Bonds In Conversation : A May To Remember

02/05/2014 by

40 days to the World Cup and they say we cannot sell in May because it is the probably the last leg for something to happen.

Pfizer makes headlines with the largest acquisition in recent pharmaceutical history with its US 100 bio offer for Astrazeneca. http://money.cnn.com/2014/04/28/news/pfizer-astrazeneca/

Looking at the list of largest M&A deals, Pfizer is responsible for 3 in the top 20 deals of all time. And we have not had a decent mega size deal in a while. http://www.bloomberg.com/visual-data/best-and-worst/largest-mergers-and-acquisitions-of-all-time-deals

It does make the Fed 10 bio taper look like peanuts.

It’s been a mixed bag of a week with equities not doing much (except some weakness in Nasdaq) and an unexciting FOMC.

Companies like Pfizer, GE and Apple trying their best to avoid taxes through acquisitions and bond issuance.

Apple launched a US 12 bio bond in 7 tranches to fund its stock buy back while GE is using its offshore cash pile to target Alstrom.

While deals have been looking rosy with a heavy issuance calendar, we note that risk is waning.

Chinese pork giant WH Group pulls Hong Kong IPO citing weak demand http://www.scmp.com/business/china-business/article/1500070/chinese-pork-giant-wh-group-pulls-hong-kong-ipo-weak-demand
Junk-Loan Funds Post Biggest Outflow Since ’11, Lipper Says http://www.businessweek.com/news/2014-05-01/junk-loan-funds-post-biggest-withdrawal-since-2011-lipper-says
Hedge Funds Short Small Caps Most Since ’04 http://www.bloomberg.com/news/2014-04-27/hedge-funds-short-small-caps-most-since-04-russell-falls.html
I see speculative bubbles like in 2007, We are in a world where the profits belong to the banks, while the governments socialize all the losses : William R White http://www.fuw.ch/article/i-see-speculative-bubbles-like-in-2007/
Norway’s US 850 bio Wealth Fund’s Losses on Russia, China Erode Returns http://www.bloomberg.com/news/2014-04-30/norway-wealth-fund-returns-dwindle-as-global-stock-rally-fades.html
London’s prime property party may be over as price growth slows http://news.yahoo.com/londons-prime-property-party-may-over-price-growth-135535945.html

These are hypocritical times indeed as we witness America take up the cudgels for Ukraine and yet allow Egypt to execute just about 683 Morsi supporters. And it looks like Germany will not support further sanctions on Russia. http://online.wsj.com/news/articles/SB10001424052702303948104579535983960826054?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702303948104579535983960826054.html

We have an IPO linked to the future earnings of a 49ers player. http://dealbook.nytimes.com/2014/04/28/i-p-o-linked-to-football-player-opens-for-trading/?_php=true&_type=blogs&_r=0

And Beijing is banning barbeques ? to combat their smog which is not caused by barbeques …. http://www.dailymail.co.uk/news/article-2616769/Outdoor-chefs-face-grilling-China-Beijing-bans-barbecues-bid-combat-terrible-smog-problem.html#ixzz30NMjbSX7

The moment of truth awaits…

Meanwhile Singapore saw its biggest ever book size for a new issue in a long time, well over SGD 5 bio for a household name. After Far East Horizon’s success last week and now Yanlord, we should be seeing more offshore names flood in.

Finally, it looks like we can expect Moet Champagne brunch served at Crystal Jade outlets on weekends.

With the Non Farm Payrolls tonight, this could be a May to remember.

Good luck !

US Bonds Listed in SGX and HK