A serious shareholder revolt at SwissGlobal Assets Mgm tried to lower payments to managers and executives of the fund which was founded by my late friend Gilbert de Botton. He invented a new category of fund for high-net individuals, run with public disclosure of its performance (published in the Financial Times.) He also created variations of each popular fund in different jurisdictions so tax and regulatory compliance was improved, while the actual investment decisions were standardized. Since Gilbert died young, these innovations have led to rebellions by shareholders upset that poor GAM performance was not penalizing the guys running the fund.

​Shareholders in AstraZeneca are trying to cut the 68% higher bonus granted last year to CEO Patrick Soriot as a relic of his signing up with the UK firm 4 years earlier. Over 39% of votes were negative. When he joined he spoke of a $45 bn revenue goal which is a long way from coming to pass to block a takeover bid from Pfizer which would have limited his pay. He also failed to produce earnings per share of $4.20 last year as promised.​

France's Tobam plans to market to US investors an anti-benchmark emerging markets fund engaging in stock picking and balance. It will seek maximum diversification by asset classes via stocks which have a low correlation to others it buys, rather than tracking indexes and also expects there will be lower costs and less trading. The manager, Ayaaz Allymun, used to run a fund based on the same concept but it was liquidated in 2014 and it has ranked poorly. Tobam has $8 bn under management and its fund will be launched together with BNY Mellon and FundVantage Trust. 

After terrible Thursday it is ferocious Friday, another day with too many quarterly results to deal with. The US economy grew at an annualized 0.7% in Q1, the lowest rate in three years. The supposed “Trump Bump” has proven to be a fantasy pregnancy. We have news from Norway, Sweden, Finland, Denmark (a full house!), Mexico, Canada, Israel, Britain, Switzerland, Germany, Belgium, Bermuda, Argentina, Chile, Brazil, India, Hong Kong, Australia, and a few other places like San Diego.

*Tomra Systems, a Norwegian maker of reverse vending machines and sorting systems for everything from recycling to pharmaceuticals, from potatoes to ores, reported a good Q1, but  was distorted because of its Compac sorting acquisition last year. In constant currencies, revenues rose 19% to 158 mn Norwegian Kroners before tax, up by 5 mn from prior year, nipped by lower margins and higher operating expenses as it brings on Compac. Operating expenses hit NOK 475 mn up from 421 mn they year before, of which NOK 4 mn was for Compac. Like for like currency-adjusted revenues rose 5% in collection and 8% in sorting solutions.

However TMRAY eps came to NOK 0.58 vs prior year 0.54 and cash flow from operations rose over 3% to NOK 122 mn. The order intake from sorting (excluding Compac) hit a new high of 682 mn in the quarter. The backlog is NOK 875 mn, up 6% y/y without Compac and NOK 1.139 bn including it. NOK consolidated Compac startingFeb. 1. The USA was the fastest growing market up 6% y/y. More tech below.

*Before the door on trading slammed I doubled up on Autoliv at $106.805/sh, the Swedish airbags and auto passive security firm. It fell sharply back 6.8% to $99.98 today despite beating on EPS and revenues. In Q1 it earned $1.65/sh vs consensus (Capital IQ) expectations of $1.56. It revenues hit $2.61 bn while the forecast was for $2.57 bn. Like for like growth was 4%, however and prior year EPS had been $1.66. However, the sales figure was a record for the auto safety firm, boosted by troubles at competitor Takata. Operating margin came in at 8.4% and Q1 operating profit at $217.6 mn easily also beat forecasts which average $211 mn.

ALV cut its estimates for Q2 to see sales fall as much as 1% from prior year vs an earlier forecast for the quarter of 3% higher sales, but said organic growth in Q23 would be 2%. This comes to ~$2.55 bn below the consensus forecast of $2.60 bn. However, it reaffirmed its full year target for sales up 3% to $10.34-10.4 bn and its operating margin to be ~8.5%. Morningstar reaffirmed its long-term investment thesis that safety and driver assistance are the future norm in autos. It expects the growth rate in active safety and advanced driver assistance systems will grow 20% by 2020.

Mining and Heavy Industry

*Cameco, which fell 7.2% in European trading and is down 8%, tried to put a good gloss on its Q1. The Canadian uranium mining firm beat on revenues which fell less than expected to C$393.4 mn (vs a forecast of C$351 mn). But it missed badly on profits, with a loss of C$18 mn in the quarter or 7 cents/sh vs the Capital IQ consensus forecast of minus 4 cents. A year earlier it earned plus C$78 mn, 20 loony cents/sh, on sales of C$408 mn. Moreover adjusted net losses hit $29 mn boosted by a stronger C$, a disputed contract termination by Tepco of Japan, and severance costs for laid off miners.

CEO Tim Gitzel said “our cautious optimism remains unchanged” but also warned that with weak prices, CCJ will “evaluate all our supply sources.” He also forecast that 2017 sales are on track with an average higher realized price for uranium than the current spot price.

He moreover claimed that “once the uncertainty clears and uranium demand picks up, we expect prices will move significantly higher.” For a low-cost operation like CCJ, Gitzel promised “we will be in the enviable position of being able to respond with expanded capacity” with low costs.

He cited Japanese reactor restarts as a key boost to sales later this year. He also expects higher average realized uranium prices before Q4 with the average per lb at (US) $49 for the year. He also left the guidance issued last quarter.

*Delek Group is on an uptrend after its partner in desalination venture IDE Technologies Ltd, which runs a plant in San Diego, exited by selling its stake to a group of funds and insiders in the company. The seller was Israel Chemicals which seems to have been desperate for cash, settling for $175 mn, well below what DGRLY wanted when they were going to sell jointly 4 months ago. DGRLY now has become operating partner of the $350 mn venture. It rose to over $23 in late Thursday trading. DGRLY yields over 3.1%.

*BP plc is selling its half stake in a Shanghai petrochemical plant to its partner Sinopec via two subs for $1.68 bn. The asset is called SECCO Petrochemical Co. Separately BP has found a new 200 mn bbl oil reserve in the US Gulf of Mexico uncovered with advanced seismic imaging rather than subsea drilling as with the ill-fated Deepwater Horizon seven years ago this week. The new reserve could produce $2 bn of crude at current prices.

*Orocobre which reported good results yesterday and expansion in Argentina, gained 5.4% overnight. For some reason the Investor's Digest treats its ORL listed in Toronto as a Canadian company, which it is not. It is Australian but the lithium sector is hot up North. The only analyst covering OROCF says it will lose 15 cents/sh in the current FY and gain 13 cents next year. It reports in US$s but I have no idea what kind of cents ID is talking about.

*Tata Motors debt has been upgraded to BB+ by Fitch which likes its “sustained improvement” in India commercial vehicles. The rating agency has hopes for the Nano passenger vehicle side and seems to consider the Tiago launch a success. It also likes the Slovakia plant plans for Jaguar Landrover which of course is the big money spinner for TTM. But the main reason for the upgrade is that it is supported by Tata Sons Ltd, based on reputational risks and strategic importance given Ratan Tata's increased control of TTM after ousting Cyrus Mistry. If I were Fitch I would worry about TTM's reputational risks and strategic importance to the controlling family. The analysts are in Singapore where family pressures are less pernicious in my view

Banks and Insurance

*AIA Group of Hong Kong reports a 55% rise in new business in its Q1 this year which boosted the stock price by 5.5%. AAIGF new business hit HK$A884 mn in the quarter. The AIG spinoff we bought at its IPO is now the No. 3 life insurer on the planet, and of course specializes in bringing insurance products to the underserved Asian markets. Higher ​b​usiness means more profits from premiums and investment, and cuts the per policy cost of services.

*Sampo Oij fell 6% today in Helsinki on no news so Harry Geisel investigated what was up. It turns out they declared a euros 2.30 divvie for shareholders payable May 2. It turns out that unlike US brokers, Finns do not adjust prices for shares going ex-dividend. It is also down 5.34% on Wall St.

More Finns below.

Healthcare

*Galapagos (GLPGY) reported revenues up 169% to euros 39.3 mn and halved operating loss, at euro 11.2 mn, and a net loss of euros 13.6 mn. The Belgian firm which we exited because our former biotech maven retired closed the quarter with euros 959 mn in cash and is working on an anti-inflammation drug, filgotinib and a triple therapy against cystic fibrosis. It lost 29 eurocents/sh this Q1 vs a gain of 35.9 a year ago

*With the Trump bump now discredited by very low US growth, it is a good day for foreign investing. Among the winners: Mazor Robotics, was up 5.44% to $36.84. It has gained over 68% YTD. Then it fell back 2.6%, because Friday is a tough day for Israeli stocks as the home market is closed.

*Teva of Israel announced that results of a phase II-III study of deutetrabenzine for treating tardive dyskinesia, a chronic debilitating condition induced by reaction to drugs against schizophrenia and bipolar disease, were published by the Journal of the American Academy of Neurology. It is safe and efficacious.The study by Cleveland Clinic and Georgetown Medical School professors treated 104 patients in the US and Europe either with the drug or with a placebo. The treatment arm was blind and treated patients had their dose increased for 6 weeks and then held at that level for another 6 weeks. Results were statistically significant. Teva is trying to find a bottom as its C-suite heads off to other companies. Ultimately its labs and Chief Scientist Dr. Michael Hayden who leads the push into neuro drugs will be what saves TEVA as it digests its excessive generics purchases and looks to replace Copaxone for multiple sclerosis when its patent runs out.

Funds & REITs

*Mexican Equity & Income Fund, MXE, reported on its performance in the year to Jan. 31. While it did okay in pesos its $ net asset value fell 13.15% in its H2 because of Trump, although thanks to currency factors Jan. saw a 0.66% rise. Its market price however remains under a cloud despite the NAV rise. MXE does not try to track the Mexbol or MSCI indexes, but engages in stock picking under the leadership of manager Maria Eugenia Pichardo who seeks out oversold small-cap liquid value stocks which account for about 6% of holdings. In the last 6 mos of its FY it gained from positions in construction, telecoms, and metals and mining but lost from holdings in transport infrastructure, banks, and beverages by more than its overweights generated. Despite the income in its name, the fund is 90% invested in common shares.

Its largest holdings as of end-January, which can have changed since, were: Grupo Financiero Banorte; telco America Movil; miner Grupo Mexico; Wal-Mex; Promotora y Operadora de Infraestrucua; Infraestructura Energetica Nova; Mexichem; food firm Gruma; and Aeropuertuario del Centro Norte. MXE is up over 0.5% today. She doesn't own Grupo Bimbo which fell 2% here today as a beneficiary of lower pesos.

*Mexican REIT Fibra Uno had a positive quarter with revenues up 12.3% y/y to pesos 3.564 bn, with same-site rents up 15%. Occupancy topped 93.3%. Rent revenues rose 1.6% to P49.6 mn sequentially boosted by currency appreciation in the dollar (in which some rents are fixed), higher same-store sales, and rises over the inflation rate on new and renewed leases. Also helping were the first revenues for the Torre Diana site in Mexico City.

The REIT cut its debt thanks to a stronger peso, to 61.773 bn from 65.356 bn. About a third of the total is in US$ which corresponds to the share of rentals also payable to Fibra Uno in greenbacks.

Offsetting this boost, there was an insignificant drop in total retail rental, a 1.7% drop in industrial rentals, notably for the Soriana distribution center, and a 1% drop in office occupancy. Retail accounts for half of its rentals, with industrial at 26.7% and offices making up the rest. However revenues rose despite the vacancies, by 4.7% for industrial; 6.4% for retail; and a whopping 15.35 for offices, in every case from year earlier Q1

Funds from operations rose 5.2% y/y to P1.691 bn and operating margins were sold at 80.7%. Fund from operations margin was down from the average in 2016 but still a respectable 52.8%. This is the 24^th quarter in a row showing growth because despite politics and cyclicality, demand for offices, stores, and industrial logistics facilities in Mexico is growing.

CEO Andre El-Mann said that during Q1 FBASF halted closing new acquisitions but this has now resumed with closing on the first tranche of Frimax, an industrial-logistics site of 212,000 sq m near the Toluca Lerma highway corridor. It now has developments sites for offices in La Ciga and G-30 (near Frimax); more industrial also in G-30; retail-office combos in Jalisco and another site; and shopping malls in Tlalpan and Tllolocan, and is co-investor in the huge new site of Miticah in Mexico City. It also announced acquisition of a prime office bloc in Monterrey today for P702 mn plus 109 mn in improvements. It was designed by starchitect Norman Foster and is getting an LEED Green Certification from the US Green Building Council. Its 70% lead tenant who signed up for 10 years with an option on more.

FBASF also closed some hedges against a rise in the dollar and also repaid some dollar credits, in anticipation of the peso drop reversing. The numbers are even better when converted into dollars because the peso has risen sharply YTD.

*Fibra Uno will pay a dividend of 0.5154 pesos for Q1 this year, up both sequentially and y/y from last year.