Yesterday I got a lot of attention, being quoted first on Seeking Alpha.com, which picked up my overall blog with the note by Dr. Max Golt on how currency trading is becoming more restricted, and my quoting Michael Kurtz on China inflation sectoral predictions. I was also interviewed on his hedgefund radio program by John Thomas, of themadhedgefundtrader.com
I was thinking a bit about the latter chat today. As old-time readers know, I share a birthday with a Burmese “twin” Aung San Suu Kyi AKA The Lady. She was released from house arrest over the weekend. The question is whether there is any way to invest in Myanmar to celebrate with The Lady. The answer is: no. The SLORC, or whatever the military junta call themselves now, do not allow businesses, except Army businesses (like timber cutting, rubies, and oil exploration) they run for their own corrupt profit.
Every market in the world is not necessarily worth investing in. Vietnam is another. About 18 years ago Mark Mobius of the Templeton Group launched a closed-end Vietnam Fund which I and my readers bought. But Mark, an old Asia hand (his first job after getting his PhD from MIT was selling Tiger Milk in northern Thailand) could not find ‘Nam companies to invest in. So fund holders were given their money back or a chance (which I took) to buy into the Templeton open-end Emerging Markets Fund without paying the 8.25% fee then charged.
Just because Mount Everest is there, you don’t have to climb it, unlike Sir Edmund Hillary. And just because a frontier economy is appearing on the radar screen, you don’t have to venture to invest in it.
Meanwhile perfectly respectable stocks from western countries deep in disaster, like Greece, Portugal, Ireland, and Japan are doing well for our subscribers. In serious economies with problems, often investment vehicles caverride the problems.
*In Portugual, we gain from the continued international expansion of Portugal Telephone PT, the telco, which is in the process of redeploying its cash into Brazilian cellphone operator Oi.
*In Greece we gain from the good performance of Coca Cola Hellenic,
CCH,which is Greek only in its site of incorporation, as it operates across great swarths of Europe, from Northern Ireland to the Caucasus, and in sound markets like northern Itlay and Switzerland, as well as the Greece the controlling family hark from. We also gain from the National Bank of Greece preferred shares I like, which are still paying a double digit return despite the share outperforming most of the yield portfolio.
*In Ireland our Paddy Power, operators of bookie and spread-betting shops, mainly in Britain, are doing just fine. Despite those heavy losses, a handful of Irish stocks have recovered to hit fresh highs, along with some others that strategists see as potential winners, among them PDYPY. Of course it’s business is not really Irish said Stephen Taylor, equity strategist at Dolmen Securities.
*Sharing glory with Chris Loew, momentum-players smarTrend identified an Uptrend for Makita (MKTAY) on Sept. 20, at $30.65. In 2 months, Makita returned 17.4%. In the past year, they write:” MKTAY traded between a low of $25.55 and a high of $39.65 and are now at $36, 41% above that low price. Makita is currently above its 50-day moving average of $32.73 and above its 200-day moving average of $31.06. “ This was a Chris-Vivian find.
*The metal du jour is not an easy call. Gold continues to puzzle hedge funds. George Soros, who called gold “the ultimate bubble” cut his holdings of Streettrackers Gold, GLD, by 1 mn shares. Eton Park topped Soros by cutting its holdigns by twice asd many shares. Meanwhile buyers included Chris Shemagy, Dan Loeb, and Highfield Capital. John Paulson, the man who broke the bank of mortgage securities (as Soros broke the Bank of England) kept his gold stakes constant. I am not able to sell a million shares so I am keeping my stake as it is. But this is no time to buy more GLD.
*With everyone bailing out of Chinese property it had to happen. Your editor’s stubborn liking for Xinjiang Real Estate today was shared by Thomson Gradient analysts who raised XIN to buy from hold.
*Nuclear worries can never be laid to rest, but the Greenwich University-led British campaign against Areva has crashed: The British Nuclear Regulator stated in a joint letter addressed to AREVA and
EDF that both companies have “addressed satisfactorily” its concerns regarding the EPR™ reactor’s digital Instrumentation and Control system. The letter was issued as part of the Generic Design Assessment. There no longer are any showstoppers for the reactor to successfully complete the asssessment process. Areva will cooperated with constructors and British safety authorities,by providing input, helping the Regulator complete a meaningful assessment of the EPR™ by the June 2011 target. The EPR™ reactor is the world’s most powerful reactor and meets the highest safety standards. It is currently being built in Finland, France and China and US certification is underway.
Yestgerday it was revealed that last month the CLP-Guangdong Nuclear Invesment Co nuclear plant in Daya Bay, China leaked but operations and public safety were not affected. The leak was rated level one, the lowest level on the International Atomic Energy Agency’s Nuclear and Radiological Event Scale. The facility has been operating since 1994 and uses older French technology to generate 10bn kWh/yr.
*Posco aims to sign a contract to build a 450,000 tonne Guangdong steel galvanization plant in China to match the one it already is building in India, same size, same purpose (auto bodies.) Govt permits are pending. It alrady makes stainless in China at the rate of 1 mn tonnes/yr and has a 230,000 tonne cold rolled steelproducts plant. (A tonne is a metric ton.) PKX is South Korean and has some of the best steel tech in the world. Besides us, Warren Buffett is a shareholder.
*Mellanox took aim in two directions today announcing a next-generation infiniband bandwith connection system for supercomputers and mega data-warehouses (at the top end of the market in capacity and price). But at the same time it also announced 8- and 10-point small connection switches for smaller applications. MLNX is Israeli.
*AstraZeneca, facing a 2011-4 decline in sales after losing patent protection on two blockbuster drugs, Nexium and Seroquel, has figured out how to raise cash for buying startup drugs. It will sell its Swedish non-core unit making denatal implants and medial devices, Astra Tech, for 3.4x sales. This is about $2 bn. JP Morgan is the advisor. It will also sell its US Aptium Oncology outpatient centers on the market, for anoterh half billion dollars. AstraZeneca needs to generate $4-6 bn in new products to meet its 5-yr sales target range of $28-34 bn. AZN>
*Sonova being Swiss does not do quarterlies, only semiannual. Its sales in HI (FY to Mar. 31) hit a new record of SwFr 832 mn boosted 17.2% in Swiss money and 8.2% in constant currencies from organic sales. Pretax profits jumped 5.3% to 204 mn francs and after tax income to 170.5 mn. The company makes hearing aids. Just under 12% of the sales growth came from acquisitions like Advanced Bionics (hearing implants) and InSound Medical. And 81% of sales came from products less than 2-years old. Last month SNVKF luanched a new innovative line using its “spice” platform. Sonova, a Global Investing Pro share traded only aborad expects organic growth to hit 8-10% for the rest of the year and to post a pre-tax margin of 26% or so. In H1 gross margins rose sequentially to 70.1% from 69.4%.
*Today is crunch day at the US FDA for GSK’s Benlysta against lupus. Its advisory panel was quite worried about side effects, and usually the main body follows the advisors.
*Eli Lilly got its patent on cancer treatment Alimta confirmed by a US Federal Court, , which will protect against generic competition from, among others, Teva, until mid-2016. TEVA also lost in another federal court case which upheld the U.S. patent for the blockbuster antipsychotic Abilify, made by Otsuka Pharma and Bristol-Myers Squibb until 2015.
Despite these setbacks in the courts, TEVA was reiterated at Buy by UBS and the target raised to $64.
*Hyflux of Singapore signed a contract to build a $100 mn water treatment plant in Libya. HYFXF.
*Also in Singapore, RIG is buying a new $195 mn high-tech jackup from PPL able to drill in 30,000 fet deep offshore sites. Transocean of Switzerland has to upgrade its rig fleet part of which is currently idel by adding more sophisticated deep-water products able to compete with Seadrill and Dryships.
*Exane BNP analysts rate Intertek as outperform with a GBP 26 target. The company today announced that it will be testing the safety of WindTamer Corp.’s 8 gigaton wind turbines which are novel and big and American. IKTSF.
*Our poshest stock, Wendel & Cie, also from the GlobalInvesting Pro stable, reported a 23% rise in Q3 sales to €1,463.3 mn. WNDLF says it is firing on all cyclinders. It sold its Stallergenes 46% stake generating a capital gain of €300 mn which shareholders in STLEF, including PP and me, will join in when the mop-up takes place. WNDLF made 35x its investment in STLEF; we didn’t do that well, but I am up 606% on what is now only trading as GENP:FR (not STLEF). WNDLF is using its payback after 17 years to cut debt.
*ICAP plc (IAPLY) announced expansion of base metals broking business by addition of a London Metal Exchange desk in Hong Kong, and the hire of former Citigroup trader Jason Dobson.
*JPMorgan raised G4S the security firm to attractive. GFSFY.
Dividend news: Aberdeen Pacific Income Fund continues to pay 3 ½ cents/month. FAX.
Stable-mate Aberdeen Global Income Fund pays 7 cents/mo. FCO. Both are relatively light on the emerging markets bond markets, which is reassuring.
