Market Updates: Walt Disney Adding Marvel To Its Roster; Funds Dumping U.S. Consumer Stocks

Japan Election Rout Shakes Shares; Shanghai Composite Falls Nearly 7%; Walt Disney Adding Marvel to its Roster; Baker Hughes Buys Rival BJ Services; PetroChina Gaining Athabasca Tar Sand Control; Petrobras Wants 30% Stake in Brazil Reserve Wells; India’s Economy Grows 6.1%; JPMorgan: China-Taiwan Interested in Mutual Opportunities; Funds Dumping U.S. Consumer Stocks

• The Democratic Party of Japan routed national elections Sunday, causing stocks to fall and the yen to strengthen. The landslide win breaks the long-held single-party dominance that has ruled Japan for decades. “Some are saying the market has fully reflected the change of government, but the change is too big to be priced in,” Hisakazu Amano, who helps oversee the equivalent of $18 billion at T&D Asset Management Co., told Bloomberg News. “The impact of the DPJ victory on company earnings is still uncertain and investors can’t decide what to buy or sell.”

• The Shanghai Composite Index cratered 6.74% yesterday (Monday), closing its second-worst month in 15 years, Reuters reported. The final blow to the month’s trading sent the index to a three-month low, and its ripple crippled stock markets around the world. After posting monthly gains for seven consecutive months, the index fell 21.8% in August.

• The Walt Disney Co. (DIS) said it plans to buy Marvel Entertainment, Inc. (MVL) for $4 billion, a 29% premium to Marvel’s closing price Friday, Reuters reported. The deal shows Disney’s confidence that Marvel’s roster of fictional characters - Iron Man, Fantastic Four and Spider Man - continues to translate into box office jackpots.

• Oilfield service provider Baker Hughes Inc. (BHI) yesterday (Monday) said it would buy one of its biggest competitors, BJ Services Co. (BJS), for $5.5 billion, a 16% premium to BJ Services’ stock price on Aug. 28. The deal represents the largest oilfield-services takeover since 1998 and is a bet on more dependence on U.S.-based natural gas, Bloomberg reported. “[Baker Hughes is] buying an asset that is highly correlated to a rebound in natural-gas prices, and they look to benefit as to what they hope to see as higher activity rates for land rigs somewhere down the line,” Ted Harper of Front Investment Advisors told Bloomberg.

• PetroChina Co. Ltd. (PTR) and Athabasca Oil Sands Corp. have begun a series of agreements that will result in PetroChina owning 60% stake in the MacKay River and Dover oil sands projects in northeastern Alberta, Canada. The tentative dollar figure to the deal is $1.73 billion (C$1.9 billion), Bloomberg reported.

• Brazil’s state-owned oil titan Petroleo Brasileiro SA, or Petrobras, (PBR), has filed a plan with Brazilian regulators to own 30% of the wells earmarked for the country’s offshore oil reserves, which many claim to be the largest major discovery in the Western Hemisphere for decades. Brazil is attempting to set up an oil-sharing model for reserves found in its water and soil similar to models established in Middle Eastern countries, MarketWatch reported.

• India’s economy grew 6.1% in the last quarter, the first acceleration since 2007 and a sign that one of the world’s biggest emerging markets is recovering from a global financial crisis that crippled its export-dominated economy. India’s gross domestic product (GDP) rose 5.8% in the previous quarter. But India isn’t out of the clear yet; draught threatens to reduce harvests and invite food inflation, Bloomberg reported.

• A JPMorgan Chase & Co. (JPM) analyst said that China’s banks are eyeballing opportunities in Taiwan, and vice versa. However, before economic progress is gained, more needs to take place in the tumultuous political arena between the two, Reuters reported. “If you look at the recent Taiwanese regulations around mainland investment guidelines, financials are one of the encouraged sectors,” Brian Gu, head of JPMorgan Chase’s Greater China M&A unit, said at the China Investment Summit. He continued: “There is definitely strategic rationale for that, it just needs to be handled very carefully.”

• Institutional funds are dumping U.S. consumer stocks at the fastest pace in 14 years, a sign that Wall Street doesn’t believe consumer power will fully return soon. Mutual funds, pensions and endowments controlling a combined $16.4 trillion sold $1.8 billion more in consumer stocks than they thought, according to State Street Corp. (SST).

Subscribe by RSS Subscribe by Email