Pure Technologies Q2 revenues hit $20.5 mn, up 20% while its backlog rose to C$80 mn thanks to increases of $33 mn. However, other metrics at the Canadian small cap pipeline inspection service company were less stellar because of heavy spending on technical and marketing managers, which nearly doubled its cost of sales to C$5.85 mn from prior year Q2. The result was that adjusted earnings before interest, taxes, amortization, and depreciation (EBITDA, a measure of cashflow) fell 17% not counting forex and acquisitions. The bottom line was a profit down 79% at C$454 mn or 1 loony cent/sh. Part of the problem is the lumpiness of contracts for inspection services, which may be made up in Q3. Part of this has to do with the margin mix from a project in Australia which is cost-plus based. PPEHF says that the management restuctruring impact on SG&A expenses is a one-time hit. I hope they are right.

The conservatively managed firm has net working capital of nearly C$77 mn of which $35 mn is in cash. The flat 3 loony cents/sh divvie will be paid Sept. 16.

What Veolia and Novartis share is a history, unusual for European companies, of activist investors triggering board fights.

*The one at NVS was over the pretensions and pay of its former CEO Dr Daniel Vasella whose golden parachute was reduced from $78 mn to only $5.2 mn 13 months ago. The scandal spilled over into a referendum to limit Swiss pay levels. Acquisitive Dr Vasella emigrated from Switzerland in embarrassment. New CEO Jim Jimenez is divesting parts of the vast mixed drug portfolio Vasella accumulated during his tenure, and also canceled the plan to build a research center next to Vasella's former sprawling estate in Risch outside Zurich, depriving Vasella of a potential real estate gain. Vasella did not exercise his option on the Risch site and sold the lakeside palace, another divestiture. In its Q1 report, NVS stressed the Dr. Vasella, now honorary chairman, will have neither pay nor clout.

During the dismantling and transition, NVS shares underperformed other European majors even GlaxoSmithKline, of which more below. NVS exited injections and picked up oncology drugs in trades with GSK and it also plans to sell over-the-counter drug lines. It is also taking the lead (with Amgen) in getting more transparency over the regulation of generic production of US biosimilars, made by its Sandozdivision. Sandoz was first to file with the US FDA for a biosilar of Amgen's Neupogen, so the cooperation is highly signficant. Neupogen helps chemotherapy patients fight infection.

*Veolia has twice been subject to attempted boardroom coups against the CEO, currently Antoine Frérot. The one earlier this year was mounted by Serge Dassault, a major French oligarch. He wanted to impose a new CEO, David Azéma, head of a state holding company APE, which is related to another major shareholder, theCaisse de Dépôts et de Consignations, the big French govt shareholder, which threatened to dump the stock unless Dassault got his way. In the end, the VE coup was defeated by the government deciding that M. Azéma had a conflict of interest and Frérot was reappointed until 2018. A prior coup against Frérot was led by his predecessor as CEO. Henri Proglio, who tried to oust him in 2012. Again what is at stake is the earlier expansion of the business of supplying water, sewage, and other utility services outside France. VE is very active in Britain where I see its gardeners under contract from Tower Hamlets council lolling around in their trucks near Mudchute Manor. The need to tighten controls. Now that shareholders have won time for CEO Frérot I expect he will set out to tighten the VE ship after a disappointing Q2.

*Today's Wall Street Journal reports that Glaxo's CEO Sir Andrew Witty also faces pressure to clean up its business lines and boost results. Triggering the dissent is the latest bribery scandal eruption, over Syria. Syria until the civil war broke out, was run by an MD, Bashir Al-Assad, an ophthalmologist. Beside bribery scandals in many markets, Glaxo illnesses include slow uptake of its new respiratory drugs (Breo and Advair) and a 2014 profits warning. Witty was the new broom who took over in 2008 after US investigations revealed illegal marketing by GSK for which it paid a $3 bn fine.

*Galapagos has lost its backing from Glaxo for an anti-inflammatory lead after failure in phase II trials. GLPYY developed the JAK-1 inhibitor to treat lupus, ulcerative colitis, and psoriasis now called GSK2586184 but now GSK is delaying further trials while keeping its interest after things went wrong in the lupus and colitis trials because of interactions with statins. The psoriasis trial failed to produce statistically significant benefits. GLPYY of Belgium is suffering some reputation damage from the failure but has plenty of cash on hand.

*Schlumberger Ltd warned that sanctions against Russia would cost about 3 cents/sh in profits in Q3 and probably until theyend. As I warned from London, being Dutch-incorporated does not let SLB avoid embargoes against Putin-land. The Netherlands had the most victims from the Malaysian Airlines plane taken down by a missile of Russian origin in eastern Ukraine.

Separately, SLB won an integrated drilling services deal from Statoil of Norway work about $190 mn over the next 24 months, plus possible extensions for wireline services for STO drilling in Norwegian offshore deep waters.

In addition, SLB's sub Helix Energy, via a new jv with Cameron International, called OneSubsea, will a range of new services for deep subsea well drilling and management. Helix does well intervention using its own fleet while CAM operates a submarines and flow equipment, compression, and pressure control systems.

*Another Dutch gang, Liberty Global, is focusing more on content than on pipes, which I kind of guessed it would. It is now making a friendly offer for the rest of Ziggo, the Dutch cable operator in which it already holds a stake, euros 3.4 bn in stock and only euros 1.6 mn with cash.. According to today's Financial Times, LBTYA has debt at 4.8x its annualized free cash flow. But the FT thinks this will not stop its pending deal to buy 49% of Formula One (with Discovery Channel) or a potential buy of ITV which is on the block.

*Delek Group reported that it granted a delay to the Cypriot tender process from this month to Nov. 30. Israel has designated the Tanin and Karish gas fields as proven discoveries, which will let the operator (Noble Energy) and Delek sell these fields to avoid being declared a monopoly by Israeli trust-busters.

*Brazilian stocks are now plays on the forthcoming election, with every poll and scandal sheet showing Dilma Rousseff declining boosting shares. The most recent poll by IPOBE Aug.6 showed the incumbent had boosted her approval rating to 47% from 44% earlier, probably enhancing her chances. So this is bad news for Vale, a political target. Brasilia instituted fierce tax collection to prove Rousseff's populist credentials despite her having been involved in or oblivious to corruption, money-laundering, and tax evasion at Petrobras, which she headed before moving to the presidency. VALE

*The latest Brazilian scandal affects banks in the country, including Santander, which already is seeking shareholder approval of a proxy to allow it to buy back its Banco Santander Brazil.

The bank allegedly was involved in money laundering for to Petrobras brass.

*Railroads run both ways. After a steady week of ever rising stock prices, today Guangshen Rail's share price fell back 6.75% to $21.54.

*Naspers hit a new 52-wk high at $132 in London today. It was 1^st tipped by contributor Harry Geisel.

*Tencent, in which it owns nearly 30%, was subject to Chinese censorship of some of the content of its WeChat instant messaging service. One netizen was arrested for “rumor-mongering” on the site.

Dow Jones reported that TCTZF is increasingly dependent on video games earnings (people buy coins stuff to make the phone games easier to win.) It reportstomorrow and Thomson Reuters analysts expect profits to rise ~50% thanks to gaming. The stock has risen 30% YTD. Dow Jones expects NTDOY may buy into more mobile games. I think TCTZF may buy into DeNA in Japan, why I am keeping DNACF. More below.

*Roach motel note 2: A possible roach motel is China Chaintech CTEK, a China small infrastructure play trading in London. Its market cap is only GBP 50 mn and its bid ask spread is about 9%. It closed today at GBP0.95 but not if anyone trades it.

Fund notes:

*SPDR Gold ETF, GLD, sought our proxy to limit fees to 0.40% of the asset value and also to let the World Gold Council (its founder and a shareholder in its management group) pay for marketing the ETF. The effort which not cost GLD shareholders anything. This will probably result in a plethora of articles about how every portfolio should hold some gold, or GLD, which I happen to think is wise. But we do not accept marketing fees.

*Africa Opportunity Fund has fallen to under $1 today, down nearly 11%. It closed in London at $1.06, actually up ~0.5%. In its June quarter report it revealed that it owns 7.1% of NPSNY (cf above) because it feels the share is undervalued despite an 83 p/e ratio because of its African TV franchise being undervalued. The fund offset its taste for Naspers by shorting Tencent which meant it ultimately got the Naspers TV business for free. The paired trade is a synthetic purchase of non-TCTZF NPSNY, focussing on Africa, where AOF is supposed to be going.

But AOF also revealed that it had 14.2% of of its money in Enterprise Group Ltdand 3.6% in Standard Chartered Bank Ghana, plus 22% of its money overall in Ghana. The collapse of the Cedi took Q2 NAV down 10.1% and the shares fell as well.

The market price at June 30 was said by the managers to be at a 16% discount from the portfolio appraisal value of the shares of $1.37. This measures what the managers think the portfolio is worth, and is subjective. The fund also revealed that it has a current yield of 5.8% and a 13.5x pe ratio. It also revealed that it was not putting money raised in its $29.2 mn C share issue of April into Ghana.

*Eaton Vance Tax-Managed Global Equity Fund, EXG, reported for the quarter and half year to April 30. It had net income in its Q2 of $0.343 per share or $103.5 mn, and for H1 of $0.359/sh or $108.3 mn. It also had realized and unrealized gains in Q2 of $49.1 mn or 16 cents/sh in Q2 and of $70 mn or 22.9 cents/sh in the half. In effect it did badly in the 1^st quarter of its FY to Oct. 31 and made up for it in Q2.

'*Infrastructure investments are a good way to get high yields with relatively low volatility. Macquarie First Trust Global Infrastructure, a closed-end fund, is our play here, MFD. It pays a quarterly dividend of just under 8% currently, 35 cents vs a share price of $17.64. The CEF payout may include return of capital, to be determined after the year ends. The fund managers are out of the formerKleinwort Benson Australian investment bank. On Aug. 8 its NAV was $18.48 and its share price $17.54. The divvie is flat from prior quarters.

*Mongolia Growth Group is up 4% today on heavy volume. MNGGF may be converting into a REIT.

*Via our stake in Canadian General Investments, we own a bit of Canadian Pacific Railway. It is likely to gain from the delay in approvals for the Keystone XL pipeline from the US State Dept. and state courts. CGI reported its Aug. 11 net asset value at C$28.08 while its share price is only $19.80. This is a bigger discount than almost any other closed-end fund easily tradeable from the USA suffers (CGI belongs to the Closed-End Fund Association, www.CEFA.com, and is covered by Barron's as well.) CGRIF.

*Central European and Russian Fund is running a 5% buyback of its shares and despite our having sold our stock my dinner hour was twice disturbed last night by CEE calls soliciting us to tender by Sept. 9. So much for privacy. The offer is at 98% of net asset value per share Sept. 10.