Stock Market News & Stocks to Watch from StraightStocks » Italy

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

Energy Blast – Nov 23, 2009

Robert Amsterdam — Mon, 23 Nov 2009 11:41:42 +0000

Iran began five-day, large-scale air defense war games yesterday aimed at protecting its nuclear facilities from attack. Changes in the permafrost in western Siberia are costing Russian oil companies a reported $1.9 billion every year in damage repair for infrastructure...

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

This Small Oil Producer is Ripe for a Takeover… Here’s How to Profit

Investment U — Fri, 20 Nov 2009 18:18:58 +0000

This Small Oil Producer is Ripe for a Takeover… Here’s How to Profit by Sheena Martin, Contributing Editor Friday, November 20, 2009 Takeovers are big news in the market at the moment. In fact, did you know that takeovers have the biggest one-day gain in stocks for any asset? As my colleague – and takeover expert [...]

Etrion Corp. (TSX: ETX) and SunPower Corp. (NASDAQ:SPWRA) Team Up to Deliver Four Italy-based Solar Plants

QualityStocks — Thu, 19 Nov 2009 20:47:51 +0000

Canadian energy company Etrion Corporation (TSX: ETX) and U.S.-based solar manufacturer SunPower Corp. (NASDAQ:SPWRA) (NASDAQ:SPWRB) today announced an agreement to build four solar power plants in the Puglia region of southern Italy. SunPower has more than 500 megawatts of solar power plants installed or under contract around the world, including Italian power plants in Milan [...]

Stable Authoritarianism

Robert Amsterdam — Mon, 16 Nov 2009 14:47:34 +0000

From time to time, La Russophobe forwards us links to what they are publishing. This posting on subnational authoritarianism in particular is quite interesting. Writing in the Russian Analytical Digest, Vladimir Gelman argues that the processes of political recentralization of...

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).

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

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.

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.

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

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.

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

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

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

Zacks Investment Research

Prieur’s readings (November 16, 2009)

Prieur du Plessis — Sun, 15 Nov 2009 14:46:44 +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.

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

The Euro Is Overvalued

David Taggart — Fri, 13 Nov 2009 10:17:37 +0000

One of our major themes here at The Macro Trader over the past two years has been to short Europe. We mean that in a general sense as we have been short Spain and Italy off and on for over a year and are bearish on most things EU relative to most of the world. [...]

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.

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).

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 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.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

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

Zacks Investment Research

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"
Read the full analyst report on "DT"
Read the full analyst report on "FTE"
Read the full analyst report on "TEF"
Read the full analyst report on "VZ"
Zacks Investment Research

Zacks Analyst Blog Highlights: Enzon, Merck, OSI Pharmaceuticals, Pfizer and Bank of America Corporation – Press Releases

Zacks Market Commentaries — Wed, 11 Nov 2009 12:55:57 +0000

For Immediate Release

Chicago, IL – November 11, 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: Enzon (ENZN), Merck (MRK), OSI Pharmaceuticals (OSIP), Pfizer (PFE) and Bank of America Corporation (BAC).

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 Tuesday’s Analyst Blog:

Enzon Beats, Announces Sell-off

Enzon records revenues from three sources -- products, royalties and contract manufacturing. The three segments recorded a decline of 1%, 6% and 56%, respectively, compared to the year-ago period.

Enzon has four marketed products -- Oncaspar for the treatment of acute lymphoblastic leukemia (ALL); DepoCyt for lymphomatous meningitis; Abelcet for antifungal infection related to cancer and Adagen used to treat severe combined immunodeficiency disease (SCID), commonly known as the "bubble boy" disease. Apart from Oncaspar, whose sales remained unchanged from the year-ago period, the other three recorded a decline of 4%, 15% and 10%, respectively.

Enzon earns royalties from several products, which have been manufactured using its proprietary PEGylation technology -- Pegintron, marketed by Merck (MRK); Macugen, marketed by OSI Pharmaceuticals (OSIP) and Pfizer (PFE); Pegasys, marketed by Hoffmann-La Roche; and Cimzia, marketed by UCB Pharma. The company earns a majority of royalty revenue from sales of Pegintron, which is approved for the treatment of hepatitis C. Unfavorable movement of the foreign exchange brought down royalty revenues during the quarter.

Additionally, cancelled shipments and discontinuation of customer schedules were responsible for lower contract manufacturing revenues. We expect contract manufacturing revenues to suffer going forward since many of the current contracts are to expire in the next two years.

R&D expenses during the quarter were $15.8 million, unchanged from the year-ago period. The company has several pipeline candidates: PEG-SN38, the HIF-1 alpha antagonist, Survivin (antagonist) and other LNA- and PEGylation- based programs.

The company’s financial position continues to worry us. At the end of the reported quarter, total cash reserves including investments were $201.3 million, down compared to $206.9 million at the end of December 2008, primarily due to the repurchase of $20.4 million of notes in 2009 offset by the cash provided by operating activities.

Shortly after announcing its third quarter results, Enzon announced that it has decided to sell its specialty pharmaceutical business to the Sigma-Tau group of Italy for $300 million. In addition, the company is eligible to receive another $27 million based on success milestones and royalties of 5% - 10% on incremental net sales above a 2009 baseline amount from its four marketed products through 2014.

BofA Extends $184B in Credit

In its latest quarterly Lending & Investing Initiative report, Bank of America Corporation (BAC) said on Monday that it has extended about $184 billion in credit during the third quarter of 2009 to support households and communities.

The report makes obvious how BofA is utilizing the bailout money to support the U.S. economy. According to the report, since the fourth quarter of 2008 when the Troubled Asset Relief Program (TARP) was initiated, BofA had extended $759 billion in new credit. This represents almost $17 for every dollar of the $45 billion it received under the TARP. BofA also continues to provide a significant return on investment to the U.S. taxpayers. The bank is expected to pay more than $2.5 billion in dividend to the U.S. Treasury through Nov 16, 2009.

The extension of home loans continues to be among BofA’s priorities. The company extended $96 billion alone in first mortgages during the reported quarter. The loans helped nearly 450,000 people purchase a home or refinance an existing mortgage.

BofA is also extending credit to the municipalities and non-profits and has already provided $7 billion to help meet local needs and serve communities across the country.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

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

Zacks Investment Research

Enzon Beats, Announces Sell-off – Analyst Blog

Zacks Market Commentaries — Tue, 10 Nov 2009 20:53:40 +0000

Enzon (ENZN) achieved break-even earnings during the third quarter of 2009, better than the Zacks Consensus Estimate of loss of 7 cents but below the year-ago earnings of 1 cent. The company reported revenues of $44.6 million, a decline of 9% compared to $48.8 million reported in the third quarter of 2008.

Enzon records revenues from three sources -- products, royalties and contract manufacturing. The three segments recorded a decline of 1%, 6% and 56%, respectively, compared to the year-ago period.

Enzon has four marketed products -- Oncaspar for the treatment of acute lymphoblastic leukemia (ALL); DepoCyt for lymphomatous meningitis; Abelcet for antifungal infection related to cancer and Adagen used to treat severe combined immunodeficiency disease (SCID), commonly known as the "bubble boy" disease. Apart from Oncaspar, whose sales remained unchanged from the year-ago period, the other three recorded a decline of 4%, 15% and 10%, respectively.

Enzon earns royalties from several products, which have been manufactured using its proprietary PEGylation technology -- Pegintron, marketed by Merck (MRK); Macugen, marketed by OSI Pharmaceuticals (OSIP) and Pfizer (PFE); Pegasys, marketed by Hoffmann-La Roche; and Cimzia, marketed by UCB Pharma. The company earns a majority of royalty revenue from sales of Pegintron, which is approved for the treatment of hepatitis C. Unfavorable movement of the foreign exchange brought down royalty revenues during the quarter.

Additionally, cancelled shipments and discontinuation of customer schedules were responsible for lower contract manufacturing revenues. We expect contract manufacturing revenues to suffer going forward since many of the current contracts are to expire in the next two years.

R&D expenses during the quarter were $15.8 million, unchanged from the year-ago period. The company has several pipeline candidates: PEG-SN38, the HIF-1 alpha antagonist, Survivin (antagonist) and other LNA- and PEGylation- based programs.

The company’s financial position continues to worry us. At the end of the reported quarter, total cash reserves including investments were $201.3 million, down compared to $206.9 million at the end of December 2008, primarily due to the repurchase of $20.4 million of notes in 2009 offset by the cash provided by operating activities.

Shortly after announcing its third quarter results, Enzon announced that it has decided to sell its specialty pharmaceutical business to the Sigma-Tau group of Italy for $300 million. In addition, the company is eligible to receive another $27 million based on success milestones and royalties of 5% - 10% on incremental net sales above a 2009 baseline amount from its four marketed products through 2014.

The specialty pharmaceutical business includes the company’s four marketed products as well as the manufacturing facility in Indianapolis, Indiana which will be purchased by a US subsidiary of Sigma-Tau Pharmaceuticals, Inc. (Maryland). Sigma-Tau Pharmaceuticals will distribute the products in the US market.

Following the deal, Enzon’s business will consist of its royalties and its pipeline. We believe declining sales of the products in the recent past forced the company to take such decision. Currently, company’s aim will be to focus on its developmental candidates.
Read the full analyst report on "ENZN"
Read the full analyst report on "MRK"
Read the full analyst report on "OSIP"
Read the full analyst report on "PFE"
Zacks Investment Research

Ericsson Beats Estimates – Analyst Blog

Zacks Market Commentaries — Thu, 05 Nov 2009 20:45:55 +0000

LM Ericsson Telephone Company (ERIC) reported earnings per share of 16 cents for the third quarter of 2009, exceeding the Zacks Consensus Estimate of 12 cents per share.

Net sales in the third quarter were SEK 46.4 billion ($6.6 billion). Sales in the quarter decreased 4% year-over-year for comparable units, i.e. excluding Ericsson Mobile Platforms, and decreased 12% adjusted for currency exchange rate effects and hedging. The third quarter last year was comparatively strong with no normal seasonality.

Sequential sales decreased 11%, negatively impacted by currency exchange rate effects, seasonality and a reduced scope of the renewed managed services agreement in Italy.

Network sales in the third quarter declined year-over-year by 8%. Even though the comparison is tough with last year's strong third quarter, the market was weaker. The markets are fairly strong in the world's leading economies, while demand is weaker in several emerging markets affected by the present economic climate.

Professional Services sales increased 9% year-over-year. Growth in local currencies amounted to 4%. Total service sales, including network rollout, now account for 40% of Group sales. In the present financial climate there is strong demand for services targeting the operational efficiency of operators such as managed services and consulting.

However, managed services sales increased by just 3% year-over-year due to the reduced scope of the renewed agreement in Italy. Other professional services sales increased by 11% year-over-year.

The gross margin, was flat sequentially despite the lower sales, and decreased only slightly year-over-year to 36.2%.

Ericsson is a world-leading provider of telecommunications equipment and related services to mobile and fixed network operators globally. Over 1,000 networks in more than 175 countries utilize its network equipment and 40 percent of all mobile calls are made through its systems. It is one of the few companies worldwide that can offer end-to-end solutions for all major mobile communication standards.

We currently have a Neutral recommendation on ERIC.
Read the full analyst report on "ERIC"
Zacks Investment Research

Norsat International, Inc. (NSATF.OB) Announces 2009 Third Quarter Financial Results

QualityStocks — Thu, 05 Nov 2009 17:27:46 +0000

Vancouver-based Norsat International Inc. designs, engineers and markets intelligent satellite solutions for high-speed data transmission. The company’s portfolio of capabilities include: microwave components, turnkey maritime navigation and communication systems, fixed or mobile maritime satellite systems, and end-to-end network services. The company announced today their financial results for the three and nine month periods ended on September [...]

Zegna’s First Mainland Concept Store To Open In Shanghai

China Retail News — Wed, 28 Oct 2009 19:30:37 +0000

Ermenegildo Zegna, a leading multinational in men's luxury clothing and one of the oldest business families in Italy, has located its first Chinese mainland global concept store at Lippo Plaza, Luwan district, Shanghai. This new store in Shanghai is reported to be the fifth Zegna global concept store designed by architect Peter Marino, following those in [...]

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

A Long Look at the National Debt

QualityStocks — Fri, 23 Oct 2009 12:34:52 +0000

Short-Term Deficits Pale in Comparison to Unfunded Liabilities on the Horizon Dwindling U.S. economic activity and accelerating government spending resulted in a record $455 billion federal budget deficit for fiscal year 2008. During the same trying period, the total national debt increased to about $10 trillion, and the forecast for 2009 was for an even larger [...]

Energy Blast – Oct 23, 2009

Robert Amsterdam — Fri, 23 Oct 2009 08:31:52 +0000

In a meeting with Italian prime minister Silvio Berlusconi, Vladimir Putin made a surprise announcement that the South Stream pipeline, a joint project between Gazprom and Italy's Eni, could be finished before its official start-up date of 2013. Plans for South Stream's...

Energy Blast – Oct 21, 2009

Robert Amsterdam — Wed, 21 Oct 2009 08:10:04 +0000

Luke Harding has two pieces on Russian climate change in today's Guardian: an audio report on Northern-Siberia's seasonal shifts, and a special report on the Yamal peninsula. Rumors abound that China, Japan, Russia and France have been in secret talks...

Iconic Brands, Inc. (ICNB.OB) is “One to Watch”

QualityStocks — Mon, 19 Oct 2009 20:24:08 +0000

Iconic Brands Inc. develops, markets and distributes high quality, celebrity branded alcoholic beverages. The Company does this by capitalizing on the ability to obtain superior and unique products from around the world and brand the products with internationally recognized celebrities. With their corporate headquarters in Lindenhurst, New York, Iconic Brands, Inc. trades on NASDAQ’s OTCBB. The [...]

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 [...]

Zacks Analyst Blog Highlights: Cognizant, UBS AG, Infosys Technologies Ltd, Repsol YPF S.A. and Eni S.p.A. – Press Releases

Zacks Market Commentaries — Mon, 19 Oct 2009 12:48:02 +0000

For Immediate Release

Chicago, IL – October 19, 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: Cognizant (CTSH), UBS AG (UBS), Infosys Technologies Ltd (INFY), Repsol YPF S.A. (REP) and Eni S.p.A. (E).

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 AnalystBlog:

Cognizant Buys UBS ISC

Cognizant (CTSH) recently announced a definitive agreement to acquire UBS India Service Centre Private Limited for about $75 million. Based in India, UBS ISC is a captive service provider to UBS AG (UBS) and currently employs 2,000 associates.

Headquartered in Zurich and Basel, Switzerland, UBS AG is a global firm providing services to private, corporate and institutional clients. New Jersey-based Cognizant is a leading provider of consulting, technology and business process outsourcing (BPO) services.

The transaction is expected to close by the end of 2009. As part of the transaction, UBS and Cognizant have entered into a multi-year service agreement under which Cognizant will provide a range of business process outsourcing (BPO), knowledge process outsourcing (KPO), IT, and remote infrastructure management services to UBS divisions around the globe. Cognizant aims to help these divisions to reduce time-to-market, expand service delivery, and improve productivity, operational efficiency and quality.

UBS is a leader in wealth management, investment banking, asset management, research and remote IT infrastructure management. Management at Cognizant believes that this acquisition will help Cognizant strengthen its business and knowledge process capabilities, deepen its financial services domain knowledge, and improve its capabilities to provide integrated services across consulting, technology, and outsourcing.

Cognizant continues to outperform its peers and remains a leader in IT services. Compared to its competitors Tata Consultancy Services Ltd and Infosys Technologies Ltd (INFY), CTSH is setting a more robust tone going forward.

Repsol Confirms Gas in Venezuela

Following the test on recently found gas resource in the shallow waters of the Gulf of Venezuela, Repsol YPF S.A. (REP) confirmed reserves of between 5.6 trillion and 7.8 trillion cubic feet of gas. With an estimated area of 33 square kilometers, it is the country’s largest discovery.

Repsol (32.5% interest) partners with Italy's Eni S.p.A. (E – 32.5%) and Venezuela's state-owned oil company Petroleos de Venezuela SA (35%) for future production on this resource.

While Venezuela aims to increase natural gas output to overcome the current deficit, Repsol wants to boost oil and gas production through new discoveries off the coasts of Brazil and Venezuela after four years of declining output.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

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

Zacks Investment Research

Repsol Confirms Gas in Venezuela – Analyst Blog

Zacks Market Commentaries — Fri, 16 Oct 2009 19:32:17 +0000

Repsol (32.5% interest) partners with Italy's Eni S.p.A. (E – 32.5%) and Venezuela's state-owned oil company Petroleos de Venezuela SA (35%) for future production on this resource.

However, a challenging operating and contractual environment in Venezuela may create obstacles for developing new gas reserves. Moreover, the mandate of the Venezuelan government to sell any new gas to the domestic market at subsidized prices may negatively impact the company’s earnings.

Apart from the company’s declining reserves and low reserve lives, a host of challenges (weak volumes and rising costs) will continue to weigh on valuation, limiting its upside from current levels. Our Neutral rating remains unchanged at this stage.

Read the full analyst report on "REP"
Read the full analyst report on "E"
Zacks Investment Research

Today in Russian Business – October 16, 2009

Robert Amsterdam — Fri, 16 Oct 2009 09:20:31 +0000

According to the FT, Russia, Belarus and Kazakhstan have abandoned their attempt to join the World Trade Organization as a single customs union, after WTO members made clear the unprecedented suggestion would elongate the process by some years. The trio...

Energy Blast – October 13, 2009

Robert Amsterdam — Tue, 13 Oct 2009 09:23:17 +0000

TNK-BP is on the lookout for oil and gas production projects in Iraq as the country builds up to its second round of international bidding. A piece in the New York Times examines how the Nord Stream pipeline could reinforce...

Three Government Reports Point to Fiscal Doomsday

Martin D. Weiss, Ph.D. — Tue, 06 Oct 2009 00:39:26 +0000

When our leaders have no awareness of the disastrous consequences of their actions, they can claim ignorance and take no action. Or when our leaders have no hard evidence as to what might happen in the future, they can at least claim uncertainty. But when they have full ...

In praise of emerging markets

Prieur du Plessis — Mon, 05 Oct 2009 05:30:06 +0000

"We are currently in the midst of a synchronized global recovery, and with aggressive government stimulus, strong balance sheets and an ever-growing share of global GDP, emerging markets are likely to outperform the developed markets due to strong domestic consumption and forward-looking infrastructure investments," said John Derrick in this guest post. A few interesting charts are included.

In Praise of Emerging MarketsIn Praise of Emerging Markets

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

This commentary is from John Derrick, U.S. Global Investorsrsquo; director of research. If you believe now is a good time to invest in U.S. stocks, emerging markets may offer even more opportunity. We believe global growth is the most powerful investment theme now and for the foreseeable future. You can see this playing out as countries like China, India and Brazil grow in economic stature. As we saw in Pittsburgh last week, the G-7 is being supplanted by the more inclusive G-20 when it comes to global economic decision-making. Emerging market stocks were hit especially hard during the financial crisis but have been among the best performers during the rebound. We are currently in the midst of a synchronized global recovery, and with aggressive government stimulus, strong balance sheets and an ever-growing share of global GDP, emerging markets are likely to outperform the developed markets due to strong domestic consumption and forward-looking infrastructure investments. The chart below from Goldman Sachs on consumer spending illustrates that point. Goldman estimates that consumer spending in China will increase by about 10 percent in 2010, while India and Brazil will be in the 4 percent to 6 percent range. At the same time, negative growth is expected in Spain, Britain and Italy, and the forecast for the United States is flat. Industrial production in emerging markets has recovered to roughly where it was when the recession began; in developed markets, IP is still down nearly 20 percent. This second chart, also from Goldman Sachs, compares the operating margins in developed and emerging markets for the companies in Europersquo;s Dow Jones Stoxx 600 Index. The analysis going back to the early 1990s found that the emerging-market operations of these companies have consistently yielded higher margins, and oftentimes the spreads have been significant. U.S. Global Investors recently hosted a global outlook webcast that featured Dr. Marc Faber, the well-known investor based in Hong Kong. In the course of that webcast, Dr. Faber addressed the developed-versus-emerging issue: If you look at the next 10 to 20 years in the West, I donrsquo;t see how the lifestyle of the average person will improve meaningfully. On the other hand, if you look at a country like Vietnam, they have a GDP per capita annually of $800 which may go to $3,000 over the next 15-20 years. The same is true for China and India. You suddenly have a middle class of 230 million people in India who will be buying cars like the $2,500 Nano and other goods. Once a family moves from the bicycle to the motorcycle, itrsquo;s an improvement in their standard of living. But when you move to the car and drive your children to school in your car, itrsquo;s a huge increase in your standard of living and your social class. Global growth has been a tremendous benefit for commodities, with the key driver being strong demand from China. And as we pointed out in a recent webcast focused on China, that use of commodities is less to fuel export growth and more to satisfy domestic demand as income levels rise. Increasing demand for commodities and the corresponding rise in prices has positive knock-on effects for much of the developing world. The increasing importance of emerging countries in the world order also argues for their currencies to strengthen relative to the dollar. International stock markets outperformed the U.S. market during the 1970s and much of the 1980s, with much of that outperformance relating to relative currency strength. A continuation of the dollarrsquo;s decline in the face of slow growth and yawning budget deficits ndash; nearly $11 trillion between 2009 and 2019, according to White House estimates ndash; would provide a significant tailwind for globally-minded investors. 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 Dow Jones STOXX 600 Index is an index of 600 stocks representing large-, mid- and small-capitalization companies in the developed countries of Europe.

In Praise of Emerging Markets

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

Exodus from WiMAX Continues – Analyst Blog

Zacks Market Commentaries — Fri, 02 Oct 2009 21:56:58 +0000

The much-hyped next-generation (4G) technology of WiMAX is quickly losing ground to the alternative technology of Long-Term Evolution (LTE). Large telecom infrastructure equipment makers are gradually shifting from WiMAX to LTE, and as a result the WiMAX field is getting less crowded day by day.

This gives the smaller gear makers like PureWave Networks and Airspan Networks a chance to enter the WiMAX market.

Alcatel-Lucent (ALU) has scaled back its WiMAX R&D expenditures and now concentrates only on fixed WiMAX infrastructure deployment, rather than the complex mobile deployment. Nokia-Siemens Network, a joint venture of Nokia Corp. (NOK) and Siemens AG (SI), has taken a strategic decision to shift its focus to other next-generation wireless technologies, such as LTE and HSPA+, and decided to outsource the WiMAX technology from Alvarion Ltd. (ALVR). Fujitsu Ltd. has entirely stopped the development of WiMAX radio technology. Motorola (MOT) is also moving towards the LTE platform.

We believe WiMAX still enjoys commendable growth potential, especially within emerging markets. The technology provides a low-cost, open network system with an all-IP mobile Internet solution that enables efficient and scalable networks for voice, data, and video transmission. The government of India has decided to allocate spectrum for the WiMAX network together with 3G technologies.

Chunghwa Telecom (CHT) of Taiwan, P.T. Telekomunikasi (TLK) of Indonesia, Aria SPA of Italy and Mobitel Nigeria have decided to implement WiMAX broadband solutions. Millicom International Cellular (MICC), a leading telecom service provider in Central America and Africa, is also exploring an option to implement the WiMAX network as a niche alternative to cable and DSL networking.

In the U.S., WiMAX still generates enthusiasm among telecom service providers. Clearwire Corp. (CLWR) is on the verge of a nationwide WiMAX deployment. The U.S. government stimulus plan for Rural Broadband expansion has also encouraged several regional telecom operators to implement WiMAX. For example, Open Range Communications Inc. has decided to implement WiMAX network spanning 17 states, 546 rural communities, which may reach a population of 6 million.

Read the full analyst report on "ALU"
Read the full analyst report on "NOK"
Read the full analyst report on "SI"
Read the full analyst report on "ALVR"
Read the full analyst report on "MOT"
Read the full analyst report on "CHT"
Read the full analyst report on "TLK"
Read the full analyst report on "MICC"
Read the full analyst report on "CLWR"
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

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

DrStockPick.com Stock Report! 9/30/09, SALN, CCNI, ZHNE, ADPT, TRR, AEP

Dr. Stock Pick — Wed, 30 Sep 2009 13:09:02 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Wednesday September 30, 2009 DrStockPick.com Stock Report! ************************************************************** Salon City, Inc. (PINKSHEETS: SALN) announced today that 3rd quarter sales resulting from new media offerings and August’s launch of Beauty Entertainment (BE!) Magazine has helped to contribute to the Company’s overall revenue increases as compared to [...]

PWRM, CVX, NDAQ, TSPG, BA, AQNM, LMT, DrStockPick.com Stock Report!

Dr. Stock Pick — Tue, 29 Sep 2009 17:04:00 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Tuesday September 29, 2009 DrStockPick.com Stock Report! PWRM, CVX, NDAQ, TSPG, BA, AQNM, LMT ************************************************************** PWRM, Power 3 Medical Products Inc, PWRM.OB Power3 Medical Products, Inc. is a leading bio-medical company engaged in the commercialization of neurodegenerative disease and cancer biomarkers, pathways, and mechanisms of diseases through the development [...]

PWRM, SHMN, MRK, TSPG, AQNM, DrStockPick.com Stock Report!

Dr. Stock Pick — Mon, 28 Sep 2009 14:49:55 +0000

Dr Stock Pick HOT News & Alerts! _________________________________________ FREE Daily Stock Alerts From DrStockPick.com _________________________________________ Monday September 28, 2009 DrStockPick.com Stock Report! PWRM, SHMN, MRK, TSPG, AQNM ************************************************************** PWRM, Power 3 Medical Products Inc, PWRM.OB Power3 Medical Products, Inc. is a leading bio-medical company engaged in the commercialization of neurodegenerative disease and cancer biomarkers, pathways, and mechanisms of diseases through the development of diagnostic [...]

Italian Parliament in Support of Mikhail Khodorkovsky

Robert Amsterdam — Thu, 24 Sep 2009 12:33:31 +0000

The following is a press release being distributed today on behalf of the Mikhail Khodorkovsky defense team: OVERWHELMING MAJORITY OF ITALIAN PARLIAMENT VOTE TO SUPPORT MIKHAIL KHORDOKOVSKY Rome, September 23, 2009 - The Italian parliament today voted in favour...

Energy Blast – September 24, 2009

Robert Amsterdam — Thu, 24 Sep 2009 08:58:56 +0000

Gazprom is apparently making plans to construct and run power plants in Turkey in partnership with the country's own Aksa. Kazakhstan will postpone a feasibility study for a gas pipeline along the Caspian coast to Russia until 2010 while the...

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.

Read the full analyst report on "STP"
Zacks Investment Research

Premier Power Renewable Energy (PPRW.OB) Signs New Contracts for 400 Kilowatts of Solar Rooftop Installations in Spain

QualityStocks — Wed, 23 Sep 2009 15:07:47 +0000

Premier Power Renewable Energy, a global provider of large and small-scale solar power systems, recently announced that the company has received contracts for more than 400 kilowatts of solar rooftop installations in Spain. Leading the solar power markets in the United States, Spain and Italy, these commercial rooftop projects will utilize crystalline modules provided by [...]

SunPower Shines in Italy – Analyst Blog

Zacks Market Commentaries — Tue, 22 Sep 2009 20:58:00 +0000

SunPower Corp. (SPWRA) recently teamed up with SunRay Renewable Energy to construct a 24MW solar electric power plant in Montalto di Castro, Italy. This project is the first phase of a planned 100MW development that is expected to be fully operational in 2010.

This would be Italy’s largest operating solar power plant after completion. Spread over 80 hectares, the Montalto di Castro project is owned by SunRay Renewable Energy. The company has engaged SunPower to design and construct the power plant apart from providing ongoing operations and maintenance services for the project. The project is being financed by a consortium of primary international and Italian. Electricity produced at the plant will find a ready market locally and any surplus will be added to Italy’s national electric grid.

SunPower is focused on tapping the rapidly expanding Italian solar market. Its 2008 acquisition of Solar Solutions, a solar systems integration and product distribution company based in Faenza, significantly helped the company to expand its dealer network in Italy.

Headquartered in San Jose, California, SunPower designs, develops, manufactures, markets and sells high-performance solar electric power technology products, systems and services worldwide for residential, commercial and utility-scale power plant customers. Its semiconductor-based solar cells and solar panels, which convert sunlight into electricity, are manufactured using proprietary processes and technologies.

SunPower operates through two business segments: Components and Systems. Its solar power products are sold through its Components segment. The Systems segment develops, engineers, manufactures and delivers large-scale solar power systems. We maintain our long-term Outperform rating on the shares.

Read the full analyst report on "SPWRA"
Zacks Investment Research

TGI Solar Power Group, Inc. Announces Plans to Begin Process to Become Fully Reporting

Dr. Stock Pick — Tue, 22 Sep 2009 16:19:05 +0000

Dr Stock Pick HOT News & Alerts! _______________________________________ FREE Daily Stock Alerts From DrStockPick.com _______________________________________ Tuesday September 22, 2009 DrStockPick.com Stock Report! TSPG, TGI Solar Power Group Inc., TSPG.PK ************************************************************** TGI Solar Power Group, Inc. Announces Plans to Begin Process to Become Fully Reporting RED BANK, NJ–(CRWENEWSWIRE - 09/22/09) - TGI Solar Group (Pinksheets:TSPG - News), a provider of solar and other alternative energy [...]

Premier Power Signs New Contracts for More Than 400 Kilowatts of Solar Rooftop Installations in Spain

Stuart T. Smith — Tue, 22 Sep 2009 13:46:11 +0000

Sep. 22, 2009 (Business Wire) — Premier Power Renewable Energy (OTCBB:PPRW), a global leader in the development, design, engineering and construction of solar power systems for commercial, government and utility markets in the U.S., Spain and Italy, today announced that it received signed contracts for more than 400 kilowatts (kW) of solar rooftop installations in [...]

There’s More to Russia’s Competitiveness Than Meets the Eye

Robert Amsterdam — Thu, 17 Sep 2009 03:11:41 +0000

I've finally gotten around to looking more closely at the World Economic Forum's annual Global Competitiveness Report, released last week. The report ranks 133 countries on the basis of 12 measures of an economy's competitiveness: institutions, infrastructure, macroeconomic stability, health...

Premier Power Helps the County of San Joaquin Harvest the Sun

Stuart T. Smith — Wed, 16 Sep 2009 13:43:54 +0000

Sep. 16, 2009 (Business Wire) — Premier Power Renewable Energy (OTCBB:PPRW), a global leader in the development, design, engineering and construction of solar power systems for commercial, government and utility markets in the U.S., Spain and Italy, today announced that it has completed the installation of multiple solar systems for the County of San Joaquin [...]

Grigory Pasko: A Week in Almaty, Part 1

Robert Amsterdam — Wed, 16 Sep 2009 10:43:44 +0000

At the end of August, I telephoned the well-known Kazakh human rights advocate Yevgeny Zhovtis and asked how things were going on "the front" with the criminal case that had been opened in relation to him. Yevgeny replied that in...

Oil & Gas Industry – Industry Outlook

Zacks Market Commentaries — Tue, 15 Sep 2009 05:00:00 +0000

Crude oil's gains have been even more impressive, given its heavy leverage to the health of the global economy. Our view is that oil should be able to hold onto its recent gains and consolidate around current levels, provided this favorable economic view remains in place.

While we have greater confidence in the staying power of the current oil rally, this does not mean that we will not see any short-term pullbacks. On the whole, we expect oil prices in 2010 to be higher than the 2009 levels, but remain significantly below the 2008 peak levels.

Crude oil's near-term fundamentals remain dismal, to say the least. Inventories in the U.S. are at multi-year highs and remain bloated worldwide. At current projections, global 2009 demand will be below last year's level, which itself was below the 2007 level -- the first time since the early 1980's of two back-to-back negative growth years.

The only positive in this otherwise bleak supply-demand picture is OPEC's success at taking a fair amount of oil off the market. OPEC's successful stewardship provided the commodity with a floor in Dec'08 in the low $30's a barrel range.

While the market has been heavily discounting the commodity's near-term problems, we would expect the day-to-day price movement to largely track the news flow about the health of the global economy.

The oil price outlook has historically been the key determinant of the sector's performance. And given our favorable oil price view, we would strongly advocate for taking an over-weight position in the sector.

OPPORTUNITIES

This outlook has major implications for sub-sector choices within the energy space, though the risk-reward trade off for most of these sub-sectors remains compelling despite recent gains.

The strengthening oil price environment should benefit producers, particularly those international players having attractive growth opportunities in their home markets. Two such standout names are Brazil's Petrobras (PBR) and China's Cnooc Ltd. (CEO). Both of these emerging market energy plays offer lucrative growth opportunities going forward. Italy's Eni (E) also remains attractive at current levels.

Petrobras is perhaps the only major oil company worldwide that has discovered substantial oil reserves in recent years. The company's discovery of oil offshore Brazil in the massive Tupi field, expected to be developed in the coming years, has made Brazil a major oil player.

Cnooc Ltd. remains well placed to benefit from China's growing energy appetite. The company enjoys a monopoly on exploration activities in China's very prospective offshore region. Cnooc Ltd. also has a growing presence in China's natural gas and LNG infrastructure.

WEAKNESSES

Despite their strong recent gains, we continue to feel strongly that industry players in the servicing and drilling ends of the business with substantial natural gas-focused and North America-centric operations should be avoided. We also remain wary of refiners, given weak gasoline demand and strengthening oil prices.

A major sub-sector that fits that description is the onshore drillers. We believe that pricing and margins for operators in these two sub-sectors will remain under pressure through 2010, even as the outlook for natural gas price improves. As such, we would avoid Nabors (NBR) and Patterson-UTI (PTEN), two major North American land drillers.

We continue to have a negative view of refiners as well, particularly independent refiners such as Valero (VLO) and Tesoro (TSO), who have no other line of business to support them in the current soft environment. The massive economy-wide job losses are not expected to reverse anytime soon even though the outlook for the overall economy has steadily improved. This, coupled with an unfavorable regulatory landscape, is expected to keep demand under pressure for the foreseeable future. Margins are expected to remain under pressure given the strengthening oil prices (oil is a refiner's primary feedstock).Zacks Investment Research

Repsol Strikes Gold in Venezuela – Analyst Blog

Zacks Market Commentaries — Mon, 14 Sep 2009 22:15:31 +0000

Repsol YPF S.A. (REP) recently found a huge gas resource in shallow waters of the Gulf of Venezuela. The largest integrated oil and gas company in Spain said that the offshore field had an estimated area of 33 square kilometers and was 60 meters deep.

Along with its exploration partner Italy's Eni SPA (E), Repsol estimates that the discovery could hold between 7 and 8 trillion cubic feet of gas. This equals to more than five years of gas consumption in Spain.

While the two companies will have a 32.5% interest each in all future productions, Venezuela's state-owned oil company Petroleos de Venezuela SA would hold a 35% stake.

Repsol is targeting stable production growth driven by pipeline projects in Venezuela, Trinidad and Tobago, Libya, Bolivia, Argentina and Ecuador. Long-term growth is expected to come from opportunities in Trinidad and Tobago, Algeria, the US Gulf of Mexico, Libya and Saudi Arabia.

However, a challenging operating and contractual environment in Venezuela may create obstacles for developing new gas reserves. The Venezuelan government also maintains that any new gas development should be directed to heavily subsidized prices in the domestic market. This could have a negative impact on Repsol’s earnings visibility.

Apart from this, we are also concerned about the company’s declining reserves, very low reserve lives and rising costs. Consequently, we maintain our Neutral recommendation.

Read the full analyst report on "REP"
Read the full analyst report on "E"
Zacks Investment Research

Oil & Gas Industry – Industry Outlook

Zacks Market Commentaries — Mon, 14 Sep 2009 20:07:24 +0000

The emerging positive narrative of a favorable outlook for the U.S. economy has done wonders for the markets, particularly equities and commodities. The broad equity markets as well as most commodity groups are up smartly from their early-March lows.

Crude oil’s gains have been even more impressive, given its heavy leverage to the health of the global economy. Our view is that oil should be able to hold onto its recent gains and consolidate around current levels, provided this favorable economic view remains in place.

While we have greater confidence in the staying power of the current oil rally, this does not mean that we will not see any short-term pullbacks. On the whole, we expect oil prices in 2010 to be higher than the 2009 levels, but remain significantly below the 2008 peak levels.

Crude oil’s near-term fundamentals remain dismal, to say the least. Inventories in the U.S. are at multi-year highs and remain bloated worldwide. At current projections, global 2009 demand will be below last year’s level, which itself was below the 2007 level -- the first time since the early 1980’s of two back-to-back negative growth years.

The only positive in this otherwise bleak supply-demand picture is OPEC’s success at taking a fair amount of oil off the market. OPEC’s successful stewardship provided the commodity with a floor in Dec’08 in the low $30’s a barrel range.

While the market has been heavily discounting the commodity’s near-term problems, we would expect the day-to-day price movement to largely track the news flow about the health of the global economy.

The oil price outlook has historically been the key determinant of the sector’s performance. And given our favorable oil price view, we would strongly advocate for taking an over-weight position in the sector.

OPPORTUNITIES

This outlook has major implications for sub-sector choices within the energy space, though the risk-reward trade off for most of these sub-sectors remains compelling despite recent gains.

The strengthening oil price environment should benefit producers, particularly those international players having attractive growth opportunities in their home markets. Two such standout names are Brazil’s Petrobras (PBR) and China’s Cnooc Ltd. (CEO). Both of these emerging market energy plays offer lucrative growth opportunities going forward. Italy’s Eni (E) also remains attractive at current levels.

Petrobras is perhaps the only major oil company worldwide that has discovered substantial oil reserves in recent years. The company’s discovery of oil offshore Brazil in the massive Tupi field, expected to be developed in the coming years, has made Brazil a major oil player.

Cnooc Ltd. remains well placed to benefit from China’s growing energy appetite. The company enjoys a monopoly on exploration activities in China’s very prospective offshore region. Cnooc Ltd. also has a growing presence in China’s natural gas and LNG infrastructure.

WEAKNESSES

Despite their strong recent gains, we continue to feel strongly that industry players in the servicing and drilling ends of the business with substantial natural gas-focused and North America-centric operations should be avoided. We also remain wary of refiners, given weak gasoline demand and strengthening oil prices.

A major sub-sector that fits that description is the onshore drillers. We believe that pricing and margins for operators in these two sub-sectors will remain under pressure through 2010, even as the outlook for natural gas price improves. As such, we would avoid Nabors (NBR) and Patterson-UTI (PTEN), two major North American land drillers.

We continue to have a negative view of refiners as well, particularly independent refiners such as Valero (VLO) and Tesoro (TSO), who have no other line of business to support them in the current soft environment. The massive economy-wide job losses are not expected to reverse anytime soon even though the outlook for the overall economy has steadily improved. This, coupled with an unfavorable regulatory landscape, is expected to keep demand under pressure for the foreseeable future. Margins are expected to remain under pressure given the strengthening oil prices (oil is a refiner’s primary feedstock).

Zacks Investment Research

Buy, Sell or Hold: The SPDR Gold Trust ETF (NYSE: GLD) Continues to Offer Investors a Hedge Against Inflation

Contrarian Profits — Mon, 14 Sep 2009 19:45:05 +0000

pThe just-concluded Group 20 (G20) meeting left us with a chorus of very #8220;prudent#8221; governments and central bankers singing the praises of easy monetary and fiscal conditions. So where can we take refuge when all the central banks in the world print money and governments run deficits in order to spend like drunken sailors? The answer is gold. /p pFortunately for us, we foresaw this scenario a while ago. a href="http://www.moneymorning.com/2009/04/20/gold-etf/" target="_blank"On April 20, I recommended that investors diversify their portfolios by adding the strongSPDR Gold Trust ETF/strong/astrong (NYSE: a href="http://www.google.com/finance?q=gld" target="_blank"GLD/a)/strong. The fund is up about 14% since that recommendation, but it’s not yet time to sell, as there are still a number of factors working in gold’s favor./p pFor starters, there is more and more#8230;/p

TSPG, TGI / PRIME SOLAR SIGN CONTRACT WITH SMW GOLD

Dr. Stock Pick — Mon, 14 Sep 2009 19:25:39 +0000

TSPG, TGI Solar Power Group Inc, TSPG.PK DrStockPick.com Stock Report! Dr Stock Pick HOT News & Alerts! TGI / PRIME SOLAR SIGN CONTRACT WITH SMW GOLD Monday September 14, 2009 ************************************************************** TGI / PRIME SOLAR SIGN CONTRACT WITH SMW GOLD Red Bank, NJ-(CRWENEWSWIRE)— TGI Solar Group (OTC PINK SHEETS: TSPG), a provider of solar and other alternative energy products and solutions, announced [...]

Access Pharmaceuticals Inc. (ACCP.OB) Inks Marketing and Distribution Agreement for its FDA-approved Mucositis Treatment to Alleviate Cancer Therapy Side-effects

QualityStocks — Fri, 11 Sep 2009 18:43:02 +0000

Access Pharmaceuticals Inc. develops and commercializes proprietary products for the treatment and care of cancer patients. The company today announced an agreement with commercial manufacturer Accupac Inc. to produce and distribute Access’ FDA-approved MuGard in the North American market. MuGard is a mucoadhesive oral wound rinse for patients in radiation and chemotherapy that often-time develop [...]

TGI / PRIME SOLAR SIGN CONTRACT WITH SMW GOLD

Stock-PR — Fri, 11 Sep 2009 11:31:24 +0000

Red Bank, NJ– (CRWENewswire) TGI Solar Group (TSPG), a provider of solar and other alternative energy products and solutions, announced today that it has jointly with Prime Solar, its strategic partner, signed a consulting agreement with SMW Gold LTD to review and assess its areas of exploration in Egypt, to determine the feasibility of bringing [...]

VOD Debuts UK’s SME Market – Analyst Blog

Zacks Market Commentaries — Thu, 10 Sep 2009 22:51:22 +0000

Vodafone (VOD) UK has reportedly launched a converged fixed-mobile service (called "Vodafone One Net") yesterday for small and medium enterprises (SMEs) across the UK, helping them to more effectively manage their corporate communications. This follows the company’s successful launch of Vodafone One in June 2009 that offers bundled voice, data and fixed-line services for large businesses.

Vodafone One Net, which was previously launched in Italy and Czech Republic, marks Vodafone UK’s entry in the lucrative communications market for SMEs in the UK, representing an approximate £8 billion market opportunity.

The new combined service offers a single number for mobile and landline services, one voicemail number for all messages and one contract through a single service provider. Users can seamlessly switch between landline phones and their mobiles while in a call and will have the flexibility of paying a flat call rate per subscription for all calls. Vodafone One Net thus provides businesses the privilege to concentrate more on their customers rather than spending time on managing their communications.

For businesses with multiple office locations, the company will offer effective call management through a virtual switchboard which will route the calls to different locations via the most effective channels. Vodafone UK has plans to eventually incorporate Microsoft's (MSFT) Office Communications Services (such as email and messaging) in its latest offering. Vodafone One Net will allow small and medium businesses greater cost control with up to 20% savings on the total communication bill.

Vodafone UK has also extended its collaboration with BT Group (BT) which will enable it to provide fixed-line services to the SME market in the UK as a part of the Vodafone One Net offering. Under the five year managed service agreement, BT will offer IP-enabled fixed-line voice and broadband services to Vodafone UK. This will enable Vodafone to expand its service portfolio in UK without any huge investment to build its own fixed-line network.

Vodafone has a strong presence in the enterprise wireless market in the UK. The company is the second-largest player in the UK wireless market with roughly 24.7% share. However, its presence in the enterprise fixed-line services market has been lackluster to date.

Vodafone One Net enables the company to become a full-service provider for businesses in the UK, offering integrated mobile and fixed services. This will take Vodafone UK a step ahead in its bid to lead the domestic unified communications market for SMEs.
Read the full analyst report on "VOD"
Read the full analyst report on "MSFT"
Read the full analyst report on "BT"
Zacks Investment Research

WiMAX Sees Exodus – Analyst Blog

Zacks Market Commentaries — Thu, 10 Sep 2009 16:30:06 +0000

The much hyped next-generation (4G) technology of WiMAX is quickly losing ground to the alternative technology of Long-Term Evolution (LTE). Large telecom infrastructure equipment makers are gradually shifting from WiMAX to LTE, and as a result the WiMAX field is getting less crowded day by day. This has given the smaller gear makers like PureWave Networks and Airspan Networks a chance to enter the WiMAX market.

Alcatel-Lucent (ALU) has scaled back its WiMAX R&D expenditures and now concentrates only on fixed WiMAX infrastructure deployment rather than the complex mobile deployment. Nokia-Siemens Network, a joint venture of Nokia Corp. (NOK) and Siemens AG (SI), has taken a strategic decision to shift its focus to other next-generation wireless technologies like LTE and HSPA+ and decided to outsource the WiMAX technology from Alvarion Ltd. (ALVR). Fujitsu Ltd., has entirely stopped the development of WiMAX radio technology. Motorola (MOT) is also smartly moving towards the LTE platform.

We believe WiMAX still enjoys commendable growth potential, especially within emerging markets. The technology provides a low-cost, open network system with an all-IP mobile Internet solution that enables efficient and scalable networks for voice, data, and video transmission. The government of India has decided to allocate spectrum for the WiMAX network together with 3G technologies.

Chunghwa Telecom (CHT) of Taiwan, Aria SPA of Italy and Mobitel Nigeria have decided to implement WiMAX broadband solutions. Millicom International Cellular (MICC), a leading telecom service provider in Central America and Africa, is also exploring an option to implement the WiMAX network as a niche alternative to cable and DSL networking.

In the U.S. also WiMAX still generates enthusiasm among telecom service providers. Clearwire Corp. (CLWR) is on the verge of a nationwide WiMAX deployment. The U.S. government stimulus plan for Rural Broadband expansion has also encouraged several regional telecom operators to implement WiMAX. For example, Open Range Communications Inc has decided to implement WiMAX network spanning 17 states, 546 rural communities that may reach a population of 6 million.
Read the full analyst report on "ALU"
Read the full analyst report on "NOK"
Read the full analyst report on "SI"
Read the full analyst report on "ALVR"
Read the full analyst report on "MOT"
Read the full analyst report on "CHT"
Read the full analyst report on "MICC"
Read the full analyst report on "CLWR"
Zacks Investment Research

Fluor Grabs $150 Million Contract – Analyst Blog

Zacks Market Commentaries — Wed, 09 Sep 2009 22:13:25 +0000

Fluor Corporation (FLR) announced yesterday that it received a $150 million engineering, procurement and construction (EPC) contract from ISAB Energy to rebuild a gas turbine power train.

The contract is to rebuild one of the two 266-megawatt combined cycle gas turbine power trains in Sicily, Italy. The power train, which is a part of a 532-megawatt power plant that provides electric power to the Italian grid, was damaged in an accident in October 2008.

The company is working with ISAB Energy to rebuild the facility and bring its power plant back to full capacity by the end of the second quarter of 2010. The total installed cost for the project managed by Fluor is more than $150 million.

The project was booked into the company’s second quarter 2009 backlog.

During its second quarter conference call, Fluor stated that its backlog at the end of the second quarter was $30.9 billion, down 6% year over year, but up 6% sequentially. New project awards for the quarter amounted to $6.8 billion, compared to $6.4 billion last year. The second quarter backlog also includes a large mining project in its Industrial & Infrastructure segment.

Further, at the start of the third quarter, Fluor’s Government segment won LOGCAP IV for northern Afghanistan. The total contract value is potentially more than $7 billion over five years. Also, the company won an engineering services contract to design a concentrating solar power plant for eSolar, Inc. The company did not disclose the contract value for this project.

Given its year-to-date performance and strong backlog, the company is confident of achieving earnings in the range of $3.80 to $4.10 per share for 2009.
Read the full analyst report on "FLR"
Zacks Investment Research

Premier Power Breaks Ground on First Solar Project in Southern Italy

Stuart T. Smith — Wed, 09 Sep 2009 13:58:58 +0000

Sep. 9, 2009 (Business Wire) — Premier Power Renewable Energy (OTCBB:PPRW) announced today that it has broken ground on the first phase of its 20 mega watt (MW) solar pipeline in Italy. Premiers Power’s first phase projects are located in the Puglia region of southern Italy and are the first in a series of projects valued [...]

OECD: Global Economic Recovery to Start Sooner Than Expected, but Caution Remains

Money Morning — Fri, 04 Sep 2009 17:10:11 +0000

The $300 Trillion “Recovery” No One’s Talking About The biggest mega trend in 100 years is already taking over half the world. Early investors could stand to make initial gains of 237%, 139%, 163%, 356%, 341%, and 600% on six companies driving this trend. Click here for details. The worst global recession since World War II [...]

PennyOmega.com Stocks Upgraded, Downgraded and Short Highlights Before the Bell Friday September 4, 2009

PennyOmega.com — Fri, 04 Sep 2009 13:01:48 +0000

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

More Baby Steps For A German Economic Recovery

Contrarian Profits — Tue, 01 Sep 2009 16:00:46 +0000

pGerman unemployment falls! RBA disappoints the markets#8230; China to buy Canadian company#8230; ISM to print positive? And Now#8230; Today#8217;s Pfennig!br / Good day#8230; And a Terrific Tuesday to you! And Welcome to September! Well#8230; Here#8217;s a thought to get our engines started this morning#8230; a href="http://www.contrarianprofits.com/articles/author/bill-bonner/" class="alinks_links"Bill Bonner/a of the a href="http://www.dailyreckoning.com" class="alinks_links"Daily Reckoning/a ( www.dailyreckoning.com )had this to add to my ranting about our National Debt going to over $20 Trillion in the next 10 years, due to deficit spending#8230;/p p#8220;The Obama administration, for example, expects to run $9 trillion in deficits over the next 10 years – and that number is based on a recovery! Imagine what will happen if the economy doesn’t recover?#8221;/p pNow, that#8217;s a nice comforting thought to start our day right? NOT! WAKE UP! Morning has broken, and#8230;/p

Let’s meet up – in Slovenia

Prieur du Plessis — Tue, 01 Sep 2009 09:20:43 +0000

I will be in Slovenia next week as I am taking a group of South African business people on a fact-finding mission. If you happen to be in Ljubljana on Monday, September 7, join us for a special day the Slovenian Chamber of Commerce and JAPTI have organized to facilitate interaction between our delegation and Slovenian business people. Blog posting will be slow (and totally absent on some days) while I am on the road.

Europe Shares Rise for 6th Week in 7

Contrarian Profits — Fri, 28 Aug 2009 14:30:10 +0000

pEuropean shares touched a 10-month high on Friday on optimism for a global economic recovery and with Nokia and results from U.S. bellwethers boosting the technology sector./p pThe FTSEurofirst 300 #60;.FTEU3#62; index of top European shares rose 1 percent to 978.34 points. Over the week, the index climbed 1.2 percent, its sixth weekly gain in the last seven weeks./p pThe European benchmark index is up more than 51 percent from its lifetime low of March 9, as investors have become more confident on the prospects of economic recovery./p p#8220;Things look good for the time being, but the higher we go the more we could be setting ourselves up for a disappointment,#8221; said Andy Lynch, a fund manager at Schroders./p p#8220;The world economy is doing well,#8230;/p

BBV, PWRM, DrStockPick Watch List! for Monday August 24, 2009, Banco Bilbao Vizcaya Argentaria, S.A. and Power 3 Medical Products Inc, PWRM.OB

Dr. Stock Pick — Sun, 23 Aug 2009 20:35:40 +0000

BBV, Banco Bilbao Vizcaya Argentaria, S.A. PWRM, Power 3 Medical Products Inc, PWRM.OB DrStockPick Watch List! DrStockPick Watch List! for Monday August 24, 2009 My Picks for Monday August 24, 2009 are: ************************************************************** BBV, Banco Bilbao Vizcaya Argentaria, S.A. BBV is a financial services group with more than $750 billion in total assets, 48 million clients, 8,000 branches and approximately 108,000 [...]

Suntech Q2 Profit Falls – Analyst Blog

Zacks Market Commentaries — Fri, 21 Aug 2009 22:47:26 +0000

Suntech Power Holdings Co. Ltd. (STP) failed to live up to market expectations of a revival in its fiscal second quarter. Although EPADS of 6 cents during the quarter surpassed the Zacks Consensus EPADS estimate of a penny, this was a far cry from the year-ago EPADS of 31 cents. Also, the quarterly results included a $17.5 million foreign exchange gain on account of the appreciation of the euro versus the dollar. Excluding this impact, the company swallowed a loss per ADS of 5 cents during the quarter.

On the revenues front, Suntech witnessed a marginal growth of 1.7% sequentially to $321 million. The growth came through higher shipments leading to volume growth over the first quarter of 2009. Suntech’s dependence on Germany continues, with almost half of its sales coming from the country during the quarter, and Italy chipping in a healthy 13%. The company also generated revenues from France, Greece, Benelux ( Belgium , Netherlands and Luxembourg ) and the Czech Republic . Overall Europe generated approximately 78% of total sales during the quarter. Besides, the company generated 11% from Asia, 8% from North America and 3% from rest of the world.

In the second quarter, Suntech witnessed 8% lower average selling price (ASP) from the previous quarter. Still, gross margins rose to 18.6% in the second quarter from 17.8% in the prior quarter. This was due to improvements in the company’s cost structure on account of lower silicon wafer costs.

Wuxi, China-based Suntech is a leading solar energy company in the world. The company designs, develops, manufactures and markets photovoltaic cells and modules. Looking forward, Suntech expects more than 50% spike in shipments in the third quarter over the second quarter. However, the company sees no further room for margin expansion in the near term. The company revised its fiscal 2009 shipment guidance to approximately 600MW from the earlier guidance range of 600MW to 700MW.

At present, Suntech is trading at a premium to its comparable peers in terms of price-to-book and price-to-sales on account of its leadership position in cell conversion efficiency and improving module manufacturing cost. However, falling ASPs, pruned expansion plans in light of lower demand and dilutive stock issuances make Suntech’s valuation unappealing in the near term. Thus, we maintain our Neutral recommendation on the shares.

Read the full analyst report on "STP"
Zacks Investment Research

Beacon Equity Research Featured Company: Activision Blizzard, Inc. (ATVI)

QualityStocks — Wed, 19 Aug 2009 15:08:12 +0000

Activision Blizzard, Inc. is an online and personal computer, console and hand-held game publisher. The company develops, publishes and distributes video games, as well as maintains its proprietary online game-related services. Their products include Call of Duty, Guitar Hero, Quake, Tony Hawk, Over the Hedge, X-Men, and Spider Man. The company’s success can be seen [...]

Gold Will No Longer Be a Toxic Derivative to Central Banks

Adrian Ash — Tue, 18 Aug 2009 21:36:21 +0000

pem“If gold is ‘past its day’, what of toxic derivatives and today’s deluge of US Treasury bonds…?”/em Just like poor Pip Dickens’ emGreat Expectations/em, central banks keep inheriting unwelcome bequests./p pToday’s “legacy assets” are toxic derivatives; a decade ago it was gold reserves. Both are proving hard to shrug off, but for very different reasons. Both legacies also come thanks to previous central-bank history; the fossils remain only too livid today./p pAnd 10 years from now, if not sooner, just how welcome will the current central bank must-have become – freshly printed government debt, bought with money that doesn’t exist until the central bank wills it?/p pSeeking first to defend against inflation and war, the West’s central banks built up huge reserves of the#8230;/p

Energy Blast – August 18, 2009

Robert Amsterdam — Tue, 18 Aug 2009 08:57:23 +0000

Yesterday's fatal accident at the Sayano-Shushenskaya hydropower plant will present a considerable setback in Russia's attempts to increase its power production, says the New York Times. It will take 'years rather than months to restore three of the 10 turbines'...

Trend Condition of Country Funds

Richard Shaw — Tue, 18 Aug 2009 02:04:51 +0000

There were some substantial price moves today for many country and region funds. How do they look now relative to their 200-day simple moving averages? The chart below shows the ratio of the price to the 200-day average, and the 100-day average to the 200-day average, for 35 country and region funds as of end-of-day August [...]

Abercrombie & Fitch Disappoints – Analyst Blog

Zacks Market Commentaries — Fri, 14 Aug 2009 14:56:19 +0000

Abercrombie & Fitch Co. (ANF), a leading international specialty retailer, reported disappointing second quarter results with a net loss of $26.7 million or -30 cents per share compared to a net income of $77.8 million or 87 cents per share in the year-earlier quarter.

The year-over-year decline in results was primarily due to the continued economic downturn plaguing the industry that has resulted in reduced consumer discretionary income and a cut in non-essential spending.

Overall net sales of the company during the quarter decreased 23% to $648.5 million from $845.8 million in the year-ago quarter. Total company direct-to-consumer net sales decreased 13% year-over-year to $48.7 million, while overall comparable store sales decreased 30%.

Gross profit rate during the quarter decreased 360 basis points year-over-year due to a higher markdown rate. Abercrombie was able to reduce its stores and distribution expense (as a percentage of sales) through savings in store payroll, and reduction in direct-to-consumer and other variable expenses. The marketing, general and administrative expenses also decreased during the quarter from $109.0 million to $88.7 million due to savings related to employee compensation and benefits, and cut in travel and outside services.

However, the rate of sales decline of the company was much higher than the reduction in expenses. Furthermore, Abercrombie witnessed an increase in rents, depreciation and lease termination costs related to the exit of RUEHL branded stores.

During the quarter, the management approved the closure of 29 RUEHL branded stores and associated direct-to-consumer operations. Abercrombie incurred $23.6 million of pre-tax charges during the quarter to exit RUEHL, along with an impairment charge of $0.8 million. The company expects to complete the closure by the end of fiscal 2009.

At quarter end, Abercrombie had $366.5 million of cash and cash equivalents along with outstanding debt and letters of credit of $79.6 million. The company repaid $100 million of US dollar-denominated outstanding debt, and obtained approximately $37 million in foreign currency denominated borrowings to fund its international lease and capital expenditures.

During the quarter, the company opened its first Epic Hollister flagship store in New York, two Hollister mall-based stores in the UK, and one Abercrombie store in the US. Abercrombie mulls opening nine mall-based stores in fiscal 2009 in the US, which includes two Abercrombie stores, four Hollister stores, one Gilly Hicks store, and two outlet stores. Internationally, the company intends to open 10 mall-based stores in the current fiscal year, including one Abercrombie store in Canada, one Hollister store each in Germany and Italy, and seven Hollister stores in the UK.

Abercrombie has reduced its earlier capital expenditures projection for fiscal 2009 from $200 million to $185 million, due to lower-than-expected construction costs and the reduction and deferment of non-essential projects related to existing stores.
Read the full analyst report on "ANF"
Zacks Investment Research

PennyOmega.com Stocks Upgraded, Downgraded and Short Highlights Before the Bell Friday August 14, 2009

PennyOmega.com — Fri, 14 Aug 2009 12:43:18 +0000

<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<

Budget Insanity, FOMC Down-Low, Oil Sands Investing and More!

Contrarian Profits — Thu, 13 Aug 2009 16:00:10 +0000

pGovernment budget hits all-time insanity… record monthly, year-to-date deficits#8230; “Cash for clunkers” helps GM, but not economy… July retail sales stage surprise fall#8230; Fed plans exit strategy, ends bond buys… why the FOMC is still not helping you#8230; Byron King’s crude reality: How Canada could be the next Saudi Arabia#8230;/p p It’s official: strongOur government ran a record $180.7 billion over budget in July,/strong the Treasury Department said today. That’s just a bit over Wall Street expectations and just under the Congressional Budget Office estimate we reported a href="http://www.agorafinancial.com/5min/the-debt-ceiling-dividend-plays-a-currency-sea-change-and-more/"Monday/a. Thus the government tab so far this fiscal year is a record $1.27 trillion, not the record $1.3 trillion the CBO guessed earlier this week. Phew… what a relief./p pA few more scary details:/p ul liThe budget deficit is still on track to#8230;/li/ul

XOM’s LNG Terminal Update – Analyst Blog

Zacks Market Commentaries — Tue, 11 Aug 2009 19:27:57 +0000

Exxon Mobil Corp. (XOM) declared that the first liquefied natural gas (LNG) cargo has arrived at the Adriatic LNG regasification terminal located offshore of Porto Levante, Italy. The terminal is the first offshore gravity based structure in the world for unloading, storage and regasification of LNG.

The terminal is owned by Qatar Terminal Limited (a Qatar Petroleum subsidiary owning 45%), Exxon Mobil Italiana Gas (45%) and Edison (10%).

The regasification terminal utilizes Exxon Mobil proprietary technology. Designed around a large concrete structure, the terminal houses two LNG storage tanks, a regasification plant and facilities for mooring and unloading LNG vessels.

Once it reaches full operational capacity later in 2009, the terminal will be able to deliver 775 million cubic feet of natural gas per day or approximately 10% of Italy’s current natural gas requirements.

Notably, Exxon Mobil has also recently started another LNG regasification terminal in Wales, UK. This is the South Hook Terminal, owned by Qatar Petroleum (67.5%), Exxon Mobil (24.15%) and Total (8.35%).

The company’s investments in Qatar also play a key role in Exxon Mobil’s LNG strategy. Exxon Mobil has a 25% stake in Ras Laffan Liquefied Natural Gas Company, or RasGas, which produces LNG from a designated area within the North Field, the largest offshore natural gas field in the world.

Exxon Mobil is a global leader in developing and delivering advanced LNG technology. Through advanced technologies, project execution expertise and economies of scale, Exxon Mobil is extending its ability to bring global LNG supplies to Italy and elsewhere around the world.

Exxon Mobil is one of the best-run companies among the global oil majors. Its diversified portfolio of assets, both in terms of businesses as well as geographic locations, gives its results a very high level of stability. It produces one of the largest earnings in the corporate world, generates substantial amounts of cash flows and pays out a dividend that has increased steadily in each of the last 26 years.

Read the full analyst report on "XOM"
Zacks Investment Research

FAF, HSTX, WNDM Stock-PR Report August 11, 2009

Stock-PR — Tue, 11 Aug 2009 17:34:16 +0000

First American CoreLogic, a member of The First American Corporation (NYSE: FAF) family of companies and America’s largest provider of advanced property and ownership information, analytics and services today introduced RealQuest(R) Home Value Pro, a free Apple iPhone application that enables individuals to view comprehensive market data on over 140 million residential properties in the [...]

Energy Blast – August 10, 2009

Robert Amsterdam — Mon, 10 Aug 2009 09:11:05 +0000

Italian President Silvio Berlusconi has been unabashed about taking the credit for getting Turkey to participate in the South Stream pipeline deal, seeing it as a reflection of his gift for 'great commercial diplomacy'. For a timeline of important dates...

“Advances in Development Reverse Fertility Declines” – Science or Hocus Pocus?

Edward Hugh — Sun, 09 Aug 2009 08:28:00 +0000

by Edward Hugh: : L'Escala de Empordàbr /br /According to a once-upon-a-time post on the Economist's a href="http://www.economist.com/blogs/certainideasofeurope/2007/07/a_fistful_of_reply.cfm#list-comments"Certain Ideas of Europe Blog/a Edward Hugh “was very cross” about some of the journalism they were serving up over at that prestigious journal. Well, not to worry, since this time he is hopping mad. And the issue which lies behind his wrath is essentially the same one, how to interpret and understand the demographic processes which are currently so evidently affecting our societies. In what is simply the latest episode in a long and sorry saga (if you want documentation, please see the comments Claus Vistesen and I nailed to their "Wall" in the above linked post) this week's print issue contains a href="http://www.economist.com/sciencetechnology/displaystory.cfm?story_id=14164483"a research review from their science and technology correspondent/a who is evidently not backward in coming forward with headline grabbing claims. According to the said corresponedent the demographic transition (a process which has been ongoing for over two hundred years now) has finally and definitively gone into reverse gear:br /blockquote"One of the paradoxes of human biology is that the rich world has fewer children than the poor world. In most species, improved circumstances are expected to increase reproductive effort, not reduce it, yet as economic development gets going, country after country has experienced what is known as the demographic transition: fertility (defined as the number of children borne by a woman over her lifetime) drops from around eight to near one and a half. That number is so small that even with the reduced child mortality which usually accompanies development it cannot possibly sustain the population.br /br /If Mikko Myrskyla of the University of Pennsylvania and his colleagues are correct, though, things might not be quite as bad as that. A study they have just published in Nature suggests that as development continues, the demographic transition goes into reverse."/blockquotebr /br /Well quite a strong claim is being made here. The idea that a group of researchers have come up with a finding that shows the "rule....that people have fewer children as their countries get richer...no longer holds true" is certainly not one to be sniffed at. Such a strong claim needs some very heavy backing you would think, given all the research that has gone into the topic in recent years.br /br /In fact, the research makes no such direct claim, since Myrskylä et al simply find statistically significant evidence for a reversal in the relationship between the human development index (HDI)br /and the total fertility rate (Tfr) at HDI levels around 0.85–0.9. The rest is only interpretation. As we will see, to move from a simple statististical correlation to formulating a hypothesis you need an explanatory framework, and you need to be able to make falsifiable predictions. The Nature letter from Myrskylä et al is far from being at this stage of development. They have simply found an interesting correlation, and the rest is in the eye of the observer.br /br /blockquote"Back in 1975, a graph plotting fertility rate against the Human Development Index fell as the Human Development Index rose. By 2005, though, the line had a kink in it. Above an HDI of 0.9 or so, it turned up, producing what is known in the jargon as a “J-shaped” curve (even though it is the mirror image of a letter J). As the chart shows, in many countries with really high levels of development (around 0.95) fertility rates are now approaching two children per woman. There are exceptions, notably Canada and Japan, but the trend is clear."/blockquotebr /br /However, according to the Economist the trend is clear. But is it? Edward has been doing some digging.br /br /In fact the problem goes beyond the Economist, since the source behind the article is a letter published in Nature. Below a href="http://www.nature.com/nature/journal/v460/n7256/full/nature08230.html"you can read that letter/a.br /br /blockquote"During the twentieth century, the global population has gone through unprecedented increases in economic and social development that coincided with substantial declines in human fertility and population growth rates. The negative association of fertility with economic and social development has therefore become one of the most solidly established and generally accepted empirical regularities in the social sciences. As a result of this close connection between development and fertility decline, more than half of the global population now lives in regions with below-replacement fertility (less than 2.1 children per woman. In many highly developed countries, the trend towards low fertility has also been deemed irreversible. Rapid population ageing, and in some cases the prospect of significant population decline, have therefore become a central socioeconomic concern and policy challenge10. Here we show, using new cross-sectional and longitudinal analyses of the total fertility rate and the human development index (HDI), a fundamental change in the well-established negative relationship between fertility and development as the global population entered the twenty-first century. Although development continues to promote fertility decline at low and medium HDI levels, our analyses show that at advanced HDI levels, further development can reverse the declining trend in fertility. The previously negative development–fertility relationship has become J-shaped, with the HDI being positively associated with fertility among highly developed countries. This reversal of fertility decline as a result of continued economic and social development has the potential to slow the rates of population ageing, thereby ameliorating the social and economic problems that have been associated with the emergence and persistence of very low fertility."/blockquotebr /br /br /Here is the chart (reproduce from Nature data) which the Economist presents to illustrate the 'J curve' relationship.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Sn1c5QH2KJI/AAAAAAAAOw8/9EElMH7Rg3w/s1600-h/Nature+Chart.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 252px; DISPLAY: block; HEIGHT: 277px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367548469545674898" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sn1c5QH2KJI/AAAAAAAAOw8/9EElMH7Rg3w/s400/Nature+Chart.png" //abr /br /Nice, isn't it? Nature even go to the lengths of a putting up a special "event" podcast featuring an interview with Hans Peter Kohler (a href="http://www.nature.com/nature/podcast/"click here for link/a) as if to underline the importance of the "finding") But does any of this have any compelling validity?br /br /Methinks not as much as the authors of the letter, or those who are covering it in the media, are trying to make out. There are many issues which are raised here, but I would just like to mention three.br /br /The first is the decision of the research team to work with a period based fertility measure which is known to be very unreliable for "tempo" reasons (the Total Fertility Rate- Tfr) as the basis for a longitudinal study. And let us remember, the authors only really claim to have found a correlation between HDI levels in the 0.85–0.9 range and movements in the Tfr, and there could be many explanations for this. Indeed the authors themselves even offer one of them in their supplementary information - "countries at development levels near the critical level HDI = 0.86 might have a more rapid postponement of childbearing than more advanced countries.. " - a possibility which, in fairness to the authors, they try to test for.br /br /And you don't have to rely on me for the suggestion that the Tfr is hardly the most desireable measure for what they want to do, since the authors themselves point this very fact out in the supplementary information (and the only thing which surprises me is that nobody else who has reviewed the research seems to have twigged the implications of this). So the very title of the Letter is totally misleading, they have not found that "Advances in Development Reverse Fertility Declines" -since in the first place the direction of causality is not adequately determined (it might be that reverses in fertility decline advance development, as I try to show in a piece referenced below) and in any event the research only shows movements in the HDI correlate with movements in the Tfr (and not with "fertility").br /br /blockquoteThe recent literature on low fertility in developed countries has pointed to the important role of delayed childbearing, that is, the ongoing postponement of childbearing to increasingly later ages. In the context of this paper, delayed childbearing is potentially important because the postponement of childbearing can distort the total fertility rate as a measure of the quantum (or long-term level) of fertility. “Tempo effects”, or the reductions in the total fertility rate resulting from a postponement of childbearing, have been shown to partially explain the very low fertility rates observed in some European countries./blockquotebr /br /So this is the first issue. Due to the phenomenon of birth postponement, the Tfr is a hopelessly unreliable indicator, and what is often called "the birth recovery" is in fact a statistical issue produced by the fact that the Tfr first sinks to very low levels (the birth dearth) and then recovers as women reach the new (higher) childbearing age. Since all of this is simply so obvious, I am absolutely astounded that two such well known and highly respected demographers - Hans-Peter Kohler and Francesco Billari - have placed their name on a piece of research that could almost be described as a publicity stunt. I am even more astounded by the way Nature appear to have been hoodwinked.br /br /Basically, I don't think that there can be any doubt that if they used a more comprehensive measure of fertility - say completed cohort fertility - they wouldn't get the correlation they claim to have found, since CFRs never fell so low, and have not bounced back in the same way. This is essentially because this indicator removes the temporal component found in the TFR (older first birth ages among women in developed societies) and only focuses on quantity. True, they did carry out a robustness test using an adjusted Tfr, but the results are much weaker, and the sample far from satisfactory (at least for the claims being made), and the authors well know this (see below).br /br /In their longitudinal study the authors look at Tfrs for a number of countries over the period 1975 to 2005 and compare these to the lowest Tfr reading observed while a country's HDI was within the 0.85–0.9 window. For all countries considered, the HDI in 2005 was found to be higher than the HDI in the reference year. For 18 of the 26 countries that attained a HDI 0.9 by 2005, the Tfr in 2005 was found to be higher than the TFR in the reference year. As I say, this is hardly surprising, given the tempo impact on Tfrs. The "2005 18" are Norway, the Netherlands, the United States, Denmark, Germany, Spain, Belgium, Luxembourg, Finland, Israel, Italy, Sweden, France, Iceland, the United Kingdom, New Zealand, Greece and Ireland.br /br /Perhaps it is more surprising (and interesting) to learn that they found six countries where the HDI was over 0.9 but where the Tfrs didn't pick up: Japan, Austria, Australia, Switzerland, Canada and South Korea. Clearly the absence of "rebound" in even the Tfrs is something of a cause for preoccupation in these countries, and examining the background to what is happening in these countries could at the end of the day turn this research into something quite interesting. That is to say, if for their level of development we might have expected the tempo effect to be more or less over, why do some countries continue to have very low fertility levels?br /br /Basically, to shoot a hole straight through their hypothesis (falsify it that is, surely in science things should be falsifiable), I would say it is only necessary to find a significant number of countries in the first group where fertility as measured by a better indicator didn't rise. Unfortunately we don't have a really good time series for such an indicator, but Eurostat have published statistical estimates for Completed Cohort Fertility Rates (Cfrs) for EU countries up to the 1989 cohort. That is, estimates of what fertility is likely to be for women who were 30 in 2009. Looking at this data, the following countries would appear to offer no evidence whatever for a rebound in cohort fertility in what we know to dat: Norway, Netherlands, Denmark, Germany, Italy, Finland, Sweden, France, Iceland, the UK, Greece and Ireland. That is to say, as far as I am concerned, the whole hypothesis falls till at least subsequent data confirm it.br /br /I haven't been able to check foir the US (but the Cfr is probably up) Israel (also) or New Zealand. Belgium has little available data. So the only two European countries which you could say with some degree of security actually could confirm the hypothesis would be Luxembourg and Spain - but if you just look at the increases in Spain - from 1.34 to 1.35 - and think about the fact that 5 million new migrants arrived (mainly in childbearing ages) between 2000 and 2009, then the result is hardly dramatic, and if you look what just happened to the economy, it is more than likely that GDP per capita is plummeting, and and household income (which has a weighting of more than one third in the HDI) with it. Which brings me to the second question, the reference year. But before I move on to that, as I say above, the authors are perfectly well aware of the issue with using Tfrs.br /blockquoteIn particular, one could speculate that tempo effects might be—at least partially—responsible for the observed change in the development–fertility association. For example, countries at development levels near the critical level HDIcrit = 0.86 might have a more rapid postponement of childbearing than more advanced countries. If this were the case, tempo effects would reduce the TFR more strongly at intermediate than at advanced HDI levels, and the positive association between HDI and TFR in Figures 1–2 could be partially explained by differences in the pace of fertility postponement, rather than by variation in levels among advanced countries./blockquotebr /br /The authors therefore carry out a robustness test which effectively amounts to a cross-sectional study (cross-sectional note, not longitudinal) of the relationship between the total fertility rate with and without adjustment for tempo effects, and the human development index in 1975 and 2005. Tempo adjusted TFRs are not available over the period in question so they simply took data for 2005 (for those countries for which it is available from the ’European Demographic Data Sheet 2008’ (published by the Vienna Institute of Demography, Vienna, Austria) and from McDonald P, Kippen R. The Intrinsic Total Fertility Rate: A New Approach to the Measurement of Fertility (Population Association of America Annual Meeting 2007, New York, 2007). What they can then show is that the HDI–TFR relationship at persists at advanced development stages persists even after adjusting the total fertility rate for tempo effects. But, as I say, this is cross sectional, not longitudional. What does this jargon mean? It means there is no clear causal relationship, since equally it could be better HDIs which is driving better fertility, and hence you can use the HDI to explain differences between countries if you wish, but not the evolution of fertility in individual countries. The 2005 result is show as a black line in the chart below, where you can see that as HDI goes up, Tfr also seems to be higher.br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sn1xBKpJlQI/AAAAAAAAOxE/GnOAvjVfEW4/s1600-h/cross+section.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 371px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367570595746256130" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sn1xBKpJlQI/AAAAAAAAOxE/GnOAvjVfEW4/s400/cross+section.png" //abr /br /Which is very much to the point, and brings me to my second issue, since in my blog post "Taking Solow Seriously - Does Neoclassical Steady State Growth Really Exist?" (a href="http://edwardhughtoo.blogspot.com/2009/06/taking-solow-seriously-does.html"which you can find here/a) - I demonstrate using a few simple charts that the evolution in GDP per capita (which accounts remember for one third of the HDI) may well be a function of underlying population dynamics, since three countries with stronger population growth and higher fertility (the US, the UK and France) evidently perform much better than three will low-to-negative population growth and very low fertility (Italy, Japan and Germany).br /br /Also, it should be remembered, as I mention, we need to think about base years. 2005 was the mid point of a massive and unsustainable asset and construction boom. I think there is little doubt that if we took 2010 or 2011, the results would be rather different.br /br /Finally, the piece in the Economist article that I personallyfind most interesting is the following:br /br /"Dr Myrskyla’s data, however, suggest the ultimate outcome of development may not be a collapsing population at all but, rather, the environmentalist’s nirvana of uncoerced zero population growth."br /br /I want to stress, I certainly think this stationary population idea is certainly one possibility in the more highly developed nations - but if we move to stationary populations, with higher and higher proportions of the population in the older age groups the result is - as we know - a rising median population age. It is the economic impact of the abrupt rise in median age that I personally am focused on, and how just this rise, and the resulting fall in living standards for many young people, might feedback in a negative way on fertility and thus produce ever more rising median ages. In recent days, some have been asking why people like myself are so focused on what is going on in Latvia, which is after all, a pretty small country. Well, I think here in the issues raised by the Nature letter we have just one more reason why that country is important, since in a sense it is conducting a "live" experiment.br /br /Finally, I want to say, none of the above should be read as suggesting that there isn't a great deal of interest and material to talk about in the study the authors have carried out. Nor would I hold them entirely responsible for the way in which others have used and abused their work. I just the reserach doesn't demonstrate what they want it to demonstrate, and that the study doesn't deserve the kind of high media profile it has been receiving, since it is going to mislead the general public more than it will enlighten them, given the important methodological issue which are still to be clarified.br /br /The heart of the problem is twofold. The excessive reliance on a rather problematic indicator (the Tfr) and the causality issue when it comes to GDP per capita and higher fertility (which way does the arrow point?). In fairness the authors do attempt to construct their own combined time series based on a mixture of tempo-adjusted Tfrs and Tfrs, a procedure which seems at the very least to be somewhat problematic if you want to reverse fifty years of academic consensus. And they do get the same sort of result, but the outcome is much weaker and is based on a much smaller sample of only 25 countries. But even this result is at the very least odd, since, as I argue above, cohort fertility hasn't really increased in most of thecountries concerned. So I think we really all need to see more details of how the authors actually constructed the time series to be able to form a better judgement.br /br /But all this being said, and whatever the original intentions of the authors, serious scientific debate does seem to have been turned here into something of a media circus. Wasn't it blogs that were supposed to do that?br /br /strongAppendix/strongbr /br /Below I offer a series of charts showing estimated completed cohort fertility rates based on data compiled by Eurostat using the distribution of births by parity (first and second or higher order births) and mean age of mothers at respective parities to carry out the calculations. Evidently, the most recent data for hard data on completed cohort fertility comes for the 1960 - 1965 cohort. These charts should not be treated as hard data, but a rule-of-thumb type quick visual inspection suggests that it is hard to accept the case for a substantial fertility rebound in many European countries.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Sn3PO8BEe7I/AAAAAAAAOx8/9eOvojQ9XYQ/s1600-h/Switzerland+and+Slovenia.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 203px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367674186431232946" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sn3PO8BEe7I/AAAAAAAAOx8/9eOvojQ9XYQ/s400/Switzerland+and+Slovenia.png" //abr /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Sn3PJ0CFCQI/AAAAAAAAOx0/yu_FnUR5KkM/s1600-h/norway+and+denmark.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 203px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367674098388633858" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sn3PJ0CFCQI/AAAAAAAAOx0/yu_FnUR5KkM/s400/norway+and+denmark.png" //abr /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Sn3PGVm-g8I/AAAAAAAAOxs/1jEqYkUYjqE/s1600-h/netherlands+and+Italy.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 201px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367674038682289090" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sn3PGVm-g8I/AAAAAAAAOxs/1jEqYkUYjqE/s400/netherlands+and+Italy.png" //abr /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Sn3PCbmMTYI/AAAAAAAAOxk/6BPfKQPDsIc/s1600-h/luxembourg+and+spain.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 203px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367673971570134402" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Sn3PCbmMTYI/AAAAAAAAOxk/6BPfKQPDsIc/s400/luxembourg+and+spain.png" //abr /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/Sn3O-cYGe_I/AAAAAAAAOxc/ktZadAXfAaU/s1600-h/ireland+and+Greece.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 204px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367673903059991538" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/Sn3O-cYGe_I/AAAAAAAAOxc/ktZadAXfAaU/s400/ireland+and+Greece.png" //abr /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Sn3O6b_brlI/AAAAAAAAOxU/eGWratutFCw/s1600-h/Iceland+and+Sweden.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 201px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367673834237046354" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sn3O6b_brlI/AAAAAAAAOxU/eGWratutFCw/s400/Iceland+and+Sweden.png" //abr /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Sn3O2NEgbvI/AAAAAAAAOxM/sfcSNnQpjQc/s1600-h/finland+and+germany.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 202px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5367673761512320754" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Sn3O2NEgbvI/AAAAAAAAOxM/sfcSNnQpjQc/s400/finland+and+germany.png" //adiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8991369883287712098-4815330640925891745?l=globaleconomydoesmatter.blogspot.com'//div

Turkey’s Geostrategic Energy Role

Robert Amsterdam — Fri, 07 Aug 2009 14:47:29 +0000

Given all the news this week of Russia and Italy's South Stream deal with Turkey in exchange for a nuclear power plant, I thought I would repost an article written by Robert Amsterdam last fall in Energy Risk on Turkey's...

Energy Blast – August 7, 2009

Robert Amsterdam — Fri, 07 Aug 2009 08:27:06 +0000

Vladimir Putin has rejected the 15-year old international Energy Charter Treaty. According to the Prime Minister, Turkey and Russia 'agreed on everything' regarding South Stream at their energy deal meeting and added, 'it is obvious there is demand' for the...

Goldman…Goldman…Goldman…

Bill Bonner — Thu, 06 Aug 2009 17:31:21 +0000

p Goldman Sachs Would Have Collapsed If Not For Henry Paulson./p pThe Dow slipped a bit yesterday – only 39 points. Everyone is watching. They want to see how far this rally carries on. Many think it is more than a bear market bounce; they think it is for real./p pThe prevailing opinion is that quick action by the feds avoided a more serious meltdown. Ben Bernanke says he was working to prevent a “second great depression.”/p pAnd now that the crisis is past, the economy is slowly climbing out of its hole. The second quarter showed GDP falling at 1% per year in the US#8230; rather than the 6.4% rate recorded earlier in the year. Housing sales have perked up. Oil is trading#8230;/p

A New Audio Interview with President CEO, Rich Lauer, of ICC Worldwide, Inc., is Now at SmallCapVoice.com

Stuart T. Smith — Mon, 03 Aug 2009 14:16:50 +0000

SmallCapVoice.com, Inc. announced today that a new audio interview featuring ICC Worldwide, Inc. (OTCBB: ICCW) is now available. The interview can be heard at http://smallcapvoice.com/blog/7-30-09-audio-interview-with-icc-worldwide-inc-otcbb-iccw/. SmallCapVoice.com is a recognized corporate investor relations firm, with clients nationwide, known for its ability to help emerging growth companies build a following among retail and institutional investors. SmallCapVoice.com utilizes its [...]

The Resource Wars Are Heating Up

Andrew Gordon — Tue, 28 Jul 2009 23:53:19 +0000

h2You can’t go back. So don’t assume that as the U.S. and the West recovers, they’ll attract foreign capital just like they did before the recession. It’s a far different landscape now. The easy-credit bubbles are gone. And they’ve left us with a hellacious debt burden.br / /h2 div class="entry" pThe U.S. debt is expected to zoom to $16.2 trillion by 2012, almost equal to its projected GDP. Italy’s debt is expected to reach 120% next year. France’s debt will approach 90% next year (if President Nicolas Sarkozy goes ahead with his fiscal blitz). All told, by next year, Europe’s debt should rise to about 80 percent of GDP. And then there’s Japan. Its public debt is headed toward unfathomable depths. It should reach 240%#8230;/p/div

Manpower Cautious for 3Q – Analyst Blog

Zacks Market Commentaries — Mon, 27 Jul 2009 22:50:51 +0000

Manpower (MAN) recently reported second-quarter operating earnings of $0.25 per diluted share, compared to $1.34 a year ago. Earnings were $0.15 above expectations and were at the high end of the guidance range.

Net revenue for the temporary staffing firm declined 35.7% year-over-year to $3.8 billion. On a constant currency basis, revenues from services declined 26.6% due to weak performance of the company's operations in the U.S. (23.9% decline), France (35.6%), EMEA (25.0%), Italy (40.3%), and Other Operations (12.7%).

In addition, revenues at Jefferson Wells were down 36.5% due to projects being deferred into backlog and investment overseas. However, revenues at Right Management continued to increase and posted a robust 46.5% increase due to strong demand for outplacement services.

The liquidity of the company improved during the quarter with cash of $1.1 billion and total debt of $874 million, thereby improving net cash position to $233 million from $147 million in the previous quarter. The overall debt-to-capitalization remains stable at 26%.

Management provided a cautious outlook for the third quarter of fiscal 2009. On a consolidated basis, it expects revenues to decline between 29% and 31% in reported dollars (24% to 26% in constant currency). Although a significant decline, the rate of contraction is expected to improve slightly from the second quarter.

The company expects the Americas, France, EMEA and Asia-Pacific to be down from the prior-year; again the rate of contraction is expected to be slightly less than what it was in the second quarter. The Right Management business will continue with strong growth, which is expected between 29% and 31% in constant currency. The market for Jefferson Wells is expected to remain difficult and revenues are expected to decline 38% to 40%.

Quarterly earnings per share are expected to be in the range of $0.07 to $0.21 and the company expects a negative currency impact of $0.01.

Read the full analyst report on "MAN"
Zacks Investment Research

ICC Simplifies Capital Structure With Reduction of Fully Diluted Shares and Reorganization of Debt

Stuart T. Smith — Mon, 27 Jul 2009 14:03:58 +0000

CORONA DEL MAR, Calif., July 27, 2009 (GLOBE NEWSWIRE) — ICC Worldwide, Inc. (OTCBB:ICCW) today announced that a comprehensive agreement had been reached with four of the firm’s principal financing sources to consolidate a total of ten existing promissory notes, each with varying terms and conditions, into four new superseding notes with a much more [...]

Rebecca Wilder: World economic updates for the week of July 17–24

Prieur du Plessis — Sat, 25 Jul 2009 07:21:28 +0000

"This week, a compilation of indicators shows that the recovery is tentative at best - more likely, a global bottom has not yet been found. The leading indicators are stronger in some countries; exports are still declining at an annual pace of 20+ percent but stabilizing; and volatile retail sales growth rates are, well, quirky. Must wait for a trend - the US stock market(s) certainly see one coming!," says Rebecca Wilder in this guest post.

VOD Buoyed By FX Swing – Analyst Blog

Zacks Market Commentaries — Fri, 24 Jul 2009 14:15:02 +0000

Vodafone Group Plc (VOD), the largest wireless carrier in the world by revenue, has announced financial results for the first quarter of fiscal year 2010 (ended June 30, 2009). The company reported group revenues of £10.7 billion (US$16.6 billion), representing a 9.3% year over year growth. Favorable exchange rate (euro-sterling) movements and net impact of merger and acquisition initiatives (especially additional 15% stake in Vodacom) contributed to this growth. Excluding these impact (organic basis), revenue declined by 2.4%.

Geographically, revenues for the European segment increased 3.8% (down 4.8% on organic basis) to £7.5 billion (US$11.6 billion) in the first quarter. Africa & Central Europe segment posted revenues of £1.7 billion (US$2.6 billion), up 27.8% year over year. Organically, revenue fell 2.5% as consistent growth at Vodacom (South Africa) and favorable exchange rate movements were partly offset by weak contributions from Romania and Turkey. Asia Pacific & Middle East segment continues to perform in line with expectation with revenue surging 20.3% (13.7% organically) to £1.6 billion (US$2.5 billion), favored by strong growth momentum in India.

Group service revenue declined 2.1% on an organic basis to £10.1 billion (US$15.6 billion), primarily due to weaker contributions from European markets as recessionary conditions curbed demand for wireless services. Service revenue in Europe declined 4.4% organically as growth in Italy was more than offset by decreases across Spain, Germany and U.K due to a weaker economy, regulatory pressure and intense competition.

In the first quarter, Vodafone registered 8 million new mobile connections across its operations, bringing the total subscriber base to 315.3 million (83% represented by prepaid). India continues to be a key driver for subscriber growth with a net addition of 7.7 million customers followed by Egypt (1.4 million) and South Africa (1.3 million). In Europe, the company lost 633,000 subscribers in the quarter. Verizon Wireless posted a net addition of 1.1 million customers.

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$16.5 billion to US$17.7 billion), assuming a favorable foreign exchange environment. Free cash flow is projected between £6.0 billion and £6.5 billion (US$9 billion to US$9.7 billion).

Vodafone is aggressively pursuing its cost reduction program (including a workforce reduction in Europe) which could generate annual savings of £1 billion (US$1.6 billion) by 2011, with 65% of the savings expected to be realized in fiscal 2010. Also, the company continues to accelerate 3G wireless service deployments and expanding network availability across Asia, Eastern Europe and Africa, primarily through acquisitions. Additionally, Vodafone is focused on improving shareholder returns through attractive dividend payouts.

While we consider the limitations of economic improvements in key European markets over the near-term, we believe Vodafone’s financial prospects remain attractive relative to many other large-cap telecom carriers. Additionally, management’s outlook for fiscal 2010 appears favorable with opportunity for sustainable growth across the incipient markets.

That said, we maintain our Buy rating for Vodafone.
Read the full analyst report on "VOD"
Zacks Investment Research

ABB Reports Lower Earnings – Analyst Blog

Zacks Market Commentaries — Fri, 24 Jul 2009 11:37:25 +0000

ABB Ltd. (ABB) reported second quarter 2009 revenues of $7.9 billion, which are lower than our estimates while earnings came in at $0.30, which are also below our expectations.

Orders came in lower at $7.3 billion, down 35% compared to the year-ago quarter as a consequence of lower volumes as well as price decreases driven by reduced demand. Orders were down 20% in the Americas. Europe saw lower demand in all businesses. Orders from Asia were down across divisions except Industrial Automation, where higher orders in India offset decreases in other markets.

Revenues increased in local currency terms in those divisions with heavy order backlogs- Power Products, Power Systems and Process Automation. Revenues were down in the Automation and Robotics divisions. Pre-tax margin declined compared to the year-ago quarter on lower revenues and capacity utilizations in automation as well as restructuring charges.

Net financial income for the quarter was negative due to lower market rates on the company’s net cash balance compared to the year-ago period. Net income in 2Q09 was $739 million, a decline of 26% year over year.

During the quarter, the company acquired Comem SpA, an Italy-based manufacturer of transformer components with operating units in Italy, Brazil, Turkey and China. This is an example of vertical integration and we consider the target a good fit for the company’s transformers portfolio.

The cost and scarcity of project funding have delayed many power investment decisions, and ABB is unable to forecast when the various government stimulus programs will start having an impact and the improvement in the availability of funding. Demand in ABB’s industrial end-markets depends to a large extent on GDP growth and capital spending, together with commodity prices.

ABB has reconfirmed its previously fixed targets for 2007-2011, with the exception of the Robotics division, which requires major restructuring following an unforeseen market slump.

ABB is a leader in power and automation technologies that enable utility and industry customers to improve performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 120,000 people. The company has diverse interests and offerings in Power Products, Power Systems, Automation Products, Process Automation and Industrial Robotics.

We continue to maintain our Hold rating on ABB.
Read the full analyst report on "ABB"
Zacks Investment Research

Listening to Eastern Europe

Robert Amsterdam — Mon, 20 Jul 2009 14:14:37 +0000

Ever since Barack Obama's first relatively friendly state visit to Moscow, Washington and the Kremlin have engaged in a showdown of gestures over the elephant in the room: the legitimacy of Russia's claim to a privileged sphere of influences. Directly...

RIMM Settles Patent Dispute – Analyst Blog

Zacks Market Commentaries — Fri, 17 Jul 2009 22:30:47 +0000

Research In Motion (RIMM), the manufacturer of BlackBerry smart-phone devices, has entered into a definitive agreement with Visto Corp, a leading mobile e-mail developer, to settle all outstanding worldwide patent-related litigations.

Visto first filed a patent infringement lawsuit against RIMM in May 2006 in the U.S. federal court of Texas. Later on, the legal battle between these two companies also entered courtrooms in Italy, Canada, U.K., and Germany. According to the settlement agreement, RIMM will pay a one-time payment of $267.5 million to Visto and will get a perpetual and fully-paid license on all Visto patents together with a transfer of some Visto intellectual property.

RIMM announced that the major part of this payment will be expensed as an unusual item during the second quarter of fiscal 2010 and the reminder will be recognized as an intangible asset. We do not expect this settlement charge to have any material impact on RIMM's liquidity, as the company has an un-leveraged balance sheet with more than $2.4 billion of cash and marketable securities at the end of the first quarter of fiscal 2010.

According to our view, settlement of this litigation issue is significant since this was the last major patent-related dispute of RIMM. Now the company can give more emphasis on the R&D and marketing aspects of BlackBerry. The smart-phone mobile market is growing continuously.

As a result, this market is getting increasingly crowded with new players and is expected to witness intense competition going forward. In addition to RIMM, Apple Inc. (AAPL), Nokia Corp. (NOK), Sony-Ericsson, a joint-venture between Sony Corp. (SNE) and L.M. Ericsson (ERIC) and Samsung have launched a series of innovative products. Motorola (MOT), Google (GOOG), HTC, and LG Electronics are other new entrants in this market. In order to remain competitive, RIMM has undertaken more than $1 billion of expenditure on intangible assets like patent & license, during the past two years.

RIMM has been able to successfully differentiate its BlackBerry products from other offerings in the communications market. Demand has been overwhelming for its BlackBerry Bold, Storm, Pearl Flip 8230, and BlackBerry 8830 World editions. The recently-launched BlackBerry Tour received encouraging market traction. The Tour is an updated edition to the BlackBerry 8830 World Edition and a combination of the BlackBerry Curve 8900, Pearl and the Bold. We reiterate Buy recommendation for RIMM.

Read the full analyst report on "RIMM"
Read the full analyst report on "AAPL"
Read the full analyst report on "NOK"
Read the full analyst report on "SNE"
Read the full analyst report on "ERIC"
Read the full analyst report on "MOT"
Read the full analyst report on "GOOG"
Zacks Investment Research

Natalia Estemirova and the Price of Courage

Robert Amsterdam — Wed, 15 Jul 2009 16:22:43 +0000

The following is a rant with little editing or consideration.No sooner had the news media reported on her abrupt kidnapping, did we hear of the discovery of the journalist and human rights advocate Natalia Estemirova's body. I am told that...

TAP’s Joint Venture with Cobra – Analyst Blog

Zacks Market Commentaries — Mon, 13 Jul 2009 21:40:06 +0000

Molson Coors' (DD) UK division and Cobra Beer formed a joint venture, Cobra Beer Partnership Ltd., that will own, produce and market the Cobra beer brand. The joint venture will own the worldwide rights to Cobra, with the exception of the Indian Sub-Continent, and will be managed by Molson Coors (UK), which holds a 50.1% share of the joint venture.

Lord Karan Bilimoria, the founder of Cobra, will be the chairman of Cobra Beer Partnership Ltd, along with a board primarily consisting Molson Coors executives. Adrian Davey, formerly MD Molson Coors Off-trade, is appointed the Managing Director of Cobra Beer Partnership Ltd. The Cobra brand was introduced in 1989 and was positioned as an ‘exotic, less gassy beer.’ Cobra has grown into a 200,000 barrel brand, distributed in more than 40 countries, and stocked by majority of ethnic restaurants in the UK.

The rapid growth in popularity of Cobra compelled management to implement an aggressive expansion plan over the past two years. However, the business model could not be sustained in the current economic environment and Cobra was put up for sale in late 2008. Considering Cobra is an excellent fit with its UK portfolio with strong international brands such as Grolsch, Blue Moon and Sol, TAP (UK) in mid 2009 formed the joint venture. The joint venture further builds on the company’s commitment to offer customers a wide range of beers.

Molson Coors is the fifth-largest brewer worldwide. Castle Brands (ROX) is the main competitor with a solid platform of high-end, high quality, premium branded spirits. Boru vodka, the company's leading brand, is an ultra-pure, quadruple distilled, and specially filtered premium vodka. ROX also has a growing distribution network in Europe primarily in the Republic of Ireland, the United Kingdom, Germany, France, Italy and elsewhere, primarily in the Republic of Ireland, the United Kingdom, Germany, France, Italy, Canada and the Caribbean.
Read the full analyst report on "TAP"
Read the full analyst report on "ROX"
Zacks Investment Research

Turkish Delight: Nabucco Meets Reality

Robert Amsterdam — Mon, 13 Jul 2009 20:40:54 +0000

Right up there with swine achieving flight and hell freezing over, the probability that European bureaucrats would succeed in building the Nabucco natural gas pipeline was, at least up until a year ago, firmly placed in the realm of impossibility.How...

Cliff Hanging In Bulgaria

Edward Hugh — Sun, 12 Jul 2009 18:12:00 +0000

by Edward Hugh: Barcelonabr /br /br /pa href="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s1600-h/bulgaria+population.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 258px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357485959172294626" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SlmdGD2bh-I/AAAAAAAAOoo/P8vnyB3RTno/s400/bulgaria+population.png" //abr /br /br /The International Monetary Fund this week forecast the recession in Bulgaria would be deeper than it previously predicted. Such a decision should come as no surprise to anyone, since the country's economic dynamics in both the short and long term look extremely unstable, and Bulgaria is now almost certainly headed towards a series of more or less hair-raising roller-coaster rides. Even the briefest of glances at the population chart above should lead even the most sceptical among us to stop and think a little about the possible economic implications of such an appauling demographic outlook. As can be seen, the opening to the west brought a sharp outflow of people in the late 1980s (mainly ethnic Turks), but the important thing to note is that the decline has continued almost continuously ever since. That is, the decline was not a one-off demographic "shock", but rather it has become a way of life (or, if you prefer, of death, since deaths constantly outnumber births, even before you consider emigration). And it is this "terminal style" dynamic which virtually guarantess that the coming ride will be a bumpy one, not only in the short term (guaranteed by the size of the current account deficit - 25% - which Bulgaria needs to correct) but in the longer term, since according to any known growth theory there is simply no way any country can sustain headline GDP expansion with potential labour force and population contractions of this magnitude.br /br /strongSharp Recession in 2009/strongbr /br /Well, to come down to earth with a bump, let's now get into the immediate situation, and down to the fact that the IMF now expects Bulgaria’s economy to shrink by 7 percent in 2009 (previously they were forecasting a 3.5 percent contraction). They also upped (or downed) their 2010 outlook to an anticipated 2.5 percent contraction, from an earlier 1 percent one, although such an adjustment at this point this is now better than mere guesswork. The point is we are in for a severe contraction, and it isn't going to be any laughing matter.br /br /The IMF revision also follows last weeks announcement that it now expects a “sluggish” global economic recovery and its 2009 forecast reduction for central and eastern European, which went to a 5 percent contraction from an earlier 3.7 percent one.br /br /The heart of the Bulgarian problem at the moment stems from the need to correct a current account deficit which reached 25pc of GDP in 2008, the highest of the 80 emerging markets around the world tracked by Fitch Ratings. Gross external debt reached 102 percent of GDP.br /br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SlicspjK3sI/AAAAAAAAOms/fOshCXR7_Pc/s1600-h/bulgaria+CA+deficit.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 225px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357204047638748866" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SlicspjK3sI/AAAAAAAAOms/fOshCXR7_Pc/s400/bulgaria+CA+deficit.png" //abr /br /Bulgaria faces a drastic process of external adjustment process which with the shadow of the current international economic crisis hanging over it will surely be far from painless. Vulnerabilities accumulated during the boom period - a marked rise in private sector external, debt along with a rapid increase in credit growth and widespread FX-denominated borrowing - will make demonstrating unwavering commitment to the currency board arrangement very hard work indeed. Neil Shearing at Capital Economics estimates Bulgaria’s external financing needs at $25 billion this year, including the current-account deficit, short-term private foreign debt payments and interest payments. Foreign investment has fallen by almost half over the last year. Meanwhile private deb is up to just shy of 100 percent of gross domestic product, while the government budget revenue fell 6 percent in May.br /br /br /br /br /strongPlummeting GDP/strongbr /br /br /The Bulgarian economy contracted 3.5 percent in the first quarter when compared with the first quarter of 2008, according to the most recent figures from the National Statistics Office. The turnround is massive when you consider that the economy actually grew by 3.5 percent year on year in the last three months of 2008. In fact, GDP actually shrank by 5 percent from the fourth quarter (or at an annual 20% rate), when it contracted 1.6 percent, according to quarterly data which the statistics institute published for the first time. At this speed, I would say the IMF estimate is well short of the likely outcome, and we could well be looking at a double digit contraction.br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/Slic7GmLG1I/AAAAAAAAOm0/N4iMVFgiRlc/s1600-h/bulgaria+GDP.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 204px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357204295954144082" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/Slic7GmLG1I/AAAAAAAAOm0/N4iMVFgiRlc/s400/bulgaria+GDP.png" //abr /br /Domestic consumption fell 5.4 percent in the first quarter from a year earlier after a 1.4 percent increase in the previous three months. Industrial output, which makes up 31 percent of total GDP, plummeted an annual 12.4 percent in the first quarter, after a 3.7 percent decline in the fourth quarter of 2009. Agricultural output, which accounts for 4 percent of the economy, dropped 4 percent after rising 26.7 percent in the fourth quarter. Services, which make up 65 percent of GDP, rose an annual 2.5 percent after a 3.8 percent gain in the previous quarter, although it is obvious that on a quarter over quarter basis even services are now contracting.br /br /First-quarter exports dropped 17.4 percent, while imports dropped 21 percent, meaning that the net trade impact on GDP was positive.br /br /br /strongShort Term Indicators/strongbr /br /br /Bulgarian industrial production continues to fall and was 22.1 percent from a year earlier in May - the eighth consecutive monthly decline. Output was also down month on month - by 1 percent over April. Retail sales dropped an annual 10.4 percent in May.br /br /a href="http://2.bp.blogspot.com/_ngczZkrw340/SligIsPRYFI/AAAAAAAAOnY/_OEyFwlsvoc/s1600-h/Bulgaria+IP+two.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 233px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357207827931816018" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/SligIsPRYFI/AAAAAAAAOnY/_OEyFwlsvoc/s400/Bulgaria+IP+two.png" //abr /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SligEPw0AII/AAAAAAAAOnM/_qRNyf4K5LQ/s1600-h/Bulgaria+IP+one.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 233px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357207751568392322" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SligEPw0AII/AAAAAAAAOnM/_qRNyf4K5LQ/s400/Bulgaria+IP+one.png" //abr /Construction activity is also well down, falling by 9 percent in April, over April 2008 according to Eurostat data.br /br /br /br //ppa href="http://2.bp.blogspot.com/_ngczZkrw340/SlidIIljhlI/AAAAAAAAOm8/hKx_y2KaVg8/s1600-h/bulgaria+construction.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 205px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357204519826720338" border="0" alt="" src="http://2.bp.blogspot.com/_ngczZkrw340/SlidIIljhlI/AAAAAAAAOm8/hKx_y2KaVg8/s400/bulgaria+construction.png" //a Donestic demand is also in full retreat, as evidenced by retail sales which were down by 3% year on year in May, with the pace of decline steadily increasing.br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/SlihALFeqTI/AAAAAAAAOn4/gigxC_4bnyU/s1600-h/bulgaria+retail+two.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 205px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357208781105047858" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/SlihALFeqTI/AAAAAAAAOn4/gigxC_4bnyU/s400/bulgaria+retail+two.png" //abr /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/Slig7hHUosI/AAAAAAAAOnw/fl4GR8rKUXQ/s1600-h/bulgaria+retail+one.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 203px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357208701119013570" border="0" alt="" src="http://1.bp.blogspot.com/_ngczZkrw340/Slig7hHUosI/AAAAAAAAOnw/fl4GR8rKUXQ/s400/bulgaria+retail+one.png" //a /pbr /pUnemployment is also rising, and hit 6.5% in May, according to the EU harmonised methodology. This is still comparatively low, but the rate will continue to rise sharply throughout the rest of this year.br /br //pa href="http://4.bp.blogspot.com/_ngczZkrw340/SlihKlHP8NI/AAAAAAAAOoA/eVZIKWwXHA0/s1600-h/bulgaria+unemployment.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 206px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357208959890485458" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/SlihKlHP8NI/AAAAAAAAOoA/eVZIKWwXHA0/s400/bulgaria+unemployment.png" //abr /br /br /With all this contraction going on, deflation must surely be looming for Bulgaria, but given the very high levels which inflation hit in the second half of last year, the annual rate of inflation continues in positive territory, and what we are seeing for the time being is rapid disinflation. Bulgaria's annual inflation rate fell to 3.9 percent in May from 4.8 percent in April. This is already the lowest level since July 2005, but there is surely much more to come, and consumer prices actually fell 0.3 percent month on month from April, and basically prices are little changed now over the start of the year. Bulgaria’s EU harmonized inflation rate, slowed to 3 percent in May from 3.8 percent in April. Using this measure prices stagnated on the month after gaining 0.5 percent in April.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SliglbU_yXI/AAAAAAAAOng/lXI-H33wA7w/s1600-h/bulgaria+CPI.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 234px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357208321608632690" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SliglbU_yXI/AAAAAAAAOng/lXI-H33wA7w/s400/bulgaria+CPI.png" //abr /br /More evidence of the deflationary pressures which are now about to arrive can be found in Bulgarian producer prices, which slumped the most in more than a decade in May, led by falling manufacturing, mining and quarrying costs. Factory-gate prices dropped 3.2 percent on an annual basis after a 2.3 percent decline in April. Producer prices rose 0.3 percent in the month, after April’s 0.8 percent decline.br /br /a href="http://3.bp.blogspot.com/_ngczZkrw340/SligwV_fDqI/AAAAAAAAOno/WQNyTCjp7O0/s1600-h/bulgaria+PPI.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 232px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357208509154791074" border="0" alt="" src="http://3.bp.blogspot.com/_ngczZkrw340/SligwV_fDqI/AAAAAAAAOno/WQNyTCjp7O0/s400/bulgaria+PPI.png" //abr /Mining and quarrying producer prices slumped 13.4 percent in the year, reflecting a global decline in commodity prices, after a 15.7 percent drop in April. Metal producer prices plummeted 30.9 percent in year, after a 29 percent decline in the previous month.br /br /strongAnother Candidate For Internal Devaluation?/strongbr /br /Many supporters of the continuty of the current Currency Board Arrangement aregue that while the adjustment process is likely to be a bumpy one the CBA should be able to ride out the storm. I severely doubt this, for many of the reasons I have already offered in the case of the Baltic Countries (a href="http://latviaeconomy.blogspot.com/2008/12/why-imfs-decision-to-agree-lavian.html"here/a, a href="http://latviaeconomy.blogspot.com/2009/01/why-latvia-needs-to-devalue-soon-reply.html"here/a, a href="http://latviaeconomy.blogspot.com/2009/06/latvia-devalue-now-or-devalue-later.html"here/a, and a href="http://fistfulofeuros.net/afem/demographics/the-long-and-difficult-road-to-wage-cuts-as-an-alternative-to-devaluation/"here/a). Advocates for maintaining the peg argue the CBA is solidly based and able to weather adverse shocks, given the substantial buffers accumulated in the fiscal reserve account (around 15.0% of GDP) and the existence of large foreign reserves. Bulgaria’s "safety margin" - the sum of international reserves and the domestic currency component of the government’s fiscal reserve account — is estimated to be around 48% of GDP. This compares favourably with the rating agencies’ estimate of contingent liabilities from the financial sector under a reasonable worst case of around 30% of GDP (Standard and Poor’s, 2009). Also, as in the Baltics there is strong feeling of national identification with the CBA, which, coupled with the solid backing of all potential stakeholders (the EU and the IMF in particular), could be consided to offer a robust anchor to the CBA. But as with the Baltics, this kind of support may not be sufficient. Lets have a look at why not.br /br /The first and most obvious issue is the competitiveness one. Since Bulgaria's domestic construction, borrowing and spending bubble has now most definitely burst, and since government spending will be brought under a tight lease by the IMF (when they inevitably arrive) Bulgaria is now (like the Baltics) destined to live by exports (not only live, but also pay down some of the accumulated debt) and this is just where we hit a snag. If we look at the chart for Bulgaria's Real Effective Exchange Rate, then we will see that the country has experienced a significant drop in international competitiveness since the end of 2005, due largely to the high level of inflation the country has suffered.br /br /br /a href="http://4.bp.blogspot.com/_ngczZkrw340/Slm6W-Pt2PI/AAAAAAAAOow/7j7cMzQwP8Q/s1600-h/bulgaria+REER.png"img style="TEXT-ALIGN: center; MARGIN: 0px auto 10px; WIDTH: 400px; DISPLAY: block; HEIGHT: 233px; CURSOR: hand" id="BLOGGER_PHOTO_ID_5357518135562721522" border="0" alt="" src="http://4.bp.blogspot.com/_ngczZkrw340/Slm6W-Pt2PI/AAAAAAAAOow/7j7cMzQwP8Q/s400/bulgaria+REER.png" //abr /br /Wage costs have risen significantly, and even as recently as the first quarter of this year total hourly labour cost rose by an annual 19.2%. The total hourly labour cost was up by 18.5% in industry, by 16.3% in services and by 32.2% in construction according to the statistics office.br /br /Basically then, in order to maintain the CBA Bulgaria will need what is called an "internal devaluation" (generalised reduction in prices and wages) of something like 20%, and seeing the pace at which this process has progressed in the Baltics, there are serious questions about whether Bulgaria would be able to implement such an internal devaluation (ecen with IMF support) before it gets caught in a vicious and painful spiral of falling GDP, falling tax income, falling government spending and even more rapidly falling GDP. Also, unlike the case of the Baltics, where the other Scandinavian countries have been able to render assistance to some extent, there is no obvious external supporter for the Bulgarian peg, and indeed the banking system in some of the countries involved in Bulgaria (Greece in particular) may be nothing like as strong or willing to maintain funding as their Swedish counterparts.br /br /Nonetheless the Bulgarian central bank rejects devaluation, saying the country’s reserves of $16 billion is sufficient to protect the peg, and favours an “internal devaluation” byforcing down domestic wages and prices, a process which will weaken domestic demand, trigger deflation and prolong recession in my view.br /br /Further, since there is no realistic prospect of Bulgarian euro membership in the short term, sticking to the peg for the sole purpose of quickly adopting the euro is a non sequitur, and there is no obvious exit strategy in sight.br /br /On the other hand, while a devaluation would obviously close the current account gap far less painfully, it would not help improve Bulgaria's external financing picture owing to adverse balance sheet effects and the likely rise in bankruptcies. But as has been amply discussed in the Baltic case, the difference with an internal devaluation does not exist from this point of view, and indeed the internal devaluation path may be even more damaging given that even those with loans in Lev would be affected.br /br /The current account will adjust in either case, since it has to, as financing is no longer viable, but this can either be done more painfully, or less painfully, and this is the real question. On the face of it Bulgaria’s incoming government, led by Sofia Mayor Boiko Borissov, advocates taking a loan from the IMF and the World Bank, and following in the footsteps of Latvia, Romania, Hungary, Serbia and Ukraine. The outgoing Socialist government ruled out any international loans. Negotiations are expected to start shortly after the new Cabinet takes office, with the loan itself would probably coming at the end of this year or during the first quarter of 2010, according to Bisser Boev, an economist in the election winning GERB party, in an interview last week.br /br /Neil Shearing, an emerging Europe economist at Capital Economics, goes further, and says Bulgaria’s next government faces a deepening recession and an “imminent” loan agreement with the International Monetary Fund. Basically I agree with Neil: the loan will come sooner rather than later, since having the "bad cop" of the IMF to wave is the only way the new government will be able to govern and implement the internal devaluation, which it is likely will be attempted for a time, even if a breaking of the peg is the most probable medium term outcome.br /br /Neil Shearing also forecasts Bulgaria’s economy will contract by 5 percent this year and 4 percent in 2010. My own feeling is that Neil is a bit to cautious here, and looking at the Q1 contraction and the pace of the decline since, we may well be in for a double figure (10 percent plus) 2009 contraction. Evidence from the Baltics would also tend to confirm this view: struggling to maintain a currency peg in this environment can be very costly in terms of lost GDP, since almost all the burden of current account correction falls on reducing imports, with exports falling rather than rising due to short term competitivity issues, especially when a number of other countries - Poland, Romania, the Czech Republic and Hungary may either devalue or see their currencies fall through sell-offs if they try to lower the currently punitive interest rate firewall (Hungary and Romania).br /br /br /The markets also appear to be far from convinced, and credit-default swaps linked to Bulgarian five-year bonds are up in the region of 400 basis points from the one year low of 290.4 hit on May 20, as perceptions of credit quality deteriorate.br /br /br /br /The coalition must work immediately to shore up revenue, which may fall as much as 3 billion lev ($2.1 billion) this year, said Boev, who was part of the team that mapped GERB’s economic policies and has been suggested by daily Dnevnik as the top candidate to run the Economy Ministry. “We’ll urgently revise the budget and cut what we can, postpone or freeze spending where we can,” said Boev. “This is our first task.” Bulgaria can only afford to co-finance infrastructure projects to bring roads and railways to EU requirements, Boev said. Restoring access to EU funds, which were frozen in 2008 over suspicions of graft, is crucial, he said. Bulgaria stands to receive 11 billion euros ($15.3 billion) in EU subsidies by 2013 to bring living standards closer to EU levels. Boev said the government would be “prepared” to cut investment spending and administrative costs, though it will leave social spending alone because reductions would generate additional unemployment.br /br /br /The IMF forecast a budget deficit of 1 percent of gross domestic product this year and urged the previous government to cut spending by 20 percent. Ousted Prime Minister Sergei Stanishev froze public sector wages less than a month before the elections.br /br /strongThe Risk Of Spillovers/strongbr /blockquote"The macro-situation in Bulgaria is dire," said Lars Christensen, emergingbr /markets chief at Danske Bank.Foreign investment has plummeted. The downturn inbr /the economy accelerated in May and June. While the new government is anbr /improvement, I would not rule out a drop in GDP of 15 to 20pc from peak tobr /trough," he said. My concern is that this is going to spill over into otherbr /countries. If you look at the main lenders, they are Greece, Hungary (OTP bank),br /and Italy."/blockquotepThe danger of a messy ending in Bulgaria adds another twist to the contagion worries which is facing Eastern and Southern Europe in the wake of the global crisis. A break in the Latvian peg (now, not in six months time) would be a blow, but it would, in my opinion, be containable. Estonia and Lithuania would have to correct in line, and pressure would come on Hungary and Romania, but if the Bulgarian peg goes, not in a managed devaluation but as part of a financial crisis inspired rout, which associated political chaos then the problems could rapidly escalate, immediately to four other countries in the west Balkans (Serbia, Croatia, Macedonia and Albania) and more indirectly down into an already weakend Southern Europe via the Greek and Italian banking systems. /ppBut, you might ask, aren’t the Balkan economies too small to be a potential problem for Europe? This is true, but we need to bear in mind that all four of these nations, despite being outside the European Union, are in fact effectively euroised economies - in all cases their currencies are pegged to the euro. In addition all the Balkan countries have very close economic ties with southern Europe via the channel of expatriate remittances. And the economic problems which currently exist in Greece and Italy only serve to further weaken the nations of the Western Balkans, due to the strong trade linkages that exist within the region. These impacts will in their turn work their way back negatively into Greece and Italy due to their role in funding the region. South Eastern Europe could therefore, be quite literally at risk of economic seize-up.br /br /And we should never forget that the political consequences of economic and currency reversals in the Western Balkans are potentially far greater than the Baltics simply because the former region has a population three times greater than that of the latter.br /br /To be precise, maintaining Balkan GDP involves significant currency corrections. These corrections can take place by formal devaluations, or via the so-called "internal devaluation" process. The slower the Balkan currencies correct, the greater the depth and length of the recession. Basically, under these circumstances, I think that the incentive to devalue will, in the end, be too great. The immediate impact of such devlaluations will be most painful for countries like Croatia, which has a large proportion of euro-denominated loans.br /br /When it comes to the short term dynamics of the looming currency crisis in Emerging Europe, one of the Baltic Three, probably Latvia, will be first to concede its peg. When it does others are almost bound to follow. Everything depends on whether the EU Commission and the IMF are proactive or limit themselves to a mere reactive, problem containment role. If the Latvian currency realignment is done in an organised and systematic fashion, then it may, even at this late date, be a containable process. If the situation is left to fester, and the country falls into the grip of a growing political anarchy, then containment will be much more difficult, since panic will more than likely set in./ppA similar situation pertains in Bulgaria. Absent a Latvian devaluation, it is not unthinkable that the Lev peg may be maintained for another year or so. But if the authorities do go down this road, then we face the severe risk of a raggedy ending, since the problem is not one of sustaining the peg, but of restoring competitiveness and economic growth, and this is much more difficult without a formal devaluation. And if Bulgaria goes hurtling off that cliff on which it is currently perched, then just be damn careful it doesn't drag half of South Eastern Europe careering after it./pdiv class="blogger-post-footer"img width='1' height='1' src='https://blogger.googleusercontent.com/tracker/8991369883287712098-6963277081178645008?l=globaleconomydoesmatter.blogspot.com'//div

And Then There’s This…Friday, July 10, 2009

Contrarian Profits — Fri, 10 Jul 2009 19:00:49 +0000

pFrom the close of trading in New York on Wednesday afternoon at 5:15 Eastern Time#8230;and the close of trading 24 hours later on Thursday at the same time#8230;the U.S. dollar lost about 90 basis points. That#8217;s a strongbig/strong drop. Gold#8217;s response? Up three bucks#8230;and silver was actually down on the day./p pYesterday#8217;s low tick on the U.S. dollar occurred around 2 p.m. in New York at 79.72 cents#8230;plus or minus a couple of ticks. Gold#8217;s peak price in the first few days of June was around $990#8230;when the dollar printed a low of about 78.70 cents. In five weeks, the U.S. dollar has gained a full cent [one percent and change], while the US$ gold price has been hit for 77 big#8230;/p

Frightened Investors Move Back into US Treasuries

Contrarian Profits — Fri, 10 Jul 2009 15:30:59 +0000

pJobs data skewed by #8217;seasonal adjustments#8217;#8230; BOE surprises the market#8230; Oil falls below $60#8230; China#8217;s reserves continue to grow#8230; And Now#8230; Today#8217;s Pfennig!/p pGood day#8230;Chuck has a bevy of doctor#8217;s appointments today, so he decided to let me take over the Pfennig. Unfortunately it will go out a little later than usual, as I always struggle to get all of my thoughts together so early in the morning. Its not that I come in late (I was here two hours before everyone else) but it just takes me much longer than Chuck to get it all on paper. But enough of the excuses, I#8217;ve got to get writing./p pWeekly jobless claims released in the US yesterday morning fell below 600k for the first time since January#8230;/p

Energy Blast – July 10, 2009

Robert Amsterdam — Fri, 10 Jul 2009 09:02:34 +0000

Russia may have sidestepped greenhouse gas emission cuts at the G8 summit, but Finance Minister Alexei Kudrin has pledged a Russian 'energy revolution' when the State Duma consider a bill to increase energy efficiency by 40% by 2020. A transit...

Video-o-rama: Fresh wave of risk aversion

Prieur du Plessis — Fri, 10 Jul 2009 08:17:23 +0000

The usual debate on the outlook for the economy and financial markets dominated the video channels over the past few days, but interesting snippets on the improved forecast of the IMF for the global economy, the viability of the Public-Private Investment Program (PPIP), the role of the US dollar as reserve currency and the prospects for the earnings-reporting season were also featured in the clips included in the Video-o-rama compilation.

Speculators Feel the Heat as Demand for Tighter Regulation of Oil Contracts Rises

Contrarian Profits — Thu, 09 Jul 2009 17:36:38 +0000

div class="entry" pThe Commodity Futures Trading Commission (CFTC) may impose stricter limits on commodities speculators who are believed to be behind the main force behind wild swings in the futures markets over the past two years. The investigation has the support of politicians seeking greater price stability for the global economy and consumers, but traders argue that such restrictions will only reduce market liquidity and not necessarily prices./p pCFTC Chairman Gary Gensler said his agency will hold a series of hearings from July through August to determine whether or not it should place new limits on energy futures contracts./p pRight now, the CFTC sets limits on the amount of futures contracts in some agricultural products that can be held by market participants. But futures#8230;/p/div

AstraZeneca Boosts Neuro Pipeline – Analyst Blog

Zacks Market Commentaries — Thu, 09 Jul 2009 16:50:40 +0000

We are pleased with AstraZeneca’s (AZN) decision (on July 8) to go ahead with the development of AZD1446 for the treatment of Alzheimer's disease (AD). This drug, currently in phase I, was discovered in collaboration with Targacept.

The company also decided to conduct additional trials of AZD3480 (another drug for neuroscience) by initiating phase IIb studies in attention deficit/hyperactivity disorder (ADHD). Last year, the evaluation of AZD3480 for the treatment of AD and Schizophrenia had been inconclusive.

But in May 2009, preliminary result of AZD3480 showed significant improvement in symptoms of ADHD. With the progress of this drug candidate, AstraZeneca has agreed to make a milestone payment of $10 million to its collaborating partner Targacept.

Many pharma players have been eyeing this segment as AD had been the third-leading cause of death in the recent past. More than 24 million people are already affected worldwide and the number could reach 40 million by 2020. The market potential of this disease is well understood. Revenue estimates for the only approved AD drugs across major markets (US, Japan, France, Germany, Italy, Spain and the UK) were pegged at over $3 billion in 2006, and is expected to exceed $5 billion by 2012.

As both drug candidates are in early stage of development, it is difficult to estimate if they would be successful at all. But we are hopeful based on the strong R&D initiatives of the company and encouraging phase IIa data of AZD3480. As far as pipeline is concerned, the company currently has ten projects which are either in phase III trials or have filed for registration.

The company’s goal is to file up to three new license applications per year and bring at least two new drugs to market every year through 2010. We have a Hold rating on the stock as we see the current price as quite attractive given AstraZeneca’s long-term potential.

Read the full analyst report on "AZN"
Zacks Investment Research