I hope my screed last week about frothy dry bulk carrier stocks persuaded you not to get into that thicket—or to sell out if you had been lured in. The group, led by Dryships (DRYS), which we sold ages ago, duly crashed. Unlike Alan Greenspan, sometimes I can spot a bubble.

More follows from Thailand to Brazil, from Cuba to South Africa, with a few stops in between. We have two news items from Malta, a first. We have two company reports, plus a new buy, and a sell.

*I was on a bus when Naspers (NPSNY) reported weaker H1 earnings Friday so I am quoting Dow-Jones on the South African media group. NPSNY which famously owns a third of Hong Kong's Tencent (TCTZF). Naspers, which operates worldwide, reports in US$s. Its net fell by over 10% to $554 mn in its FY H1 (to Sept. 31) this year from last. Adjusted “core' earnings however rose 31% to $914 mn. Revenues dropped about 1% to $2.96 bn, hurt by video-entertainment businesses higher costs of licensing in dollars., Without the currency impact which cost NPSNY 6% y/y, licensing revenues would have grown 6%.

Its homeland of South Africa generated only 20% of total revenues, vs prior year 25%, a sign that even a good company from a bad neighborhood can suffer from political risks.

Barron's on-line writer Dimitra DeFotis quoted parts of the Naspers release which stated that it had sold a Polish business, and went on to discuss India:

“In India, the merger of the ibibo platform with MakeMyTrip will create a leading business in the travel segment. The acquisition of Citrus pay drives consolidation in the online payments space in India.”

Naspers sub PayU “provides Indian merchants with online payment solutions that work” for people without email addresses or credit cards.

As was shown by the impact of the latest Indian currency re-issue last week, Indians rely on cash even for on-line cyber purchases, paying at the door when the stuff is delivered. There are 1.3 bn Indians but only 21 mn of them have a credit card now. More on India below along with another quarterly report from one of our companies.

The King of Siam

*Nudged by Paul Renaud in Thailand and Max Deml in Vienna, I opted to buy during the royal interregnum ther​e but not the shares they each recommend, neither of which have ADRs. Paul runs www.thaistocks.com for foreign investors in Bangkok. US people have a hard time buying on the local market as banks and brokers require lots of paperwork to open accounts. My bank will trade in Bangkok, but their fees are huge, so this requires that I have total confidence in Paul. Given his past record, he can produce both great gains and great losses, so I hesitate. I am not giving you the name of his stock pick because it is only for his subscribers and followers unless I pay him to reprint his pick.

Max produces a global solar energy index and a “green” newsletter. His latest pick is another Bangkok share, Thai Solar Energy, also un-buyable from the USA. Those outside the country may want to look it up on the internet under its name.

Looking into the Thai ADR options I decided upon an outfit I have already written about in the past, Minor International PCL, which now has an ADR,   MNILY. The unsponsored OTC ADR, created this June, is equal to 25 Thai shares. We ran into MNILY before it had an ADR issue when it gobbled up Tivoli Hotel assets sold by the Espirito Santo clan in Portugal and Brazil for $320 mn. The Portuguese family sold assets which had been held via a Luxembourg holding company which had sold worthless commercial paper to Portugal Telecom, an ADR stock we owned which lost its capital as a result. There was no recourse for ​us ADR owners of PT.

Minor International all by itself is an ethical challenge. It was founded by William Ellwood Heinecke in 1963 when, as a teenager, he bought a Carvel ice-cream franchise in Bangkok. Heinecke had attended high school there and spoke Thai, but was supposed to return to the US to go to college. His father reportedly was the CIA station chief in Bangkok.

Instead of following orders, the young entrepreneur stayed on in Thailand and in 1992 renounced his US nationality to become a Thai and a tax exile. This no-longer-young man went on to create a global business until the Bangkok ticker symbol MINT of which he is CEO and Chairman.,

Early this month, MINT reported profits up 7% ​to 990 mn bahts, or 0.2236/sh. These were boosted to a 16% rise y/y by restating 2015 Q3 profits, I know not how.

According to its most recent report, its revenues are ~65% from hotels, 40% from restaurants, and the rest from retail stores and contract manufacturing, called “Lifestyle”.

Under Thai GAAP on its 9-mo data which showed revaluation gains from the Tivoli buy and also from its investment in BreadTalk Group of Singapore, and Sun International and Oaks Elan Darwin hotels in Australia, which would have produced a 46% gain over the 9-mo figures in 2015. Eliminating those, MINT core net profit excluding non-recurring items rose 11% to 3,229 bn Thai bahts in the 9-mos, mostly because of its restaurant and hotel operations. It is unclear if the same eliminations applied to the Q3 results.

For validation of sorts, note that the Q3 corporate tax applied by Thailand and other jurisdictions rose 338% which probably confirms the real rise. There is an offsetting negative, a rise in minority interest to 56 mn bahts from 25, mn, up 125%. I assume this is Mr Heinecke looking after himself.

The Tivoli hotels which were acquired early this year boosted results as did the Thai ones and those in another new site, Zambia. The original business—fast food and restaurants—also did will with a 16% net profit growth, also excluding one-offs. The newest business, “lifestyle”, branded franchise stores, saw profits drop by 37% because of the costs of investing in new stores. However, there also was also an impact of deep aggressive discounting of fashion brands. In Q3, separated out only for this, the drop was on​ly 15% vs 2015. Other Q3 data is not separated out.

I am not upset that Mr Heinecke did not play the patriot game as a youngster but I think his reporting is not altogether up front. It would help if its accounts were less opaque. For what it is worth, the stock is mostly rated hold by those following it. It upped its liabilities by 10% by issuing new debt to buy the Tivoli chain and it owes 66.015 bn bahts while its shareholder equity is only 38.85 bn. It is leveraged to the hilt.

Its p/e ratio is about 18x. It pays a modest dividend. But its net profit margin in Q3 this year was 8% after removing the one-offs and paying the interest, down about 9 basis points from last year but still a nice pile of cash.

My reasons for buying now are because of the death of King Bhumibol and MINT's position as a partner with the Royal Project Foundation in Thailand to help farmers get out of poverty by producing food instead of opium. It is also green, aiming to reduce energy consumption in its hotels, and actively recycle and support sustainability.

The other reasons for buying now are specifically Thai. First, China is cracking down on Chinese tour operators which offered virtually free trips to Bangkok and then tried to force tourists to spend a lot of money at stores which gave the operators kickbacks. This was not the shops owned by MINT but helps explain the heavy discounting by competition this summer.

To make up for the lost China business, Thailand then cut taxes applied on foreign tourist spending in hotels and restaurants by over 25%. This will help continue to lure Chinese bargain seekers to Thailand who use hotels and restaurants it own​s. It will also boost sales at MINT's cheap chain stores selling fashion items. While the going has not been easy I think there is a market for fashion brands in Thailand under the Esprit, Etam, GAP, Banana Republic, Brooks Brothers, and other global marques.

So far mostly in the future is MINT's real estate arm which will develop and sell vacation homes around its hotels in Bangkok, Phuket, and via a jv in Chiang Mai, plus eventually via a different brand in New Zealand, Bali, and Sanya, China.

It is a gamble. There is a bit of sulphur in the air. But I can take the risk more easily with an ADR than in Bangkok. Note that the ADR has a very wide bid-ask spread but you can offer to buy in the middle as I did today.

*To pay for this one we sold Gemalto (GTOMY) at $26.04/sh today. GTOMY is a disappointing Dutch security firm​.

Oil Patch

*Schlumberger Ltd (SLB) which is incorporated in the Dutch Antilles signed an agreement to provide Iran with technical evaluation of an oilfield there. It said it is complying with the laws and regs of countries where it operates. SLB has form in going early into troubled lands as it flogged its wellhead services to Opec countries back when they ousted the oil majors in the wake of the Yom Kippur War of 1973. Note that SLB's owners are mostly French nationals and its CEO is Norwegian. SLB has an edge against the largest US alternative supplier of wellhead services, the future combo of GE and Baker Hughes.

If Pres. Trump tears up the Iranian deal it will not affect the Netherlands or France as the EU group of countries signed the de-nuclearization agreement with Teheran in their own right.

*Delek Group (DGRLY) is acquiring its pro rata share of new registered participation units in Ratio which were issued to fund the Israeli firm's offshore exploration and production in Guyana-Surinam, Malta, Ireland, and the Philippines. This follows earlier moves by DGRLY into offshore oil operations in the UK North Sea and Canada. Delek via subs is partner with Ratio in the Leviathan offshore Israeli gas field.

Yesterday Delek also said that its subs which own 45% of Leviathan got a binding agreement from UK branches of HSBC and JP Morgan banks for a $1.5-1.75 bn financing package to finance phase I development of Leviathan field, the largest ever Israeli project financing deal.

*BP plc (BP) will buy next year a 10% stake in the Zohr field offshore Egypt from ENI of Italy for $375 mn plus an option to buy another 5% stake by 2017 by paying more. It will also pay funds not yet determined to reimburse past exploraing spend by ENI since the field was discovered in 2015. It holds an estimated 30 trillion cu ft of gas, more than Leviathan.

Iron-y

*VALE and its jv partner BHP-Billiton (BHP) will each pay US$181 mn for environmental remediation and compensation over the Samarco dam bust just over a year ago in Brazil. This will come out of VALE's reais 3.7 bn provision created in Q2 (about $1.1 bn). The partners will also pay up to $115 mn each in short-term credit lines to Samarco in H1 of 2017 for support which may not include restoring production.

*Chartists InvestorsIntelligence.com called CRH plc (CRH) a bull as it "unwinds into price and relative uptrend", whatever that may mean. CRH is Irish and considered to be a US infrastructure play, but these guys are late to the party.

Drug Dealers

*TEVA of Israel will market an inhaler to deliver medical cannabis to manage pain using an inhaler made by Syqe Medical, also Israeli. The device will init​ially be sold only in Israel.

Separately, TEVA is shutting in an Allergan (AGN) generics plant in Malta and cutting about 200 jobs there by 2018.

*GlaxoSmithKline (GSK) is challenging erythropoiesis injections to boost red blood cell production to treat kidney disease patients with anemia. GSK's daprodustat is a hypoxia-inducible factor prolyl hydroxylase inhibitor based on how blood pressure reacts to high altitudes. It also may help keep down their blood pressure. GSK was raised to bull by investorsintelligence.com, UK chartists, today, along with rival drug firms including Astra-Zeneca (AZN) and Indivior.

Las Latinas

*My post-Castro play, Copa Holdings (CPA), a Panama airline, turned out to be a loser on Fidel's death although a major holder of the CPA shares, Herzfeld Caribbean Basic Fund, ticker symbol CUBA, soared 18% on the opening today. CPA is down about 3% on the assumption that it will lose its rank as more Miami to Havana flights are booked. We don't own CUBA any more after the stock went ballistic as the easiest Havana buy when the US eased restrictions on travel there last year.

The selloff may be because US airlines and the DJ Transportation index have reached resistance levels. But I am sticking with CPA after selling it way too soon the last time we tipped it, as we are following Warren Buffett into airlines.

*Mexichem (MXCHF) is up nearly 6% in pesos in local trading.

*Canadian language software firm Lingo Media Corp (LMDCF) lost 34.55% this morning. Thanks to support from Telefonica of Spain LMDCF is offering English-language teaching programs widely in Latin America. It reported Q3 revenues of C$152,657 on which it posted a net loss of C$581,710, equivalent of 1.6 loony cents per share. Its CEO Michael Kraft boasted that it has a growing pipeline and will recognize revenues as contracts are signed. He added: “Buyers are mostly governments and educational institutions with long sales cycles.” Year earlier revenues were C$1.2 mn on which the small cap startup had income of C$740,746 or 2.3 loony cents/sh. So this is a bummer but operating expenses did not change significantly despite the new hires and other moves like cutting its debt.

*Vale is up another 4.4% today to $8.8 after we sold half too soon. It is at another 52-week high. I still remain a skeptic about Brazil ever achieving Order and Progress (the national motto) given the continuing rise in indictments of politicians over the Petrobrascar-wash scandal and the likely slow-down of Chinese construction for which it supplies the iron ore raw material.

*Cosan of Brazil, a less flaky share, is up only 2.5% today.

*Hard-charging REIT Fibra Uno (FBASF) of Mexico is up 2.32% today on substantial volume on Wall Street. FBASF is a play on Mexican growth being able to survive whatever Trump ultimately decides to do about NAFTA.

*However after gaining at the opening today, Cemex (CX) fell later on. It initially rose on rumors it might build what my children's cousin Toby calls Trumpety-Dumpety's wall, and because Mexican investment advisor Guillermo Rodriguez put a buy on CX yesterday.

Banks

*The Financial Times reports that Banco Santander (SAN) will abandon its plan to split off UK investment banking operations from its “ring-fenced” consumer banking businesses as had been required by the 2012 Vickers reforms, to be done by 2019. Of course this TBTF regulation was imposed before the Brexit vote which changes everying for SAN despite its heavy UK retail businesses acquired under the prior chairman,Abbey National, Bradford & Bingley, and Alliance & Leicester. Instead, SAN will use offshore UK sites (like the Channel Islands) and other EU ones to continue to offer the full range of services it does now.

*UK major banks are under pressure today as the Bank of England will publish new stress tests Weds giving more weight to the problems of Opec on which the Old Lady of Threadneedle Street has been expressing concern for a while. Mark Carney, its governor, has been warnings that the cartel's inability to control output creates banking risk.

In addition, Tesco (TESO) is down on a Times article saying that its own systems left its bank vulnerable to fraudsters stealing million from its bank sub customers. The impact of these developments is negative for large banks including Royal Bank of Scotland (RBS) which we own only through its non-cumulative preferreds, which we will collect on as long as the bank cannot be privatized.

Our Virgin Money (VRGDF) shares are off 0.75% in London trading today, modestly down in the bank selloff.

*Barclays (BCS) sold its Asia wealth management on the cheap to Overseas Chinese Banking Corp of Singapore, for $225 mn, less than half of what it was valued at last Dec. 31, pre-Brexit. We own BCS non-cumulatie preferreds, not the common, and the cash inflow boosts confidence in their continued payment by slashing its risk-weighted assets. BCS earlier exited its Africa banking arm.

*Standard Life (SLFPY) shares gained nearly 3% today in London trading as yield-seekers bought it in place of banks. SLFPY pays out 6.25%.

Indian Givers

*Infosys (INFY) is not likely to be sold despite my marking it for sale because I am too greedy to accept what I am being offered for my stock now. However the U​S share I would have bought more of had INFY been sold is doing much better, Cognizant Technologies (CTSH) of New Jersey, which does back office work in India too. Its 4% shareholder Elliott Management is meeting with management to try to get through a value-enhancement program which includes paying shareholders a dividend and create a stock buy-back program. CTSH is up over 8% today which is another reason not to sell INFY,

*With the dollar down and Indians looking for a new way to cache their cash, gold is back on the up including our SPDR Gold ETF, GLD.

*Aberdeen Asia Pacific Income Fund (FAX) only earned 52% of its YTD distributions from dividends and capital gains, with the rest coming to us as untaxable return of capital. 

*Its stablemate Aberdeen Global Income Fund (FCO) only earned 36% of its distributions paid to shareholders with the rest return of capital. These quirky figures are the result of steady distribution policies which are not really good for shareholders, unless they are too stupid to see what is happening in their funds. It is much better to sell stock if you need the proceeds rather than cutting your basis by the backdoor.