Chicago, IL – November 20, 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), KT Corp. (KTC), SK Telecom (SKM), China Unicom (CHU) and American Express Company (AXP).

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Here are highlights from Thursday’s Analyst Blog:

South Korea Welcomes iPhone

Apple Inc.’s (AAPL) iPhone is finally reaching the hands of South Korean mobile users. The country’s telecom regulator Korea Communications Commission (“KCC") has granted Apple the license to sell the iconic handset in the domestic cell phone market. KCC has also lifted the restrictions that prohibited location-based services on smartphone devices such as the Google Maps application on iPhone.

South Korea’s second-largest wireless carrier KT Corp. (KTC) will start booking Internet order for iPhone (3G & 3GS) soon and begin selling it from Nov 28, 2009. The company targets to initially sell 150,000 units priced between KRW250,000 and KRW300,000 (US$216 and US$260). KT’s peer SK Telecom (SKM), the largest mobile operator in the country, is still negotiating with Apple for securing distribution rights.

South Korean wireless market is technologically advanced and relatively mature with roughly 47 million total subscribers, representing 96% penetration of the country’s population. Currently, the country’s cellular handset market is dominated by local companies such as Samsung and LG Electronics, two of the world’s leading handset manufacturers.

With KCC’s approval, South Korea is set to become one of the last major Asian countries to get the iPhone. The device has been already launched by China Unicom (CHU) in China in October 2009. Additionally, iPhone is also being sold in other major markets such as India, Japan and Australia.

KCC’s approval to allow foreign handset vendors to enter the domestic market is aimed at increasing the options for brand-conscious cell phone users rather than just limiting their choice to indigenously manufactured devices. In April 2009, the Korean government cleared the path for foreign handset vendors by abolishing a mandate requiring all mobile handsets sold locally to use a home-grown software platform.

AmEx to Buy Revolution Money

American Express Company (AXP) said on Wednesday that it will acquire Internet payment platform Revolution Money for about $300 million.

The deal is expected to close in early 2010. Following the closure of the deal, Revolution Money would operate as a subsidiary of AmEx. The founder and chief executive of Revolution Money, Jason Hogg, will continue as president and chief executive.

St. Petersburg-based Revolution Money was founded by AOL co-founder Steve Case’s Revolution LLC in 2007. Revolution Money provides payments through an internet-based platform and issues prepaid cards that can be used for offline payments or to withdraw cash from ATMs in the U.S. Additionally, Revolution Money offers MoneyExchange, a service to remit money by people using social and instant messaging networks.

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Aimco bought Palencia Apartment Homes for $14.9 million in 1997. The property covers 70 acres of land and generates an average rent of $766, or 99 cents per square foot.

Earlier this year, AIV sold its Doral Oaks Apartment for $10.7 million, or $42,460 per unit, which was nearly twice its original purchase price. The 252-unit complex was sold to GMC Properties, a subsidiary of GMC Mortgages & Financial Services, a leading financial services products company.

In the last two years, AIV has been persistently increasing liquidity through asset sale and currently lists 100 communities representing over 28,700 units across the country for sale. Seven of these communities are located in Tampa and include the 276-unit Sienna Bay and the 200-unit Tamarind Bay, both in St. Petersburg; the 262-unit Twin Lakes in Palm Harbor; the 200-unit Solana Vista in Bradenton; the 300-unit Charleston Landings in Brandon; the 348-unit Bridgeview in Tampa and the 256-unit Fisherman’s Landing in Temple Terrace.

With the sale of non-core assets, AIV also aims to concentrate on fewer markets. However, despite attempts to reposition its portfolio in higher growth markets, much of the company’s portfolio is still located in areas where housing is relatively cheap. Consequently, its long-term profitability is likely to suffer. As AIV continues to sell non-core assets and buy in higher growth, infill areas, we expect continued earnings dilution.

Quotable
"A good conspiracy is unprovable. I mean, if you can prove it, it means they screwed up somewhere along the line.”
Jerry Fletcher (played by Mel Gibson), Conspiracy Theory

FX Trading – Kookburger Time!  A rant it is!
----------
Editors Note: Warning to gold lovers, conspiracy nuts, and US haters.  This rant you may want to avoid. 
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The conspiracy crowd is working overtime these days.

Many “deep thinkers” among the gold crowd still spout conspiracy stuff on a regular basis to help explain why their beloved metal is not now sitting at least $2,000 an ounce.  Could it really be that each morning Fed Chairman Bernanke, Treasury Secretary Paulson and, of course, V.P. Dick Cheney wake from their slumber and huddle in the safe room to discuss how they can manipulate the gold market.  We tend to think they have bigger fish to fry. 

What’s odd about the gold conspiracy theory crowd is that gold’s price action, and minor role in the system, is very rationally explainable (granted the explanation may be wrong) on standard economic terms.  But gold guys all seem to have the secret handshake and “know” it’s manipulated.  Odd indeed!  Does it make one feel better to say you lost money because of some nebulous “manipulation” you can’t really define?  Guess so.  And isn’t it disconcerting when the “manipulators” push gold up for no particular reason and a believer makes money?  We don’t get it. But then again, Philistines we are. 

But it’s getting better than that out there.  Over the past couple of days we’ve been made privy to some whoppers in the making.  If you don’t already know, let us clue you in on a couple: The Amero is on the way.  This conspiracy uncovered says the US will soon toss away its world reserve currency status in order to distribute new currency that has Mexican and Canadian politicians’ pictures on the front.  Aren’t American politicians on our money enough already?  It’s a loony idea indeed. 

And a new conspiracy uncovered, and emailed to us, stars on You-Tube.  A gentleman there has revealed a well heeled crowd in the Middle East will use its vast wealth to take over Russia of all places; after it crushes the US economy in its spare time.  Hmmm…wouldn’t Spain be a lot nicer given those nasty winters in St. Petersburg?  We’ve heard real estate prices are looking good in Barcelona.   

Do powerful people do all they can to advance their interest and power in the world?  Absolutely!  Are markets “manipulated” by pools of capital at times?  No doubt.  But, this doesn’t automatically equal conspiracy.  At least we don’t think so.

“There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen,” wrote Frederic Bastiat.

We don’t think Bastiat was talking conspiracy theory here.  We do think he was talking about all the stuff underneath the surface of an advanced and complex, yet fragile, system of decisions by millions of players with all types of varying interests that make up what we call an economy. 

Just because we can’t discern what’s going on below the surface, it doesn’t mean it isn’t at least as important, or more important, than the stuff we see going on above.  And because we can’t always apply our Newtonian cause and effect to what we see above, it doesn’t mean we should create conspiracy theories as explanation. 

I’ve recently talked about the doom and gloom crowd getting it exactly right with their broken clocks, but most got it exactly wrong too as they believed US dollar doom was the upshot of the story.  What we found interesting as we followed the dollar doom and gloomers along this long path was the degree to which price action seemly proved them right, hiking their egos along the way, yet the reality bite now shows maybe they were simply fooled by randomness, and shouldn’t have chalked up their rightness to their rather pedestrian intelligence.

Nassim Taleb said it well in Fooled by Randomness: 

“By some viciousness of the structure of randomness, a profitable person like John [trader of rather pedestrian intelligence], someone who is a pure loser in the long run and correspondingly unfit for survival, presents a high degree of eligibility in the short run and has the propensity to multiply his genes.  Recall the hormonal effect on posture and its signaling effect to other potential mates.  His success (or pseudo-success owing to its fragility) will show in his features as a beacon.  An innocent potential mate will be fooled not thinking (unconditionally) that he has superior genetic makeup, until the following rare event.  Solon seems to have gotten the point; but try to explain the problem to a naïve business Dawarinist—or your rich neighbor across the street.”

Let me put this yet another way.  Many so-called “currency experts” got it right for many years because of the trend and carved out guru-like status along the way.  The root of their argument was the US was, and still is, all bad.  The US fundamentals were terrible.  The US is the root of all global financial evil.  Thus, despite this “bounce” of 23%+ in the US dollar, to hell in hand basket it will still go.  This crowd has no clue as to what is and has gone on below the surface for the most part, yet glib they still are. 

I’m sure the US haters will wine and complain about our defense of the US financial system—so be it.  But what if all of you who bashed the US for its “dependency” for money flow to support its deficits got it completely wrong?  It would explain why many of you find it so confusing the dollar could dare to rally.

What if the US was the lynch-pin for the global financial system and therefore charged with finding a proper home for all those forex reserves built up by dictatorial countries who were very happy not to reinvest in their own people lest they create wealth that could come back to challenge their rule?  What if they just kept dumping all this stuff into the bad old US where their assets were most efficiently processed and protected by the rule of law, which isn’t quite available at home?  What if the US current account is what we have always said it was, a representation of US dollar credit greasing the wheels of all global asset markets for the betterment of the this thing called globalization (which helps explain why the last two times we got what the economists and whiners wanted, an improvement in the current account, which coincided with stock market crash in 1987 and 2000)?  What will happen to all those resources re-funneled by the US financial system to strengthen export sectors the world over when said export demand by the bad old US falls?  

In short, blame the US financial system if you wish.  But be careful about your diagnoses on the dollar.  If all this efficient recycling of resources which sparked a massive run-up in global growth by creating massive dollar-based credits for others around the globe to grow is now heading home and said export models built on credit come crashing down, this little dollar bounce could easily morph into a multi-year bull market; which is what we expect after applying our pedestrian-like intelligence to the stuff we can and can’t see.   

And of course you can just imagine the plethora of conspiracy theories hatched when the world realizes the good old greenback’s world reserve currency status is poised to soar in a way it never has before.  This will make the Plunge Protection Team look like child’s play.  Stay tuned. 

Is the dollar finally correcting?  We’ve been playing for it near-term and getting steamrolled by it.  But this morning, it’s getting whacked a bit as stocks are actually bidding higher pre-open and did well in Europe. Hopes of a US rate cut tomorrow from the Fed seem to be lifting spirits, and some calmness in the interbank market suggesting the credit may be normalizing a bit. 

The high yielders, which have been whacked so hard recently, are flying today…

AUDUSD 90-min: Just above near-term resistance.

Given the dollar index chart is looking parabolic, any correction that does materialize could be very powerful.

…and by the shape of the open interest and mix of overwhelming bears to bulls in the euro currency futures, maybe Mr. Market is due to shake off some dollar bulls…
 
Regards,
Jack&JR

The swift return to cordial relations was recognition of just how intertwined the German and Russian economies have become. Manufacturing everything from luxury autos to machinery to food, some 4,600 German companies are active in Russia and 70,000 German jobs depend on business with the country. Germany is also Russia's largest trading partner, with $45 billion in two-way trade during the first six months of this year. Little wonder that the 25 German businesspeople who joined Merkel in St. Petersburg seemed anxious to forgive the events in Georgia and get back to doing deals with Russian partners. The biggest deal: an agreement allowing energy supplier E.ON (EONGn.DE) to acquire 25% of a huge Siberian natural gas field owned by state-controlled Gazprom (GAZP.RTS). The Düsseldorf-based utility traded control of a 3% stake in Gazprom valued at $5.4 billion, ending years of stalemated negotiations.

The Storchak case has been widely seen as the byproduct of a government power struggle between the so-called St. Petersburg economists, led by Finance Minster Alexei Kudrin, and the siloviki — officials within or with close ties to security and law enforcement agencies. Storchak's lawyer, Andrei Romashov, said the final version of the charges filed did not specify a figure for the amount of funds allegedly stolen. "How can they charge him with fraud without these figures," he said.

Russia's economic growth is obviously slowing quite quickly - and evidently far more rapidly than the government anticipated - largely due to the impact of the global credit crunch, the downward movement in oil prices and investor reaction to Russia's "go it alone" attitude in international disputes.

In the present environment inflation is likely to slow quite rapidly, and in September this easing in infaltion was noted in the prices that manufacturers pay and charge, as highlighted in the VTB report: "The rate of increase in prices charged by Russian manufacturers eased for the fifth straight month to its weakest' since at least January 2003".



Oil Output Down


And just to cap it all, Russia's oil production also fell in September as companies struggled with costs and maturing fields, effectively bringing the world's second-largest crude exporter closer to its first annual drop in output since 1998. Production fell to 9.83 million barrels of crude a day (40.2 million metric tons a month), 0.4 percent less than a year earlier, according to figures released by the Energy Ministry's CDU-TEK unit.

So What Can We Expect?

Well, in broad outline I don't think the outlook has changed that much from when I wrote my last analysis two weeks ago.

As I said at that point, Russia is hardly the Baltics, so we should not expect the economy to go into a complete nosedive. A lot depends on the view you take about the future of energy prices. While the global economy is now evidently set to slow considerably - in addition to the reduction in growth rates already seen so far this year -and especially in the aftermath of the most recent bout of financial turmoil. Cleary oil prices are set to drop even further - and this will only keep pushing Russian growth down - but at some point the market will find a floor, possibly in the region of $80 a barrel. More importantly when it comes to the future of oil prices, I would not be banking on some kind of long and deep global recession. Many of those developed economies who are significantly affected by the bursting of their construction booms (and the banking issues which have gone with it) will probably have weak domestic consumer demand for some time to come, but a solid core of emerging economies may well take off again quite rapidly as we move into 2009 -and especially if energy prices drop back, and the current near panic in the financial markets settles down (people do, after all, have to put their money somewhere). So the emergent (and numerous in population terms) emerging economies should give another strong shove to what may have become a rather listless global economy. As a knock on effect this should also serve to put some life back into export dependent economies like Germany and Japan (who by and large are not reeling under the impact of the construction bust, although their banks may have been lending to people who are).

So the bottom line here, I think, is be ready for a sharp slowdown in headline Russian GDP, but don't expect to see any imminent meltdown in the Russian financial system, one way or another they have the wherewithall at this point to keep limping forward. Of course, in the longer term, well, you know......

Russia's economic growth is obviously slowing quite quickly - and evidently far more rapidly than the government anticipated - largely due to the impact of the global credit crunch, the downward movement in oil prices and investor reaction to Russia's "go it alone" attitude in international disputes.

In the present environment inflation is likely to slow quite rapidly, and in September this easing in infaltion was noted in the prices that manufacturers pay and charge, as highlighted in the VTB report: "The rate of increase in prices charged by Russian manufacturers eased for the fifth straight month to its weakest' since at least January 2003".



Oil Output Down


And just to cap it all, Russia's oil production also fell in September as companies struggled with costs and maturing fields, effectively bringing the world's second-largest crude exporter closer to its first annual drop in output since 1998. Production fell to 9.83 million barrels of crude a day (40.2 million metric tons a month), 0.4 percent less than a year earlier, according to figures released by the Energy Ministry's CDU-TEK unit.

So What Can We Expect?

Well, in broad outline I don't think the outlook has changed that much from when I wrote my last analysis two weeks ago.

As I said at that point, Russia is hardly the Baltics, so we should not expect the economy to go into a complete nosedive. A lot depends on the view you take about the future of energy prices. While the global economy is now evidently set to slow considerably - in addition to the reduction in growth rates already seen so far this year -and especially in the aftermath of the most recent bout of financial turmoil. Cleary oil prices are set to drop even further - and this will only keep pushing Russian growth down - but at some point the market will find a floor, possibly in the region of $80 a barrel. More importantly when it comes to the future of oil prices, I would not be banking on some kind of long and deep global recession. Many of those developed economies who are significantly affected by the bursting of their construction booms (and the banking issues which have gone with it) will probably have weak domestic consumer demand for some time to come, but a solid core of emerging economies may well take off again quite rapidly as we move into 2009 -and especially if energy prices drop back, and the current near panic in the financial markets settles down (people do, after all, have to put their money somewhere). So the emergent (and numerous in population terms) emerging economies should give another strong shove to what may have become a rather listless global economy. As a knock on effect this should also serve to put some life back into export dependent economies like Germany and Japan (who by and large are not reeling under the impact of the construction bust, although their banks may have been lending to people who are).

So the bottom line here, I think, is be ready for a sharp slowdown in headline Russian GDP, but don't expect to see any imminent meltdown in the Russian financial system, one way or another they have the wherewithall at this point to keep limping forward. Of course, in the longer term, well, you know......

A Russian court left a veil of secrecy over oil trader Gunvor on Wednesday, rejecting a private shareholder's lawsuit demanding state oil company Rosneft disclose dealings with the firm. Moscow Arbitration Court Judge Alexei Manenkov ruled disclosure of the information to shareholders was not required under Russian corporate law. Rosneft had said its dealings with Gunvor were a commercial secret. Gunvor handles a third of Russian oil exports and has repeatedly won rights to export a large share of Rosneft's Urals blend crude in regular tenders by the state owned company, Russia's largest producer of crude. The company's co-owner, Gennady Timchenko, has rejected speculations he enjoyed special ties with former president and current Prime Minister Vladimir Putin, who was honourary president of a St Petersburg judo club sponsored by Timchenko. Rosneft's minority shareholder Alexei Navalny, who brought the suit against Rosneft, also sued to obtain information about Russian state oil pipeline monopoly Transneft's charity work. The suit was also rejected by the court on Wednesday. Navalny had claimed that shareholders' rights were violated in both cases. "We want to know where the money is going," Navalny told Reuters on Wednesday, adding that he would appeal the ruling. Navalny has been involved in opposition politics, running the Moscow division of the liberal Yabloko party until recently. He has been active in other opposition parties and appeared in public political debates. He said the lawsuits against the state companies were not political and he was defending his economic interests.