HALISTER1: Buy USD Vol Via 1m10y Straddles Ahead of NFP, Fed Minutes: Citi

Buy USD Vol Via 1m10y Straddles Ahead of NFP, Fed Minutes: Citi

(Bloomberg) -- Long volatility recommendation based on options markets underpricing potential for move in rates ahead of FOMC minutes and payrolls next week, says Citi strategist Jabaz Mathai in note.
  • The potential for shifts in rate path higher or lower for 2017 can move term structure, offsetting implied breakeven move in rates
    • “Slight” potential for government shutdown on April 28 and associated “legislative uncertainty” could effect equities and push interest rates lower
    • First round of French elections has also moved into 1- month timeframe
  • Trade expressed by buying 1m10y straddles at 68bp, delta hedging on sharp moves away from strike

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

People
Jabaz Mathai (Citigroup Inc)

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UUID: 7947283

HALISTER1: SouthGobi Resources FY Loss/Shr 24c Versus Loss 79c Y/Y

SouthGobi Resources FY Loss/Shr 24c Versus Loss 79c Y/Y

(Bloomberg) -- SouthGobi 4Q loss per share narrowed to 7c from loss of 44c year/year.
  • 4Q rev. $19.0m, up from $2.87m y/y
  • FY16 sales volume rose to 3.91m tonnes from 1.07m tonnes y/y
  • Sees arbitration decision on First Concept in 2Q
  • Updated estimate of Ovoot Tolgoi deposit measured resources is 201.9m tonnes; had previously reported 175.7m tonnes proven and probable reserves based on ’12 technical report
    • Surface resource est. 144.3m tonnes
    • Underground resource est. 57.6m tonnes
  • NOTE: Nov. 14, SouthGobi Says Ability to Continue as Going Concern Threatened
Link to Statement on IIS:Link Press release link

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
CHIVCZ CH (China Investment Corp)
SGQ CN (SouthGobi Resources Ltd)

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UUID: 7947283

HALISTER1: Rent-A-Center Downgraded on Comps, Covenant Risks: Stephens

Rent-A-Center Downgraded on Comps, Covenant Risks: Stephens

(Bloomberg) -- Rent-A-Center rated underweight from equal-weight with a PT of $9, Stephens analyst Vincent Caintic writes in note.
  • Rent-A-Center is facing headwinds, including a major turnaround led by interim mgmt, activist pressure to sell and deteriorating earnings that may place funding/covenants at risk, Stephens says
  • Says March comps unlikely to improve after January, February declines
  • Co. declined yesterday to renew referral agreement with Conn Appliances; expects “immediate improvement” in Acceptance Now division as a result
  • Stephens prefers Aaron’s; says RCII trades at 1.8x book value, compared to AAN at 1.4x
  • RCII had 0 buys, 9 holds, 1 sell; avg PT $8.75: Bloomberg data
  • NOTE: Earlier, Conn Fell Post-Market as Rent-A-Center Declined Contract Renewal
  • NOTE: Earlier, Rent-A-Center Raised to Buy at Northcoast, PT $12

Alert: HALISTER1
Source: BFW (Bloomberg First Word)

Tickers
RCII US (Rent-A-Center Inc/TX)
AAN US (Aaron's Inc)

People
Vincent Caintic (Stephens Inc)

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UUID: 7947283