Trader Talk

Pisani: Traders Watching IPOs, Europe


European banks trading higher as a deal to help Greece has crystallized: coordinate bilateral news from euro countries, with the partial help of the IMF.

Regardless: traders (who don't normally talk politics) are passing around articles noting that there are local German elections May 9th in North Rhine-Westphalia. Merkel's party needs a win here; a loss means she will lose her majority in the Upper House. Sarkozy is in trouble, too. Berlusconi? He's facing regional elections this weekend. The point is, expect a lot of politicians in Europe running for re-election on the "No bailout!" platform.

Next step: Greece needs to raise 15.5 billion euros by the end of May. Traders say it is widely expected that they will price a 3 year or 7 year issue.


1) the move up in Treasury rates definitely has traders talking. According to , 30 year fixed rate mortgages have risen to 5.11 percent, up about 11 basis points in the past two days.

2) Brinker is up 4 percent after raising guidance due to an improved sales outlook. The restaurant group expects Q3 and full-year earnings to be above current Street estimates. Stronger March sales helped offset negative impact from the wintry weather earlier in the quarter. Systemwide same-store sales at its Chili's, Maggiano's and On the Border restaurants are now seen falling 1 percent to 2 percent in 2010 — better than the company's earlier guidance.

Additionally, Brinker announced it is boosting its quarterly dividend 27 percent to $0.14 and is expanding its buyback program by $250 million.

Restaurant reports have been choppy lately, with CKR and SONIC disappointing, Darden good.

3) Another good IPO pricing: China Lodging priced its IPO of 9 million shares at $12.25, at the top end of an expected $10.25-$12.25 range. The company, which operates the large HanTing chain of budget hotels in China, raised about $110 million and will begin trading today on the Nasdaq.

This comes at the end of a fairly busy week for IPOs. On Wednesday, two tech firms (MaxLinear & Calix) and one bank (First Interstate) all priced within or above their price range, then surged during their first day of trading.

However, two other pricings have struggled this week: dry shipper Alma Maritime postponed its IPO due to market conditions, while Chinese ad firm Redgate Media has still failed to price after lowering its expected range earlier in the month.

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