Trump is due to make announcements regarding his administration postings in the next month and the financial community will be eager to learn what kinds of personalities the President-elect will put in charge of The Treasury and the Department of Commerce.
Kevin Baker, Piper Jaffray chief analyst, said, “It’s going to be a very interesting few months as Trump takes over the reins of power. I don’t think anyone is certain how many of his pledges he will deliver on but certainly the expectation of his economic policies is having a positive effect on the markets at this moment in time.”
Trump has already made clear that he will not be forging ahead with a free trade agreement involving Pacific-rim nations.
Friday, November 11, 2016
Fed will observe and adjust rates as needed - Fischer
Fed Vice Chair Stanley Fischer said late last week that he is encouraged by the state of the American economy and if conditions continue as they are, the Fed would bring in incremental interest rate hikes but the situation needs to be constantly monitored.
10-year Treasury yields have gained slightly since the surprise election of Republican Donald Trump, even though many analysts saw his win as a negative for the economy as a whole.
“We are looking very closely at the markets and will adjust policy as needed,” said Fischer in a central banking conference in Santiago, Chile. “At this moment in time we need to be flexible and manage policy almost on the fly. Whichever way the market turns we will be ready to adapt.”
“Overall we are encouraged by the U.S. economy and we should see interest rates increase in the near future,” he added.
The central bank’s second-in-command also mentioned that they were “getting closer” to their jobs and inflation targets which made the case for tightening monetary policy even stronger. Analysts in the economic circles tend to agree.
“At the moment we can’t see anything other than a gradual continued expansion for the American economy,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management.
“If the Fed has the same view then it would be the right time to get interest rates up to normal levels slowly.”
President-elect Trump mentioned he was happy to continue fiscal stimulus and although Fischer didn’t mention what effect the incoming Republican would have for overall economic policy, he confirmed the Fed would be happy with steady stimulus for the economy as it enters a more solid growth phase.
“Should fiscal policy be expanded I don’t think anyone could argue that it wouldn’t help the economy and take some of the burden for growth. The Fed board certainly would see it as a useful addition to the current upswing,” Fischer said.
Should the Fed raise interest rates next month, as is widely expected, they are likely to keep the hike extremely gradual and the prospect of a unified Republican government could mean greater levels of cooperation between departments and less red tape in Washington, according to many experts.
The Fed is expected to make an announcement regarding policy after their monthly meeting in late December and the official minutes will be released shortly after.
10-year Treasury yields have gained slightly since the surprise election of Republican Donald Trump, even though many analysts saw his win as a negative for the economy as a whole.
“We are looking very closely at the markets and will adjust policy as needed,” said Fischer in a central banking conference in Santiago, Chile. “At this moment in time we need to be flexible and manage policy almost on the fly. Whichever way the market turns we will be ready to adapt.”
“Overall we are encouraged by the U.S. economy and we should see interest rates increase in the near future,” he added.
The central bank’s second-in-command also mentioned that they were “getting closer” to their jobs and inflation targets which made the case for tightening monetary policy even stronger. Analysts in the economic circles tend to agree.
“At the moment we can’t see anything other than a gradual continued expansion for the American economy,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management.
“If the Fed has the same view then it would be the right time to get interest rates up to normal levels slowly.”
President-elect Trump mentioned he was happy to continue fiscal stimulus and although Fischer didn’t mention what effect the incoming Republican would have for overall economic policy, he confirmed the Fed would be happy with steady stimulus for the economy as it enters a more solid growth phase.
“Should fiscal policy be expanded I don’t think anyone could argue that it wouldn’t help the economy and take some of the burden for growth. The Fed board certainly would see it as a useful addition to the current upswing,” Fischer said.
Should the Fed raise interest rates next month, as is widely expected, they are likely to keep the hike extremely gradual and the prospect of a unified Republican government could mean greater levels of cooperation between departments and less red tape in Washington, according to many experts.
The Fed is expected to make an announcement regarding policy after their monthly meeting in late December and the official minutes will be released shortly after.
Wednesday, November 9, 2016
Neighbour currencies gain as markets back Clinton victory
The financial community continued to bet on a Clinton presidential victory in the next 12 hours. As it did, both the Canadian dollar and the Mexican peso rose with the greenback against the yen and Swiss franc.
Many research firms are projecting a Clinton victory in some of the traditional battleground states, and market sources have cited that data as a reason for the currency movements.
The Japanese yen has always been seen as a “safe haven” currency, and an unlikely Trump win would most probably see capital shift into that direction, along with the Swiss franc which also has some level of perceived security. Clinton is seen as a much more stable candidate for the markets, due to her relatively neutral stance on trade, foreign policy and immigration.
Conversely, Republican candidate Donald Trump has promised to re-negotiate the NAFTA with America’s neighbours and even erect a wall between the United States and Mexico which understandably has investors spooked.
“Only a few hours ago VoteCastr agency had Florida trending towards Mrs. Clinton, so this is why we are now seeing Clinton-orientated trading going on in the markets. You could say it’s betting on non-volatility,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management.
“Of course, polls and research data has been wrong before. We only need to look back a few months at what happened with Brexit. A Clinton win in Florida would pretty much seal it for her though.” Poulson added.
The greenback hit a monthly high against the yen at 105.20 and levelled up just below that at 105.06, a 0.65 percent gain. The dollar also saw a quarter percent gain versus the Swiss franc to 0.9767.
The Mexican peso hit a monthly high versus the dollar, rising over 1 percent, and the Canadian dollar, affectionately referred to as the ‘loonie”, also climbed 0.3 percent against its neighbour’s currency.
According to the most prominent polls, Clinton has over a 90 percent chance of claiming the White House, leading to little, if any, hedging on a Trump win. If the Republican nominee were to pull off an unlikely victory come tomorrow morning, the markets will undoubtedly go through a substantial period of high volatility as investors scramble to exit.
As of the last set of data, Clinton is set to easily surpass the 270 Electoral College votes needed to claim victory.
Many research firms are projecting a Clinton victory in some of the traditional battleground states, and market sources have cited that data as a reason for the currency movements.
The Japanese yen has always been seen as a “safe haven” currency, and an unlikely Trump win would most probably see capital shift into that direction, along with the Swiss franc which also has some level of perceived security. Clinton is seen as a much more stable candidate for the markets, due to her relatively neutral stance on trade, foreign policy and immigration.
Conversely, Republican candidate Donald Trump has promised to re-negotiate the NAFTA with America’s neighbours and even erect a wall between the United States and Mexico which understandably has investors spooked.
“Only a few hours ago VoteCastr agency had Florida trending towards Mrs. Clinton, so this is why we are now seeing Clinton-orientated trading going on in the markets. You could say it’s betting on non-volatility,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management.
“Of course, polls and research data has been wrong before. We only need to look back a few months at what happened with Brexit. A Clinton win in Florida would pretty much seal it for her though.” Poulson added.
The greenback hit a monthly high against the yen at 105.20 and levelled up just below that at 105.06, a 0.65 percent gain. The dollar also saw a quarter percent gain versus the Swiss franc to 0.9767.
The Mexican peso hit a monthly high versus the dollar, rising over 1 percent, and the Canadian dollar, affectionately referred to as the ‘loonie”, also climbed 0.3 percent against its neighbour’s currency.
According to the most prominent polls, Clinton has over a 90 percent chance of claiming the White House, leading to little, if any, hedging on a Trump win. If the Republican nominee were to pull off an unlikely victory come tomorrow morning, the markets will undoubtedly go through a substantial period of high volatility as investors scramble to exit.
As of the last set of data, Clinton is set to easily surpass the 270 Electoral College votes needed to claim victory.
Tuesday, November 8, 2016
Markets react violently as Clinton win becomes “less likely”
As Donald Trump widened his possible path to the White House with a victory in Ohio, the country’s stock index futures plummeted and global markets in general reacted violently to the possibility that Hillary Clinton could lose this race, defying the polls.
Traditional battleground states have remained close but so have states that were expected to be held easily by Clinton, leading many analysts to believe that her chances of winning the campaign overall are waning.
With many networks calling the crucial state of Florida and also North Carolina for Mr Trump, financial markets have been abuzz with a probable upset.
There was a 5 percent drop in the S&P futures ESc1 on news of those state results, and the Dow Industrials futures slumped over 690 points.
The financial community as a whole has seen Clinton as the safe bet for stability in the markets, while a Trump presidency is expected to have the opposite effect due to his radical stance on trade, national security and foreign policy.
“The fact is that a Hillary win is looking far less likely now and not many analysts hedged for this, so we are seeing an exodus,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management. “This is why we’ve seen over a million contracts changing hands on the S&P 500, and the index over 4 percent down. Similar results for other areas of the markets too. It’s still way too early to call but Trump certainly has a good chance now.”
Reflecting investor anxiety over a Trump victory, the CBOE Volatility index soared over 35 percent. The Mexican peso took a battering as it fell to a record low of 20 versus the greenback.
Ameriprise Financial chief analyst David Joy said, “You have to admit that not many polls and experts saw this situation occurring as we move towards the evening polls. It’s going to be a big shock to the system if Trump wins and you are seeing a lot of scrambling around not just on Wall Street but in Asian markets too. Asset prices are hitting very surprising levels. There’s still a long way to go today but preliminary results show that this is going to be very close.”
Traditional battleground states have remained close but so have states that were expected to be held easily by Clinton, leading many analysts to believe that her chances of winning the campaign overall are waning.
With many networks calling the crucial state of Florida and also North Carolina for Mr Trump, financial markets have been abuzz with a probable upset.
There was a 5 percent drop in the S&P futures ESc1 on news of those state results, and the Dow Industrials futures slumped over 690 points.
The financial community as a whole has seen Clinton as the safe bet for stability in the markets, while a Trump presidency is expected to have the opposite effect due to his radical stance on trade, national security and foreign policy.
“The fact is that a Hillary win is looking far less likely now and not many analysts hedged for this, so we are seeing an exodus,” said Stuart Poulson, Head of Corporate trading at Nikko-Desjardins Asset Management. “This is why we’ve seen over a million contracts changing hands on the S&P 500, and the index over 4 percent down. Similar results for other areas of the markets too. It’s still way too early to call but Trump certainly has a good chance now.”
Reflecting investor anxiety over a Trump victory, the CBOE Volatility index soared over 35 percent. The Mexican peso took a battering as it fell to a record low of 20 versus the greenback.
Ameriprise Financial chief analyst David Joy said, “You have to admit that not many polls and experts saw this situation occurring as we move towards the evening polls. It’s going to be a big shock to the system if Trump wins and you are seeing a lot of scrambling around not just on Wall Street but in Asian markets too. Asset prices are hitting very surprising levels. There’s still a long way to go today but preliminary results show that this is going to be very close.”
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