closed-end-fund-data
As noted last week, you cannot get the full Monty Barron’s outside the U.S., although some columns are on-line. The now-Murdoch weekly no longer will cover stock prices on the American Stock Exchange, or the Nasdaq (small-cap) Capital Market Listings. It will drop foreign stock-exchange data.
However, Barron’s continues to cover closed-end funds (CEFs), with an unfortunate twist. The data will come out on Saturday not for the week that just closed, but for the prior one. It is now collated by fund guru Thomas Herzfeld Advisors from what fund managers send to the Investment Company Institute, the mutual fund industry, with a week’s delay. A week is a long time on Wall Street.
The raw ICI data are a dog’s breakfast. I used to get this for closed-end funds we cover. The industry grouping, the Closed-end Fund Association, www.CEFA.COM, opted not to continue to clean up the data. And the ICI, mainly supportive of high-fee open-end funds, is unwilling to take this one on.
This is bad news for investors. Following a note I wrote about exchange-traded funds for www.Seekingalpha.com, readers asked me to set them straight about closed-end funds in Asia. I would love to, but it would help to have current discount and premium numbers.
Some more material about our closed-end funds portfolio will follow the news for our paid subscribers. Most of news is from the part of North America I most like to invest in, Canada small caps.
Back in the Big Apple, I am delighted at a new pop singing group written up in The Village Voice, called The Vivian Girls.
My freshman year Yale student boyfriend, from when I was 17, sent me back all the letters I had written to him from Harvard. Luckily there seem to be no indiscretions, just lots of naiveté. So he could not blackmail me with them.
Because I am not a girl any longer, there were about a dozen communications from the drug insurance firm and Medicare about my account being paid from my social security pension. This entailed a wait of four months from when I started getting a pension, giving me a second new pharmacy card. I got several communications from a bunch of seemingly different insurance companies who all seem to be responsible for my drug coverage. Most of the letters I cannot understand the meaning of, despite Harvard.
There was also a nasty denial of coverage for a preventive care colonoscopy which Medicare refused to cover. I have one of these every decade because colon cancer killed my dad and there is a family history of this disease going back to my great grand-father in the 1920s.
One advantage of a US universal health care program would be to stop the need for the insurance policy fine-print Greek denying preventive care. And I am not even trying to get expensive drugs or treatment. I suppose the point is to keep the sick and the old in good mental form to try to figure out what they are being told.
*Start with the bad news. Fitch downrated the hybrid securities of a batch of European banks including Royal Bank of Scotland today. It fears the European Commission will require lenders to delay interest payments, as it already has done to Allied Irish Banks and Bayerische Landesbank. While government support covers depositors, of course it does not cover US subordinate preferred stock investors. But for political reasons, just because RBS can delay interest payments does not mean it will. I already noted last week that the payout on Wall Street is hugely more generous than what you can get in Edinburgh’s Princes St.
*QBE reported today. QBEIF.PK, Australia’s leading P&C insurer, had H1 profits up 19% to A$1.02 bn (US$846 mn), boosted by premiums and premium volumes going up and forex gains. The share rose 6.4% in Sydney but is still down 15% this year. It declared a 62 cents dividend for the half. It wrote in its statement: “We expect premium rate increases achieved in the first half of the year to continue for the majority of our insurance products”. It had investment losses of A$144 mn in H1 which was more than offset by currency gains.
*The immature Chinese market is up again today. This has fed through to Brazilian pricing of VALE (Cia. Vale do Rio Doce) which exports iron ore pellets to China.
*Another Chinese note. Frida Ghitis writes that Fushi Copperweld has been added to the World Economic Forum’s list of Global Growth Companies, an elite list of 500 firms the operator of the famous Davos annual ‘do’s’ calls the wave of the future. She notes acerbically that the next interim WEF meeting next month takes place in Dalian, China, home of – you guessed it! – FSIN. It makes copper wires for telephony and electric transmission. Since your editor’s college buddy Maria Livanos Cattaui was fired by the WEF, she has not been a booster of the Davosians, but Frida goes further:
“The WEF claims to be impartial, apolitical, and devoid of national interest. We like Fushi but we wonder about the WEF’s own transparency.”
*Frida also notes that Nestle now owns only 39% of Alcon, and 12% went to Novartis. ACL, which she tipped, has regained pre-crash levels. It has added a new contact lens solution to preserve eye moisture for wearers of gas permeable lenses, “bread and butter on a vast buffet”. The plan for NVS to buy the rest of ACL depends on price, with many analysts saying ACL is too dear.
*Teva lost to Merck in a hard-fought 30-month federal case over patents on Singulaire, a best-seller allergy med with $4.3 bn in sales. UBS raised TEVA.Q to “strategic stock” (best) while S&P downrated it to “positive” (2nd best.)
*GlaxoSmithKline won US FDA ok for its meningitis vaccine used as a gooster for exposed kids 15 months to 4 years old. GSK
*NIMBY by the Brits led Danish wind turbine-maker Vestas to shut its Isle of Wright plant. Now VWDRY>PK reported profits off 15% to euros 78 mn in part because of paying redundancy to to Brit and Danish workers despite revenues up 29% to euros 1.68 bn. It is moving production to China and moving selling targets and other plants to the USA. BofA Merrill and UBS have put WVDRY on their buy list with targets of DKK 380 and 357, respectively, up from 350.
*One of our Canadians, Bombardier, has terminated contracts for LearJet 60-XR private planes from Jet Republic. Only 25 of the 110 orders totalling $1.5 bn were firm. BDRAF.PK builds them in the US but we own it mainly for its mass transport business, not its planes.
*My favorite stock from my favorite investment destination is Computer Modelling Group Ltd. It reported revenues up 57% to C$43.94 mn in the FY to March 31 on which net profits rose 119% to C$16.6 mn or 97 cents/sh. CMDXF managed to boost its rate of profit and revenue growth in FY 09 despite the fall in the oil the price and recession. It provides software to enhance reservoir management to oil and gas companies, as well as running a smaller consulting and contract research business. Chris Loew found this by sleuthing from Osaka Japan.
*We had good news too from Dundee Precious Metals which ended Q2 with pretty much flat revenues but thanks to mining profits and cost controls, it produced net earnings of C$3.3 mn (3 cnets/sh) compared to p[rior year losses of C$14.12 mn or 23 cents/sh). A former closed-end fund, DPM-Toronto mines gold mainly in Bulgaria, with other properties in Rumania, Serbia, and Armenia.
*Niko Resources, NKO-Toronto, is rated buy by Terry Peters of Canaccord with a 12-mo target of $95. NKO, currently in the 70s, now reports in U.S. dollars. It drills for hydrocarbons in exotic lands like India, where it has a major gasfield, Bangladesh, and Pakistan, and added exploration acreage in Madagascar, Kurdistan, and Indonesia. Mr Peters expects “the momentum in Niko’s production, cash flow, and drilling program will have a postitive impact on its share performance.” “While many competitiors are struggling to fund growth in the current environment, Niko is hitting its strice with the start of signficant growth in production and cash flow from the start up of the D6 gasfield.” D7, offshore India, had delays in coming on stream but began production in April.
*Following news that uranium miner Cameco is selling the remainder of its Centerra gold mining assets in Mongolia and Kyrghyzstan, reported last week, I am pleased that we now have another twofer with Iamgold, IAG, IMG-Toronto, which is rated a buy by Steven Green, an analyst with TD Newcrest, mainly because of its uranium mine in Chicoutumi, Quebec, not properly valued in the IAG price, and which may be sold off. It accounts for a quarter of IAG sales and plenty of cash flow. IAG now expects to produce this year some 910,000 oz of gold or more, up from an earlier guidance of 880,000 oz, at cost of $460-470/oz (US).
*Canada’s Bank of Nova Scotia (Scotiabank) is a buy for Peter Rozenberg of UBS despite provisions for credit losses going up, because trading and higher margins plus expense controls offset them. While BNS expects EPS to rise 7-12% this year, he expects a higher level. He thinks its PE is under 11. We like it because it is a safe way to get into Latin America.
*Craig Fehr at Edward Jones weighs in with a buy for Power Corp., a Canadian holding company where Power Financial (another holding co.) accounts for 94% of the net asset value. With this pile up of holdings, he thinks confused investors undervalue the group. The financial group controls Putnam in the U.S., Great-West Life, and IGM Financial. The edge from owning Corp. rather than Financial is that you also get exposure to Total, the French oil co., French bank BNP Paribas, biotech, nickel mining, and real estate.
*More on Coca Cola Hellenic, now a consensus buy. By country, its business is 16% in Russia, 13% in Italy, 9% in Romania; 8% each in Poland, Greece (homeland), and Nigeria, where the Levantis family first went global. Other countries on the list are Ukraine, 5%; Hungary, Austria, and Switzerland, all 4%; and undifferentiated 21%.
*While pofits were down 43% year over year, Delek Auto, the car importing arm of Delek Group, DLKGF.PK, a Global Investing Pro stock, beat analyst forecasts, boosting its parent with net income of NIS 102.5 mn or 1.10/sh.
*Now about closed-end funds. Macquarie First Trust Global Infrastructure (MFD) is at a lower premium because its market price gained more than its NAV in H1. But the share is still at a 20% plus discount. The largest holdings of this fund which aims to invest 2/3 outside the U.S. Holdings include: Severn Trent plc (British waterworks) 5.4%; United Utilities plc, 5.3%; SP AusNet, 4.8%; Red Electric Corp S.A., ditto; Atlantia SpA, 3.9%); Spark Infrastructure Group ditto; Enagas S.A. 3.4%; Northland Power Income Fund, 3.3%; Pembina Piieline I.F. 3%; and Pennon Group plc, 2.8%. It has double-d9igit stakes in the U.S., Britain, Australia (where Macquarie comes from), Spain, Canada, and Italy, in utes: electric, gas, water, multi-line; transportation infrastructure, and power generation.
*Western Asset Emerging Markets Floating Rate Fund (EFL) is aiming to merge with Western Asset Emerging Market Debt Fund (ESD) on Aug. 27. A prior attempt was withdrawn. The reasoning is that emerging market issues like to issue fixed income rather than floating rate debt.
*Aberdeen Global Income Fund, FCO, entered a $30 mn loan facility with BNS and renewed it in March. It also may use reverse repo derivatives to further leverage its holdings, although it is not dosing so now. It also has a steady-Eddie payout program which may give you back your own money in distributions if earnings fall short.
*Other funds from Aberdeen do the same thing. Its Asia-Pacific Income Fund (FAX) has a $600 mn BNS loan facility which was renewed in April but because of covenants requiring asset coverage ratios, FAX paid down $140 mn of the total.
*Another way to gain leverage is by issuing Auction Market Preferred shares or AMPs. Another CEF I own, Advent-Claymore Convertible Securities, uses AMPs but cut them back this year to $262 mn rolled over every 7 or 28 days. There are failures, which do not require that the ARMs be redeemed; the AMPs revert to a mechanism setting a band of rates which the holders receive, based on a spread to Libor (the London Interbank Offer Rate). This fund, headed by Tracy Maitland, is managed by sometime contributor F. Barry Nelson, a convertibles specialist formerly with Value Line.
*Tomorrow I will write about a couple of hot ideas, a DNA research group from Iceland and a fuel cell producer from Canada. The former is afflicted with debt and the latter is not. As always, all the company names bolded above are ones in the Global Investing portfolio, which the editor and her readers own.
