Stock Market News & Stocks to Watch from StraightStocks » Germany

Clenergen Corp.’s (CRGE.OB) Management Leads Innovative Push into Renewable Energy

QualityStocks — Wed, 25 Nov 2009 20:22:44 +0000

Clenergen Corp. is approaching the renewable energy/biofuels sector from a unique perspective – an agronomy/ plantation standpoint rather than from a purely technical/engineering standpoint. Clenergen’s goal is produce high-density, short-rotation biomass (non-food) crops to use as feedstock for advanced gasification technologies to produce electricity. The company is led by an outstanding management group. Here is a [...]

First Solar Sells Solar Project – Analyst Blog

Zacks Market Commentaries — Wed, 25 Nov 2009 16:20:11 +0000

First Solar Inc. (FSLR) announced that it would sell the 21 MW solar energy project that it has developed and constructed in Blythe, California, to NRG Energy Inc. (NRG). First Solar will provide operations and maintenance services at Blythe under a long-term contract with NRG Energy. This is second sale by First Solar, recently in October 2009 the company sold a 20 MW solar power project in Ontario to the Canadian oil pipeline company – Enbridge Inc. (ENB).

Located in Riverside County about 200 miles east of Los Angeles, the Blythe project is California's first and largest utility-scale photovoltaic (PV) solar generation facility, and among the largest in North America. Construction on the project began in September 2009 and is expected to be fully completed by year-end fiscal 2009. Once fully completed, the Blythe project when will generate over 45,000 megawatt-hours of electricity annually. The solar generation reduces over 12,000 tons of carbon dioxide emission per year, the equivalent of taking 2,200 cars off the road. The construction of this project has created 175 green jobs.

Electricity from the plant will be sold to Edison International’s (EIX) subsidiary Southern California Edison under a 20-year power purchase agreement. California based utilities such as Edison International is spending big money to reduce greenhouse gas emission and adhere to California’s renewable portfolio standard. First Solar is also developing 1,300 MW of PV solar projects in California and the Southwest.

Based in Phoenix, Arizona, First Solar designs, manufactures and sells solar electric power modules using a proprietary thin film semiconductor technology. The company's solar modules employ a thin layer of cadmium telluride semiconductor material to convert sunlight into electricity. It sells its products to project developers, system integrators and operators of renewable energy projects primarily in Europe with a distinct focus on Germany. First Solar also focuses on designing and deploying commercial solar projects for utilities in the United States.

First Solar enjoys a distinct cost advantage over its peers due its reliance on low cost thin-film cells. However, the advantage is ebbing fast due to falling polysilicon prices. First Solar’s growth potential and that of the solar industry in the aggregate requires a prudent long-term focus on technological enhancements, capacity build-out and cost minimization. Balancing all the three aspects would be an uphill task. Competition in the field is becoming tougher day by day for U.S. solar players such as First Solar, who have missed out on Government doles unlike its Chinese counterparts including Suntech Power Holdings Company Ltd (STP) and ReneSola Ltd (SOL). We maintain our market Neutral recommendation on the shares.
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How and Why China Will Flood the Gold Market

Contrarian Profits — Wed, 25 Nov 2009 14:58:29 +0000

The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year's meltdown in the stock market, people believe it. After all, Chinese citizens don't receive government retirement money... and they don't have company pension plans like people in many other countries do.

DrStockPick.com Stock Report! 11/25/09, STM, CSRH, HLIT, SOLF, OBAS, CIMT

Dr. Stock Pick — Wed, 25 Nov 2009 11:35:43 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Wednesday Nov 25, 2009 DrStockPick.com Stock Report! ************************************************************** Consorteum Holdings Inc. (OTCBB: CSRH) launched its consumer stored value rebate card. The consumer rebate card program will offer manufacturers and retailers a new way to process mail-in rebates that ensures increased customer loyalty and decreased [...]

FirstEnergy to Develop Norton – Analyst Blog

Zacks Market Commentaries — Tue, 24 Nov 2009 15:40:27 +0000

FirstEnergy Generation Corp., a subsidiary of FirstEnergy Corporation (FE), has acquired the rights to develop the Norton Energy Storage Project - compressed air energy storage (CAES) facility in Norton, Ohio - from CAES Development Company, LLC. The transaction includes rights to a 600-acre underground cavern, formerly operated as a limestone mine, which is ideal for energy storage technology.

FirstEnergy believes that the compressed-air technology at this site will enable the company to store energy at night, when electricity demand is less, and use it during the day when demand escalates. It is normally observed that many renewable energy sources, like wind, are irregular and do not produce power when there is a high demand. Given the energy storage aspects of this project, the company sees Norton Storage as a key component to its overall renewable energy strategy.

FirstEnergy expects the project to create hundreds of construction jobs and additional green energy jobs. FirstEnergy is evaluating its options related to the project. The initial phase would involve installing two to four units capable of generating a minimum of 268 megawatts (MW) of electricity. With 9.6 million cubic meters of storage, the Norton Energy Storage Project has the potential of expanding to 2,700 MW of capacity.

Currently, there are two commercial-scale compressed air electric generating facilities: a 110 MW plant in McIntosh, Alabama; and a 290 MW facility in Bremen, Germany. While there are other compressed-air projects under development, none is expected to be comparable in size and scope to the Norton facility.

The Norton Energy Storage Project is part of FirstEnergy's overall environmental strategy, which includes continued investment in renewable and low-emitting energy resources. Compressed-air storage, when combined with renewable energy resources, provides for low-emitting power generation which is dispatched when customers need it. FirstEnergy currently has more than 800 MW of renewable capacity, including pumped-storage hydro and wind power. By the end of 2012, once the biomass project at the Burger Plant is complete, the company's renewable capacity is expected to be more than 1,000 MW.
Read the full analyst report on "FE"
Zacks Investment Research

Provectus Pharmaceuticals Inc. (PVCT.OB) Delivers Favorable Oncology Treatment; Presents Data to 3rd World Meeting of Interdisciplinary Melanoma/Skin Cancer Centers

QualityStocks — Tue, 24 Nov 2009 14:57:47 +0000

Provectus Pharmaceuticals Inc. is a development-stage biopharmaceutical study focused on oncology and dermatology therapies. The company recently announced that the results of its phase II trial showed comparable trends to phase I survival data for 20 subjects with metastatic melanoma. The one-year overall survival data of its lead oncology agent PV-10 showed longer overall and [...]

Ford Focuses on Brazil – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 22:31:01 +0000

Ford Motor (F) has revealed its plan to invest R$4 billion ($2.26 billion) in order to benefit from government tax incentives and lower interest rates in Brazil that are fueling record sales. Presently, Ford is the fourth-largest automaker in the country.

Ford has decided to spend R$2.8 billion at the Camacari plant -- a state-of-the-art plant in the northeastern state of Bahiato -- with the aim of increasing output by 20% to 300,000 vehicles a year. The plant produces the sport utility vehicle EcoSport and the Fiesta subcompact. The investment is expected to generate 1,000 jobs in the region. The remaining R$1.2 billion will be invested at Ford's factories in Sao Paulo including its Sao Bernardo plant and a testing facility in Tatui.

So far, car sales in Brazil have been significantly helped by government tax incentives that lowered car prices and lured consumers to showrooms. But the tax breaks are scheduled to expire by the end of the year. However, the investment will allow Ford to achieve state and federal tax breaks from the Brazilian Government until 2015.

Being the fourth-largest automaker in Brazil, the investment will no doubt help Ford strengthen its position to tap the huge market potential in the country, edging it past peers such as Italy's Fiat, Germany's Volkswagen and some Asian and French manufacturers. According to the Brazilian automobile dealers' association, automobile sales in the country are expected to grow by 9% in 2010.
Read the full analyst report on "F"
Zacks Investment Research

Campbell’s Beats, Raises Guidance – Analyst Blog

Zacks Market Commentaries — Mon, 23 Nov 2009 17:42:33 +0000

Campbell Soup Co. (CPB) reported fiscal first-quarter earnings of 87 cents per share, which was above the Zacks Consensus Estimate of 81 cents. Quarterly earnings were up 14.5% compared to the prior-year quarter.

Quarterly net sales declined 2.1% year over year due to a negative impact of 4% from volume and mix and 1% from increased promotional spending, partially offset by positive contributions of 2% from price and allowances and 1% from currency translation. Gross margin for the quarter expanded 170 basis points (bps) to 41.9% versus 40.2% in the year-ago quarter, reflecting productivity improvements and pricing benefits.

Sales of the US Soup, Sauces and Beverages segment decreased 5% year over year. US soup sales fell 3%, driven by sales declines in condensed, RTS and broth. Prego pasta sauce and Pace Mexican sales dropped due to competitive pressures, while beverage sales declined due to weak sales of V-8 vegetable juice.

Sales of the Baking and Snacking segment were up 4%, driven by growth in the Arnott's branded business, led by higher biscuits sales. Pepperidge Farm sales were similar to the year-ago level as increased sales in bakery business were offset by lower sales in the cookies and cracker business.

In the International Soups and Sauces business, sales contracted 2% due to declines in Europe, primarily attributable to divestitures and lower sales in Germany. In Canada, sales increased due to gain in soups and favorable impact of currency. Sales in the Asia-Pacific region also increased, led by strength in Malaysia, Hong Kong and Australia along with the favorable currency impact.

Sales in the North American Foodservice business declined 2% year over year due to continued weakness in the food service sector. Price and sales allowances benefits were more than offset by unfavorable volume and mix.

Based on its performance in the first quarter, Campbell raised its guidance for fiscal 2010. The company now expects net sales growth of 4%-5%, as compared to its previous guidance of 3%-4% growth. Annual earnings growth is expected in the range of 9% and 11%. Earlier, the company provided earnings growth guidance of 5% to 7%. The guidance is consistent with the company’s long-term growth targets.

We hold a Neutral recommendation on Campbell shares.
Read the full analyst report on "CPB"
Zacks Investment Research

Solar Energy Initiatives, Inc. (SNRY.OB): Grass Roots Solar

QualityStocks — Mon, 23 Nov 2009 15:13:27 +0000

These days, solar is one of the most popular words in the green lexicon. You hear it everywhere, with most of the talk focusing on the increasingly large solar power plants that are now being built. New designs have dropped the price of large scale solar electricity generation by over 80% in the last 25 [...]

MWW Automotive Group (MWWC.OB) Subsidiary Signs Major Distribution Agreement

QualityStocks — Mon, 23 Nov 2009 14:31:36 +0000

MWW Automotive Group is a young corporation that has gained notoriety across the globe for producing and delivering their products, design and Class A painting services to automobile manufacturers and assembly lines across the world. Today, MWW announced that Modelworxx, its wholly owned subsidiary located in Germany, signed an executive agreement with Isomotive BV, [...]

Prieur’s readings (November 23, 2009)

Prieur du Plessis — Mon, 23 Nov 2009 08:38:15 +0000

This post provides links to a number of interesting articles I have read over the past few days that you may also enjoy. Please also add the links to any other worthwhile articles you would like to share to the comments section.

Are Russia’s Consumers Getting “Carried Away” With Themselves?

Edward Hugh — Sun, 22 Nov 2009 16:24:00 +0000

blockquote“Cutting rates by 50 basis points here and there is not going really diminish the appeal of the ruble,” said Manik Narain, an emerging markets strategist at Standard Chartered Bank Plc in London. “In terms of nominal interest rates Russia (at 9% as of 24 November) is still offering the highest yields in the emerging market space and in an environment where oil prices are remaining relatively well supported we think that the ruble will continue to be seen as an attractive way to position for global recovery,” /blockquotepbr /The world's central banks are having a hard time of it these days, having just gotten through the worst banking and financial crisis in living memory they now face a growing dilema between continuing to give support to the developed economies (which are yet to recover from those early hammer blows) and the danger of creating fresh global asset price bubbles in emerging economies, asset bubbles which could easily be being fuelled by low US interest rates and a weak dollar. The latest warning in this respect comes not from Nouriel Roubini (or even from me, a href="http://fistfulofeuros.net/afoe/economics-country-briefings/the-dollar-as-a-funding-currency/"but see this post/a, and a href="http://www.forexblog.org/2009/11/interview-with-edward-hugh-the-dollars-demise-is-vastly-overstated.html"this recent interview I gave on Forex Blog/a), rather it emmanates from Germany’s new finance minister, Wolfgang Schäuble. His comments - which were a href="http://www.ft.com/cms/s/0/4ec41a1a-d616-11de-b80f-00144feabdc0.html"cited in last Saturday's Financial Times/a - highlight official concern in Europe that the exceptional steps taken by central banks and governments to combat the crisis carry with them a series of undesireable side effects.br /br /Such openly expressed concerns only add further weight to a href="http://www.ft.com/cms/s/0/85f1fac2-d1dc-11de-a0f0-00144feabdc0.html"recent statements made in China/a, where only a week ago the banking regulator Liu Mingkao explicitly criticised the US Federal Reserve for indirectly fuelling the “dollar carry-trade” – a process whereby investors borrow dollars at ultra-low interest rates in the United States and the invest them in higher-yielding assets abroad.br /br /Wolfgang Schäuble went even further, saying it would be “naive” to assume the next asset price bubble would look just like the last one. “More likely today is a scenario in which excess liquidity globally creates a new [sort of] asset market bubble.” he said, and the fact “ that low interest rate currencies such as the US dollar increasingly being used as a basis for currency carry trades should give pause for thought. If there was a sudden reversal in this business, markets would be threatened with enormous turbulence, including in foreign exchange markets.”br /br /As I argued in my last post on the carry trade, the danger of a short term sudden reversal may be being overstated at this point, since exit from emergency life support will be at best slow and measured in the United States, while ample funding will continue to remain available in Japan, where the central bank a href="http://www.ft.com/cms/s/0/c3a3be3e-d608-11de-b80f-00144feabdc0.html"has now formally recognised that the economy is once more back in deflation/a (officially it exited in 2006, and the Bank did manage to summon up a full half percentage point worth of interest rate rise before falling back towards zero again, but in reality, if we strip out the oil price impact, the sad truth is that Japan never really left deflation).br /br /However, regardless of whether or not we are running the danger of having an overly rapid unwind effect, untold damage is in fact being done, with the structural distortions being produced by the massive “wall of liquidity” which is currently sweeping the planet being evident enough, showing up as it is in some unexpected places, like Russia for example.br /br /br /strongRuble Once More On The Rise/strongbr /br /On the face of it the idea that investors who were rushing for the Russian door following the Roki tunnel incursion back in August 2008 may now be rushing back in again may seem hard to believe, particularly given the serious economic recession which followed, and in reality it isn’t quite like this, but what is clear is that a steady and significant flow of funds is now most definitely heading in Russia’s direction - even if the immediate objective is not to increase what Russia most definitely needs, namely capital investment. A brief glance at the charts for movements in the ruble vis a vis the US dollar (see below) shows immediately what has been happening. After hitting a low of $31.39 on September 2 the ruble has been steadily rising, and was at $28.65 on November 11, since which time it has been hovering, as investors vacilate waiting to see where policy and the currency go from here./ppa href="http://1.bp.blogspot.com/_ngczZkrw340/Sw4pa3BFLiI/AAAAAAAAPow/4p8N8w7-NNQ/s1600/rouble+2.png" /ppimg style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 240px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408305743940365858" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sw4pa3BFLiI/AAAAAAAAPow/4p8N8w7-NNQ/s400/rouble+2.png" //a At the same time, if we look at movements in the ruble-USD over a longer period of time (2 years in the chart below) it is plain the the ruble hit bottom on 4 February 2009 at $36.22 after falling steadily from 17 July 2009 when it touched $23.25./pp /ppbr //ppa href="http://3.bp.blogspot.com/_ngczZkrw340/Sw4pXI2mHVI/AAAAAAAAPoo/UTsQ29_bkVA/s1600/rouble+one.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 244px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408305680008748370" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sw4pXI2mHVI/AAAAAAAAPoo/UTsQ29_bkVA/s400/rouble+one.png" //abr /br /In fact, as I say, while it is clear that Russia is on the receiving end of a steady inflow of funds, it is far from clear that these funds are of the kind she most needs at this point. Much of the money has been going into stocks, and Russian equity funds drew record amounts at the end of October, according to data provided by EPFR Global. In fact Bloomberg data show that the ruble has been the second-best performer among emerging market currencies after the Chilean peso over the past three months, gaining 8.7 percent in the period. And even foreign currency purchases from the central bank and lowering interest rates systematically to a record low (in Russian terms) has not worked. Indeed Russia's foreign currency reserves have now risen to $441.7 billion (as of Nov. 13) compared with the low of $376.1 billion reached on March 13. Whilethe Micex Stock Index has gained 116 percent this year, making the Index the best-performing benchmark equity measure globally since January (in local currency terms), again according to Bloomberg data. br /br /In comparison Russia’s foreign direct investment plummeted an annual by 48.1 percent, the most on record, to just $10 billion in the first nine months of the year, while overall foreign investment, including credits and flows into securities markets, was $54.7 billion, down 27.8 percent when compared with the same period a year earlier,according to Federal Statistics Service data. Other foreign investments, including loans from foreign banks and Russian companies’ foreign divisions, were down 20.9 percent in the period to $43.7 billion. The consequence of all this is that the decline in investment activity has been - as can be seen in the GDP growth components chart below - perhaps the greatest single drag on the domestic Russian economy over the past twelve months.br /br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Swq58CA-BvI/AAAAAAAAPnI/A-avWTMjlnI/s1600/russia+growth+components.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 297px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5407338743595927282" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Swq58CA-BvI/AAAAAAAAPnI/A-avWTMjlnI/s400/russia+growth+components.png" //abr /br /But, as I am stressing this earlier overall impression of Russia as a country with problems of net capital flight now no longer gives us a precise up-to-date picture because, in a reversal of the earlier pattern Russia has seen, since mid September, significant capital inflows. In this sense some of the aggregate flow data is misleading, and even while the pressure from foreign lenders to repay sindicated loans continues and Russian borrowers continue to have difficulty rolling over their debt, the aggregate capital flow data to some extent masque a change in the underlying structure of Russian external debt - here, as ever, the devil lies in the details. As Guillaume Tresca, a Paris-based emerging market strategist with Credit Agricole’s Caylon Unit, argues the mounting weight of that huge wall of liquidity sweeping the planet means that something somewhere has to give, with the consequence that the Russian authorities are now under severe pressure to accept the inevitability of short term ruble appreciation since even though they “will try to do what they can to smooth the process, it’s very hard for them to go against the flow” since current “capital inflows are massive.”br /br /In fact a growing consensus seems to be now emerging that Russia’s central bank will find itself forced to accept a stronger ruble next year as the devastating cocktail of rising commodity prices and abundant liquidity simply prove to be too powerful a force for policy makers to counter. So while representatives of the Russian administration have repeatedly asserted that they will do all they can to cap the ruble’s advance, all may well not be enough, despite Vladimir Putin's repeated declarations that his government won’t allow excessive appreciation in a bid to give some support to struggling exporters. The Canute like task of driving back the ocean is hardly an easy one, and, as the IMF itself recently warned, all efforts to fight the ruble’s advance may simply prove to be “unproductive.”br /br /The problem has recently become even more complicated since, in the short term at least, letting the rouble rise also has its attractions for a Russian administration faced with simmering popular frustration with their inability to get the ongoing economic contraction fully under control. A rising ruble means slower inflation and more spending power for domestic consumers, consumers who have yet to get over the record 10.9 percent economic contraction which hit them in the second quarter. Given that the nine interest rate cuts introduced by the central bank since April have manifestly failed to unlock the credit flow to consumers as banks hold back their lending on concern borrowers can’t repay their debt (see chart below) a rising exchange rate certainly seems to be worth a second look as a way forward, since while a higher exchange rate coupled with near double digit inflation may cripple manufacturing competitiveness, it does transfer incomes directly into people’s pockets, something hard pressed politicians might see as quite beneficial.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Swv02_RS5BI/AAAAAAAAPnQ/EGbBRnSLgsk/s1600/russia+credit+growth.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 327px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5407685003122500626" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Swv02_RS5BI/AAAAAAAAPnQ/EGbBRnSLgsk/s400/russia+credit+growth.png" //a br /br /Lending is still - as can be seen in the above chart prepared by the World Bank for its latest report - a problem, and corporate (or non-financial corporation lending) fell by 0.7 percent in September from August continuing the ongoing decline. Lending to households dropped 1.1 percent making the eighth consecutive monthly decline, with year on year levels now in negative territory, while non performing retail loans rose, climbing to 6.4 percent from 6.2 percent.br /br /And the World Bank expect the many bank balance sheets will continue deteriorating as the share of non-performing loans increases. “In the environment of increasing credit risks, lending activities by the banks have remained limited despite improving liquidity conditions in the economy and continuing monetary loosening.” Bad debts in the banking industry may reach an average of 10 percent by the end of the year according to the Bank.br /br /br /And when we look at ruble realities, as the IMF point out, efforts to stem the ongoing rise with intervention are far from being able to give the desired result. Bank Rossii bought a net $15.2 billion and 485 million euros in October, their largest foreign currency purchases since May, and went on to buy $6 billion during the first 17 days of November according to press reports citing central bank chairman, Sergey Ignatiev. Yet last week the Russian the ruble ended 0.1 percent higher at 35.0632 against the central bank’s target currency basket, its strongest level since December 23 2008. The ruble appreciated 3.4 percent in October against the dollar (for its second consecutive monthly gain) and has risen more than 1 percent so far in November. Thus the central bank has now moved on to use monetary policy to try and stem the rise, and said on October 29 that it would also use interest rates in an attempt to reduce the “attractiveness of short-term investments in Russian assets and stop the accumulation of risk”.br /br /The recent rise follows ruble a 35 percent slump against the dollar between August last year and January, raising the cost of imports (which make up about 49 percent of the consumer goods sold in Russia) and, in theory, making Russia's domestic industry somewhat more competitive externally. However, without a sound institutional infrastructure, and a coherent monetary policy, short term devaluation gains can easily be turned into medium term inflation, thus defeating the purpose of corrective price devaluation.br //pp/pbr /br /br /pThe current problems are not of recent making, but are the logical end product of steady and systematic long term mismanagement of Russia's monetary policy, a mismanagement which has now created a veritable Procrustean bed of problems for both Russia's economy and the wider society. Warnings were frequent enough, but went unheaded, and the continuing failure to address the underlying inflation problem between 2005 and 2008 now means that large structural distrortions have been accumulated in the economy, including a massive one of commodity export dependence, a problem which effectively turned the country into a veritable disaster waiting to happen if ever there should be a protracted lull in the secular rise in energy prices. That lull has most definitely now arrived, since while it is obvious that Russia's short term future depends on energy prices, it is far from clear what the future holds for those energy prices themselves. /pbr /pa href="http://3.bp.blogspot.com/_ngczZkrw340/Swv5min3eZI/AAAAAAAAPnY/rqDWKGy7ABg/s1600/world+bank+oil.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 283px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5407690218112776594" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Swv5min3eZI/AAAAAAAAPnY/rqDWKGy7ABg/s400/world+bank+oil.png" //abr /br /Weak global demand for oil has led to a sharp rise in excess capacity and OPEC's spare capacity has risen to levels not seen since 2002, when prices averaged USD25/barrel with OPEC’s pricing power staying very low. Up to now oil prices have remained in the USD70/barrel range, supported by OPEC output restraint and its stated desire to have prices reach what it calls "a comfortable level" - ie near USD75/barrel - as well as by expectations of rising demand. At its September 2009 meeting, OPEC left its production quotas unchanged but indicated it would take rapid action if prices dropped sharply. OPEC production, however, continues to edge higher, with compliance to its combined cuts of 4.2 million barrels per day falling to 66 percent in September from 71 percent in August. Thus there is evidence of OPEC strains and there is considerable uncertainty about real levels of 2010 demand, all of which makes for considerable uncertainty about prices. As can be seen in the above chart, World Bank oli price estimates (like their economic growth ones) have fluctuated, and have moved from a price estimate in March of around $62.95 for 2010 to the current (November) expectation of $75.29. While the earlier estimate may certainly be considered to be on the low side, the current one may well be too high, and a level of around $70 may not be an unrealistic forecast. It should be noted however that there are credible dissenters, and in a more or less reasoned analysis Capital Economics suggest that oil prices could well fall back again in 2010 to average somewhere around $50. If this forecast were to prove to be anywhere near correct, the Russian economy is going to be subject to major downside risks, due in particular to the difficulties posed by:br /br /i) financing the fiscal deficitbr /ii) rising unemploymentbr /iii) growing bad loans in the banking systembr /iv) refinancing external debtbr /v) the continuing high level of consumer price inflation and the difficulties this poses for monetary policy at the central bankbr /br /Added to all this, the economy will clearly not rebound as easily as many seem to foresee, adding to the risk element on all fronts.br /br /br /strongA Return To Growth In The Third Quarter/strongbr /br /Following the deep output drop sustained in the first half of the year (10.4% of GDP year on year), the slow recovery in global demand and rise in commodity prices has helped lift Russia’s economy up from its earlier lows. But the recovery has only been a modest one, since preliminary data indicate that the economy still registered a 9.4 percent year-on-year drop in the thrid quarter, indicating only a very small improvement (possibly a seasonally adjusted 0.6%) over the second quarter. More recent data also point towards a rather uneven progression, with the manufacturing sector falling back while rising real incomes means that consumer demand is producing stronger growth in the services sector.br /br /As in other countries, investment (both foreign and domestic) took a severe hit on the back of the credit crunch, and gross capital formation was indeedthe main demand side factor dragging GDP down in the first half of the year (by 14 percentage points), followed at some distance by consumption, which contributed 1.2 and 3.0 percentage points to aggregate output contraction rates respectively in the first and second quarters. Net exports, on the other hand, made a positive contribution (5.1 percentage points in the first quarter and 5.9 percentage points in the second) although strongas elsewhere/strong the strongdrop in imports/strong was the key factor. When imports are looked at in volume (price adjusted) terms we find that real ruble depreciation (the real effective exchange rate depreciated by 5.9 percent in the first nine months of 2009) meant that the import contraction was more severe than it seemed, especially in the second quarter of 2009 when the drop in imports meant that net exports increased by 66 percent according to World Bank calculations.br /br /strongUnemployment Falls Back, But Problems Remain /strongbr /br /Six million Russians were added to the government’s official poverty count in the first quarter of this year alone, and by the end of 2009, 17.4 percent of the population or 24.6 million people will be living beneath the subsistence level of $185 per month, almost 5 percent more than before crisis, according to World Bank estimates. Unicredit analysts forecast that the number of Russians with disposable incomes of more than $1,000 per month will fall 48 percent this year to about 13.6 million, or roughly 9.6 percent of the population. Thus this recession is likely to have lasting and important results./pbr /pOn the hand, employment statistics from the Federal Statistics Service indicate that a sharp downward adjustment in the labour market took place up to February this year, before moderating and then reversing. Unemployment seems to have peaked in February at 9.5 percent following the sharp decline in output, and the severity of the blow was especially strong in the industrial sector. /pbr /pa href="http://1.bp.blogspot.com/_ngczZkrw340/Swv-srF1PgI/AAAAAAAAPng/ib8hHjWpxx8/s1600/russia+unemployment.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 201px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5407695821023297026" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Swv-srF1PgI/AAAAAAAAPng/ib8hHjWpxx8/s400/russia+unemployment.png" //abr /br /br /Since the beginning of March 2009, however, with real level of economic activity bottoming out (see above chart), the labor market continued to show moderate improvement: by September the number of those in employment had increased by 2.6 million, and the rate of unemployment fell to 7.6 percent, down significantly but still much higher than in September 2008 (5.8 percent). According to the World Bank this steady improvement is rather misleading as it reflects significant seasonal gains in employment and a shift in labor adjustment towards labor hoarding in the manufacturing sector.br /br /As the World Bank also notes, the long term regional differences in Russian unemployment rates are striking ranging from a low of 1.6 percent in Moscow to a high of 52.1 percent in Ingushetia in August 2009. Traditionally unemployment is largely concentrated in the Southern, Far Eastern and Siberian federal districts. However, the crisis related unemployment shows a different pattern, with the largest increases in unemployment being found in the North Western District (from 4.8 to 7 percent) and the Urals (from 4.9 to 8.1 percent). Regression analysis carried out by the World Bank revealed that unemployment levels were higher in those regions with higher levels of manufacturing, and where industrial production accounted for a larger share of GDP.br /br /And while it is entirely possible that the economy will show a “modest” recovery in the second half of 2009, this is “unlikely to have significant impact on social indicators,” according to the World Bank. Unemployment will increase to 9 percent “as seasonal factors wane” from 7.6 percent in September and it may take three years before the number of Russians living in poverty falls to pre-crisis levels, the World Bank estimates. Indeed, in the short term real incomes are “likely to fall further". /pbr /pstrongMonetary Policy Mess /strongbr /br /The political threat posed by growing unemployment and rising poverty must most certainly be one of the reasons behind Russia’s central bank recent decision to lowered its key interest rates for the eighth time in six months, in a bid to both stimulate lending and to stem the inflow of funds and the rise in the value of the ruble which is making the work of restoring competitiveness to the manufactured sector all the more difficult. Earlier this month Bank Rossii cut the refinancing rate to 9 percent from 9.5 percent and reduced the repurchase rate charged on central bank loans to 8 percent from 8.5 percent. Despite the reductions Russia still has the fourth-highest benchmark interest rate in Europe after Ukraine, Iceland and Serbia.br /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Sw24Z-mJeJI/AAAAAAAAPog/dK4SaanO7nc/s1600/russia+interest+rates.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 230px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408181483981076626" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sw24Z-mJeJI/AAAAAAAAPog/dK4SaanO7nc/s400/russia+interest+rates.png" //abr /br /The best thing that can be said about Russian monetary policy instruments is that they are hopelessly ineffictive. Even October consumer-price growth at 9.7% annually, while well down on the 15.1 percent peak hit in June 2008, is still horribly unacceptable, and it is extremely hard to understand how economic mismanagement and incompetence can have reached such a level that an economy which has been contracting at the rate of nearly 10 per cent a year can still have this kind of price inflation. There is no other word for it, this is a mess.br /br /br /The bank is caught on the horns of a large dilema, since cutting rates further to stem inflows and the ruble rise may only risk fuelling more inflation, yet First Deputy Central Bank Chairman Alexei Ulyukayev stressed only this week (following the latest in rate decision) that the central bank did not exclude the possibility of further cutting its rates since it sees “no inflationary risks” next year and an inflation rate “much lower” than 9 percent. This follows explicit remarks at the end of October that the Bank was ready and willing to use interest rate policy as required to stem speculative capital flows that "threaten to undermine currency stability". br /br /strongInflation Woes/strongbr /br /One small consolation at least in this ongoing mess is that pressure on Russia’s producer prices have been easing, and factory gate prices have even been falling. According to the preliminary data from the State Statistics Service, the price of goods leaving factories and mines was in fact down an annual 10.8 percent in August following a record 12.3 percent drop in July. Evidently The with the 2008 spike in oil and energy prices the logic behind this is easy to see. What is not so easy to see is why domestic prices take so long in responding to general capacity utilisation signals and why the Economic Development Ministry still seems comfortable with the expectation that average inflation will range between 12 percent and 12.5 percent in 2009 only marginally down from last year’s 13.3 percent. Stunning!br /br //pbr /br /pa href="http://3.bp.blogspot.com/_ngczZkrw340/Sw0V_P4X0lI/AAAAAAAAPno/7WSwEAciAlg/s1600/russia+inflation.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 243px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408002903880749650" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sw0V_P4X0lI/AAAAAAAAPno/7WSwEAciAlg/s400/russia+inflation.png" //abr /br /And while consumer price inflation has been tame in recent months this good behaviour may not last long, since it could rise more than expected in November, according to Deputy Economic Minister Andrei Klepach, who does not seem to completely share Alexei Ulyukayev price optimism. Consumer prices could rise "by about 0.3% to 0.4%" in November, Klepach said in comments recently, and this prediction seems to be near the mark, since according to the latest data we have consumer prices rose 0.1% in the week to 9 November, bringing to an end a period of just over three months without inflation. Looking into the future price growth may be further spurred by an influx of budget spending in the fourth quarter, as well as by a planned 30% increase in pensions which is due to come into effect on 1 December.br /br /In fact, despite the fact that inflationary pressures have been easing in Russia in recent months, chiefly due to collapsing consumer demand and outlfows of capital following the crisis that hit the country a year ago, the official outlook for Russia's inflation in January 2010 is only that it will be "significantly below "the level of January 2009. This kind of argument is hardly reasssuring, since inflation last January was at an annual rate of 13.4%, although the short term outlook is for only a mild acceleration, with consumer prices increasing by between 0.2% and 0.3% in November and by about the same amount in December.br /br /strongWhy Not Devalue?/strongbr /br /Well, one way not to solve the problem, according to European Bank for Reconstruction and Development Chief Economist Erik Berglof, would be a ruble devaluation, since despite recognising that the country has a very difficult couple of years in front of it, Berglof argued recently that “this (devaluation) is the wrong way to think about the recovery in Russia”.br /br /As he said, Russia’s failure to wean itself off its reliance on commodity exports has condemned the country struggling to find economic growth in the face of a large drop in demand for its key export products. “If you want to have a flexible exchange rate, you need to get out of this dependence on commodities,” Berglof said. “It’s a major concern that in the last 10 years Russia has become actually more dependent on commodities. Unfortunately, not much progress has been made.”br /br /Well, this is exactly the point, and is why I have been arguing over the last two year about how a href="http://russiatooat.blogspot.com/2007/12/inflation-in-russia-two-much-money.html"all those wage increases which the Russian administration seemed to rejoice in/a (since they bought short term popularity, and fuelled consumption) simply stoked-up the domestic inflation bonfire and in the process did untold damage to domestic competitiveness. However it is evident Russia's industries cannot now simply be transformed overnight, and this is where I find a weakness in Berglofs argument, since some remedy is needed to straighten out the distortions and get of commodity export dependence. But what? If it isn't devaluation, then surely we will need to see very substantial wage deflation in order to attract the now much needed inward foreign investment. The current position whereby prices rise by an annual 10%, and living standards are maintained by a sharp rise in the value of the ruble (making imports cheaper) is quite simply unsustainable, for reasons which should be evident from looking at the chart below. If you look at the green line (which shows the Real trade weighted Effective Exchange Rate) we will see how this has risen sharply since 2003, with the exception of the drop in the value of the ruble in the second half of last year. If we then look at the blue line (which shows the non oil and gas current account balance) we will see how this has been steadily deteriorating (again with the exception of the short sharp shock occassioned by the crisis of last autumn). However, as we can also see, the green (REER) line has now once more resumed its upwards march - the consequence of all those financial inflows, and the associated rise in the ruble - and with the upward march comes the ongoing structural damage to the economy, precisely the can't of structural damage which Erik Berglof would like to avoid, and even unwind.br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sw54z7eJgNI/AAAAAAAAPo4/wLXX1ViodVQ/s1600/Russia+REER.png"img style="display:block; margin:0px auto 10px; text-align:center;cursor:pointer; cursor:hand;width: 400px; height: 347px;" src="http://1.bp.blogspot.com/_ngczZkrw340/Sw54z7eJgNI/AAAAAAAAPo4/wLXX1ViodVQ/s400/Russia+REER.png" border="0" alt=""id="BLOGGER_PHOTO_ID_5408393036051349714" //a br /br /Of course not everyone agrees with Berglof, and the Russian Association of Regional Banks, whose 450 members include the Russian units of Barclays and Citigroup, has called for a devaluation of as much as 30 percent. Billionaire Vladimir Potanin, realist and owner of 25 percent of OAO GMK Norilsk Nickel, said in recent interview with the Russian Newspaper Vedomosti that the “interests of the economy” will lead the currency to depreciate in the “mid term,” allowing exporters to cut costs and modernize production.br /br /Nonetheless energy, including oil and natural gas, accounted for 69.1 percent of exports to countries outside the former Soviet Union and the Baltic states during the first seven months of this year, according to the Federal Customs Service, while metals were responsible for another 12%. So the commodities dependency is massive, and this situation can't be turned round easily.br /br /strongGetting Carried Away By Global Liquidity?/strongbr /br /Bank Rossi are also not 100% convinced by the merits of Berglof's reasoning, as witnessed by the fact that they facilitated a 35 percent depreciation in the ruble during the second half of last year (see chart below), and as the collapse in raw material prices and the dramatic change in local credit conditions first pushed Russia's economy into recession the ruble’s trading range was widened to between 26 and 41 against the dollar-euro basket.br //pbr /pHowever, as I keep stressing, the central bank is now locked on the horns of a massive dilemma, since as risk appetite returns, with it comes the enthusiasm for buying the so called "high yield" currencies - like the South African Rand, the Russian ruble and the Hungarian forint. Instruments denominated in all these currencies offer investors substantial returns at the present time thanks to offering some of the highest interest rates among globally traded currencies.br /br /Indeed buying Russian rubles was one of the key recommendations made by Angus Halkett, currency strategist at Deutsche Bank in London, in a research report published back in April, and the market seems to have followed his advice The so-called carry trade works by investors borrowing in currencies with low interest rates and good prospects of continuing depreciation (the USD at the moment, for example) in order to buy higher-yielding assets, in countries with high domestic interest rates and continuing prospects for ongoing appreciation.br /br /In general, engaging in one or other form of the thousand-and-one-varieties carry trade is pretty standard practice during times when returns for real economic activity are low, and central banks hold down rates and supply liquidity. Indeed we may include here the kind of carry practiced by banks in borrowing from the central banks only to then lend - for a small, but very low risk, interest rate commission - to their national government, who at this stage in the business cycle will normally be running a fiscal deficit. So more than funding recovery, the watchword at the moment is very much "carry on carrying".br /br /But for those on the receiving end, the consequences of so much carry are far from innocuous, since the process simply funds all sorts of economic distortions, and far from allowing normal market corrections to occur, it simply amplifies the problem. Things are now becoming very detached from the so called "fundamentals" (whatever those might be in the topsy turvy world in which we now live), since it simply is not plausible that the currency should be rising in this way in a country with nine percent plus consumer price inflation and which badly needs to move away from commodity export dependency. The only conclusion which could be drawn is that the Russian economy now needs massive structural reforms, and on any imaginable scenario in the world in which I live these are simply not going to be implemented.br /br /On the other hand Russia’s central bank may have to accept a stronger ruble next year as rising commodity prices prove too powerful a force for policy makers to counter and as consumer demand plays a bigger role in the bank’s decisions. The authorities “will try to do what they can to smooth the appreciation, but it’s very hard to go against the flow,” said Guillaume Tresca, Paris-based emerging market strategist for Calyon, the investment-banking unit of Credit Agricole. “Capital inflows are massive.”br /br /Policy makers have indicated they will cap the ruble’s gains and Prime Minister Vladimir Putin has said his government won’t allow an excessive appreciation as exporters struggle to tap into a global trade recovery. Even so, efforts to fight the ruble’s advance may prove “unproductive,” the International Monetary Fund warned on Nov. 12, adding that “underlying factors” justify its strength. There is a growing consensus that Russia’s central bank is now close to accepting the inevitable, and will allow the ruble to continue appreciating to help domestic demand and cap inflation. As Clemens Grafe, chief economist at UBS in Moscow puts it, “A higher exchange rate, because it transfers incomes into people’s pockets, could actually be more beneficial,”br /br /strongFiscal Resources Near To Running On Empty?/strongbr /br /br /According to preliminary estimates from the Ministry of Finance, the federal budget deficit totaled 4.0 percent between January and September, slightly below the expected level, in part due to the under execution of budgeted expenditures in the first three quarters of 2009. The federal non-oil deficit (which excludes drawing on oil revenues) amounted to 11.0 percent. This is managable, especially given the comparatively low level of Russian sovereign debt to GDP. However, as the World Bank point out under the likely scenario of a sluggish global recovery and modest growth, Russia will face a tightening budget constraint and need to reduce expenditures and the fiscal deficit over the medium term. Further, funding the planned increase in social expenditures, mainly related to increases in pensions, may well requires spending cuts in other expenditure categories. /pbr /br /pThe Ministry of Finance baseline federal budget estimates with conservative oil assumptions icorporate plans to reduce the federal budget deficit from 8.3 percent of GDP in 2009 to 3 percent in 2012, but the medium term fiscal outlook also indicates an extensive drawdown of Russia's Reserve Fund to finance the deficit. Given the size of the anticipated deficit, the Reserve Fund is likely to be depleted by the end of 2010 and borrowing will be required to offset the gap. Estimates of the Ministry of Finance indicate that the combined external and internal borrowing to cover the fiscal deficit will amount to 1.0 percent of GDP in 2009, 1.6 percent in 2010, 2.5 percent in 2011, and 1.5 percent in 2012. All of this is manageble, but the depletion of the Reserve Fund does mean that if downside risks materialise, and in particular if there are more writedowns in the banking sector needing government support that there is now little in the way of a cushion between managed adjustement and unstable dynamics.br /br /br /strongOutlook – A Hard Road To Travel/strongbr /br /br /If one thing is clear hear it is that attaining a recovery in Russia's economic fortunes at this point is going to be no easy feat, as a href="http://www.bloomberg.com/apps/news?pid=newsarchiveamp;sid=aC8Q3ycECRlw"Trust Investment Bank put it in their latest report/a, October data for the world’s largest energy exporter suggest “an almost complete absence of clear signs of recovery” since industrial output slumped and capital investment fell. October capital investment was still down 17.9 percent while industrial output dropped an annual 11.2 percent in October worse than the September reading. Even unemplyment was up again, at 7.7%, although as the World Bank pointed out, this is the result of the same seasonal factors which lead to the fall in unemployment over the summer. br /br /On the other hand, this is by no means a one way street, since disposable incomes climbed a monthly 6 percent in October and rose 3.9 percent compared with the same period last year, registering their biggest annual jump since September 2008, according to provisional data from the Federal Statistics Service, while wage declines eased with wages falling an annual 4.5 percent, compared with a 4.9 percent annual decline in September. And retail sales, which had previously fallen for nine consecutive months, the longest period of declines on record, suddenly sprang back to life, with October retail sales rose 3.2 percent from September and declined by 8.5 percent on an annual basis as compared with a 9.9 percent drop the month before.br /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Sw0ZKg7CYQI/AAAAAAAAPnw/bQRC4SINF3E/s1600/russia+retail+sales.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 242px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408006395968774402" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sw0ZKg7CYQI/AAAAAAAAPnw/bQRC4SINF3E/s400/russia+retail+sales.png" //abr /br /Other data also show this mixed picture. Monthly GDP Indicator data from VTB Capital, based on the PMI surveys for the Russian manufacturing and service sectors, continued to show economic contraction on an annual basis in October, butthe rate of decline eased for the fifth consecutive month. The Indicator showed a 0.6% annual contraction, the slowest rate seen suring the current eleven-month period of continuous decline.br /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Sw2smUlPK_I/AAAAAAAAPoA/Det1Qvhq7ls/s1600/GDP+indicator+2.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 243px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408168501901732850" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sw2smUlPK_I/AAAAAAAAPoA/Det1Qvhq7ls/s400/GDP+indicator+2.png" //abr /br /The seasonally adjusted Total Activity Index remained above the no-change mark of 50.0 for the third month running in October, indicating growth of private sector output. The Index improved fractionally over September, to 54.2, indicating reasonably robust growth (although it remained below its historic trend of 56.6). This was driven by a faster rise in services activity, while the rate of growth in manufacturing production slowed to a weaker pace. On a quarterly basis the indicator showed 0.4% q-o-q growth for the second month running.br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/Sw2qzRN1UlI/AAAAAAAAPn4/h6pCnqcA1nI/s1600/GDP+Indicator+One.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 242px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408166525313307218" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/Sw2qzRN1UlI/AAAAAAAAPn4/h6pCnqcA1nI/s400/GDP+Indicator+One.png" //abr /br /blockquoteCommenting on the survey, Aleksandra Evtifyeva, Senior Economist at VTB Capital, reported:br /br /““The GDP Indicator continued to point to an improvement in economic activity in October. The manufacturing sector’s performance deteriorated slightly while activity in the services sector is approaching pre-crisis levels. This might be one of the consequences of higher oil prices and a stronger rouble as low export orders were the main drag on manufacturing. Another encouraging development highlighted by the October surveys was the deceleration in the pace of job cuts: the employment sub-indices now stand at around 47, which is already higher than last autumn./blockquotebr /The GDP indicator reading was based on manufacturing sector survey findings which confirmed that overall Russian manufacturing business conditions deteriorated in October. Although output, new orders and input purchases all continued to grow, the rates of expansion slowed compared to September. Moreover, manufacturers shed jobs at a faster pace than in September.br /br /The headline seasonally adjusted Russian Manufacturing PMI fell from 52.0 in September to 49.6 in October, signalling an overall deterioration in the business climate at the start of the fourth quarter. It was the first month-on-month fall in the headline index since it plummeted to a record low (33.8) in December 2008, although the latest figure was indicative of only a marginal rate of decline. Of particular note, the new export orders index posted a strongish decline to 47.8, evidently reflecting the recent ruble appreciation. The input price index continued to point to strong rise in costs associated with metals, energy and oil-related items while output prices index pointed to a moderating growth in price charged.br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sw2xWi1TESI/AAAAAAAAPoI/50mTeapNq4s/s1600/russia.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 244px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408173728407425314" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sw2xWi1TESI/AAAAAAAAPoI/50mTeapNq4s/s400/russia.png" //abr /br /In contrast the rebound in Russian services activity rose continued in October, supported by a record fall in charges, and Russia's services sector, which accounts for about 40 percent of the economy, rose for the third consecutive month, reaching its highest level since September 2008, although the reading of 54.3 still remained significantly below the long-run series average.br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sw2yMDZ9MQI/AAAAAAAAPoQ/ZbQ0hewWC1Y/s1600/russia.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 243px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408174647684182274" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sw2yMDZ9MQI/AAAAAAAAPoQ/ZbQ0hewWC1Y/s400/russia.png" //abr /br /br /strongSo Where Do We Go From Here?/strongbr /br /In contrast to the most recent PMI data and the opinions of analysts like Neil Shearing at Capital Economics and Trust Investment Bank , Russia's political leaders are markedly more optimistic. Russia’s economy may expand as much as 4 percent in the last quarter of 2009 following a timid return to growth in the third quarter, according to Deputy Economy Minister Andrei Klepach speaking at a conference in Moscow recently. The economy may show “quite strong growth” of between 3 percent and 4 percent in the fourth quarter over the previous three months, Klepach said. This is an interesting claim, and doubly so given that Klepach has been quite cautious so far this year in his claims. However, as Neil Shearing at Capital Economics points out Klepach’s claim that growth could rise to an annual 4% at some point is perhaps not as wild as it first sounds. Shearing estimates that output fell by over 9% between Q4 2008 and Q1 2009, which means that given the sizeable base effects which will exist the Q1 2010 year on year growth rate might well look look quite impressive.br /br /But this may be a kind of "mirage effect" since if the global recovery slows towards mid-2010 (and with it the level of energy prices) then Russian annual growth could easily fall back sharply over the second half of next year and into 2011. Thus the prospect of a renewed fall in energy prices would imply that the risk a double-dip recession in Russia is quite a real one. br /br /But this is all for the future, while here in the present the rising price of oil and the return of some financial flows into Russia continues to fire-up optimism, as do the numbers for retail sales, so we had better just grit our teeth and hope they don't also fire up the inflation process again, although with lending to households still stuck in gridlock, perhaps the dangers here should not be overstated. More worryingly, inflation may fail to fall significantly from its current high level, even as the central bank reduces interest rates in a bid to stem the ruble rise.br /br /Klepach's optimism is not shared, however, by the World Bank who in their latest report argue Russia’s economy will suffer a deeper contraction than they previously estimated this year even after a series of central bank interest rate cuts which have manifestly failed to ease the “prolonged” credit drought. The World Bank now expect the Russian economy to contract by 8.7 percent this year, compared with their June forecast for a 7.9 percent decline. The government is currently predicting the economy will shrink 8.5 percent this year and grow 1.6 percent next year.br /br /br /blockquote“We expect that the central bank will continue lowering its policy rate in the near future to facilitate credit to the real sector,” the World Bank said. “The impact, however, appears to be limited. The policy rates are mostly indicative, while the cost of credit remains very high.”/blockquoteThe OECD, on the other hand, seems rather more positive, arguing that Russia’s economy will enjoy a stronger commodity-driven rebound than first estimated, although, they hasten to add, authorities should avoid a sudden removal of stimulus measures to ensure the domestic economy keeps up the pace of its advance. They now expect the Russian economy to expand by 4.9 percent in 2010, compared with a June forecast for 3.7 percent growth, although output is still expected to contract 8.7 percent this year (broadly in line with the World Bank), more than the 6.8 percent estimated in June. The 2010 figure seems very optimistic in the light of the problems here identified, and more than adding to our appreciation of the Russian situation such numbers may rather cast doubt on the methodology being applied, and raise questions about some of the numbers being seen for other countries.br /br /br /blockquote“Although recovery is in prospect, the large output gap and subdued inflation suggest that policy stimulus should not be removed too hastily,” the OECD said. “Fiscal policy should be managed to avoid dislocative demand effects from a surge of expenditures in late 2009 followed by a tightening in 2010.” /blockquotebr /According to the OECD, Russia’s economy will enjoy a stronger commodity-driven rebound than first estimated and “Fiscal and monetary stimulus and the recovery of global demand should result in a strong rebound of output towards the end of 2009". The basic OECD argument is that “A large part of the policy stimulus will be felt only late in the year, as fiscal expenditure is back-loaded and a series of interest rate cuts began only in the second quarter.”br /br /strongLong Term Impact On Russian Growth/strongbr /br /But let us not underestimate the difficulties. According to the World Bank Russia’s real GDP will likely return to pre-crisis levels only in late 2012. And, the Bank says, without a more productive, diversified, and competitive economic base, its long-term growth is likely to be slower than in the past decade and than the pre-crisis expectationbr /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sw21w05Cq4I/AAAAAAAAPoY/BxotSEDWSOI/s1600/Russia+Trend+Growth.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 213px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5408178577978076034" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sw21w05Cq4I/AAAAAAAAPoY/BxotSEDWSOI/s400/Russia+Trend+Growth.png" //abr /br /Russia’s pre-crisis decade of prosperity was built on strong capital inflows, rising consumer and corporate credit, and significant capital investment. The post-crisis world will look very different: Russia will need to implement fiscal adjustment and diversify its economy in the context of sluggish global growth, low capital flows, and more limited access to foreign financing. So it is now time to look towards a new growth model based on increases in productivity and know-how and on more efficient allocation and use of investment, labor, and FDI. Next generation reforms should be geared to make Russia's monetary policy instruments much more effective, the Russian economy much more productive, diversified, and open—and more able to respond to future shocks. The success and duration of the transition from the current model of heavy dependence of natural resources to a more sustainable growth model depends, according to the World Bank on maintaining a competitive exchange rate, sustaining a prudent fiscal stance, improving the investment climate, more mobile capital and labor, making the financial sector deeper and more efficient, investing in infrastructure to eliminate key bottlenecks to growth, and strengthening governance and fighting corruption as part of the overall effort to improve the effectiveness of the public sector.br /br /The OECD more or less agrees: “Laying the foundations for sustained rapid growth will require unwinding some of the distortive consequences of the crisis". And, may I add, unwinding some of the distortive processes which lead the crisis to be such a severe one in the first place might not be such a bad idea either.div class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/7303901362201842397-2825345067395600868?l=russiatooat.blogspot.com' alt='' //div

The week ahead

Prieur du Plessis — Sat, 21 Nov 2009 07:15:37 +0000

The video clips in this post provide a handy summary of the reports expected on the economic, financial and corporate front around the globe during the week ahead.

Cowen’s Stone Maintains Suntech (NYSE:STP) at NEUTRAL on Q3 Earnings Report

Small Cap Pulse — Fri, 20 Nov 2009 21:06:00 +0000

November 20, 2009 ndash; Analyst Comments ndash; Cowenrsquo;s Rob Stone weighed in on Suntechrsquo;s (NYSE:STP) Q3 financial results this morning noting that given the delayed ramp of Pluto and thin-film production, and outstanding GSF A/R exposure, he thinks shares are fairly valued. He maintains a NEUTRAL rating on the stock. Q3 Results Suntech (NYSE:STP) reported Q3 revenues of $473.1 million, compared with revenues of $594.4 million for the same period last year, and $320.9 million in Q209. Gross margins in Q3 were 17.7%, down from 18.5% in Q2, and 21.5% in Q308. Net income was $30,1, or $0.16 per diluted ADS, compared with $42.5 million for the same period last year and $9.6 million in Q208. Highlights for the quarter included hitting 16.53% conversion efficiency. Management increased its FY09 shipment target from 600MW to a range of 640MW to 660MW, and an increase in total cell and module production capacity to 1.4GW by mid-2010, of which 450MW will be Pluto-enabled. Stonersquo;s Key Takeaways middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Shipments to Germany should continue to grow, but account for a smaller percentage, with stronger growth in the rest of Europe (Italy, France, Czech Republic) middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; U.S. distribution and utility scale projects, China and other Asian markets (Australia, Korea and Japan) should also drive growth middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Raising 2009-12E shipments to 640MW, 1.1GW, 1.6GW and 2.2GW including system integration of 37MW, 100MW, 160MW and 230MW middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Mix of systems reduces GM by about 60 basis points in 2009, 80-100 basis points in 2011/12 but GM in 2010 reflect better H1 module ASPs middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Raised EPS to $0.35, $0.65, $0.99 and $1.35 on revenue of $1.6B, $2.1B, $2.7B and $3.5B

Cowen’s Stone Comments on Trina Solar (NYSE:TSL) Q3 Earnings – Maintains OUTPERFORM

Small Cap Pulse — Fri, 20 Nov 2009 21:04:00 +0000

November 20, 2009 ndash; Analyst Comments ndash; Cowenrsquo;s Rob Stone weighed in on Trina Solarrsquo;s (NYSE:TSL) Q3 financial results, noting that he sees 80%+ upside in the stock relative to the market in 12 months, reiterating an OUTPERFORM rating. Q3 Results Trina Solar reported a 14.1 Y/Y decline in Q3 revenues to $249.7 million, up 66.5% over Q2, on shipments of 122.6MW, compared with 66.4MW in Q308 and 63.8MW in Q209. Gross margin was 28.5% in Q3, compared with 22.4% in Q308 and 27.4% in Q209. Net income in Q3 was $40.1 million, or $1.29 per diluted ADS compared with $32.1 million for the same period last year, and $18.9 million in Q209. Net margin was 16.1% in Q309. Manufacturing costs for module production declined to about $0.82/watt. The companyrsquo;s cash and equivalent position as of September 30, 2009 was $384.9 million. In terms of guidance, management expects to ship between 145MW to 165MW of PV modules with gross margins of 25% and 27%. For the full year, it expects total PV module shipments to be between 380MW and 400MW compared to previous guidance of 350MW to 400MW. For the FY, it expects to reduce manufacturing costs by 15% to 20%. Stonersquo;s Key Takeaways middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Gross margins rose 110 basis points while silicon costs ($0.62 vs. $0.84) fell faster than ASP. middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Raised 2009 12E shipments to 390MW, 730MW, 960MW and 1.27GW (vs. 338MW, 510MW, 700MW and 960MW) noting that TSL should gain significant market share in 2009/10. Sees stable GM at about 26% on continued cost reduction. middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Raised 2009-12E E/ADS to $3.04, $4.50, $5.50 and $6.90 on revenue of $827M, $1.28B, $1.56B and $1.92B. middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Good visibility for the first half of2010, with large orders from Italy and Spain, and ongoing demand in Germany. middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Maintains OUTPERFORM rating

Genta Inc. (GETA.OB) Cancer Drug Shown Effective with Chemotherapy in Advanced Melanoma

QualityStocks — Fri, 20 Nov 2009 19:26:53 +0000

Genta Inc. released the results from a pilot study on advanced melanoma incorporating the Company’s cancer drug Genasense(R) (oblimersen sodium). This study was featured earlier this week in a presentation at the World Meeting of Interdisciplinary Melanoma/Skin Cancer Centers in Berlin, Germany, an international conference organized every year by a co-leader of the AGENDA trial, [...]

Fed Characterizes Declining Dollar as Nominal

QualityStocks — Thu, 19 Nov 2009 18:26:24 +0000

Future voting members of the Fed’s policy setting committee waved off concerns regarding a declining dollar on Thursday, Nov. 19, suggesting that unless the decline becomes volatile or otherwise erratic, concerns about an inflationary impulse are unwarranted. In commentary that seems to suggest the dollar’s decline may be a counterbalance to a historically undervalued renminbi [...]

Small Cap Voice Featured Company: Wind Works Power Corp. (WWPW.OB)

QualityStocks — Tue, 17 Nov 2009 16:26:23 +0000

Wind Works Power Corp. is on a mission to become a leading developer of wind energy projects in North America. To facilitate this business plan, WWPW has entered into a joint venture agreement and option agreement with Zero Emission People LLC, (“Zero Emission”) an entity controlled by Dr. Ingo Stuckmann, WWPW’s chief executive officer. Zero [...]

DrStockPick.com Stock Report! 11/17/09, ZENG, HZHI, RHT, MDAS, CIEN, COP

Dr. Stock Pick — Tue, 17 Nov 2009 15:27:35 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Tuesday November 17, 2009 DrStockPick.com Stock Report! ************************************************************** Horizon Health International Corp. (Pink Sheets:HZHI) launched a product awareness campaign. The company will be show-casing products through existing e-commerce sites to stimulate sales through online transactions. Through Its US Subsidiary SunCity Ventures, Horizon Health [...]

Zacks Analyst Blog Highlights: Citigroup Inc., Liberty Global Inc., Comcast Corp., Deutsche Telekom AG and Vodafone Plc – Press Releases

Zacks Market Commentaries — Tue, 17 Nov 2009 12:00:07 +0000

For Immediate Release

Chicago, IL – November 17, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Citigroup Inc. (C), Liberty Global Inc. (LBTYA), Comcast Corp. (CMCSA), Deutsche Telekom AG (DT) and Vodafone Plc (VOD).

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Here are highlights from Monday’s Analyst Blog:

Citi to Sell Stake in Bellsystem24

Citigroup Inc. (C) announced that it will sell stake in Bellsystem24 to U.S. private equity firm, Bain Capital Partners, in a deal that values the Japanese call center operator at $1.1 billion.

The company announced on Sunday that it will sell its 93.5% controlling stake in Bellsystem24 − which it held through its Citigroup Capital Partners Japan Ltd. − to Bain Capital Partners through a tender offer. The tender offer is expected to start on or before Nov 20 and be completed on Dec 30, 2009. Under the terms of the deal, Citi will receive 93.5 billion of yen ($1 billion) in cash.

Following the completion of the deal, Citi Holdings’ assets will be reduced by $1.2 billion. However, Citi’s net income and capital ratios will not be significantly impacted by this stake sale, the company said.

Liberty to Acquire Unitymedia

Liberty Global is the second largest cable TV operator in the world. However, it is the largest international cable TV operator since Comcast Corp. (CMCSA), the largest cable MSO in the world does not have any operation outside the U.S. As of now, the company has approximately 16.6 million customers in 14 nations, most of which are in Europe. On the other hand, Unitymedia has approximately 6.4 million RGUs (revenue generating units); including 4.5 million analog and digital basic cable subscribers and 1.9 million new service RGUs (digital TV Pay, retail broadband internet, wholesale MMA internet, and telephony).

Germany is one of the lucrative markets in Europe. In 2002, Liberty Global has failed in its attempt to acquire the cable TV business of Deutsche Telekom AG (DT). Unitymedia has the highest uptake of digital TV and highest RGU per household in Germany. Integration of Unitymedia’s operations with Liberty Global will create a formidable cable TV player in Germany to compete with Kabel Deutschland (the largest cable TV operator in Germany), Deutsche Telekom and Vodafone Plc (VOD).

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Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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312-265-9380
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Zacks Investment Research

Liberty to Acquire Unitymedia – Analyst Blog

Zacks Market Commentaries — Mon, 16 Nov 2009 19:39:12 +0000

Liberty Global Inc. (LBTYA) announced it will acquire all of the issued and outstanding capital stock of Unitymedia GmbH, the second largest cable TV operator in Germany. The total consideration will be approximately $5.2 billion. Liberty Global will acquire 100% of the shares of Unitymedia for an equity purchase price of around $3 billion and will also assume around $2.2 billion of net outstanding debt of Unitymedia. The deal is expected to be completed by the first half of 2010 subject to regulatory clearance.

Liberty Global is the second largest cable TV operator in the world. However, it is the largest international cable TV operator since Comcast Corp. (CMCSA), the largest cable MSO in the world does not have any operation outside the U.S. As of now, the company has approximately 16.6 million customers in 14 nations, most of which are in Europe. On the other hand, Unitymedia has approximately 6.4 million RGUs (revenue generating units); including 4.5 million analog and digital basic cable subscribers and 1.9 million new service RGUs (digital TV Pay, retail broadband internet, wholesale MMA internet, and telephony).

Germany is one of the lucrative markets in Europe. In 2002, Liberty Global has failed in its attempt to acquire the cable TV business of Deutsche Telekom AG (DT). Unitymedia has the highest uptake of digital TV and highest RGU per household in Germany. Integration of Unitymedia’s operations with Liberty Global will create a formidable cable TV player in Germany to compete with Kabel Deutschland (the largest cable TV operator in Germany), Deutsche Telekom and Vodafone Plc (VOD).
Read the full analyst report on "LBTYA"
Read the full analyst report on "CMCSA"
Read the full analyst report on "DT"
Read the full analyst report on "VOD"
Zacks Investment Research

Zacks Analyst Blog Highlights: Apple Inc., Microsoft Corp, Quality Systems Inc., Allscripts-Misys Healthcare Solutions, Inc. and Cerner Corp. – Press Releases

Zacks Market Commentaries — Mon, 16 Nov 2009 13:45:26 +0000

For Immediate Release

Chicago, IL – November 16, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Apple Inc. (AAPL), Microsoft Corp (MSFT), Quality Systems Inc. (QSII), Allscripts-Misys Healthcare Solutions, Inc. (MDRX) and Cerner Corp. (CERN).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s Analyst Blog:

Apple Opens New Store in New York

To ensure a high-quality buying experience for its products, in which service and education are emphasized, the company has expanded and improved its distribution capabilities by opening its own retail stores in the U.S. and internationally.

The company operates a network of 280 retail stores in 10 countries across the world, including the U.S., U.K., Italy, Australia, Canada, Japan, China, Switzerland, Germany and France to drive the demand for its other products. Further, Apple is soon to open two new stores in Shanghai as well as London and Paris.

The company further plans to open 40 to 50 new larger retail stores next year, about half of which are expected to be outside the U.S. Apple had earlier estimated that it would open 25 to 50 new stores.

Retail sales increased 4.0% to $6.57 billion (averaging $26.0 million per store annually). Store traffic grew to around 170 million in fiscal 2009. The company has extended its footprint in international retail markets. Growing its presence in the international retail market, Apple opened its first store in Sydney and Beijing and opened stores in Switzerland, France and Germany during the calendar year 2008.

Apple's business strategy leverages its ability, through the design and development of its own operating system, hardware and many software applications and technologies, to provide its customers around the world with compelling new products and solutions, superior ease-of-use, seamless integration and innovative industrial design.

To attract customers during the holiday season, the company plans to offer gift-wrapping of any iPod or portable Mac for just $5. It will also allow customers to set aside a gift and pick it up at their local Apple store for free from Dec. 15 to Christmas Eve.

Apple’s stores hosted 42.7 million visitors during the last quarter, an increase of 7% from the year-ago period. The stores posted revenue of $1.87 billion ($7.6 million per store) in the quarter, the highest level ever and up 15% from the year-ago period.

Last month, Microsoft Corp (MSFT) announced the opening of its own first retail store in Arizona. But we do not expect Microsoft to catch up anytime.

Quality Systems Barely Beats

Quality Systems Inc. (QSII) reported fiscal second-quarter earnings of 41 cents, beating the Zacks Consensus Estimate by a penny and the year-ago earnings by 4 cents.

Total revenues for the quarter increased 21.5% to $71.69 million from $58.98 million. The company’s NextGen Healthcare Information Systems division posted revenue of $67.4 million for the reported quarter, representing a 23% increase from the previous year.

Category-wise, System sales, including software, hardware and supplies, increased 5.9% to $26.24 million from $24.78 million. Revenues from maintenance, electronic data interchange (EDI), revenue cycle management (RCM) and other services grew 32.9% to $45.46 million from $34.19 million in the year-ago period.

The total cost of system sales, including software, hardware and supplies increased 16.8% to $7 million. Total cost of maintenance, EDI, RCM and other services for the quarter were $21.27 million as against $15.2 million in the year-ago quarter, up 39.9%. Consequently, total cost of revenues for the quarter increased 33.4% to $28.3 million. The company reported a gross profit of $43.4 million for the quarter opposed to $37.8 million in the year-ago period, up 14.8%.

Research & development spend for the quarter increased 30% to $4.34 million for the quarter. Selling, general and administrative expenses for the reported quarter increased 11.7% to $20.4 million.

Quality Systems exited the quarter with cash and cash equivalents of $75.4 million opposed to cash and cash equivalents of $70.2 million at the end of fiscal 2009.

Quality Systems, headquartered in Irvine, California, develops and markets healthcare information systems that automate certain aspects of medical and dental practices, networks of practices such as physician hospital organizations and management service organizations, ambulatory care centers, community health centers, and medical and dental schools. The company competes with players like Allscripts-Misys Healthcare Solutions, Inc. (MDRX) and Cerner Corp. (CERN).

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Contact:
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Web Content Editor
312-265-9380
Visit: www.zacks.com

Zacks Investment Research

Berlin Property – Invest in the Capital of Europe

Sofie Vincent — Mon, 16 Nov 2009 10:12:22 +0000

The popularity of investing in Berlin property is on the rise, there is a continuously growing number of prospective buyers and investors researching and learning about the large financial returns from Berlin investment property from this quickly growing business venture.

Apple Opens New Store in New York – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 22:45:25 +0000

Apple Inc. (AAPL) will open its newest retail store with an 8,500 square feet retail space in New York tomorrow. The store will help Apple deliver more Macs, iPods and iPhones, taking advantage of the coming holiday season. The new store is the fourth in Manhattan and fifteenth in New York.

To ensure a high-quality buying experience for its products, in which service and education are emphasized, the company has expanded and improved its distribution capabilities by opening its own retail stores in the U.S. and internationally.

The company operates a network of 280 retail stores in 10 countries across the world, including the U.S., U.K., Italy, Australia, Canada, Japan, China, Switzerland, Germany and France to drive the demand for its other products. Further, Apple is soon to open two new stores in Shanghai as well as London and Paris.

The company further plans to open 40 to 50 new larger retail stores next year, about half of which are expected to be outside the U.S. Apple had earlier estimated that it would open 25 to 50 new stores.

Retail sales increased 4.0% to $6.57 billion (averaging $26.0 million per store annually). Store traffic grew to around 170 million in fiscal 2009. The company has extended its footprint in international retail markets. Growing its presence in the international retail market, Apple opened its first store in Sydney and Beijing and opened stores in Switzerland, France and Germany during the calendar year 2008.

Apple's business strategy leverages its ability, through the design and development of its own operating system, hardware and many software applications and technologies, to provide its customers around the world with compelling new products and solutions, superior ease-of-use, seamless integration and innovative industrial design.

To attract customers during the holiday season, the company plans to offer gift-wrapping of any iPod or portable Mac for just $5. It will also allow customers to set aside a gift and pick it up at their local Apple store for free from Dec. 15 to Christmas Eve.

Apple’s stores hosted 42.7 million visitors during the last quarter, an increase of 7% from the year-ago period. The stores posted revenue of $1.87 billion ($7.6 million per store) in the quarter, the highest level ever and up 15% from the year-ago period.

Last month, Microsoft Corp (MSFT) announced the opening of its own first retail store in Arizona. But we do not expect Microsoft to catch up anytime.

We maintain our Outperform rating on Apple, partly because of the remarkable success of the Apple Store.
Read the full analyst report on "AAPL"
Read the full analyst report on "MSFT"
Zacks Investment Research

North European Oil Royalty Trust (NRT) Reports Fourth Quarter Income and Distribution

QualityStocks — Fri, 13 Nov 2009 19:54:34 +0000

North European Oil Royalty Trust reported net income of $3.5 million, or $0.38 per unit, for its fourth fiscal quarter ending 10/31/2009. During the same quarter last year, the company earned $9.4 million, or $1.02 per unit. The company paid a distribution of $0.38 per unit in the quarter. Management of the North European Oil [...]

Richard Russell: Six reasons to invest in gold

Prieur du Plessis — Fri, 13 Nov 2009 07:38:54 +0000

This post features excerpts from Richard Russell's latest Dow Theory Letters, arguing the case for gold bullion.

Economic prospects for 2010 and beyond

Prieur du Plessis — Fri, 13 Nov 2009 07:30:18 +0000

By Cees Bruggemans, Chief Economist FNB. After a great fall (2008), success in arresting the fall and stabilizing the economy on a low level of capacity utilization (2009), growth prospects tend to be very promising as slack resources as well as new inputs will be available to be put to work. Demand needs to grow in [...]

Gilead Awaits Committee Outcome – Analyst Blog

Zacks Market Commentaries — Fri, 13 Nov 2009 06:30:09 +0000

Gilead Sciences, Inc (GILD) is awaiting the outcome of the Anti-Infective Drugs Advisory Committee of the US Food and Drug Administration (FDA) scheduled on December 10, 2009. The committee will review Gilead ’s aztreonam for inhalation solution, an investigational product for the treatment of chronic pulmonary infections due to Pseudomonas aeruginosa (P. aeruginosa) in patients with cystic fibrosis (CF). Earlier, in September 2008, the drug was denied approval by the FDA, which then asked Gilead to resubmit the application with more data.

In September 2009, the drug received conditional marketing approval in Canada and Europe under the trade name Cayston (aztreonam lysine 75 mg powder and solvent for nebuliser solution). Gilead plans to make the product available in Germany and the UK in early 2010. Aztreonam formulated with lysine is a proprietary formulation of aztreonam developed specifically for inhalation, which has orphan drug status in the US and Europe . Applications for marketing approval of Cayston are pending in Australia , Switzerland and Turkey .

CF is a chronic, debilitating genetic disease that affects the respiratory and digestive systems of approximately 70,000 people worldwide, including 35,000 people in the European Union. Cayston was granted conditional marketing authorization to address the unmet medical need of the CF patients. A decision regarding full marketing authorization will be based on the completion of the ongoing phase III study examining the efficacy and safety of Cayston compared to Novartis’ (NVS) tobramycin inhalation solution (TOBI) in CF patients with pulmonary P. aeruginosa.

During the third quarter conference call, Gilead stated that it expects to complete enrollment by the year end and make the data available towards the middle of next year. We believe positive data from this study will help it to receive approval from the regulatory authorities in both US and Europe . We have a Neutral recommendation on the stock.
Read the full analyst report on "GILD"
Read the full analyst report on "NVS"
Zacks Investment Research

Steel Industry – Industry Outlook

Zacks Market Commentaries — Fri, 13 Nov 2009 05:00:00 +0000

Steel Output Mounting

The Steel industry, which consists of companies engaged in the extraction of iron ore and coke coal for the processing of iron and steel, has the major chunk of sales concentrated with a few producers. The industry includes metal ore exploration and mining services, iron and steel foundries for smelting, rolling, forging, spinning, recycling, stamping, polishing and plating of iron and steel products such as pipes, tubes, wire, spring, rolls and bars.

The largest drivers of steel consumption have historically been the automotive and construction markets, which make up more than 50% of total steel consumption. Other steel consuming industries include appliances, converters, containers, tin, energy, electrical equipment, agricultural, domestic and commercial equipment and industrial machinery. Large automakers such as General Motors, Ford Motor Company ([url=http://www.zacks.com/stock/quote/f]F[/url]), Toyota Motor Corporation ([url=http://www.zacks.com/stock/quote/tm]TM[/url]) and Honda Motor Company ([url=http://www.zacks.com/stock/quote/hmc]HMC[/url]) depend upon the steel industry.

ArcelorMittal ([url=http://www.zacks.com/stock/quote/mt]MT[/url]) is the world’s largest steel company with steel production of 103.3 million tons in 2008. Other major players in the industry are POSCO ([url=http://www.zacks.com/stock/quote/pkx]PKX[/url]), Steel Dynamics Inc. ([url=http://www.zacks.com/stock/quote/stld]STLD[/url]), AK Steel Holding Corporation ([url=http://www.zacks.com/stock/quote/aks]AKS[/url]), United States Steel Corporation ([url=http://www.zacks.com/stock/quote/x]X[/url]) and Nucor Corporation ([url=http://www.zacks.com/stock/quote/nue]NUE[/url]).

The Asia-Pacific region, especially China and India, is witnessing higher production and consumption of steel. This is due to the per capita consumption reaching up to U.S./European levels, which could, theoretically at least, double steel demand in the longer-term. China has set up the largest steel industries in the world, driven by increasing demand for rapid urbanization and large infrastructure projects. The country accounted for nearly 50% of monthly total world production in August 2009.

China’s share is larger than the combined production of the U.S., the European Union (EU), Russia and Japan, which have historically been the largest producers of steel. In 2001, China's annual share of world production stood at 17%, while the EU accounted for the largest share at 18%. In eight years, China's share of world production has almost tripled, while other producers have seen their shares decrease. Ranked behind China are Japan and the U.S.

According to the World Steel Association, global steel output had increased to 107 million tons in the month of September 2009, down marginally (0.6%) from the same month of the previous year. Month-on-month, steel output improved slightly from 106.5 million tons. World crude steel production has continued to show a steady increase since April 2009. Steel production had reached its highest level in July this year on the back of a moderate rise in demand and the resumption of idled facilities by producers. The total output of 103.9 million tons was an improvement of 4% from 99.8 million tons produced in October, but down 11.1% year over year.

All major steel producing countries -- China, Japan, Germany, the U.S., Brazil, Turkey, Russia and the Ukraine -- have shown peak monthly figures so far this year. Production in the Middle East, where demand was buoyant last year due to booming infrastructure spending, edged up by 2.0% in September, while monthly steel output in Asia increased 15% to over 60 million tons. Of this, production in China climbed 28.7% to 39.4 million tons. However, global steel production was down 32.3% in North America while production in Europe saw a drop of 23.7%.

According to the data released by the International Trade Administration, steel prices increased across almost all product groups in September 2009 from August 2009. Hot-rolled sheet prices increased 12.6% to $535 per ton from $475 per ton. Cold-rolled sheet increased 10.04% to $625 per from $568 per ton. Stainless sheet prices increased 2.7% to $2,334 per ton.

Steel prices across all product groups have fallen significantly from the previous year despite recent price increases, with the price of hot-rolled sheet showing a 54.6% decrease and cold-rolled sheet a 41.3% decrease from September 2008.

In 2007, China’s steel industry revealed signs of consolidation in a market that was previously rather fragmented and in need of mergers and acquisitions (M&A). Despite the current slowdown in consolidation within the global steel industry, M&A activity remains a critically important business strategy for companies. While the economic downturn is a significant factor in short-term decisions regarding M&A activity, steel companies expect to make acquisitions over the next three years.

OPPORTUNITIES

We expect global steel demand to improve in the long term with the recovery of the user industries. China is expected to remain the largest consumer of steel going forward. World Steel is forecasting an 8.6% year over year decline in steel production, better than the previous forecast of a 14.1% decline, driven by a strong growth in Chinese steel demand. With signs of a recovery across the world since the beginning of the second half of 2009, the association is anticipating global steel demand in 2010 to grow by 9.2% to 1,206 million tons, which is similar to the level in 2008.

With steel demand picking up in the last couple of months, steel producers are restarting facilities. U.S. Steel Corp. is restarting its blast furnace at its Hamilton, Ontario plant after a nine-month shutdown. The company had closed its Hamilton blast furnace in November 2008. It had suspended the remaining operations at Hamilton and the Nanticoke operation in March 2009 due to a drop in demand. Both the facilities were running at less than half their capacity.

Net losses for Nucor Corporation, the largest recycler of steel scrap in the U.S., narrowed to $29.5 million, or 10 cents per share, for the third quarter of 2009. The result was more positive than the Zacks Consensus Estimate of a loss of 14 cents. Long-term contracts, cost reduction efforts and a dominant acquisition strategy inspire optimism about the company’s performance in the coming quarters.

The third largest steel maker in the U.S., Steel Dynamics Inc. reported net income of $69 million -- 30 cents per share -- for the third quarter of 2009, after reporting losses for three consecutive quarters. The earnings, which were driven by cost reduction through higher production and shipping volumes at the Flat Roll Division and better-than-expected performance in the Metals Recycling segment, were higher than the Zacks Consensus Estimate of 23 cents. However, on a year-over-year basis, earnings were down 69%.

WEAKNESSES

The global steel industry is cyclical, highly competitive and has historically been characterized by overcapacity. Production cuts of up to 35% are occurring to keep operating rates in the low-80s and keep the market balanced. The U.S. domestic production capacity utilization has fallen dramatically since August 2008. Capacity utilization peaked in February 2008 at a level of 91.6%. In May 2009, estimated capacity utilization was 44.3%, less than half of its level six months ago. Capacity utilization reached its lowest point, 40.9%, in December 2008, though it has increased again since May 2009.

Overcapacity in the global steel industry could increase the level of steel imports and result in downward pressure on steel prices. Overcapacity in China has the potential to result in a further increase in imports of low-priced, unfairly traded steel and steel products to the U.S. In recent years, capacity growth in China has significantly exceeded the growth in Chinese market demand. A continuation of this unbalanced growth trend or a significant decrease in China’s rate of economic expansion could result in China increasing steel exports.

Key steel consuming industries such as auto, shipbuilding and construction had been experiencing weak demand in the last quarters, forcing global steel makers to slacken production levels. U.S. Steel, the eighth largest steel producer in the world, the largest integrated steel producer headquartered in North America, and one of the largest integrated flat-rolled producers in Central Europe, slashed production by almost 62% during the second quarter of 2009, while Korean steel maker POSCO cut production by about 15% in December last year. This was the first time in its history that POSCO was forced to take such a measure, proof of the very bad operating environment.

The current low demand from the automotive and residential sectors and rising labor costs are affecting producers in the steel industry. Weak demand and significantly lower operating rates have forced producers to shut down facilities. The slowdown in the U.S./Europe/Japanese economies remains a negative issue facing steel producers. The automotive market has yet to recover fully. Steel shipments are off at a double-digit rate.

As a whole, the steel industry posted weak results in the third quarter of 2009. U.S. Steel Corporation recorded its third sequential loss -- $3.03 billion, or $2.11 per share -- in the third quarter of 2009, in contrast to a net income of $9.19 billion or $7.79 per share in the third quarter of 2008. Commercial metals company AK Steel posted a negligible income of $6.2 million compared to $188.3 million in the same quarter of 2008.

Despite a sharp rise in steel prices in September 2009, the future pricing remains uncertain, and we believe continued demand weakness, production resumption by some mills and lower iron ore and coking coal prices in the second half of 2009 would drive monthly prices down again. The recent significant reduction in global steel production in late 2008 and into 2009 has resulted in decreases in many raw material prices.

We expect that such prices will rebound when global steel production returns to more customary levels. In contrast, prices for steelmaking commodities such as steel scrap, coal, coke, iron ore, zinc, tin and other metallic additions have escalated significantly over the last several years due primarily to growth in worldwide steel production, especially in China.Zacks Investment Research

Telefonica Tops on Lighter Sales – Analyst Blog

Zacks Market Commentaries — Thu, 12 Nov 2009 18:05:41 +0000

Telefonica (TEF) reported third-quarter 2009 results with earnings per ADS of US$1.88, comfortably beating the Zacks Consensus Estimate of US$1.49. The Spanish telecom giant reported net income of €1.99 billion (US$2.85 billion), down 0.6% year over year, due to lower sales as a result of the beleaguered economy, especially in Spain.

Revenue

Consolidated revenue fell 5.7% year over year to €14.1 billion (US$20.2 billion). Revenue was impacted by weak contributions from domestic and European markets due to the recession. Latin America contributed 40% of the group revenues followed by Spain at 35% and Europe at 25%.

Result by Segments

Telefonica Espana

The company’s Spanish revenue declined 8.9% to €4.9 billion (US$7 billion), impacted by a reduction in mobile termination rates (inter-operator fees) and the economic downturn. Wireline business revenues fell 9.4% year over year to €2.9 billion (US$4.1 billion) while revenue from wireless operation declined 6.4% to €2.3 billion (US$3.3 billion).

Telefonica Europe

Revenue from Europe declined 5.5% year over year to €3.5 billion (US$5 billion), especially due to lower revenue from the UK operation. Reported revenue from O2 UK (the company’s UK wireless operation and highest contributor to European sales) was €1.7 billion (US$2.4 billion), down 7% over the year-ago quarter, due to competition and termination rate cuts. Revenue from Germany increased 5.5% while in the Czech Republic they declined 15.7%.

O2 UK continues to struggle, with declining revenues as the operator faces intense competition, especially from its biggest rival Vodafone (VOD). Competition is set to intensify in the British mobile market as the other two major carriers Deutsche Telekom (DT) and France Telecom ((FTE) have finalized an agreement to merge their UK operations. The integrated company will dethrone Telefonica as the largest wireless carrier in the UK.

Telefonica Latin America

Revenue from Latin America, which has been the principal growth engine for Telefonica in the past quarters, also fell 2.3% year over year to €5.6 billion (US$8 billion). This is due to revenue declines across key markets such as Brazil, Argentina and Chile. Revenue in Brazil (the largest market) declined 8.9% year over year to €2.2 billion (US$3.1 billion), due to weaker contribution from its Brazilian subsidiaries, Vivo and Telesp.

Telefonica continues to lead the Brazilian wireless market with approximately 30% market share. The company recently made an all-cash bid to acquire Brazilian telecom operator GVT Holding SA in an effort to expand its presence in the lucrative Brazilian telecom market.

Subscriber Results

At the end of the third quarter, total customer access points reached approximately 268.6 million, up 6.6% year over year. Subscriber accretion was driven by healthy growth in wireless, broadband and Pay TV services.

Total retail broadband access grew 9.8% year over year to 13.2 million, boosted by the rapid adoption of bundled services (dual or triple play service packages). Total wireless access reached 205.9 million, with roughly 5 million net additions made during the quarter, driven by contributions from Brazil, Germany, Mexico and the UK. Pay TV access was 2.5 million, up 15.1% year over year.

Spain exited the quarter with 47.3 million access lines and 24 million wireless customers. Total customer access in Latin America reached 163.7 million with nearly 3 million net additions in the quarter. Europe registered 48.6 million accesses (up 8% year over year), with the mobile customer base growing 7.3% year over year to 43.5 million.

Outlook

Telefonica has reaffirmed its financial guidance for 2009 as it expects continued increases in consolidated revenues with annual OIBDA growth projected in the range of 1 - 3%. Annual operating cash flow growth is expected in the range of 8 - 11%. Capital expenditure for 2009 is projected below €7.5 billion (US$10.2 billion), lower than 2008 level, as the company is increasingly focused on reducing spending to improve cash flow generation.

The company remains committed to expanding its 3G wireless business as it has reportedly begun a commercial roll-out of its HSPA+ technology based 3G mobile broadband network in Spain that offers peak downlink speeds of 21 megabits per second. Telefonica is also set to conduct 4G network trials in six countries across Europe and Latin America during the next six months.

Telefonica has expanded its handset portfolio with the recent launch of Palm Inc’s (PALM) Pre smartphone in the UK, Spain, Ireland and Germany. The company is also aggressively pursuing expansion initiatives into other emerging markets as it recently strengthened its foothold in China through an increased stake holding in China Unicom (CHU).

The company’s dominant position in the Spanish telecom market, attractive growth prospects in Latin America and healthy dividend payouts remain positive factors for investment considerations. However, we remain cautious with regard to Telefonica’s declining wireline business, aggressive acquisition strategy and highly leveraged balance sheet.
Read the full analyst report on "TEF"
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Read the full analyst report on "CHU"
Zacks Investment Research

Zacks Analyst Blog Highlights: Vodafone Group Plc, Telefonica, Deutsche Telekom, France Telecom and Verizon – Press Releases

Zacks Market Commentaries — Thu, 12 Nov 2009 12:45:15 +0000

For Immediate Release

Chicago, IL – November 12, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Vodafone Group Plc (VOD), Telefonica (TEF), Deutsche Telekom (DT), France Telecom (FTE) and Verizon (VZ).

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Here are highlights from Wednesday’s Analyst Blog:

Vodafone Profit Leaps, Lifts Savings

The telecom giant reported consolidated revenues of £21.8 billion (US$34.8 billion) for the period, representing a 9.3% year over year growth. Favorable exchange rate (euro-sterling) swings and net impact of merger and acquisition initiatives contributed to this growth. Excluding these impacts (organic basis), revenue declined 3% year over year.

Group service revenue declined 2.6% year over year on an organic basis to £20.5 billion (US$32.7 billion), primarily due to weaker contributions from European markets as recessionary conditions curbed demand for wireless services. Adjusted EBITDA increased 2.9% year over year to £7.5 billion (US$12 billion) driven by cost control.

Revenues for the European segment increased 3% year over year (down 5.1% on organic basis) to £14.9 billion (US$23.8 billion). Service revenue in Europe declined 4.5% organically as growth in Italy and the Netherlands was more than offset by decreases across Spain, Germany and the UK due to a weaker economy, regulatory pressure and intense competition.

Decline in voice revenue continues to offset growth in data. Revenue in Germany and the UK remains under pressure due to mobile termination rate (inter-operator fees) cuts. Vodafone is also losing customers in the UK as subscribers switch to its major rival Telefonica’s (TEF) O2 which is marketing iPhone in the UK.

Moreover, Deutsche Telekom (DT) and France Telecom (FTE) have recently finalized an agreement to combine their UK units, which will create the largest mobile carrier in the UK.

This segment posted revenues of £3.7 billion (US$5.9 billion), up 36% year over year. Organically, service revenue fell 3.2% as consistent growth at Vodacom (South Africa) and increase in subscriber count were partly offset by weak contributions from Romania and Turkey. Service revenue at Vodacom increased 4.2% on an organic basis as a result of healthy subscriber accretion.

Asia Pacific & Middle East segment continues to perform in line with expectation. Revenue surged 15.9% year over year (11.3% organically) to £3.1 billion (US$4.9 billion), driven by continued strong growth in India , the single biggest contributor to organic revenue growth. Service revenue in India increased 20.5% organically boosted by roughly 55% growth in wireless customer base amid intense price competition.

During the six-month period, Vodafone registered roughly 20.6 million net new mobile connections across its operations, bringing the total subscriber base to 323.3 million (83.5% represented by prepaid). India continues to be a key driver for subscriber growth with a net addition of 14 million customers in the first six months of fiscal 2010.

In Europe, the company registered a net loss of 262,000 subscribers during the half-year period. Verizon’s (VZ) mobile unit, Verizon Wireless, in which Vodafone holds a 45% stake, however, posted a net addition of 1.1 million customers.

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Zacks Investment Research

Gold bullion makes it eight in a row – what next?

Prieur du Plessis — Thu, 12 Nov 2009 07:45:53 +0000

Gold hit a new peak after a drop in the US dollar to a 15-month trough, resulting in the precious metal recording an eight-day winning streak. What happens next?

Prieur’s readings (November 12, 2009)

Prieur du Plessis — Thu, 12 Nov 2009 07:44:05 +0000

A Green Energy Investing Guideline

Investment U — Wed, 11 Nov 2009 16:03:54 +0000

A Green Energy Investing Guideline by Louise Harris, Investment U Research Typically, when investors think about making money from climate change, they think about buying shares of companies that specialize in biofuels or alternative or green energy. But those aren’t the only ways to profit from the green movement. Deutsche Bank Group (NYSE: DB) [...]

Vodafone Profit Leaps, Lifts Savings – Analyst Blog

Zacks Market Commentaries — Wed, 11 Nov 2009 14:33:46 +0000

Vodafone Group Plc (VOD), the largest wireless carrier in the world by revenue, has announced interim results for fiscal year 2010 with adjusted net income of £4.58 billion (US$7.3 billion) increasing 15% year over year from £3.99 billion (US$6.4 billion) reported a year ago, driven by favorable exchange rate movements and reduced tax. Adjusted earnings exclude one-time items such as impairment losses.

Group Revenue & EBITDA

The telecom giant reported consolidated revenues of £21.8 billion (US$34.8 billion) for the period, representing a 9.3% year over year growth. Favorable exchange rate (euro-sterling) swings and net impact of merger and acquisition initiatives contributed to this growth. Excluding these impacts (organic basis), revenue declined 3% year over year.

Group service revenue declined 2.6% year over year on an organic basis to £20.5 billion (US$32.7 billion), primarily due to weaker contributions from European markets as recessionary conditions curbed demand for wireless services. Adjusted EBITDA increased 2.9% year over year to £7.5 billion (US$12 billion) driven by cost control.

Results by Segment

Europe

Revenues for the European segment increased 3% year over year (down 5.1% on organic basis) to £14.9 billion (US$23.8 billion). Service revenue in Europe declined 4.5% organically as growth in Italy and the Netherlands was more than offset by decreases across Spain, Germany and the UK due to a weaker economy, regulatory pressure and intense competition.

Decline in voice revenue continues to offset growth in data. Revenue in Germany and the UK remains under pressure due to mobile termination rate (inter-operator fees) cuts. Vodafone is also losing customers in the UK as subscribers switch to its major rival Telefonica’s (TEF) O2 which is marketing iPhone in the UK.

Moreover, Deutsche Telekom (DT) and France Telecom (FTE) have recently finalized an agreement to combine their UK units, which will create the largest mobile carrier in the UK.

Africa & Central Europe

This segment posted revenues of £3.7 billion (US$5.9 billion), up 36% year over year. Organically, service revenue fell 3.2% as consistent growth at Vodacom (South Africa) and increase in subscriber count were partly offset by weak contributions from Romania and Turkey. Service revenue at Vodacom increased 4.2% on an organic basis as a result of healthy subscriber accretion.

Asia Pacific & Middle East

Asia Pacific & Middle East segment continues to perform in line with expectation. Revenue surged 15.9% year over year (11.3% organically) to £3.1 billion (US$4.9 billion), driven by continued strong growth in India , the single biggest contributor to organic revenue growth. Service revenue in India increased 20.5% organically boosted by roughly 55% growth in wireless customer base amid intense price competition.

Subscriber Trends

During the six-month period, Vodafone registered roughly 20.6 million net new mobile connections across its operations, bringing the total subscriber base to 323.3 million (83.5% represented by prepaid). India continues to be a key driver for subscriber growth with a net addition of 14 million customers in the first six months of fiscal 2010.

In Europe, the company registered a net loss of 262,000 subscribers during the half-year period. Verizon’s (VZ) mobile unit, Verizon Wireless, in which Vodafone holds a 45% stake, however, posted a net addition of 1.1 million customers.

Outlook

Management has confirmed its outlook for fiscal 2010 with adjusted operating profit projected in the range of £11.0 billion to £11.8 billion (US$17.5 billion to US$18.8 billion), assuming a favorable foreign exchange environment. Free cash flow is projected between £6.0 billion and £6.5 billion (US$9.6 billion to US$10.4 billion).

Vodafone is aggressively pursuing its cost reduction program that includes workforce reduction in Europe . The company has increased its annual savings target to £2 billion (US$3.2 billion) by 2012 from £1 billion (US$1.6 billion) as per earlier expectation. Roughly 50% of the total savings is expected to be realized in 2011.

Moreover, Vodafone continues to accelerate 3G wireless service deployments and expand network availability across Asia, Eastern Europe and Africa. The company’s HSDPA technology based 3G mobile broadband network offers network speeds of 7.2 megabits per second (Mbps) across Europe.

Vodafone has recently upgraded its 3G network in the UK to offer peak download speeds of 14.4 Mbps. Efforts are underway to further upgrade the existing 3G HSDPA network to HSPA+ standard, which will offer future throughput up to 42 Mbps. Moreover, Vodafone is set to launch iPhone in the UK in early 2010.
Read the full analyst report on "VOD"
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Read the full analyst report on "TEF"
Read the full analyst report on "VZ"
Zacks Investment Research

Why the Fall of the Wall Meant So Much

Frank Holmes — Wed, 11 Nov 2009 06:00:00 +0000

Twenty years ago this week, the Berlin Wall fell and in doing so, set off a string of momentous events that in short order saw the reunification of Germany, the collapse of the Soviet Union, and freedoms and democracy spread across a long-oppressed part of the world. Few events in modern history have had such a significant impact on the lives of so many people, but momentum for the wallrsquo;s fall began years earlier. A member of our investment team who grew up in Poland points out the important role played by Polish leader Lech Walesa, the shipyard electrician who led the Solidarity labor movement that drew support from around the world. Solidarityrsquo;s success in creating the first free trade union behind the Iron Curtain weakened the regionrsquo;s Communist governments and won Walesa the Nobel Peace Prize. Walesa, later Polandrsquo;s first post-Communist president, was in Berlin this week to tip over the first in a series of artistic dominos representing pivotal events from that time. A member of our team who grew up in Azerbaijan during the Soviet era describes the Berlin Wall as the line in the sand for the Soviets. Once it was gone, it was a natural next step for the former Soviet republics to pursue their own independence. Prior to the wallrsquo;s fall, defiance of Moscow was rare in the Soviet republics, but that changed quickly. By the early 1990s, the Soviet Union was no more ndash; an outcome that few would have believed possible just a couple of years earlier. As global investors, we watch government policies for peace and prosperity as part of our investment process. The dramatic changes in the former Soviet bloc, for example, led us to create our Eastern European Fund (EUROX) in 1997 ndash; this was one of the first funds focusing on this region. Having a diverse investment team is a tremendous asset in helping us to spot opportunities arising from important global events. Please consider carefully a fundrsquo;s investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc. By investing in a specific geographic region, a regional fundrsquo;s returns and share price may be more volatile than those of a less concentrated portfolio. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Foreign and emerging market investing involves special risks such as currency fluctuation and less public disclosure, as well as economic and political risk. The Eastern European Fund invests more than 25% of its investments in companies principally engaged in the oil amp; gas or banking industries. nbsp;The risk of concentrating investments in this group of industries will make the fund more susceptible to risk in these industries than funds which do not concentrate their investments in an industry and may make the fundrsquo;s performance more volatile. #09-795

Pasko: Dvorishchi ain’t no Cape Town

Robert Amsterdam — Tue, 10 Nov 2009 19:03:05 +0000

The last week of October was a tense time for the bureaucrats at Minprirody, Russia's Ministry for the Protection of the Environment and Natural Resources, and naturally for Minister Yuri Petrovich Trutnev. He went all the way to Cape Town,...

McDonald’s Outdoing Rivals – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 15:30:10 +0000

McDonald’s Corporation’s (MCD) comparable sales for the month of October 2009 showed a sluggish growth of 3.3% as against the rise of 8.2% in the same month last year, exposing its sensitivity to rising unemployment, economic downturn, and the discount war amongst fast-food chains to lure consumers.

The company faces stiff competition from Burger King Holdings Inc. (BKC), Wendy’s/Arby’s Group, Inc. (WEN) and Yum! Brands Inc. (YUM). However, these quick-service operators are faring better than casual dining restaurant chains, such as Cosi Inc. (COSI) and Red Robin Gourmet Burgers Inc. (RRGB), as cash-strapped consumers are trading towards fast-food centers due to relative cheap dining options.

System-wide sales at McDonald’s worldwide restaurants climbed 10.3% for the month of October. However, in constant currencies, the rate of increase in system-wide sales dipped to 5.2%.  In the United States , comparable sales remained flat falling 0.1% in October (versus 5.3% increase last year for the comparable month). New menu products, including Angus Third Pounders and McCafe premium coffee line-up continued to support the month's results.

The fast-food giant had earlier indicated that U.S. sales for the month of October would be weak. Still the month’s result fared better than the overall quick-service restaurant industry.

In Europe, comparable sales increased 6.4% in October (versus 9.8% increase last year for the comparable month) fueled by strong performance in the U.K. , Germany and France . A variety of mid-tier items and premium menu options contributed to sales.  Comparable sales in Asia/Pacific, Middle East and Africa (APMEA) rose 4.7% in October (versus 11.5% increase last year for the comparable month) driven by Australia and Japan, partly offset by China.
Read the full analyst report on "MCD"
Read the full analyst report on "BKC"
Read the full analyst report on "WEN"
Read the full analyst report on "YUM"
Read the full analyst report on "COSI"
Read the full analyst report on "RRGB"
Zacks Investment Research

Pipeline Pact

Robert Amsterdam — Tue, 10 Nov 2009 15:12:28 +0000

This in from the Wall Street Journal on the somewhat disturbing, political dimensions of Russia's Nord Stream pipeline. Approved just last week by Finland and Sweden after ecological concerns were overcome, the project is now ready to get off the...

What the German experiment can teach us about the future of U.S. wealth

Bill Bonner — Tue, 10 Nov 2009 11:28:43 +0000

pa href="http://www.contrarianprofits.com/articles/author/bill-bonner/" class="alinks_links"Bill Bonner/a (a href="http://www.dailyreckoning.com" class="alinks_links"Daily Reckoning/a) – In 1949, the Soviets and the Allies divided Germany into two parts. One part followed a traditional capitalistic path to reconstruction. The other part took the socialist road. Remarkably, they kept this test going for 40 years./p pOf course it was misery for many of the test subjects. People were so eager to get out of the East German control group, they risked their lives jumping over the barbed wire. Then, when the wall was down, the population of East Germany collapsed…more than one out of every ten people moved to the West!/p pBut it was a great experiment for economists. Too bad they didn’t learn anything./p pTo read the rest of Mr. Bonner#8217;s article his long-term recommendation for#8230;/p

November 9th CEOcast Weekly Newsletter

QualityStocks — Mon, 09 Nov 2009 20:58:57 +0000

Companies featured in this edition of the newsletter: ACTC, CHIP, CVM, DKAM, ENZ, IWEB, MBCI, MFGD, PHC Markets rebounded last week, on the strength of upbeat productivity and manufacturing reports that led to solid gains in all of the major indices. Despite news that the unemployment rate had hit its highest levels in 25 years, the [...]

DT Tops Estimates on Cost-Cutting – Analyst Blog

Zacks Market Commentaries — Mon, 09 Nov 2009 18:14:35 +0000

German telecom giant Deutsche Telekom (DT) announced results for third-quarter 2009 with reported earnings per ADS of 31 cents, beating the Zacks Consensus Estimate of 25 cents. Net income of €959 million (US$1.4 billion) reflects a 7.2% increase from €895 million (US$1.3 billion) reported a year ago.

This year-over-year growth was fueled by the company’s ongoing cost-cutting initiatives under the "Save for Service" program. Total savings from this program reached approximately €5.4 billion (US$7.7 billion) at the end of the quarter, exceeding the annual savings target of up to €4.7 billion (US$6.7 billion) originally expected to be achieved in 2010.

Group Revenue & EBITDA

Reported revenues of €16.3 billion (US$23.2 billion) reflects 5.2% year-over-year growth, primarily due to the consolidation of Greek operator OTE group, in which Deutsche Telekom holds a 30% stake. Domestic revenues grew 0.6% year over year to €7.2 billion (US$10.3 billion), while international revenues increased 9.2% year over year to €9.1 billion (US$12.9 billion). Approximately 56% of the revenue was generated outside Germany in the quarter.

Adjusted EBITDA (excluding special items) increased 5.5% year over year to €5.5 billion (US$7.9 billion), driven by improved operational efficiency and reduced cost. OTE contributed €1.5 billion (US$2.1 billion) and €0.6 billion (US$858 million) to the group’s revenue and adjusted EBITDA, respectively.

The following is a snapshot of operating results by segments:

Germany

Revenue from this segment fell 2% year over year to €6.5 billion (US$9.2 billion) as a result of continued erosion in fixed-network lines and unfavorable regulatory measures. German fixed-network and mobile communications operations were combined following the recently completed operational restructuring. Fixed-network revenue declined 3.5% year over year to €4.7 billion (US$6.7 billion), while mobile communications revenue grew 1.4% to €2.1 billion (US$3 billion).

German fixed telephony subscriber base continue to contract as reflected by 8% year over year decline in fixed-network lines that registered 26.65 million lines at the end of the quarter. Broadband business remains on the growth track as total retail broadband lines grew 10.3% year over year to 11.3 million, with 72,000 customers added in the quarter. German mobile communications subscriber base increased 1.4% year over year to 39.3 million.

United States (T-Mobile USA)

Revenue at Mobile Communication USA (T-Mobile USA), the fourth-largest US wireless carrier, grew 3% year over year to €3.8 billion (US$5.4 billion). However, in dollar terms, total revenue for the quarter represents a 2.3% annualized decline. Net income (measured in dollars) also decreased 5.7% year over year to US$417 million.

Blended ARPU for T-Mobile USA was US$47, down from US$52 and US$48 reported in the prior-year quarter and previous quarter, respectively, as growth in data services was offset by lower roaming and customer migration to unlimited plans. Blended churn (customers switching to other products) increased sequentially and year over year to 3.4% as a result of an increase in contract churn due to intense competition.

Higher contract churn affected customer retention at T-Mobile USA in the third quarter, as evidenced by a net loss of 77,000 customers. This is compared to a net gain of 325,000 and 670,000 customers in the previous and year-ago quarters, respectively.

T-Mobile USA remains challenged by the cutting-edge wireless handsets offerings from its larger peers such as AT&T (T) and Verizon (VZ), resulting in increased customer defection. The entity served 33.4 million mobile subscribers at the end of the quarter.

Europe

Revenue for the Europe operating segment (combines operations in the UK, Poland, the Netherlands, Austria and the Czech Republic) decreased 13.2% year over year to €2.6 billion (US$3.6 billion). The Europe segment served 44.4 million cellular customers at the end of the quarter.

Revenue from UK (T-Mobile UK), the largest contributor to the segment’s revenue, decreased 14.6% year over year to €853 million (US$1.2 billion) due to an adverse exchange rate impact and mobile termination rate (inter-operator fees) cuts. Deutsche Telekom has reportedly finalized agreement with France Telecom (FTE) for the merger of T-Mobile UK with Orange UK under a 50-50 joint venture, which will create the largest mobile operator in the UK with 37% market share.

Southern and Eastern Europe

The segment reported revenues of €2.6 billion (US$3.7 billion) for the quarter, reflecting an increase from €1.26 billion (US$1.8 billion) reported a year ago. This growth was fuelled by the inclusion of the OTE group. At the end of the quarter, the segment served 33.7 million mobile customers and 3.7 million broadband connections.

Systems Solutions (T-Systems)

The dismal global economic environment continues to negatively affect new order bookings at T-Systems. As a result, revenues for the segment declined 7.3% year over year to €2.1 billion (US$3 billion). Telecommunications revenue decreased 12.4% year over year to €803 million (US$1.1 billion), while computing and desktop services revenue declined 0.9% to €952 million (US$1.4 billion).

Outlook

Deutsche Telekom has reaffirmed its guidance for 2009, with adjusted EBITDA expected to fall by 2-4% from €19.5 billion (US$27.9 billion) achieved in 2008. Projected free cash flow for 2009 remains at €7 billion (U$10 billion), out of which OTE’s contribution is expected to be €0.6 billion (U$0.9 billion).
Read the full analyst report on "DT"
Read the full analyst report on "FTE"
Read the full analyst report on "T"
Read the full analyst report on "VZ"
Zacks Investment Research

MoneyGram Rewards Reaches Canada – Analyst Blog

Zacks Market Commentaries — Fri, 06 Nov 2009 16:47:56 +0000

MoneyGram International Inc. (MGI) announced the expansion of MoneyGram Rewards into Canada, a loyalty program that offers members fee discounts, receive notices, and fast and convenient money transfers.

MoneyGram Rewards were expanded earlier this year into Germany, Spain and France. It was first introduced in the U.S. in 2008 and now has more than 3.5 million customers who enjoy the benefits of membership, which include discounted transactions, a personalized card for expediting money transfers, quarterly statements and the ability to manage one’s account and profile online.

Further in September, MoneyGram added a feature to the program that allows members to be notified via SMS text message when their money transfer transaction has been picked up by the receiver.

The expansion of the program is a part of MoneyGram’s growth plans in Canada. In July, the company announced the roll-out of thousands of additional Canada Post locations, resulting in MoneyGram money transfer services available at more than 5,000 Canada Post outlets coast to coast.

On Oct 30, MoneyGram reported third-quarter loss of 25 cents, substantially short of the Zacks Consensus estimate of 3 cents. The downside was mainly due to $37.4 million in one-time costs for a patent lawsuit, a legal settlement with the Federal Trade Commission, stock-based compensation and severance costs, asset write-downs and securities gains.
Read the full analyst report on "MGI"
Zacks Investment Research

Energy Blast – Nov 6, 2009

Robert Amsterdam — Fri, 06 Nov 2009 09:52:32 +0000

Apparently U.N. inspectors have found 'nothing to be worried about' upon their first examination of the formerly clandestine uranium enrichment site in Qom in Iran. 'The [Obama] administration must consider whether it makes sense to grant the regime two more...

Zacks Industry Outlook Highlights: Evergreen Solar Inc., JA Solar Holdings Co Ltd., A-Power Energy Generation System, LDK Solar Company Ltd. and First Solar Inc. – Press Releases

Zacks Market Commentaries — Thu, 05 Nov 2009 12:45:01 +0000

For Immediate Release

Chicago, IL – November 5, 2009 – Zacks.com announces the latest Industry Outlook. Today, Zacks Equity Research discusses the Alternative Energy sector, including Evergreen Solar Inc. (ESLR), JA Solar Holdings Co Ltd. (JASO), A-Power Energy Generation System (APWR), LDK Solar Company Ltd. (LDK) and First Solar Inc. (FSLR).

A synopsis of today’s Industry Outlook is presented below. The full article can be read at http://www.zacks.com/stock/news/26898/Alternative+Energy.

Alternative energy stock prices generally rise and fall in direct proportion to the price of crude oil. While in times of high oil prices this may present an opportunity, it also increases volatility in the sector.

Industry-wide excess solar cell and module capacity have led to stockpiling across the board. As a result, we think the performance of companies such as Evergreen Solar Inc. (ESLR), JA Solar Holdings Co Ltd. (JASO), A-Power Energy Generation System (APWR) and LDK Solar Company Ltd. (LDK) -- burdened as they are with high inventory levels -- will remain under pressure in the near term.

Germany, one of the prime solar markets with a lucrative subsidy program, is considering a roll-back of its grants. This will affect companies such as First Solar Inc. (FSLR), who generate a substantial portion of their sales from Germany.

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Zacks Investment Research

Alternative Energy – Industry Outlook

Zacks Market Commentaries — Wed, 04 Nov 2009 22:00:18 +0000

OUTLOOK

The Alternative Energy industry is going through a recovery after absorbing the global recession and the cascading fall in global crude oil prices. Earlier this year, quite a few alternative energy companies were in the trough. Though these companies have recovered from their lows, their valuations are still significantly lower than their 52-week highs.

The growth of alternative energy companies is closely tied to the fortunes of the economy. In its latest release, the Energy Information Administration (EIA) predicted that total U.S. electricity consumption will decline by 3.3% in 2009 before growing by 1.3% in 2010 as the improving economy coaxes a gradual recovery in electricity sales. In fiscal 2008, annual U.S. photovoltaic (PV) installed capacity grew by 63% year-over-year, bringing the cumulative installed capacity to 792MW.

According to the Solar Energy Industries Association (SEIA) -- the U.S. trade association representing close to 500 companies in the solar energy industry -- Germany ranked first followed by Spain, Japan and U.S. in terms of cumulative installed solar electric power as of year-end fiscal 2008. However in fiscal 2008, Spain (2.46GW in 2008) beat Germany (1.86GW) in terms of new installations. World solar PV installations reached a record high of 5.95GW in 2008, representing growth of 110% over 2007.

According to the European Photovoltaic Industry Association (EPIA) -- the world industry association for solar photovoltaic electricity market -- the cumulative global installed PV capacity stood at almost 15GW, compared to only 9GW in 2007.

OPPORTUNITIES

Environmental Advantage: Solar power is one of the most benign electric generation resources. Solar cells generate electricity without air or water emissions, noise, vibration, habitat impact or waste generation.

Fuel Risk Advantage: Unlike fossil and nuclear fuels, solar energy has no risk of fuel price volatility or delivery risk. Although there is variability in the amount and timing of sunlight in the day, season and year, a properly sized and configured system can be designed to be highly reliable while providing a long-term, fixed-price electric supply.

Locational Advantage: Unlike other renewable resources such as hydroelectric and wind power, solar power is generally located at a customer’s site due to the universal availability of sunlight. As a result, solar power limits the expense and energy losses associated with the transmission and distribution from large-scale electric plants to the end users. For most residential consumers seeking an environment-friendly power alternative, solar power is currently the only viable choice as it can be sourced in urban and rural environments.

Subsidy Programs: Governments, most notably that of China, have increased their financial support for solar projects. China is aiming at increasing its installed solar power capacity to 2GW by 2011 from 140MW capacity at the end of fiscal 2008. To fulfill this objective, the Chinese government offers 50% of the cost of investment of solar power projects. For solar projects in remote areas, the government subsidizes 70% of the project cost. A company under our coverage benefiting from this move includes Solarfun Power Holdings Co. Ltd. (SOLF).

Through the American Reinvestment and Recovery Act (ARRA) passed in February 2009, the U.S. Treasury Department has implemented a program to issue cash grants in lieu of the investment tax credit for renewable energy projects. Recent focus on renewable sources will greatly benefit green crusader companies like Rentech Inc. (RTK). Also, the Department of Energy (DOE) in the U.S. has implemented a loan guarantee program to help developers obtain financing for solar power projects.

WEAKNESSES

Recent Start-ups: A large number of alternative energy companies are recent start-ups with limited resources. As such, quite a few depend on their customers’ ability to finance solar projects.

Global Recession: The global economic crisis has affected alternative energy sales and earnings growth. Weakness in the debt and equity markets, for as long as it lasts, will raise costs of capital for firms in this emerging sector and may hinder project financing, working capital requirements and new research and development.

Fortune Tied to Crude: Alternative energy stock prices generally rise and fall in direct proportion to the price of crude oil. While in times of high oil prices this may present an opportunity, it also increases volatility in the sector.

Excess Capacity: Industry-wide excess solar cell and module capacity have led to stockpiling across the board. As a result, we think the performance of companies such as Evergreen Solar Inc. (ESLR), JA Solar Holdings Co Ltd. (JASO), A-Power Energy Generation System (APWR) and LDK Solar Company Ltd. (LDK) -- burdened as they are with high inventory levels -- will remain under pressure in the near term.

German Roll-back: Germany, one of the prime solar markets with a lucrative subsidy program, is considering a roll-back of its grants. This will affect companies such as First Solar Inc. (FSLR) and SunPower Corporation (SPWRA), who generate a substantial portion of their sales from Germany.Zacks Investment Research

Teva Reports Strong Quarter – Analyst Blog

Zacks Market Commentaries — Wed, 04 Nov 2009 20:30:40 +0000

Teva Pharmaceutical Industries Ltd. (TEVA) reported earnings of 89 cents in the third quarter of 2009, up 16% from the year-ago period and a cent above the Zacks Consensus Estimate. Strong sales of Copaxone and in the respiratory business helped drive earnings in the reported quarter.

Net sales increased 25% to $3.55 billion, with the Barr acquisition contributing to sales across different geographical segments. The strengthening U.S. dollar adversely impacted net sales by $160 million or 6%.

Revenue performance across key business segments was mixed. While the Pharmaceuticals Sales segment posted growth of 27% with revenues coming in at $3.4 billion, the active pharmaceutical ingredients (API) segment reported an 8% decline in growth with sales coming in at $136 million.

Pharmaceutical segment sales were driven by strong performances in the North American, European and International segments. The launch of generic versions of Ortho Tri-Cyclen Lo and Eloxatin and continued strong sales from existing products like generic versions of Adderall XR, Yasmin and Protonix helped North America sales grow 34% to $2,164 million.

Meanwhile, key branded product Copaxone continued to impress with global in-market sales increasing 38% to $776 million. While U.S. in-market sales increased 53% to $540 million, ex-U.S. in-market sales totaled $236 million, up 12%. Unfortunately, Mylan (MYL) is looking to launch a generic version of Copaxone.

Other products/segments that contributed to growth were Azilect at $64 million, up 39%, women’s health business at $103 million, up 10%, and the global respiratory business at $243 million, up 37%.

We expect the North American pharmaceutical segment to continue posting strong sales going forward. The company has a strong pipeline of products, and as of October 23, 2009 had 210 abbreviated new drug applications (ANDAs) awaiting U.S. Food and Drug Administration (FDA) approval. These represent more than $113 billion in branded sales. About 136 of these ANDAs are paragraph IV challenges including approximately 83 first to file opportunities representing more than $54 billion in branded sales. The launch of Effexor XR in July 2010 should help drive sales.

Pharmaceutical sales in Europe increased 15% to $787 million, mainly due to strong generic sales in Germany, Spain and Poland. International pharmaceutical sales grew 14% to $463 million, driven by increased sales in Russia, Croatia, Israel and certain countries in Latin America.

Gross margin improved to 58.2% (up from 54% in the year-ago period) thanks to higher contributions from innovative and branded products, including Copaxone, ProAir, Azilect and women's health products, and improved gross margins of the U.S. generics base business.

Research & Development expense remained relatively unchanged at $195 million. We expect R&D expense to increase as the company delivers on its plans to double its generic R&D output from its 2007 level by 2012. Teva also intends to expand R&D activity in biogenerics and its innovative and branded franchises.

Selling and Marketing (S&M) expenditures (excluding amortization of purchased intangible assets) increased 36.5% to $662 million mainly due to higher royalty payments on higher Copaxone revenues and the addition of Barr's business which is characterized by higher S&M expenses.

General and Administrative (G&A) expenditures totaled $212 million, or 6.0% of sales, for the third quarter, compared with $156 million, or 5.5% of sales, in the comparable quarter of 2008.

Based on its performance in the first nine months of 2009, Teva raised the lower end of its previously issued earnings guidance by 10 cents. The company now expects earnings in the range of $3.30 to $3.40, up from the previous range of $3.20 to $3.40. For 2010, the company expects earnings in the range of $4.40 and $4.60.
Read the full analyst report on "TEVA"
Read the full analyst report on "MYL"
Zacks Investment Research

Two Investments to Add to Your “Green” Portfolio

Investment U — Wed, 04 Nov 2009 19:19:59 +0000

Two Investments to Add to Your “Green” Portfolio by Louise Harris, Investment U Research Green investing can be tricky. That was evidenced after oil prices dropped last year and alternative energy companies saw their profits fall just as quickly. Naturally, investor enthusiasm followed, as green ETFs like Claymore/Mac Global Solar Energy Index (NYSE: TAN) [...]

GM U-Turn Startles

Robert Amsterdam — Wed, 04 Nov 2009 14:34:26 +0000

It felt as if negotiations would go on for an eternity, with months of stalling: search this site for 'Opel bid' and the stories of stops and starts come thick and fast. Now, just as it seemed that the deal...

Celanese Beats Zacks Estimate – Analyst Blog

Zacks Market Commentaries — Tue, 03 Nov 2009 21:55:33 +0000

Celanese Corporation (CE), a leading global chemical company, reported net earnings of 58 cents per share in the third quarter of 2009, beating the Zacks Consensus Estimate of 42 cents. Results, however, were lower than last year’s 78 cents.

Weak pricing and lower volumes, especially for Acetyl Intermediates and Industrial Specialties products on weak global demand led to net sales of $1.3 billion in the quarter, down 28% from the same period last year. The Acetyl Intermediates segment primarily serves customers in the chemical, paint and adhesives industries.

Consumer Specialties: Net sales slid 8% to $271 million in the quarter, driven by lower sales volumes primarily in North America and Europe and negative currency impacts. However, higher pricing, lower raw material and energy costs and benefits from the company’s fixed cost reduction efforts drove a 24% rise in operating profit to $52 million. Consumer Specialties continued to deliver strong performance as higher pricing and Acetate Products venture growth in China -- as well as lower overall costs -- offset modest volume declines resulting from softer product demand.

Advanced Engineered Materials: Significantly lower volumes in many of its end-use industries continued to impact year-over-year performance in the segment. Net sales decreased 19% to $220 million in the quarter, primarily driven by lower volumes in the U.S. and European automotive markets, as well as other consumer and durable goods segments. Operating profits improved 61% to $21 million on lower raw material and energy costs.

Industrial Specialties: Net sales of $236 million reflected a 38% year over year decline driven by lower volumes associated with softer demand for PVOH. The decrease in net sales was also attributed to lower pricing and the negative impacts of currency. However, volumes increased sequentially on improved demand in North America, Europe and Asia, particularly in the company’s emulsions business. Operating profit more than doubled to $44 million compared with $18 million in the same period last year. Margins expanded in the core businesses, following lower raw material costs and the benefits of the company’s fixed spending reduction efforts.

Acetyl Intermediates: Net sales declined 37% to $666 million in the quarter compared with $1,067 million in the same period last year, primarily due to lower pricing and modestly lower volumes. Lower year-over-year industry utilization rates caused by reduced global demand, coupled with lower raw material costs, drove the pricing decline. The company’s operating rates for its acetic acid facilities remained at high levels during the quarter; however, volumes in vinyl acetate monomer and other derivative products were lower, reflecting the reduced demand.

Industry demand in Asia has continued to increase sequentially from its lowest levels in the fourth quarter of 2008. Demand in Europe and the Americas remained weak in comparison, but showed modest improvement during the same period.

Cash and cash equivalents at the end of the quarter were $1.3 billion compared with $548 million at the end of the third quarter of 2008. In 2009, the company received net cash of $168 million from the sale of the PVOH business and an advance payment of $412 million related to the relocation of Ticona’s business in Kelsterbach, Germany. Celanese reduced its net debt at the end of the reported quarter to $2.3 billion from $3 billion last year. However, debt to capital ratio of above 80% is our major concern.

Going forward, Celanese plans to reduce fixed spending by $100 million in 2010, as it streamlines manufacturing operations and administrative functions, including the closure of its facility in Pardies, France. The company also expects volumes to increase across all of its businesses and an adjusted tax rate of below 20%. Celanese expects these changes to add $1 to earnings per share next year.
Read the full analyst report on "CE"
Zacks Investment Research

AGCO’s Outlook Remains Weak – Analyst Blog

Zacks Market Commentaries — Mon, 02 Nov 2009 22:27:58 +0000

Last week, AGCO Corp. (AGCO) reported third-quarter results. The company posted earnings of 13 cents per share, compared $1.01 per share in the prior-year quarter. The significant decline in quarterly earnings was driven by lower sales volumes, weaker product mix and the negative impact of currency translation.

Net sales in the quarter were $1,403.7 million, down 32.7% compared to the third quarter of 2008. AGCO is experiencing soft demand conditions in most of its markets. Lower commodity prices, along with expectations of decreased farm income, are hampering investments in farm equipment around the world. AGCO is aggressively cutting production in order to reduce its own and dealer’s inventories.

Sales in North America were down 31.9% on a constant currency basis due to weaker sales of low horsepower tractors and hay products, as well as reduction in dealer inventory. Unit retail sales of lower horsepower tractors were down due to weakness in the landscaping, residential construction and dairy sectors. This weakness is expected to continue for the remainder of the year.

In the EAME region, quarterly sales were down 30.3%, excluding the impact of foreign currency translation, due to lower volumes in Eastern Europe, Russia, France, Germany, Finland and Scandinavia. The company experienced major demand weakness from the diary and livestock sectors.

Sales from the South American region were down 20.5% (excluding foreign currency exchange impact) due to due to dry weather conditions and the impact of tightened credit on planted acreage and car production. The company saw improved demand conditions in Brazil during the quarter as the Brazilian government’s special financing plan for small farms continued to stimulate sales of lower horsepower tractors.

AGCO expects full year revenue in the range of $6.4 - $6.6 billion, compared to $8.4 billion in 2008. The revenue forecast includes unfavorable currency translation impacts of approximately $500 - $600 million. The company anticipates full-year EPS in the range of $1.30 - $1.50. We concur with the company that the demand for farm equipment is not expected to recover in the near-term.

We maintain an Underperform rating on the stock.
Read the full analyst report on "AGCO"
Zacks Investment Research

Stonewalling Progress

Robert Amsterdam — Mon, 02 Nov 2009 20:19:11 +0000

Mikhael Gorbachev has penned an article in the New York Times reflecting on how the period since the fall of the Berlin Wall (the 20th anniversary of which will be celebrated on Friday) has not necessarily heralded a less distrustful...

BSD Medical’s Hyperthermia Therapy (NASDAQ:BSDM)

Jay Garcilazo — Fri, 30 Oct 2009 19:25:49 +0000

BSD Medical Corporation (NASDAQ:BSDM) today announced that their published study results demonstrated improvement in the overall survival, tumor response rates, and local tumor control from the addition of hyperthermia therapy delivered through BSD-2000 Hyperthermia System. ...

Energy Blast – Oct 30, 2009

Robert Amsterdam — Fri, 30 Oct 2009 09:28:07 +0000

Iran is 'unwilling to accept' a deal that would see most of its enriched uranium shipped abroad. 'Tehran is obviously probing to see whether President Obama can play hardball or whether he can be played.' Russia will share the 'prize'...

Colgate Reports Modest Earnings – Analyst Blog

Zacks Market Commentaries — Thu, 29 Oct 2009 21:23:42 +0000

Colgate Palmolive Company (CL) reported results for the third quarter of 2009 with earnings of $1.12 per share, which was a penny above the Zacks Consensus Estimate of $1.11. Earnings were up 13.1% year-over-year, driven by effective price implementation and ongoing aggressive cost savings program.

Net sales for the quarter were flat year-over-year declining marginally by 0.3% to $3.9 billion as unit volume increased 1.5% and pricing contributed 5.0%. This was partially offset by negative foreign exchange translation of 6.5%. Organic sales (excluding foreign exchange, acquisitions and divestitures) increased 7.0% in the quarter.

North American sales increased 3.0% driven by 1.5% pricing and 5.0% unit volume growth, partially offset by 0.5% negative currency translations. In Latin America, sales grew 5.0% as unit volume increased 3.0% driven by solid gains in Venezuela which were partially offset by an 11.0% negative foreign exchange impact.

In Europe/South Pacific, sales declined 5.5%; however, unit volume increased 2.5% as volume gains in U.K. and Greece, were more than offset by the declines in France, Germany the U.K., Denmark, Greece, Portugal and the GABA business. Sales in Greater Asia/Africa declined 3.0% while unit volume declined 2.5% as volume gains in India, Thailand and Turkey were more than offset by declines in Russia, the Philippines, South Africa and the Ukraine.

Sales in the Hill’s Pet Nutrition business grew 1.5%, however unit volume declined 2.5% and foreign exchange had a negative impact of 0.5%, which was partially offset by a 4.5% increase in pricing. Demand was strong for existing products such as Science Diet Culinary Creations feline products and the expanded line of Science Diet Simple Essentials Treats Canine.

Gross margins expanded 313 basis points (bps) to 59.2% from 56.1% in the prior-year period driven by benefits of restructuring activities and pricing. The operating margin also increased 333 bps to 22.2% versus 19.8% in the prior-year quarter, driven by a 30 bps decline in advertising. Capital expenditures for the first nine months of 2009 were $347 million.

Year-to-date net cash provided by operations increased 34% to $23.7 billion, due to efficient working capital management, especially a reduction in receivable days outstanding. The company has a debt-to-total-capitalization ratio of 52.5%.

Concurrent with the earnings release, management provided the outlook for the remainder of fiscal 2009. Management expects continued improvement in gross margins for the rest of the year, due to moderation in commodity costs and benefits from pricing and cost reduction programs.
Read the full analyst report on "CL"
Zacks Investment Research

Federated Investors Looks Overseas – Analyst Blog

Zacks Market Commentaries — Tue, 27 Oct 2009 21:12:25 +0000

Federated Investors Inc. (FII) is on a lookout for additional expansion after completion of last year’s acquisition, its main focus being international growth.

In 2008, Federated acquired Clover Capital Management Inc. and the assets of the two Prudent Bear Funds and has almost completed the successful integration of the same. Currently, the company aims at expanding distribution for its products, though it is not actively seeking acquisitions targeted to a specific investment expertise, the management does remain open to such deals as well.

Federated reported third quarter 2009 net income applicable to common shareholders of $57.0 million or 56 cents per share compared to a net income of $53.3 million or 52 cents per share in the prior quarter and a net income of $56.2 million or 52 cents per share in the prior-year quarter. Results were ahead of the Zacks Consensus Estimate of 52 cents due to lower-than-expected expenses offsetting lower revenues.

Total revenue decreased 4.3% year-over-year to $293.6 billion primarily due to $36.5 million in voluntary fee waivers related to certain money market funds in order to maintain positive or zero net yields. Falling yields forced Federated and other money fund managers to waive fees and keep clients invested in their products. The company witnessed positive flows into bond and equity funds.

Federated continues to evaluate multiple acquisition opportunities to add to the existing scale, including a money market consolidation deal. It is also contemplating deals for organic growth outside the U.S. but has not evaluated the timing of the same. Federated already has businesses in Germany and London.
Read the full analyst report on "FII"
Zacks Investment Research

Steel Output Mounting – Analyst Blog

Zacks Market Commentaries — Tue, 27 Oct 2009 20:57:53 +0000

According to the data released by the World Steel Association (WSA), global steel output increased to 107 million tons in the month of Sep 2009, down marginally (0.6%) from the same month of the previous year. Month-on-month, steel output improved slightly from 106.5 million tons. World crude steel production has continued to show a steady increase since Apr 2009.

Steel production had reached its highest level in July this year on the back of a moderate rise in demand and the resumption of idled facilities by producers. Total output of 103.9 million tons was an improvement of 4% from 99.8 million tons produced in the last month, but down 11.1% year over year.

All major steel producing countries such as China, Japan, Germany, the U.S., Brazil, Turkey, Russia and Ukraine showed peak monthly figures so far this year. Production in the Middle East, where demand was buoyant last year due to booming infrastructure spending, edged up 2% in September. Monthly steel output in Asia increased 15% to over 60 million tons in September. Of this, production in China − the world’s biggest producer and consumer of steel − climbed 28.7% to 39.4 million tons. However, global steel production was down 32.3% in North America in the month of September while production in Europe saw a drop of 23.7%.

Key steel consuming industries such as auto, shipbuilding and construction have been experiencing weak demand in the last quarters, forcing global steel makers to lower production levels. U.S. Steel Corp. (X) had slashed production by almost 62% during the second quarter of 2009, while Korean steel maker POSCO (PKX) was forced to reduce production for the first time in its history. POSCO curtailed production by about 15% during the period.

However, with steel demand picking up in the last couple of months, United States Steel Corp. is restarting its blast furnace at its Hamilton, Ontario, plant after a nine-month shutdown. U.S. Steel had closed the Hamilton blast furnace in Nov 2008. It suspended the remaining operations at Hamilton and the Nanticoke facilities in March 2009 due to a drop in demand. Both the facilities were running at less than half their capacity.

We expect global steel demand to improve in the rest of 2009 with a strong surge from the user industries. China is expected to continue to remain the largest consumer of steel going forward. The World Steel Association is forecasting a 8.6% year over year decline in steel production, better than the previous forecast of a 14.1% decline driven by a strong uptick in Chinese steel demand. With signs of a recovery across the world from the second half of 2009, the association is anticipating global steel demand in 2010 to grow by 9.2% to 1,206 million tons, which is a restoration to the level of 2008.
Read the full analyst report on "X"
Read the full analyst report on "PKX"
Zacks Investment Research

Grigory Pasko: Ideology – pokhuyism?

Robert Amsterdam — Tue, 27 Oct 2009 16:32:13 +0000

From eight o'clock in the morning I was looking in the window: from it, like in the palm of your hand, you can see school № 1965, which on October 11th was transformed into a polling station. Right until evening...

Evergreen Solar Inc. (ESLR) Opens Berlin-Based Headquarters to Strengthen European Presence

QualityStocks — Mon, 26 Oct 2009 20:25:21 +0000

Evergreen Solar Inc. has emerged as a recognizable figure in the solar power industry. The company develops, manufactures and markets String Ribbon™ solar power products for residential and commercial applications around the world. The solar manufacturer today announced the recent opening of its Europe-based headquarters in Berlin, Germany, which is expected to extend the reach [...]

Corning Modestly Outperforms – Analyst Blog

Zacks Market Commentaries — Mon, 26 Oct 2009 17:44:11 +0000

Corning Incorporated (GLW) reported earnings per share for the third quarter of 2009 of 41 cents, beating the Zacks Consensus Estimate of 39 cents. Quarterly sales were $1.5 billion, up 6% sequentially.

Display Technologies combined glass volume, including Corning’s wholly owned business and Samsung Corning Precision Glass Co., Ltd. (SCP), increased 4% over a very strong second quarter. Volume in the company’s wholly owned business was consistent with the second quarter, while SCP’s volume increased 7%. Glass pricing was comparable to the previous quarter.

Sales in the Display Technologies segment were $679 million, slightly higher than the second quarter. Third-quarter sales were impacted by an earthquake in Japan that affected production at the company’s LCD facility in Shizuoka in August. Display sales were positively impacted by foreign exchange rate movements in the quarter.

Telecommunications segment sales were $450 million, an increase of 3% over the previous quarter. The segment saw continued strength in optical fiber sales in China, as well as strong demand for private network products in North America. The growth rate was impacted by a slowing of fiber-to-the-home demand in North America.

Environmental Technologies segment sales were $167 million, an increase of 27% sequentially, driven primarily by automotive product sales increases in the United States, China and Germany.

Specialty Materials sales were $90 million, a 27% increase over quarter two.

Life Science sales were $92 million, compared to $81 million in the second quarter.

The company’s gross margin for the quarter was 41%. Equity earnings were $418 million, an increase of 16% over last quarter and an all-time record for Corning. Corning completed the acquisition of Axygen Bioscience, Inc. for approximately $410 million.

For the fourth quarter of 2009, the company anticipates its Telecommunications segment sales to be down 15%, due primarily to seasonally lower demand in North America. Environmental Technologies segment sales are expected to be down between 10% and 15% sequentially. Specialty Materials segment sales are expected to be similar to the third quarter or down 5% and Life Sciences segment sales are expected to be up 25%, driven by the Axygen acquisition.
Read the full analyst report on "GLW"
Zacks Investment Research

Evergreen Solar (NasdaqGM: ESLR) Announces Opening of New European Headquarters in Berlin

Dawn Van Zant — Mon, 26 Oct 2009 13:00:00 +0000

MARLBORO, Mass. and BERLIN - October 26 2009 - Evergreen Solar, Inc. (NasdaqGM: ESLR), a manufacturer of String Ribbon solar power products with its proprietary, low-cost silicon wafer technology, today announced that it has opened a new European headquarters in Berlin, Germany

Time for New Stock Market Leadership?

Frank Holmes — Mon, 26 Oct 2009 05:00:00 +0000

This analysis is from John Derrick, U.S. Global Investors Director of Research. The market has rallied dramatically since the March 9 low, with the biggest beneficiary of this rally being low-quality companies. This intuitively makes sense, given that companies with the most troubled outlooks are the ones most likely to have a strong recovery when the dire outcomes predicted at the bottom of the crisis failed to transpire. Quality may have different meanings to different investors, but in a recent research piece, Citigroup ranked performance based on multiple definitions of quality. Samp;P earnings quality ranking, debt-to-capitalization ratio and return on equity were used as proxies for quality. The research universe was the small-cap Russell 2000 Index, but I believe broader market conclusions can be drawn as well. Based on Samp;P earnings quality rankings, companies with C or D (the two lowest categories) ratings returned about 55 percent over the past six months, while the highest-rated stocks returned about 11 percent. As a whole, the Russell 2000 universe returned 30 percent over that time period. This trend is also broadly true for the other measures of quality. Generally speaking, companies with higher debt burdens outperformed companies carrying low debt, and companies with negative return on equity outperformed the broader market as well as the companies with the highest return on equity. Morgan Stanley also recently released a research report that looked at low-priced stocks as a proxy for low-quality and found that Samp;P 500 stocks trading below $5 dramatically outperformed. The same analysis was conducted on the MSCI Europe Index with very similar results, indicating a broad-based global phenomenon. Morgan Stanley highlighted that the recovery so far has been driven by multiple expansion ndash; the valuation that investors are willing to pay has increased, but that has not been supported by an increase in earnings in the current period. But we are now potentially at an inflection point at which the junk rally has more or less run its course and the market is beginning to focus on earnings growth. The business cycle plays a significant role in market valuations in the sense that the market anticipates a recovery and pays up for the anticipated earnings stream. Once the recovery takes hold, however, investors focus on actual earnings power as the primary driver of valuations. One persuasive indicator that the recovery has indeed taken hold can be seen in the ISM Manufacturing Index, which moved above 50 about six weeks ago, indicating that the economy is expanding. What has worked so far in this stock market recovery will not likely carry us into 2010 and beyond, so the time could be right to reposition for the next leg of the recovery. All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. The Russell 2000 Index is a U.S. equity index measuring the performance of the 2,000 smallest companies in the Russell 3000. The Russell 3000 Index consists of the 3,000 largest U.S. companies as determined by total market capitalization. The MSCI Europe Index is a free float-adjusted market capitalization index that is designed to measure developed market equity performance in Europe. As of September 2002, the MSCI Europe Index consisted of the following 16 developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The Samp;P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The ISM manufacturing composite index is a diffusion index calculated from five of the eight sub-components of a monthly survey of purchasing managers at roughly 300 manufacturing firms from 21 industries in all 50 states. #09-734

Niall Ferguson: US empire in decline, on collision course with China

Prieur du Plessis — Sun, 25 Oct 2009 09:50:10 +0000

The US is an empire in decline, according to Niall Ferguson, Harvard professor and author of "The Ascent of Money". This is a thought-provoking contribution from one of the best financial brains around.

Today in Russian Business – Oct 22, 2009

Robert Amsterdam — Thu, 22 Oct 2009 08:00:15 +0000

Deputy Economic Development Minister Andrei Klepach has suggested that the ruble could return to its 2008 high and reach 23 against the dollar next year, if oil prices continue going strong, spelling problems for exporters. The Duma has passed the...

10-21-09 Audio Interview with Caleco Pharma Corp. (OTCBB: CAEH)

Stuart T. Smith — Thu, 22 Oct 2009 00:48:54 +0000

The Company’s business plan is to develop its proprietary technology designed to treat moderate to severe liver maladies, such as elevated liver enzymes and the Hepatitis C viral infection, (the “Liver Health Formula”) as an over-the-counter medication and as a United States Food and Drug Administration (”FDA”) approved pharmaceutical. To date, the Company’s intellectual property [...]

Pacific Crest’s Bachman Says SunPower (Nasdaq:SPWRA) Valuation Appears To Have Peaked

Small Cap Pulse — Wed, 21 Oct 2009 01:54:00 +0000

October 20, 2009 ndash; Analyst Comments ndash; Pacific Crestrsquo;s Mark Bachman said SunPowerrsquo;s (Nasdaq:SPWRA) Q3 will likely be strong, but lsquo;its valuation appears to have peaked.rsquo; Key Takeaways middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Q3 consensus revenue and EPS estimates are $420 million and $0.39, respectively, and lsquo;even with a Q3 beat, and a reiteration of 2009 guidance, valuation has likely already peaked at 25x when using 2010 EPS of $1.35rsquo;middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Suggesting taking a short position into the call ndash; expects short-term investors to take profits following the Q3 print middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Germany is likely to offset weakness in the U.S. ldquo;Have highlighted weak commercial installs, declining U.S. market share, delayed systems revenue and lower ASPshellip;all of which confirm long-term bearish thesis on the stock.rdquo; middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; ldquo;SunPower is not the best of breed and does not deserve a premium multiplehellip;the stock currently trades at 25x our 2010 pro forma EPS estimate of $1.35; we believe 15x is a more appropriate multiple.. and therefore see downside risk to $20.rdquo; * Rates the stock at UNDERPERFORM

Beacon Enterprise Solutions Group, Inc. (BEAC.OB) Continues Engagement with Fortune 100 Pharmaceutical Company

QualityStocks — Mon, 19 Oct 2009 18:20:03 +0000

Today, Beacon Enterprise Solutions Group, Inc., an emerging global leader of high performance Information Transport Systems (“ITS”) infrastructure solutions, announced that it has expanded its relationship with an existing Fortune 100 pharmaceutical client to provide ITS infrastructure documentation, design, installation and ongoing management services. Valued at approximately $27 million, the engagement will initially focus on [...]

IBM’s Cost-Effective Offerings – Analyst Blog

Zacks Market Commentaries — Mon, 19 Oct 2009 17:24:12 +0000

International Business Machines (IBM) plans to lower costs for its clients via its offerings, which is posing a major challenge to businesses due to the difficult economic scenario.

Thus IBM released new IT Asset Management software to help companies manage the costs brought on by the proliferation of IT assets such as mobile devices, laptops, printers, switches, sensors and billions of interconnected devices. The software also helps control the complexity of software licensing and increased pace of compliance audits.

The company expects software license reuse and audit exposure savings of $3 million in 2009 and $5 million annually starting from 2010 if a company implements a software license management program using IBM’s IT Asset Management software.

In order to reduce cost, IBM announced research collaboration with the Industrial Development Agency of Ireland (IDA Ireland) to develop and expand its Risk Management Analytics capabilities in Ireland.

Under the agreement, IBM will use the expertise of its Research labs to develop enhanced methods and tools that will help companies in industries such as manufacturing, pharmaceutical, healthcare and government to manage risk efficiently. The collaboration in Ireland will be joining IBM's worldwide network of advanced analytic centers in the U.S., Germany and the U.K.

We believe that IBM is coming up with new cost efficient data centers and new IT Asset Management software to lower costs and is also focusing on new collaborations that will help customers manage their operations effectively amid the economic uncertainty. This is a positive for the company and helps it win new businesses. The expansion of its global network of analytics focused centers is expected to benefit the company going forward.

IBM faces strong competition from business intelligence software firm SAS and enterprise software giant SAP AG (SAP).

We have a Neutral rating on the stock.
Read the full analyst report on "IBM"
Read the full analyst report on "SAP"
Zacks Investment Research

DrStockPick.com Stock Report! 10/19/09, CVAT, XLNX, ARMH, HPQ, TXN, NYX, F

Dr. Stock Pick — Mon, 19 Oct 2009 13:03:35 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Monday October 19, 2009 DrStockPick.com Stock Report! ************************************************************** Cavitation Technologies, Inc. (CTI) (OTC Bulletin Board: CVAT) has signed Miura Engineering Co., Ltd. Tokyo, Japan (www.miura21.co.jp) as its new agent to serve markets in Japan for CTI’s Nano-Cavitation Process Systems. Miura is a leading [...]

Feedback from Buttonwood Gathering

Prieur du Plessis — Mon, 19 Oct 2009 08:12:12 +0000

The Buttonwood Gathering, a conference bringing together global regulators and bankers to discuss and debate new ideas and develop a new set of guidelines moving forward, has just taken place. Michael Panzer, writer of the Financial Armageddon blog, was in attendance and has kindly shared some of the more interesting quotes on his blog, as reported in this post.

Prieur’s readings (October 17, 2009)

Prieur du Plessis — Sat, 17 Oct 2009 08:07:11 +0000

This post provides links to a number of thought-provoking articles I have read over the past few days that you may also find of interest. Please also add the links to any other worthwhile articles you would like to share to the comments section.

LMT, PWRM, NOC, CSRH, IBM, CVAT, CME, AQNM, DrStockPick.com Stock Report!

Dr. Stock Pick — Fri, 16 Oct 2009 18:25:55 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Friday October 16, 2009 DrStockPick.com Stock Report! LMT, PWRM, NOC, CSRH, IBM, CVAT, CME, AQNM ************************************************************** LMT, Lockheed Martin Corporation LMT is a world leader in systems integration and the development of air and missile defense systems and technologies, including the first operational hit-to-kill missile. It also [...]

RA’s Daily Russian News Blast – October 14, 2009

Robert Amsterdam — Wed, 14 Oct 2009 08:25:08 +0000

TODAY: Did Clinton get what she wanted?; media reports possible silence for sanctions deal; START treaty progress. Georgia accused of abetting al-Qaida; Putin 'satisfied' with job. German official castigates Medvedev for investigation into Stalin-researching historian; the man of steel's grandson...

Russia’s Opel Grab in a Nutshell

Robert Amsterdam — Tue, 13 Oct 2009 19:29:39 +0000

From the Financial Times:"The Opel deal was for Russia a classic divide and conquer," the senior banker says. "They got the Germans to betray their other European partners. They said, 'If you do a deal with us we won't fire...

China, India Look Big for Harman – Analyst Blog

Zacks Market Commentaries — Mon, 12 Oct 2009 17:29:13 +0000

Harman International Industries Incorporated (HAR) is seeing significant growth opportunities in Asian markets, particularly China and India. President, Chairman and CEO Dinesh C Paliwal recently stated that the company expects its earnings from China to exceed $1 billion over the next five years. Revenue from India is expected to reach $250 million during the same time period.

Management also announced the opening of a new R&D center in the Huang Pu commercial district of Shanghai yesterday, which is expected to complement its existing manufacturing facilities in Suzhou and Shenzhen. We think this is an effective way of reducing costs, as R&D engineers typically command higher pay than manufacturing personnel. The company’s current workforce in China is approximately 1000.

Simultaneously, the company launched its latest generation, scalable automotive infotainment system, which has been designed over the past year in Asia, Europe and the US. The product will be manufactured at the Suzhou facility.

The new system is modular and software-based, with improved graphics and a friendly user-interface. The system includes features such as automotive audio and video (seamless playback of music, movies and other multimedia devices regardless of format), navigation and wireless technologies for new generation connectivity options (including Internet radio and social networking sites). It is based on the company’s QNX operating system.

Users would be able to pay separately for the modules they choose to deploy.

Harman is a leading provider of audio and infotainment products for the automotive, consumer and professional markets. The company sells its products under several premium consumer audio brands, which include JBL, Harman Kardon, and Infinity.

The company’s leading customers in the automotive market include Volkswagen (VWA.AS), BMW, Daimler AG (DAI), General Motors and Hyundai.

The largest Asian customers are Shanghai General Motors, Korea's Hyundai, Ssangyong, and Kia auto brands, and Germany’s BMW. It also offers professional audio system installations to Shanghai Grande Theater and Oriental Arts Center, Nanjing Stadium and the Hard Rock Café restaurant chain.
Read the full analyst report on "HAR"
Read the full analyst report on "VWA.AS"
Read the full analyst report on "DAI"
Zacks Investment Research

Two Sagging Economies… Two Laid-Back Banks

Investment U — Fri, 09 Oct 2009 16:59:40 +0000

Two Sagging Economies… Two Laid-Back Banks by Martin Denholm, Senior Editor Anemic. Stagnant. Plodding. Pick your favorite… it doesn’t matter. They all describe the state of the British and Eurozone economies. Two weeks before the official third quarter U.K. GDP figure is released, the National Institute of Economic and Social Research (NIESR) delivered a somber verdict. [...]

GOOG PowerMeter Much Smarter – Analyst Blog

Zacks Market Commentaries — Wed, 07 Oct 2009 19:48:27 +0000

Google’s (GOOG) PowerMeter has started a new chapter. When the company first introduced the free electricity monitoring software back in February, usage was limited to those consumers that already had a smart meter. Management has since been in talks with various device makers and utilities in search of a solution.

The company has now announced its agreement with Energy Inc., which is the maker of a power usage measuring device called TED 5000, or “The Energy Detective". The device can be bought at a minimum cost of $200, which can go up to $300, depending on the features selected.

Installation of Google’s PowerMeter software on the device enables consumers to get near-real time information on power consumed. The system can provide information at 10-minute intervals, compared to roughly a day for the smart meter system currently offered by some utilities.

The delay related to utilities is due to the fact that information has to be aggregated and transferred back to the control center back office where it is again de-aggregated and connected to users’ accounts.

We believe this is just the first of a number of similar deals that should materialize in the next few quarters. First, because the agreement is non-exclusive; second, because Google continues to work with its utility partners, Sempra Energy's (SRE) San Diego Gas & Electric and Germany's Yello Strom; and third, because this agreement covers only North American consumers. We expect Google to announce similar agreements in other geographies as well.

Earlier this year, the Semiconductor Industry Association (SIA) published a study by the Washington DC-based American Council for an Energy-Efficient Economy (ACEEE) commissioned by SIA. The study concluded that semiconductor enabled technologies would play a key role in the conservation of power over the next two decades.

Consequently, the number of technology companies getting involved in the process continues to increase. For example, International Business Machines (IBM) and Cisco Systems (CSCO) have both started programs focused on the smart grid. On the lighting front, companies like Cree (CREE), Phillips Lumileds, Osram and others have also focused initiatives based on energy efficiency.
Read the full analyst report on "GOOG"
Read the full analyst report on "SRE"
Read the full analyst report on "IBM"
Read the full analyst report on "CSCO"
Read the full analyst report on "CREE"
Zacks Investment Research

Zacks Bull and Bear of the Day Highlights: Tiffany, Developers Diversified, Alcoa, Barrick Gold and DuPont – Press Releases

Zacks Market Commentaries — Wed, 07 Oct 2009 15:00:06 +0000

For Immediate Release

Chicago, IL – October 7, 2009 – Zacks Equity Research highlights Tiffany (TIF) as the Bull of the Day and Developers Diversified (DDR) the Bear of the Day. In addition, Zacks Equity Research provides analysis on Alcoa(AA), Barrick Gold (ABX) and DuPont (DD).

Full analysis of all these stocks is available at http://at.zacks.com/?id=2676

Here is a synopsis of all five stocks:

Bull of the Day:

Tiffany (TIF) is well positioned to deliver robust sales and earnings growth through leveraging capital investments made over past several years in distribution, manufacturing and diamond sourcing processes. The company, which holds a significant position in the world jewelry market, is poised to benefit from its increased geographic diversification once the economy rebounds.

However, to weather the downturn, Tiffany is concentrating more on smaller size store formats that offer selected collections of lower priced higher-margin products, which in turn enhance store productivity.

Further, to protect its shrunken revenue base, the company has been paring its cost structure by reducing its headcount and trimming capital expenditure with fewer store openings. Consequently, our Outperform rating on the stock persists.

Bear of the Day:

Developers Diversified (DDR) has a relatively high leverage compared to its peers due to acquisitions over the past several years. Developers Diversified is raising cash through asset sales, debt, and by selling 30 million shares and additional warrants to the Otto family, a shopping center developer in Germany.

The equity sale is dilutive and the long-term sustainability of the company is under doubt. Our recommendation for the company is Underperform as we anticipate it to perform well below the broader market.

Top International Bond Funds – Mutual Fund Commentary

Alex Kolb — Wed, 07 Oct 2009 06:20:15 +0000

Today we are featuring top-performing “International Bond" Fixed Income mutual funds, which primarily invest in foreign and U.S. bonds in pursuit of current income.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank International Bond Fixed Income Funds.

3 Solid Samples

Loomis Sayles International Bond A (LSIAX) seeks high total investment return through a combination of high current income and capital appreciation.

The fund normally invests at least 80% of its net assets in fixed-income securities of issuers located outside the United States. It is non-diversified.

Shareholders have to make a minimum initial investment of $2,500 to enter this Zacks#1 Rank (“Strong Buy") fund. It has an expense ratio of 1.10%.

Putnam Global Income A (PGGIX) was incepted in June 1987. The investment seeks current income with preservation of capital and long-term total return as secondary considerations.

The fund primarily invests in investment-grade debt securities. It invests mostly in bonds that have maturities of at least three years.

D. William Kohli has been lead manager at the fund since July 1994. It has topped the total returns of its benchmark index in the last 1-, 3- and 5-year periods.

Goldman Sachs Global Income A (GSGIX) seeks current income; capital appreciation is a secondary consideration. The fund normally invests a bulk of its assets in fixed-income securities.

The fund may invest more than 25% in the securities of corporate and governmental issuers located in Canada, Germany, Japan and the United Kingdom as well as in the securities of US issuers. It must invest at least 30% of assets in securities dominated in US dollar.

The fund enters into foreign currency transactions. It distributes dividends monthly and capital gains annually.

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

Zacks Investment Research

Thermo Fisher Acquires Brahms AG – Analyst Blog

Zacks Market Commentaries — Tue, 06 Oct 2009 17:56:20 +0000

Thermo Fisher Scientific Inc. (TMO) recently completed the acquisition of Brahms AG for roughly $470 million (€330 million). Brahms AG is a leading provider of specialty in vitro diagnostic tests based on patented biomarkers for cardiovascular, sepsis and pulmonary diseases. The company also provides intensive care treatments and prenatal screening and is widely recognized for its flagship test, Procalcitonin (PCT).

The acquisition is expected to be accretive to Thermo Fisher’s earnings in 2010. The acquisition widens Thermo Fisher’s global reach and will increase its top-line. Brahms AG generated revenues of approximately $105 million (€75 million) in 2008. Thermo Fisher plans to integrate Brahms into its Analytical Technologies Segment and use the firm’s former headquarters in Germany as the European Center of Excellence for its clinical diagnostics business.

Thermo Fisher is a scientific instrument maker and a world leader in serving science. The company was formed through the merger of Thermo Electron Corporation with Fisher Scientific International Inc. in Nov 2006. Thermo Fisher Scientific serves its customers through two principal brands: Thermo Scientific and Fisher Scientific.

Thermo Scientific is the company’s technology brand that offers a complete range of high-end analytical, laboratory instruments, software, services, consumables and reagents to enable integrated laboratory workflow solutions. The Fisher Scientific brand offers a complete portfolio of laboratory equipment, chemicals, supplies and services used in healthcare, scientific research, safety and education markets.

Thermo Fisher Scientific operates through two business segments - Analytical Technologies and Laboratory Products and Services. The company generated revenues of $10,498 million in fiscal 2008, an increase of approximately 8% year over year. Thermo Fisher’s main competitors are Agilent Technologies Inc. (A), Beckman Coulter Inc. (BEC), Becton Dickinson and Company (BDX), Danaher Corporation (DHR), etc.
Read the full analyst report on "TMO"
Read the full analyst report on "A"
Read the full analyst report on "BEC"
Read the full analyst report on "BDX"
Read the full analyst report on "DHR"
Zacks Investment Research

TEF Preps 4G LTE Trial – Analyst Blog

Zacks Market Commentaries — Fri, 02 Oct 2009 23:06:11 +0000

Spanish Telecom giant Telefonica (TEF) has unveiled the details of a large-scale field trial project related to the company’s 4G network services, which is based on the Long Term Evaluation (“LTE") mobile broadband technology.

The company will test run its 4G LTE network in six countries across Europe and Latin America. The outcome of the trials will help Telefonica to chalk out its next phase of network deployment strategy.

Telefonica will conduct 4G LTE trials during the next six months in multiple European countries such as Czech Republic, Germany, Spain and the UK, while the Latin American trials will be staged in Brazil and Argentina. The company has already conducted its first LTE trial in Madrid in April 2009, which has demonstrated encouraging throughput levels.

Telefonica has also announced network infrastructure and equipment vendors to facilitate the field testing. It has reportedly selected six technology providers: Alcatel-Lucent (ALU), Ericsson (ERIC), Huawei, NEC, Nokia Siemens Networks and ZTE.

Leading carriers across the world have adopted LTE as the base technology standard for 4G network upgrade initiatives due to its fast data transfer capability. LTE offers rapid downlink and uplink speeds that averages 100 megabits per second (Mbps) and 50 Mbps, respectively, which is competitive or faster than other leading 4G standards, including WiMax.

Telefonica has recently expanded its strategic alliance with the second-largest Chinese carrier China Unicom (CHU). This extended collaboration is expected to offer significant technological and operational synergies. Additionally, the companies are likely to collaborate in future technology upgrades, such as the development of 4G LTE technology.

By moving to the 4G LTE network, Telefonica will offer its customers super-fast mobile broadband experience, representing an encouraging opportunity to improve customer retention. The company hopes to offer peak network speed of up to 340 Mbps in ideal conditions. Moreover, the ultra high-bandwidth multimedia data applications fostered by the 4G LTE network will boost revenue per user through increased minutes of use.

Read the full analyst report on "TEF"
Read the full analyst report on "ALU"
Read the full analyst report on "ERIC"
Read the full analyst report on "CHU"
Zacks Investment Research

Why You Should Invest in the ‘New’ Germany

Contrarian Profits — Wed, 30 Sep 2009 22:16:52 +0000

pPundits greeted Angela Merkel’s convincing election win in Germany Sunday with a collective yawn. Commentators think the German economy is sluggish and over-dependent on exports, and believe that a change in the German government from a grand coalition to a center-right coalition will make little policy difference./p pI think that’s wrong. It’s an erroneous viewpoint that’s symptomatic of the short memories of the chattering media. It’s also one that could cause investors to miss out on a href="http://www.moneymorning.com/2009/06/18/germany-emerging-market/" target="_blank"one of the best profit plays in the global marketplace today/a./p pI’m talking about Germany – the real powerhouse of Europe./p h3The “New” Germany/h3 pFrom the 1950s to the 1980s, West Germany consistently delivered high growth rates and low inflation. West German engineering proved superior to any other#8230;/p

ProLogis Announces Spanish Solar – Analyst Blog

Zacks Market Commentaries — Wed, 30 Sep 2009 20:37:18 +0000

ProLogis (PLD), one of the leading global providers of distribution facilities, has recently announced its third new 4.8 megawatt solar project in Spain as part of its renewable energy program. The solar project would be installed on eight rooftops at ProLogis Park Sant Boi in Barcelona and ProLogis Park Alcala in Madrid.

With these installations, ProLogis currently has solar projects on 20 buildings spanning 7.2 million square feet of roof space in the U.S., Japan, France, Germany and Spain. On completion of the new project, ProLogis would generate more than 11 megawatt of energy, which is equivalent to the power consumption in over 1,100 households per year.

For the current solar project in Spain, ProLogis has leased 2 million square feet of roof space to Recurrent Energy, a leading provider of solar energy and power distribution company. Recurrent Energy will own and operate the project, and will sell the energy produced to local utility through a feed-in tariff. On the other hand, ProLogis will earn fees for construction management services and roof rental.

Currently, ProLogis has more than 450 million square feet of roof space across the globe, which offers unobstructed and readily available space for developing large-scale solar projects. Including the new project, ProLogis is utilizing less than 2% of the available roof space, which provides an upside potential for the company.

In order to capitalize on this opportunity and procure new business, ProLogis has formed a Global Renewable Energy Group. This would further enable the company to expand on the wind and solar projects across its industrial rooftops that offer unique host-site opportunities for utilities and private companies that invest in renewable energy.
Read the full analyst report on "PLD"
Zacks Investment Research

Who’s Buying Oil?

Contrarian Profits — Wed, 30 Sep 2009 19:35:14 +0000

pAs the US strategic petroleum reserve (SPR) approaches capacity (721.5 million barrels filled out of a total possible 727 million, and will be filled by January 2010), the federal government will fade out of the oil-buying business. Some bearish traders believe that this factor can weigh in on prices, since most petroleum stocks in the United States are government-held rather than private. Bullish traders have also used the filling of the Chinese SPR as a reason that oil should go much higher./p pThe team at Casey’s Energy Opportunities believe that strongplanned government buying or selling of crude oil for SPRs actually have very little impact in the overall market./strong However, an overall drawdown of worldwide inventory could put downward pressure on the#8230;/p

The Grinder

Dr. Stock Pick — Wed, 30 Sep 2009 19:10:37 +0000

We are proud to broadcast “The Grinder Show” Grinding up and breaking down America’s businesses for you with topical content, facts, and analysis. Every Sunday, corporate leaders, experts in their fields and your opinions and questions revealed. Live Sundays 11 am to 12 pm EST About David Webb David Webb has over a decade of major market local and [...]

Inflation is Our Future

Contrarian Profits — Wed, 30 Sep 2009 17:25:03 +0000

pOn one hand, the deflationists are claiming that given the extremely high debt levels in the West, further inflation is impossible. On the other side of the argument, many proponents of inflation are calling for Zimbabwe style hyperinflation. In this business, everyone is entitled to their opinion; however it is my contention that we will get neither deflation nor hyperinflation. strongIf my assessment is correct, once business activity picks up, our world will have to deal with high inflation./strong/p pAlthough I have great sympathy for the deflation crowd, given the reckless attitude of the central bankers and their ability to create debt-based money, I do not believe deflation (contraction in the supply of money and total debt) is very likely./p pFor sure,#8230;/p

Puru Saxena: Inflation is our future

Prieur du Plessis — Wed, 30 Sep 2009 06:54:52 +0000

"Given the uncertainty in the world today and the ticking inflationary time-bomb, my view is that gold will soon embark on its north-bound journey. So, I suggest that investors hold on to gold and the related mining companies which will probably continue to perform well until next spring," said Puru Saxena in this guest contribution.

Metro Plans New Supermarket In Yantai

China Retail News — Tue, 29 Sep 2009 19:30:26 +0000

Germany-headquartered retailer Metro has signed an investment contract with the government of Yantai, Shandong to build a new supermarket in the Zhifu district of the city. With a total investment of USD10 million, this new Metro supermarket will be independently developed by the Metro Group. The contract was signed during the Third Yantai International Wine Festival in [...]

Citi Sells Chunk of Diners Club – Analyst Blog

Zacks Market Commentaries — Tue, 29 Sep 2009 18:44:01 +0000

Citigroup, Inc. (C) has sold off a part of its Diners Club credit card processing business to Elavon, a subsidiary of US Bancorp (USB), as it continues to rid itself of unwanted assets.

Elavon acquired Citibank's Diners Club Card merchant-location portfolio in Western Europe, which represents more than 75,000 merchants. Small and mid-size businesses that accept Diners Club cards in the region will now process their transactions through Elavon. Terms of the deal were not disclosed.

Separately, Elavon has also signed an agreement with Diners Club International, a unit of Discover Financial Services (DFS). The agreement will enable Elavon to provide processing, funding and customer support services for merchants that accept Diners Club International cards in the U.K., Ireland, France, Switzerland and Germany.

Citigroup, once the largest U.S. bank by assets, fell behind last year after a series of acquisitions by rivals. The bank has been severely hurt by billions in losses and write-downs of problem loans and toxic assets.

During the second quarter of 2009, Citigroup reported results separating the firm into Citicorp and Citi Holdings. The company is currently undergoing a major restructuring in its businesses and plans to hold down its assets and divest non-core businesses in Citi Holdings.

The U.S. government injected $45 billion in bailout funds into the bank, $25 billion of which was recently converted to a 34% ownership stake. Top-level management at the company is conceiving plans to downsize the government’s stake in the company through a multibillion-dollar stock offering.

Last week, Citigroup also decided to scale back its U.S. retail footprint to just six major metropolitan areas and limit lending mostly to wealthy customers.

Citigroup will release its third quarter 2009 earnings on Oct. 15, 2009 with a conference call scheduled later in the day to discuss its results. Ahead of its results, we maintain our Neutral recommendation on the stock.
Read the full analyst report on "C"
Read the full analyst report on "USB"
Read the full analyst report on "DFS"
Zacks Investment Research

DDR Offers Senior Unsecured Notes – Analyst Blog

Zacks Market Commentaries — Tue, 29 Sep 2009 15:50:10 +0000

Developers Diversified Realty Corporation (DDR), a real estate investment trust (REIT), has recently offered $300 million of senior unsecured notes scheduled to mature in 2016, at a price of 99.42% with a yield to maturity of 9.75%.

Developers Diversified expects to raise net proceeds of approximately $295 million, after deducting underwriting discounts and other expenses related to the offering. The company intends to utilize the cash to repay short-term debt and to reduce outstanding debt under its revolving credit facility.

Developers Diversified had earlier decided to sell 30 million shares and issue additional warrants to purchase up to 10 million shares to the Otto family, a shopping center developer in Germany. Although both debt and equity financing will provide the much-needed cash, they could potentially leverage the balance sheet and dilute earnings.

Headquartered in Beachwood, Ohio, Developers Diversified acquires, owns, develops, leases, and manages shopping centers and business centers across 45 states in the U.S., along with Puerto Rico, Brazil, Russia, and Canada. At the end of the second quarter of 2009, the company owned and managed 690 retail operating (including joint ventures) and development properties spanning approximately 151 million square feet.
Read the full analyst report on "DDR"
Zacks Investment Research

Westerwellian Foreign Policy

Robert Amsterdam — Mon, 28 Sep 2009 22:27:01 +0000

With so many changes afoot in Germany following the elections, there is surprising little discussion about how all this is going to affect relations with Russia. There's a pretty good reason for that, as everyone assumes the likely appointment of...

European Stocks Down, German Election Boosts Utilities

Contrarian Profits — Mon, 28 Sep 2009 15:20:48 +0000

pWorld stocks hit a 12-day low on Monday, depressed by recent weak U.S. economic data and failing to find support from the G20 summit, while the yen attracted fresh flows to hit an eight-month high against the dollar./p pWeaker-than-expected U.S. housing sales and durable goods orders on Friday drove U.S. stocks lower, and world and European stocks followed that trend on Monday./p pLeaders of the Group of 20 rich and developing nations pledged on Friday to bring the global economy back into balance but their statement contained few surprises and investors are already looking ahead to U.S. employment data at the end of this week./p pGlobal equities and other higher risk assets have risen sharply in the last six months on growing optimism#8230;/p

Today in Russian Business – September 28, 2009

Robert Amsterdam — Mon, 28 Sep 2009 09:18:40 +0000

Ria-Novosti reports that first deputy prime minister Igor Shuvalov believes the path towards a customs union with Belarus and Kazakhstan is clear. Bank of America Corp. has increased Russia's economic growth forecast for 2010 to 3.9% from 2.4%. Citigroup Inc....

Merkel Gets another Term

Claus Vistesen — Sun, 27 Sep 2009 19:15:34 +0000

In case you had not noticed, Germany has spent this Sunday electing a new government and judged by the incoming bulletins the current chancellor Angela Merkel will be getting another term, with another coalition mind, and thus the dubious honor of leading Germany out of its worst recession in a long time, here is the BBC's Gavin Hewitt;

From the moment the first exit polls appeared, the celebrations began at the Christian Democrats' Headquarters in Berlin. Every good result was met with whoops and a clinking of beer glasses. They even managed to offer sausages with "CDU" branded on them! Angela Merkel's supporters had grown nervous in recent days that they might have to continue their awkward partnership with the Social Democrats.

Soon it sunk in that Germany would have a centre-right government. It was more than many at Mrs Merkel's party headquarters had dared to hope for. One woman told us she thought it would be bad for Germany if the current coalition had continued. When Angela Merkel arrived she was met with cries of "Angie, Angie". She had made the election about herself and so this was a significant victory for her.

Although this is a shift to the right, Angela Merkel stressed that she wanted to be "the Chancellor of all Germans". Certainly her record in power suggests she will be pragmatic. In 2005 she had talked of radical economic reforms. Now she has the opportunity to reveal where her true instincts lie.

In order to add some economic perspective on this, Global Economy Matters will be featuring a look at the Germany economy from both a current as well as a theoretical perspective, so stay tuned.

On Russia, Merkel = Schröder?

Robert Amsterdam — Fri, 25 Sep 2009 20:48:27 +0000

A very interesting if not controversial article from Luke Harding makes the argument that we are seeing continuity in foreign policy toward Russia under both Gerhard Schröder and Angela Merkel. In my experience, the change has been night and day...

G-20 Heats Up…

Contrarian Profits — Fri, 25 Sep 2009 19:07:47 +0000

p Dollar#8217;s rally is cut short#8230;Major problems for loans still exist#8230;Yen rallies on exporter repatriation#8230;Kiwi gets whacked! And Now#8230; Today#8217;s Pfennig!/p pGood day#8230; And a Happy Friday to one and all! It#8217;s still raining here in St. Louis this morning, but I won#8217;t that get me down, as it is a Friday! G-20 has gotten a bit ugly, folks#8230; Seems everyone just can#8217;t seem to get along! Imagine that! 20 different countries, and now they want to be able to watch another country#8217;s finances and comment on them! Oh, I can see that working out real well! NOT!/p pSo#8230; Yesterday, we had the dollar gaining back the ground that it had lost the previous day, but at the end of the day, we#8217;re#8230;/p

Oops, Did I Say That Out Loud?

Contrarian Profits — Thu, 24 Sep 2009 17:31:51 +0000

pA Wild and Wacky Wednesday#8230;FOMC leave stimulus and QE in place#8230;Will G-20 try to throw cold water on commodities? GATA receives a letter from the Fed#8230;And Now#8230; Today#8217;s Pfennig/p pGood day#8230; And a Thunderin#8217; Thursday to you! It#8217;s Thundering and raining here, so I felt that naming today a #8220;Thunderin#8217; Thursday#8221; was bang on! We had a wild and wacky Wednesday yesterday, with the Fed Heads playing the part of the court jester#8230; And#8230; I want to know, right here, right now, why the media isn#8217;t blasting Fed Head Honcho Big Ben Bernanke! I#8217;ll tell you why they should be, in a minute#8230;/p pOK#8230; As I said, we had a wild and wacky Wednesday yesterday, as the non-dollar currencies went for a#8230;/p

RHT, APDN, UNDT, DrStockPick.com Watch List! for Thursday September 24, 2009, Red Hat Inc., Applied DNA Sciences Inc., APDN.OB and Universal Detection Technology, UNDT.OB

Dr. Stock Pick — Thu, 24 Sep 2009 01:40:18 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ DrStockPick.com Watch List! My Picks for Thursday September 24, 2009, are: ************************************************************** RHT, Red Hat Inc. RHT is the leader in enterprise Linux and is the most recognized open source brand in the world. Solutions include Red Hat Enterprise Linux, JBoss Enterprise middleware, and a broad range of [...]

Catching Up With Richard Duncan…

Contrarian Profits — Wed, 23 Sep 2009 19:03:06 +0000

pNon-dollar currencies give back very little#8230;The Unemployed are remaining unemployed#8230; FOMC puts away the board games today#8230; China invokes a #8220;Public Morals#8221; defense#8230; And Now#8230; Today#8217;s Pfennig!/p pGood day#8230; And a Wonderful Wednesday to you! Well, the Fed Head put away the board games today, and make an announcement this afternoon#8230; Yawn#8230; Norway#8217;s Norges Bank will also make an announcement with theirs coming this morning. I still contend that the Norges Bank will keep rates unchanged and give a hint as to when their rate hike cycle will begin. If that were to happen as I think, then it would be very bullish for the krone#8230;/p pWell! The non-dollar currencies held ground gained yesterday, giving back, oh-so-little to the profit taking. The#8230;/p

Suntech Beats World Record – Analyst Blog

Zacks Market Commentaries — Wed, 23 Sep 2009 17:45:12 +0000

Suntech Power Holdings Co. Ltd. (STP) recently set a new world record for multi-crystalline module conversion efficiency (aperture area only) of 16.53%. The company topped its own prior record of 15.6% set in the last month which beat the long-standing world record of 15.5% set by Sandia National Labs 15 years ago. The new world record conversion efficiency was measured by the Fraunhofer Institute for Solar Energy Systems ISE.

Suntech Power based from Wuxi, China, is a leading solar energy company in the world. The company designs, develops, manufactures and markets PV cells and modules. It also provides PV system integration services in China. Suntech caters to a worldwide customer base spread around Spain, Germany, the United States, China, South Korea, Italy, the Middle East, Australia and Japan.

For its multi-crystalline silicon modules, Suntech uses its patent-pending Pluto PV cells utilizing solar grade silicon. The Pluto technology for crystalline silicon solar cells improves power output by up to 12% compared to conventional production methods.

The company is well positioned to benefit from the Chinese solar subsidy program. China is aiming to increase its installed solar power capacity to 2GW by 2011 from 140MW at the end of fiscal 2008. We maintain our Neutral recommendation on the shares.

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