TOP NEWS • Turquoise Hill rejects Rio Tinto's $2.7 billion buyout offer Turquoise Hill Resources rejected an offer by majority shareholder Rio Tinto to buy the 49% stake it doesn't already own for $2.7 billion, as it did not reflect the Canadian company's full and fair value.
• Wall Street revives Russian bond trading after U.S. go-ahead Several major Wall Street banks have begun offering to facilitate trades in Russian debt in recent days, according to bank documents seen by Reuters, giving investors another chance to dispose of assets widely seen in the West as toxic.
• Chinese NYSE delistings could pave way for audit deal with U.S., analysts say The move to delist five Chinese state-owned enterprises (SOEs) from the New York Stock Exchange (NYSE) could pave the way for Beijing to strike an audit deal with the United States, ending a more than decade-old dispute, analysts and advisers said.
• As Fed warns of turbulence ahead, markets remove their seat belts The Federal Reserve's hawkish message on inflation registered quickly in U.S. housing markets this summer as mortgage rates shot up and home sales slowed.
• FOCUS-Newly-launched U.S. drugs head toward record-high prices in 2022 Drugmakers are launching new medicines at record-high prices this year, a Reuters analysis has found, highlighting their pricing power even as Congress moves to cut the $500 billion-plus annual bill for prescription drugs in the United States.
BEFORE THE BELL Canada's main stock index futures dipped as a fall in gold prices weighed on sentiment. Wall Street futures were in the red after China's central bank in a surprise move cut key lending rates. In Asian equities, China's stocks ended lower over fears of an economic slowdown, while Japan's Nikkei ended higher, supported by upbeat corporate earnings. European shares rose as investors turned to defensive sectors such as healthcare and consumer staples. The U.S. dollar strengthened, while yuan weakened. Oil prices dropped over demand concerns in China.
STOCKS TO WATCH • Turquoise Hill Resources Ltd: Turquoise Hill rejected an offer by majority shareholder Rio Tinto to buy the 49% stake it doesn't already own for $2.7 billion, as it did not reflect the Canadian company's full and fair value. "Engagement between the parties has not resulted in a consensus on value and price or in any improved proposal from Rio Tinto," Turquoise Hill said in a statement. "Rio Tinto is disappointed by the decision of the Special Committee and continues to believe that the terms of the Proposed Transaction would deliver compelling value for Turquoise Hill minority shareholders and provide the certainty of an all-cash offer at an attractive premium," the Anglo-Australian miner said in a statement. Toronto-listed Turquoise Hill has a market capitalisation of $5.3 billion.
COLUMN OPEC, IEA oil demand views converging, optimistic over risks: Russell The forecast for global crude oil demand was raised by the International Energy Agency (IEA) and lowered by OPEC in reports last week, but the apparent differing views actually masked an increasing convergence between the consumer and producer groups.
ANALYSTS' RECOMMENDATION • CCL Industries Inc: CIBC raises target price to C$74 from C$71, citing higher valuation parameters.
• Centerra Gold Inc: National Bank of Canada cuts target price to C$10.5 from C$14, after the company posted weaker-than-expected second-quarter results.
• Exchange Income Corp: CIBC raises target price to C$59 from C$56.5, following the company’s solid second-quarter results.
• Northland Power Inc: National Bank of Canada raises target price to C$49 from C$47, after the company’s second-quarter results beat estimates and raised guidance for the year.
• Shawcor Ltd: ATB Capital Markets raises target price to C$10.5 from C$8, following the company’s strong second-quarter results.
ECONOMIC EVENTS (All timings in U.S. Eastern Time) 0830 Manufacturing sales mm for June: Expected -0.9%; Prior -2.0% 0830 Wholesale trade mm for June: Expected 0.5%; Prior 1.6%
COMPANIES REPORTING RESULTS August 15: Ivanhoe Mines Ltd: Expected Q2 earnings of 10 cents per share K92 Mining Inc: Expected Q2 earnings of 5 cents per share
August 16: No major companies are scheduled to report for the day.
CORPORATE EVENTS (All timings in U.S. Eastern Time) 0830 K92 Mining Inc: Q2 earnings conference call 1030 Ivanhoe Mines Ltd: Q2 earnings conference call
EXDIVIDENDS There are no major ex-divs for the day.
(All analysts' estimates are according to I/B/E/S Refinitiv data.)
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