Whisky Galore II
<<Read: Whiskey Galore I
I got the expected heavy response to my note yesterday about Whiskey Galore from widely-located readers in places like Panama and Britain. Canadian Maurice F reproached me for being insufficiently wise on whiskyish matters, writing:
“You will find that whiskey from the US and Ireland has an “e” in it but from everywhere else doesn’t
I can tell you are not a serious whisky or whiskey drinker otherwise you would have known.
“According to Wikipedia, India is the third largest whiskey market. You will never guess the top 2. I didn’t. Hint: other BRIC countries.
“India is a huge producer and market for whiskey (the Indians probably import Jack Daniels and Jamiesons - so whiskey is probably penetrating their market) and goes without the “e”. I have also had a French variety appropriately named Bastille, actually quite good. You should start having the odd tipple more often.”
In my defense, yes I know that the Whisky Galore movie was set in Scotland and that British and Canadians spell the word differently than my spell-checker. I mentioned the UK spelling so Maurice and other non-US readers can find the right site on the internet, based on the British spelling.
Revelation that Volkswagen (VLKAF) also gamed the exhaust systems of diesel vehicles sold outside the US took down the share price another 18% in European trading. What were they thinking? VW is controlled via preferred shares, half owned by the Porsche family, and the rest held by the German Federal State of Lower Saxony, institutions, and Qatar. Its supervisory board, which is supposed to advise management, is headed by a trade unionist. This is supposed to be a family enterprise with strong inputs from local government and employees. Yet the shares are collapsing after the CEO, an engineer, admitted that the largest car-maker in Europe had cheated and polluted in violation of environmental regulations on both sides of the Atlantic.
When this newsletter was still printed rather than on the web we used to own VW's sponsored JP Morgan 5:1 common-share ADRs, traded here as VLKAY-OTC. It is far too soon to get back into this share especially during a market selloff. Jim Cramer is buying; I'm not.
Drug Dealers
*Galapagos (GLPG) presented at a European Respiratory Society gathering in Amsterdam results from phase I trials of its autotaxin inhibitor GLPG1690. It will move to phase II before year-end in study over its worth against idiopathic pulmonary fibrosis. Based on animal studies, it also may work against chronic obstructive pulmonary disease on which pre-trial data was presented.
For now, the Belgian biotech company is working solo on GLPG1690 although otherwise it mostly works with majors like AbbVie on AK1 inhibitor for rheumatoid arthritis and inflammation, Crohn's disease, and a search for molecules that counter the mutations of cystic fibrosis (GLPG1837, a potentiator, and GLPG2222, a corrector. But GLPG is also working alone on GLPG1205 against ulcerative colitis.
*In a biotech-Nasdaq focused sell-off, the exceptions are our Danish Bavarian Nordic (BVNRY), adjusting to a rise in Copenhagen, and Australian Benitec Biopharma (BNTC), suffering in the wake of a botched ipo. The selloff is probably related to the Turing Pharma 4-digit price hikes for a TB drug reported over the weekend.
Heavy Industry
*Delek Group (DGRLY) was one of the few bright stars, up despite or because Israeli markets were closed earlier this week. Smart money seems to buy Israeli shares (as with TEVA during the Jewish New Year) when Tel Aviv is closed. DGRLY was up; TEVA was not. Meanwhile my American gas shares are falling fast.
I think the main reason for the huge selling wave in commodities is the steady erosion of value at Glencore (GLCNF). GLCNF is doing a capital increase in London.
*Abhimanyu Sisodia writes from India about Vedanta Ltd. (VEDL) Its parent Vedanta Resources (VED-LSE) was downrated by Crédit Suisse to underperform from neutral and rated bear by Investors Intelligence, the charging service with which we trade. Vedanta Ltd is doing good works. And its stock is down over 10% today in US trading.
VEDL will develop for the Indian Ministry of Women & Child Development 4000 aanganwadis costing $15,000 each. These are courtyard shelters the public healthcare system will use to provide services in Indian villages. Initially, in 4 states, VEDL will spent ~$60 mn from owner Anil Aggarwal in addition to government funding, which was halved for WCD this year. VEDL will build ~25 aanganwadis per district, equipped with solar power, TV for e-learning, hygienic toilets, and clean drinking water.
IT and Pharma
*He also reports that Infosys (INFY) won a large but undisclosed 3-yr contract from California's Toms Shoes for digital platform development to help automate production and sales in the US, Canada, Germany, France, Holland, and the UK. Toms give a pair of shoes to a needy child for every one you buy.
*Insiders sell for many reasons but they buy for only one: because they know something they expect will pay off. Insider Pamela Kirby at Reckitt Benckiser bought £169,000+ worth (~$262,500~) of RBGLY UK shares. Meanwhile back in India RB CEO Rakesh Kapoor attacked the government for maintaining price controls on its Durex-brand condoms.
*I think one reason I worry about insider selling at Ireland's Alkermes (ALKS), the product of a drug stock inversion before the US cut the gangplank, is that its US managers have to report their transactions to our SEC. The company doesn't give you optional data on how much of its stock they still own after the trades which usually involve stock options. ALKS is showing bullish technicals in US trading.
*Nokia (NOK) won an upgrade to Buy with a $8 target price from CLSA and Crédit Agricole. The Vetr contingent downgraded NOK to hold from strong buy today with a $6.56 TP. This is a DIY website where crowd-sourcings views on a share are aggregated without being “vetted” (for example to block manipulation.)
*Goldman Sachs slashed Israel Chemicals to sell from neutral. We told you first.
Funds
*I still await word from manager Maria Eugenia Pichardo about whether or not our Mexican Equity & Income Fund, MXE, will follow Mexico Fund, MXF, which slashed its dividend 40% from 14.1%. The Mexican CB is keeping its interest rates low (for Mexico, at 4%) until our Fed raises US rates.
*Writing in the Financial Times, Stephen Foley makes the case for bond closed-end funds selling at double-digit discounts from their portfolio assets. He thinks the low prices will lure in activists who can try to open-end the funds, and argues that the passive ways of exchange-traded funds are not as appealing in bond markets as in equities. Moreover, CEFs, which do not have to sell their holdings even if their shareholders lose faith, can hang on better than open-end or exchange-traded funds.
The main reason I have not launched a campaign to buy our global CEF income funds wholesale is that the calculation of the net asset value is often delayed or improbable. Over a long period this will correct and we can make our selections
Disclosure: None
since I wrote it I approve
Lol, I should hope so!