Asian markets are being roiled by fear of North Korean aggression after it sent a guided missile straight over Japan. Meanwhile, AsiaTimes, a website, today published an article by Bill Gertz in which he argues that “the two recent collisions between US Navy warships and commercial ships have raised the specter that China was behind the 'accidents', using electronic means to disrupt or fool radar or navigation systmes into creating deliberate collisions.” He cites unnamed military experts and adds “there are signs the People's Liberation Army is preparing to use exotic electronic attacks in a further conflict.” Gertz is an author (of a half dozen books, the most recent of which is The China Threat) and national security columnist for the conservative Washington Times.

Right now stock markets are digesting the Houston hurricane and there are moves that one might not have anticipated. The latest horror from the post-hurricane deluge is that two reservoirs

19 miles from downtown burst banks and the levee south of the city has been breached by floodwaters. Six 

​more Houston suburbs are now in the flood zone and their residents are being told to evacuate their homes.

Of course the insurance, energy, and aviation industries are taking a hit. But so is Mexico. Its peso is down more than 1% against the US dollar, the biggest drop in several months, a reaction to lower crude oil prices, according to Eduardo Garcia, writing from Mexico City. Of course new Trump threats to make Mexico pay for El Muro (despite his having told his Mexican counterpart that he would settle for a fake payment) hardly helps.

The other threatened Nafta country, Canada, a major energy producer, is also suffering stock market drops—except for gold miners.

One exception to the Asian selloff is Thailand whose SET rocketed up nearly 2% today with the 2^ndhighest volume ever recorded, writes Paul Renaud from Phuket. The Thai baht also rose. He attributes the move to the long-term destabilization of Thai politics by populists having ended “with Ms Yungluck fleeting the country as did her brother Thaksin Shinawatra.” He adds: “political factions will be tamer and more humble now”, predicting a “more stable era and a more confident stock market.”

Eduardo edits sentidocomun.com.mx and Paul edits thaistocks.com. We exchange news and ideas with them both.

More today from around the globe including two corporate results and news from Brazil, Colombia, Canada, Mexico,India, South Africa, Kenya, Israel, Australia, Spain, Finalnd, Hong Kong, Britain, Ireland, and Switzerland.

Banking and Finance

*Bank of Nova Scotia reported its results today and as anticipated by Stefan Redlich, who lets readers of seekingalpha.com know his name, it has raised its dividend. However, because of worries about Hurricane Harvey, Nafta and North Korea, the BNS shares fell 1% in Canada. It reported net income under IFRS of C$2.103 mn, or 1.66/sh up from C$1,959 bn or 1.54/sh a year ago, a gain in loonies of 12%.. Both beat consensus analyst forecasts. Its YTD net hit $6.173 bn vs 2016 level of $5.357 mn. Its EPS YTD came to $4.85 vs 4.20. Its quarterly return on equity was flat at 14.8% but its YTD level was 14.7% , up from only 13.6% in the 2017 9 mos.

Domestic business in Q3 grew by 12% to $1.05 bn and its international side (why we own Scotiabank) by 16% to $614 mn. Its largest markets in Latin America, Mexico, Chile, Peru, and Colombia did less well partly because of higher taxes than smaller markets where its cost-cutting was more efficient, and where it booked investments from associated companies. Colombia also saw a drop in retail business. Its global banking business grew only 5% as revenues fell, hitting C$441 mn, off sharply from Q4 2016, and Q1-2 this year. This part of the accounts is for investment banking around the world from corporate loans. Its investment securities business produced a loss.

While Canada bank stocks are under-owned because of fears of a housing bust in Toronto and Vancouver, CEO Brian Porter boldly forecast that there would be no crisis in Canadian housing finance thanks to government initiaitves while admitting the Toronto market is “softening”. The conference call also forecast earnings growth in Canada medium term to hit 6 to 9%. It has a very healthy-looking Basel Tier I ratio of 11.3% (as of the end of July.).

BNS raised its divvie by 3 loony cents rather than the 2 cents predicted by Redlich, taking its yield to 4.1% from 3.9% starting with the payment Oct. 27 to shareholders of record Oct. 3.

*Eduardo also wrote about how the Mexican competition watchdogs have notified Banco Santander not to complete the takeover of the bankrupt local arm of Banco Popular Español, Ve por Mas, in which BPE owned 24.9%, the rest held by Antonio del Valle, a local businessman. Having bought the parent out of distress for 1 euro, SAN is being asked to devolve the Mexican bank which has sufficient capital, according to the Mexican authorities. SAN's buyout was backed by the European Union and Spain and it applied in due course to take over part of VPM.

*Insurance companies like Allianz, AIA, Validus Holdings, and Standard Life are all suffering from hurricane Harvey. Delek of Israel seems to have been spared. AZSEY; AAIGF; VR; SLFPY; DGRLY.

Funds

*Among the trends cited in the Brookfield Renewable Fund (BEP) quarterly is that Brazil exited its recession in its FY Q1 and said it expects a positive change in the GDP in calendar 2017. It also says that inflation is now down to the bottom of the forecast range of 3 to 6% for the year so the central bank is likely to further cut the SELIC (interest rate), already down to 9.25% last month from April 30 level of 11.25%. Brookfield, under a different name, Brascan, has been operating Brazilian electricity and telephone utilities and the São Paulo trams and cable cars since the late 19^th century, and the Brazilian word for street cars, bonde, comes from the bonds issued to build the systems and the first hydroelectric dams.

*Thomas Herzfeld who founded our Herzfeld Caribbean CEF with the ticker symbol CUBA, is again trying to create a Cuba Fund, according to papers he filed with our SEC. That may explain why he is not objecting to anything companies CUBA is invested in seek proxies for.

*Gold is up again, a second day in a row, as the dollar wobbled.

*Our inability to buy into the uncalled Royal Bank of Scotland preferred linked to the Libor rate should be satisfied by Pimco Dynamic Income Fund, PDI, investing in 3 offshore tranches of RBS loan participation notes along with others from Rabobank, Santander, Barclays, and Lloyds banks plus lots of corporate floaters.

Industrials

*BP's US Gulf drilling operations and chemical plants are functioning so far, knock on wood.

*Ecopetrol is selling its shares in ute Empresa de Energia de Bogota in a public offering in Colombia. Separately it has had to shut in the Cano-Limon pipeline it shares with Occidental after a left-wing rebel attack. This cuts 210,000 barrels/day normally going to Colombian refineries.

*The privatização of Brazil's Electrobras is advancing to help cut the country's budget deficit, which also boosted our Vale, where the Temer government may also find stock to sell. It was forced to cut power prices under the previous Dilma Roussef govt., which was one of the reasons she was impeached. While the electric company has to hive off its nuclear power plants and the Itaipu dam it operates jointly with Paraguay and faces opposition from preferred stockholders and politicians, the Temer government is determined to sell it.

Vale meanwhile has combined its prefs into its common shares and its stock is buoyant as a result. The various groupings of the controlling shareholders who had owned the prefs in theory makes it harder for there to be a sale of the state's share of Vale, but Temer wants to get it off the government's books and also to stop the raids by opposition lefty pols for jobs and payments.

Meanwhile pure private sector Brasileira Cosan is down today as the natives get ready for the sale of Electrobras next month. CZZ.

*Agrium signed a contract to buy Southern States Coop's 20 retail agriculture stores in Geargia and Florida and a cotton gin business in GA, boosting its commercial presence in the US. This despite AGU being in the midst of a merger with fellow-Canadian firm Potash of Saskatchewan. The contract depends on regulatory approvals and no price was given. Its shares rose 1% on the NYSE.

*BofA Merrill cut Cemex from buy to neutral today. CX.

*The US Federal Energy Regulatory Commission is now back in business, having gained a quorum at last from the often distracted administration. That may advance our Veresen (FCGYF, now in the merger process with Pembina, another Canadian.)

*Greencore of Ireland, following insider buying, rose 9.9 UK pence in London yesterday, hitting GBX199.9, making it the 5^th best performer on the LSE.

Tech-Telco

*Vodafone CEO Vittorio Colao wrote to India's regulator to urge the government not to further hurt telcos competing with Reliance Jio by forcing a cut in interconnection charges. Since Jio doesn't charge enough for mobile phones calling out, a lower connectivity fee to link to customers of other phone companies who are mostly in underserved rural areas where linkages are expensive(like VOD and its future partner Idea Cellular) would further tilt the playing field in favor of Reliance, a well-connected Indian family group. He wrote that the Rs0.14 termination charge is already below VOD costs. Jio meanwhile is plotting to offer unlimited voice and data with a new handset for Rs 153 per month, plus a deposit of Rs1500 which is refundable at the end of a year. VOD has delayed its Mumbai spinoff of its Indian ops and its lcoal CEO Sinil Sood was not felt to be powerful enough to win over Indian telecom minister Manoj Sinha, so the global chief was the one to write. VOD has operated in India since 1994 when it was called Hutchison Essar, acquired by VOD 10 years ago with great plans. This year for Diwali, Vod will offer 28-day roaming packages, Rs 392 to cover all telcos or Rs198 for VOD-to-VOD links.

Separately, VOD sub Safaricom in Kenya will offer end-to-end fiber-to-home fixed broadband. This is a service only 1% of Kenyans now have, and will come from Huawei, installable with cellphone instructions to cut costs.

*Comerica has added 3000 shares of BCE to its holdings bringing the total owned by the Dallas bank to $4.18 mn. The bank, CMA, which used to be HQ'd in Detroit, invests for its wealth management business and is also collecting funds for Houston shelters and its Red Cross and Salvation Army charities.

*Because of its dependence on Far Eastern suppliers, Finnish Nokia fell 2.7% today in Europe but regained most of that here.

*Infosys was tipped as a buy today by Deutsche Bank after India withdrew its troops from the contested Bhutan-China border and after INFY smoothly installed a new temporary CEO. It had been rated hold. The stock rose 1.6% pre-market.

*Naspers rose 4.7% in London trading to $45.02 today because of haven seeking. Now even Pretoria is considered part of the BRICS complex. Meanwhile its key holding, Tencent, fell 2.55% in Hong Kong today. Its ticker symbol is NPSND after the 1:2 reverse split.

Pharma

*DNA directed RNA interference drug firm Benitec Biopharma Down Under lost A$5.7 mn in its FY 2017 to July 31, much improved from a loss of A$24.8 mn in the prior year. Its loss fell 77%.It also snagged an R&D grant worth $10.4 mn which brought its cash on hand to A$17.4 mn. It also cut its R&D costs and employee option expenses. Last year it also wrote off A$1.8 mn for its hepatitis C work which did not repeat BNTC is advancing toward the clinic in 3 areas: oculopharyngeal muscular dystrophy, moving to trials in about a year with an orphan drug against the genetic mutation; age-related wet macular vision degeneration; and hepatitis B for which it is seeking a drugmaker partner. It also has a head and neck and rare cancers ddRNAi aiming at epidermal growth factor receptors and is looking for other diseases ddRNAi can treat. I recommend the warrants, ticker symbol BNTCW. Nant Capital of the US, owned by the richest medical doctor in the country, Patrick Soon-Shiong of Los Angeles. owns 28.6% of the BNTC shares outstanding and the shares gained 1.9% today. No warrants traded.

*Shire Pharma of Ireland was downrated by UBS because its staff are very dissatisfied with the company, and cut its target price from £45 to £40.95 because employees are not confident about management plans. That may sound far-fetched but you should recall that Switzerland is a key pharmaceutical producing country whose banks back up Roche and Novartis, Sandoz, etc

*Teva fell another 2.5% in the pre-market today after losing 1.7% yesterday but then recovered to only a loss of 1.98% on the NYSE. Recall that the call for Teva to fall to $13 was made by Crédit Suisse. This is no accident. TEVA is now facing class action suits from US legal eagles for failing to inform shareholders of the sagging profits of its generics business in the US until Aug. 2. I considered becoming a plaintiff but decided it would be bad for my reputation as a stock picker.

*Our chartist friends at investorsintelligence.com do not read newspapers, why their most recent european daily market statistics report yesterday proclaimed that Stada Arneimittel had produced a “a spike” at euros 83.2 before falling 3.17%. In fact SAZ (in Germany) or STADF (here) was the object of a successful takeover bid which was covered by our service as well as major UK newspapers. II is British and we have already noted that their chart readings for Japan are wacky and ill-informed. As the euro rises against the Greenback, our potential final dividend from STADF also rises.