E Better Than The Maestro

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.

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