|Bid||134.17 x 800|
|Ask||134.28 x 800|
|Day's range||134.01 - 135.02|
|52-week range||91.11 - 135.78|
|Beta (3Y monthly)||1.22|
|PE ratio (TTM)||13.25|
|Forward dividend & yield||3.60 (2.68%)|
|1y target est||N/A|
Fed Chairman Jerome Powell said Wednesday that the Fed could "adjust the details" of its balance sheet policies and repo operations to prevent another flare-up in money markets.
(Bloomberg) -- China yuan traders are undaunted by Sunday’s looming start of fresh U.S. tariffs even as investors elsewhere are piling into protection.As President Donald Trump’s Dec. 15 deadline for more duties on Chinese imports draws closer, one-week risk reversals -- a measure of demand for bearish yuan bets relative to bullish calls in the options market -- have been at their lowest since July. And while volatility gauges for the currency have jumped in the past week, they remain well below levels reached in August, when the yuan weakened through 7 per dollar for the first time since 2008 amid trade worries.An unusual sense of tranquility has descended on China’s financial markets the past month, in part on investors awaiting clearer insight on the state of the U.S.-China trade fight amid a near-daily dose of headlines.While the offshore yuan weakened slightly Wednesday after White House trade adviser Peter Navarro said he has “no indication” whether the looming tariffs will be implemented as scheduled, market sentiment was supported by people familiar with the discussions saying that Chinese officials expect the duties to be delayed.Yuan traders anticipate the same, said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. in Singapore. “Volatility spikes have been nothing out of the ordinary and the spot market is still calm,” he added. “I guess all the headlines about how both sides are really close to a deal have given them some comfort.”Some Chinese banks have chosen to reduce their long and short dollar positions ahead of the tariff deadline, according to three traders. Most firms have reached their year-end performance targets, so there’s no need to take fresh risk at this time, the traders added, asking not to be named as they’re not authorized to speak with the media.Amid the trade uncertainty in recent days, one-week volatility in both the onshore and offshore yuan is back to October levels. But “volatility is rising from a very low place,” said Stephen Innes, chief Asia market strategist at AxiTrader Ltd. “It’s cheap relative to the risks that lie ahead.”Read: JPMorgan’s Dimon Says He Expects U.S.-China Phase-One Trade DealThe yuan has traded in a roughly 1% range the past month, sticking close to the 7 per dollar level. Citigroup Inc. told its clients last week that while it doubted new tariffs will be enacted Dec. 15, the yuan could weaken to 7.2 to 7.35 per dollar in offshore trading if the levies get priced into the market. It’s currently around 7.03.Meanwhile, the volatility spread between the onshore and offshore yuan has widened to the most since October. That’s largely on dwindling mainland trading momentum ahead of year-end, said Frank Zhang, deputy general manager for global markets at Bank of Hangzhou Co.(Adds current level for yuan in eighth paragraph)\--With assistance from Ran Li.To contact Bloomberg News staff for this story: Livia Yap in Shanghai at firstname.lastname@example.org;Qizi Sun in Beijing at email@example.comTo contact the editors responsible for this story: Sofia Horta e Costa at firstname.lastname@example.org, Kevin Kingsbury, Fran WangFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- “Zombie Libor” and “Libor apocalypse” are probably phrases that send chills down the spines of Wall Street traders. It turns out the terms are also triggering anxiety among swaps regulators.U.S. Commodity Futures Trading Commission Chairman Heath Tarbert said Wednesday that his agency is tracking the threat of the London Interbank Offered Rate not entirely going away when banks are no longer required to provide submissions used to calculate it. That could lead to a situation in which the benchmark still exists, but isn’t a legitimate borrowing rate.“To avoid a potential zombie Libor apocalypse, various proposals are currently being discussed,” Tarbert said in a speech. “We are monitoring these discussions and look forward to responding to any proposals in due course.”Libor is used to set rates on hundreds of trillions of dollars worth of financial products. If every bank stops submitting data at the end of 2021, it will probably die. But many on Wall Street are concerned that the panel of contributors won’t shrink all the way to zero, leaving the index alive but a bad representation of lending rates. That, and the harm it might do to derivatives markets, is what Tarbert is trying to avoid.To contact the reporter on this story: Jesse Westbrook in Washington at email@example.comTo contact the editors responsible for this story: Jesse Westbrook at firstname.lastname@example.org, Gregory Mott, Nick BakerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Global equity markets rose on Wednesday after the Federal Reserve indicated interest rates would remain on hold for some time - a positive for risk assets - while oil prices fell after data showed an unexpected increase in U.S. crude inventories. New projections showed 13 of the U.S. central bank's 17 policymakers foresee no change in rates until at least 2021 as moderate economic growth and low unemployment are expected to continue through next year's presidential election.
U.S law firm Hausfeld has filed a lawsuit in London against major banks over alleged foreign exchange (forex) rigging in a bid to take over a high-profile British class action from compatriot Scott & Scott. The new action, called FX Claim UK, seeks damages from Barclays, Citibank, RBS, JPMorgan , UBS and MUFG Bank over their role in forex spot trading cartels between 2007 and 2013 and was filed at London's Competition Appeal Tribunal (CAT) on Wednesday.
(Bloomberg) -- Explore what’s moving the global economy in the new season of the Stephanomics podcast. Subscribe via Apple Podcast, Spotify or Pocket Cast.Bank of Japan officials see a sizable impact from government stimulus announced last week, raising the likelihood that the bank will upgrade its economic forecasts for the first time in a year next month, according to people familiar with the matter.Japan Leans on Fiscal Stimulus to Keep Recession at BayThe possibility of higher growth projections would likely strengthen a building view among economists that the BOJ will stand pat on key policy measures at its meeting next week and for some time to come, barring unexpected developments in U.S.-China trade talks, markets or economic data.The BOJ doesn’t revise its growth projections until January, when it next issues quarterly forecasts.The package announced last week by Prime Minister Shinzo Abe includes 13.2 trillion yen ($121 billion) of fiscal measures to support an economy facing an export slowdown, typhoon damage and the fallout from a recent sales tax hike. While the economy grew in the first three quarters with the support of domestic demand, it is forecast to shrink 2.6% in the last three months of the year.Officials at the BOJ expect the government’s stimulus to boost growth from the next fiscal year starting in April, the people said. The central bank’s projections are likely to be largely in line with the government’s view, according to some of the people.The government said its fiscal measures will boost growth by 1.4 percentage point over time, but hasn’t made clear the specific impact for the next fiscal year.Economists have cast doubt on the government’s figure for boosting growth, but they largely agree that the package makes it easier for the BOJ to hold off on extra stimulus. Analysts at banks including Barclays Plc and JPMorgan Chase & Co. are telling clients they should no longer expect the BOJ to ease anytime next year.When the Abe administration introduced economic stimulus measures in 2016, the BOJ raised its growth forecast for the following fiscal year to 1.3% from 0.1%.(Adds more comments and details throughout.)To contact the reporters on this story: Toru Fujioka in Tokyo at email@example.com;Sumio Ito in Tokyo at firstname.lastname@example.orgTo contact the editors responsible for this story: Malcolm Scott at email@example.com, Jason Clenfield, Paul JacksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
JPMorgan declined to comment. Mezzanine debt, a hybrid of debt and equity financing, gives the lender the right to convert to an equity interest in the company in case of default, after other senior lenders are paid. Often unsecured, it typically demands a much higher yield than senior debt.
(Bloomberg) -- JPMorgan Chase & Co. is raising money for a mezzanine fund through its asset- and wealth-management arm, according to people with knowledge of the matter.The firm is looking to raise as much as $1 billion from investors for a fund that would focus on providing financing to companies using a hybrid of equity and debt, said one of the people, who asked not to be identified because the information isn’t public. The bank has already raised a significant portion of its target, one of the people said.The decision caps years of discussion about how to bridge a gap in the asset manager’s alternatives offerings after JPMorgan spun out the credit manager formerly known as Highbridge Principal Strategies in early 2016, leaving it without a mezzanine fund, said one of the people. At the time, JPMorgan considered raising its own fund but shelved the plans because it didn’t want to compete with HPS while it maintained a minority stake in Highbridge’s private-equity business, the person said.A JPMorgan spokeswoman declined to comment.The new fund is part of a strategy to boost the bank’s $150 billion alternatives business as investors increase allocations to private equity, real estate and private credit offerings. Mezzanine funds invest in the riskier portion of the capital structure in exchange for higher returns.Still, fundraising for mezzanine strategies has taken a hit as managers have struggled to put cash to work amid competition from other products like unitranche financing, according to a November report from Ernst & Young.Earlier this year, JPMorgan changed the focus for its $2 billion multistrategy Highbridge fund -- converting it into a credit-only vehicle.Mezzanine financings are typically used in private debt deals to midsize companies that are too small to tap capital markets.\--With assistance from Alan Goldstein.To contact the reporters on this story: Michelle F. Davis in New York at firstname.lastname@example.org;Lisa Lee in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Dan Reichl, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Xerox Holdings Corp. believes its proposed HP Inc. takeover would create as much as $1.5 billion in potential revenue growth, according a presentation to HP’s shareholders made public Monday.The printer maker outlined its case for a tie-up between the companies, arguing the combined firm will be worth about $31 a share to HP investors on a pro-forma basis. The merged entity will generate more than $4 billion in free cash flow in the first year before taking any synergies into account, according to the presentation, confirming a report in Bloomberg News.“The value of the transaction goes beyond economics. In consolidating industries, first movers not only win but also have an opportunity to reshape the competitive landscape in an enduring way,” John Visentin, Xerox’s chief executive officer, said in the presentation.Xerox has already said it believes the combination would create roughly $2 billion in synergies, which it argues could be achieved in 24 months. Those savings could be achieved through streamlining their operations by reducing the number of suppliers the combined company would use, cost reductions on information technology and reducing its real estate footprint, among other measures.The presentation for HP shareholders goes further, saying a merger of their operations would allow cross-selling and a unified platform for clients. That could yield an estimated $1 billion to $1.5 billion revenue growth, Xerox said.To get to this amount, Xerox says it has a three-year roadmap that includes generating $540 million to $750 million from pitching complementary products to existing clients, $50 million to $100 million from manufacturing and distribution efficiencies and $350 million to $400 million from integrating HP products into Xerox’s office-as-a-service offerings.It also said there could be $300 million to $400 million in growth from Xerox’s services and software and $150 million to $300 million from offering Xerox’s leasing options to HP customers. A representative for Xerox declined to comment, while a representative for HP couldn’t immediately comment.HP’s shares were little-changed at $20.50 at 9:58 a.m. Monday, while Xerox rose less than 1% to $37.99.HP last month rejected an unsolicited, cash-and-stock offer from Xerox worth $22 per share, arguing it undervalued the company and citing concerns about the health of its smaller rival’s business. Xerox said it planned to take its case straight to HP’s shareholders after the Palo Alto-based hardware maker refused to grant the mutual due diligence it requested.The presentation to be released publicly Monday is the first step in that effort, and Visentin will start meeting some HP shareholders this week to sell the plan. Xerox has asked for three weeks of mutual due diligence in order to validate its case for a tie-up, noting in the presentation it expects no financing conditions and no regulatory risks.JPMorgan Chase & Co. analysts said this month that a merger carried risks and could cause some near-term downside in both stocks. Their Dec. 3 note added that the deal would leave investors more exposed to “a declining printer business.”Activist investor Carl Icahn, who owns as stake in both companies, called on HP last week to push ahead with the talks, calling the deal a “no-brainer.” He accused the company’s directors and management of seeking to preserve their own jobs instead of protecting shareholders’ interests. He argued HP’s standalone plans amount “to little more than rearranging the deck chairs on the Titanic.”Icahn is Xerox’s largest holder with a nearly 11% stake in the Norfolk, Connecticut-based company. He also owns a 4.2% of HP, making him its fifth-largest holder, according to data compiled by Bloomberg.(Updates with details of presentation starting in first paragraph)To contact the reporter on this story: Scott Deveau in New York at email@example.comTo contact the editors responsible for this story: Liana Baker at firstname.lastname@example.org, Fion Li, Ben ScentFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Fiverr International Ltd.’s initial zing has almost entirely faded since its June IPO, with the stock falling for six straight days to below its IPO price as insiders’ and early investors’ first chance to sell looms on Tuesday.The biggest stakeholders include Viola Private Equity’s Jonathan Kolber, Deer VII & Co., Accel London III Associates, Square Peg Group, and co-founder and chief executive officer Micha Kaufman, according to data compiled by Bloomberg. But post-IPO stock weakness, with shares off the June high of $44 by more than 52%, make it less likely shareholders will walk away.Fiverr chief Kaufman was unavailable to respond to queries.The operator of an online marketplace for software services had the fourth-best debut of this year’s 239 IPOs, rising a whopping 90% from offer to its first close. That ranks just behind Beyond Meat Inc., Adaptive Biotechnologies Corp., and Cortexyme Inc., each of which has done better hanging on to initial gains. Underwriters on the Fiverr IPO were JPMorgan, Citi, BofA, UBS, Oppenheimer, Needham, and JMP Securities.Analysts appear split, with four buy, three hold and no sell ratings on the stock, according to data compiled by Bloomberg. But with price targets ranging from $22 to $34, they seem to agree that debut highs are unlikely to be seen again anytime soon. To contact the reporter on this story: Crystal Kim in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Scott SchnipperFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The Bank for International Settlements — the central bank of central banks — has weighed in with its analysis of what went wrong in mid-September when the U.S. repurchase market all of a sudden dried up (for the first time in a decade). It looks like it has missed the point.While pointing the finger at a raft of different reasons and players, notably hedge funds, BIS doesn’t really answer the salient questions: Why haven’t the elevated funding rates that arose in September gone away and what can be done to prevent something like the original event from happening again?There are obvious quick fixes with which the U.S. Federal Reserve and Treasury have responded swiftly, such as ensuring extra liquidity on tax deadline or auction payment days. But the wider problem is that the post-crisis regulation of banks has become too rigid, and that is going to need addressing at some point.The repo market is the plumbing of the financial system where government securities are lent and borrowed for periods ranging from overnight to several months. This constant access to liquidity greases the wheels of government securities and the wider credit markets. Since the global financial crisis, cash has always been plentiful, so when repo rates all of sudden jumped as high as 10% in September, it was a rude awakening.The Fed has been in full firefighter mode ever since — along with the U.S. Treasury — to try to make sure the spike in rates isn’t repeated over the critical year-end funding period. But short-term liquidity is no substitute for a proper long-term fix. With a Dec. 16 tax payment day looming (a day on which cash is naturally drained from the banking system), and with the repo rate over the year end more than double the Fed rate of 1.5%-1.75%, this is not proving to be a temporary problem.It is in fact a confluence of systemic issues; it’s not just down to the too-swift reduction of the Fed’s bond holdings from the Quantitative Easing programs or a sudden abundance of new Treasury bonds for sale.Similarly trying to blame hedge funds for their arbitraging activities misses the point: This is meant to be the world’s most liquid money market. Extending the overnight secured repo market to longer-term dates could rapidly ease much of this funding bottleneck.The biggest four U.S. lenders own more than 50% of the Treasuries in the banking system but only one-quarter of all cash reserves. They have to hold this level of U.S. government bonds as high-grade collateral to satisfy regulatory requirements, but that restricts how much they offer into the repo market even when rates are temptingly high. This is a phenomenon that Jamie Dimon, JPMorgan Chase & Co’s chief executive officer, has been quick to point out. Another question is why the rest of the U.S. banking system has backed away from the repo market? Again, this is down to regulation and market structure, which has made the repo market a less efficient use of banks’ capital. Regulatory measures put in place by the Dodd-Frank Act need revisiting.To contact the author of this story: Marcus Ashworth 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.Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
A prosecution witness in an Australian criminal cartel case against Citigroup Inc and Deutsche Bank AG said on Friday that the banks never colluded, but that he helped a regulator build its case to get immunity. The testimony from former JPMorgan Chase & Co markets head Jeff Herbert-Smith in court is a blow to the prosecution, which is relying on JPMorgan to support a case that the three global investment banks engaged in criminal cartel behaviour in a A$2.5 billion share issue for Australia and New Zealand Banking Group in 2015. The Australian Competition and Consumer Commission (ACCC), which brought the charges, accuses Citi and Deutsche and their client, Australia's fourth-largest bank, of withholding details of the sale to support the stock's price.
JPMorgan Chase & Co began internal discussions that would lead to immunity from prosecution over a troubled Australian capital raising two years before two rivals were charged with criminal cartel behaviour, a court heard on Thursday. A former JPMorgan banker gave the timeline as the first witness to testify in a legal battle that is being closely watched by investment bankers around the world because it may change the way they are permitted to conduct capital raising. All but JPMorgan were charged last year with withholding details of the sale process to investors.
(Bloomberg) -- JFrog Inc., a technology company that makes tools for software developers, has hired Morgan Stanley and JPMorgan Chase & Co. to lead its initial public offering next year, according to people familiar with the matter.JFrog could seek a valuation of $2 billion or more in a U.S. listing, said the people, who asked not to be identified because the matter is private.Plans for an IPO aren’t final and JFrog could decide to remain private, the people said.Representatives for JFrog, Morgan Stanley and JPMorgan declined to comment.JFrog was co-founded in 2008 by former Israeli Air Force Major Shlomi Ben Haim, who remains its chief executive officer, according to the company’s website. The Sunnyvale, California-based company raised $165 million in a funding round last year that included investors Insight Venture Partners, Spark Capital, Battery Ventures and Dell Technologies Capital, according to a statement.Software companies have delivered some of this year’s best IPO returns thanks to their steady business models. Globally, shares of companies such as Zoom Video Communications Inc., Crowdstrike Holdings Inc. and Datadog Inc. have risen an average of 38% from their IPO offer prices this year, according to data compiled by Bloomberg.IPOs this year by consumer-facing internet-related companies including Uber Technologies Inc. and Lyft Inc. haven’t fared as well. Shares of those companies have fallen an average of 7.5% from their offer prices, the data show.To contact the reporter on this story: Crystal Tse in New York at email@example.comTo contact the editors responsible for this story: Liana Baker at firstname.lastname@example.org, Michael Hytha, Matthew MonksFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.