Allianz AG CFO: Sees continued upside for German equity markets; Wants to boost equity holdings - German press - Report noting the insurer recently increased its position in equities and has 6% of its €500B in assets under management in stocks.
Buyout Shops Gear Up to Spend in Asia
Private-Equity Firms Have Mountain of Cash to Spend but May Lack Attractive Targets
Private-equity firms are sitting on $120 billion in funds to be invested in Asia, the most cash they have ever had on hand. But the region's small markets, tough governments and fierce competition for deals could make it hard for firms to invest all that money profitably, industry watchers say.
Drawn by the promise of strong economic growth, investors have been pouring money into Asia for years, even though returns have lagged behind those in North America. Private-equity firms operating in Asia returned 6.5% in the year ended in March, compared with 12.7% in North America, according to data provider Preqin. In the five years ended in March, Asia funds had internal rates of return—a private-equity benchmark for the profitability of a deal—of just 3.9%, compared with 6.8% in North America.
"You do hear concerns that with all the money being raised and deal levels not at the levels you'd like to see, where is this money going to go?" said Michael Buxton , Ernst & Young Asia-Pacific private-equity leader.
The large economies where big deals are available—Japan and South Korea—aren't particularly friendly toward private equity, and when there are deals, competition is rife. Targets in high-growth markets like China or Southeast Asia tend to be small. Many of the region's initial-public-offering markets remain quiet or, in China's case, completely shut, making exits on past investments tough.
The $120 billion of unspent capital that Asia-focused private-equity firms hold is 54% more than they were sitting on five years ago, when the financial crisis started, Preqin data show. And private-equity deal activity has slowed since before the crisis: This year, just $17.3 billion in private-equity deals have been done in the Asian-Pacific region, compared with $42.5 billion in all of 2007, according to data provider Dealogic. Private-equity funds focused on Europe and the U.S., meanwhile, are sitting on less unspent money than they were five years ago.
Money has piled up thanks to successful fundraising by firms like KKR KKR +2.94% & Co., which raised a $6 billion Asia-focused fund this year, the largest private-equity fund ever for the region. CVC Capital Partners, a European private-equity firm with a global footprint, also started raising money for a new Asia fund in recent months, targeting $3 billion, and TPG Capital has brought in at least $2.5 billion for its sixth Asia fund, with the aim of raising another $1 billion by the end of the year, people familiar with the matter have said.
KKR co-founder Henry Kravis recently expressed confidence that the firm can deploy its capital in Asia, given the region's growth potential. TPG and CVC declined to comment.
Even more money may be coming. Preqin estimates 259 firms are actively raising a collective $77 billion more to invest in the region. Combine that with the existing dry powder, and private-equity firms could theoretically end up with enough capital—at around $197 billion—to buy nearly the entire Philippine stock market.
It is hard to see the pool of private-equity money in Asia shrinking anytime soon.
The hope among private-equity firms is that big markets such as Japan and South Korea, which haven't been friendly to these investors, will become more open and make it easier to invest the cash haul. There have been recent moves in that direction, but it is unclear how sustainable they are.
Last year, KKR lost out to a government fund when it bid for Japanese electronics maker Renesas Electronics Corp. The U.S. firm also hit a roadblock in Taiwan in 2011 when a $1.6 billion offer for electronics components maker Yageo Corp. was rejected by regulators.
Asia's biggest economy, China, has limited foreigners from investing in sensitive industries like defense-related companies or education and the Internet. Private-equity firms have long managed to buy only minority stakes in companies because many first-generation entrepreneurs haven't wanted to sell. Now private-equity firms are facing a potentially slowing economy and one where exits are few, after China put a moratorium on domestic initial public offerings last year following a succession of poorly performing IPOs.
"The IPO markets [in China], even if they are open and functioning well, they can maybe handle 300 plus-or-minus PE-backed IPOs a year," said David Brown , Greater China private-equity leader at PricewaterhouseCoopers. "There are thousands of companies being held by private equity."
Southeast Asia, meanwhile, is home to many small companies, and even when the firms are big, stakes available can be small. KKR said it closed its first deal out of the new Asia jumbo fund this week, investing $200 million for a minority stake in a Malaysian oil and gas transportation-services firm.
To be sure, there are some signs Asia's landscape may be changing as governments move to restructure domestic industries and push for more openness to foreign investors. Asia's biggest private-equity transaction this year, for instance, was done in South Korea, where Seoul-based private-equity firm MBK Partners bought ING Groep NV's Korean life-insurance operations in a $1.6 billion deal. There could be more to come as regulators have said they will introduce a new plan to ease rules for private equity in October.
And after years of being perceived as having an inflexible corporate culture, Japan, too, is trying to improve its image. Prime Minister Shinzo Abe has been pushing policies to help companies boost profitability since he took office. KKR just landed its biggest deal in Japan when it agreed to buy Panasonic Corp.'s 6752.TO +2.80% health-care unit for $1.7 billion.
It has taken awhile: Mr. Kravis, the American firm's co-founder, has been traveling to the country since 1978, but had only made one investment in Japan prior to the Panasonic deal.
Ropes & Gray partner Scott Jalowayski said, "The mindset in Japan is changing."
Peugeot to Weigh Capital Injection From Dongfeng
Board Meeting, Set for Oct. 22, Follows Months of Talks on Closer Ties With Chinese Partner
The board of PSA Peugeot Citroën UG.FR -0.08% will meet later this month to consider a potential capital injection from Chinese partner Dongfeng Motor Corp., according to a person familiar with the matter, as the ailing French auto maker looks for financing to ensure its survival into the second half of this decade.
Battered by dwindling sales in Europe, its core market, Peugeot is continuing to rack up losses and is burning cash that it badly needs to develop new products and expand its industrial footprint outside Europe in coming years.
Peugeot's board meeting, set for Oct. 22, comes after months of talks with Dongfeng about a potential expansion of their existing partnership outside China, including an investment in Peugeot, people familiar with the matter said.
The French government also could participate in a capital increase alongside Dongfeng, to help fund its development projects after 2016, though Peugeot hasn't formally asked it to do so, one of the people added.
A Peugeot spokesman confirmed that a regularly scheduled board meeting is slated for Oct. 22. The spokesman said the auto maker is continuing to look at possible industrial and commercial partnerships with various other industrial groups, and that ways to finance future projects is part of these discussions.
A Dongfeng spokesman declined to comment.
Dongfeng confirmed last month that it had been approached by investment banks proposing stronger ties with Peugeot, but said these discussions were at a very preliminary stage.
French Finance Minister Pierre Moscovici , speaking to reporters in Washington on Saturday, played down the suggestion that the French state is gearing up to pump taxpayers' money into Peugeot.
"Developing strong industrial partnerships is more of a priority for the company than for the French state or another automotive group to buy into its capital," Mr. Moscovici said.
Reuters new service earlier reported the possibility of a capital increase led by Dongfeng and the French government.
A potential tie-up with Dongfeng comes as Peugeot continues to struggle. It posted a net loss of €5 billion ($6.75 billion) in 2012 and consumed €3 billion of operational free cash flow. While it expects to halve that figure this year, the company is nevertheless continuing to lose share in the European automobile market.
The Peugeot family, which collectively owns 25.4% of the company's capital and 38.1% of its voting rights, has effectively controlled Peugeot for two centuries. But a capital increase could dilute that control significantly.
A family representative couldn't be reached for comment.
A deeper Peugeot-Dongfeng alliance or capital injection would fit into expansion plans by Chinese automobile makers, which are eager to build technological know-how and expand out of their home market. "Chinese state-owned and affiliated auto makers and suppliers in China are cash rich, giving them leeway to gain stakes and in some cases fully acquire international players," said Namrita Chow , IHS automotive analyst.
In 2010, Zhejiang Geely Holding Group Co. bought Volvo from Ford Motor Co. F +1.06%SAIC Motor Corp. 600104.SH +3.92% purchased technology from the now-defunct MG Rover Group Ltd.
A Dongfeng deal could pose conflicts between Dongfeng and Peugeot's main industrial partner, General Motors Co. GM +1.43% The American company owns a 7% stake in Peugeot, with the two companies jointly developing vehicles. Their agreement gives either party the right to walk away in the event of a change of control at the other. Such a change could involve Peugeot selling as little as 10% voting stake to a competitor, according to a securities filing.
However, people close to GM said on Sunday that the company wouldn't balk at a Dongfeng or French government stake in Peugeot.
It isn't clear how Dongfeng and Peugeot would fare outside China, analysts say.
Controlling a foreign company and getting the technology are two different things, said John Zeng , a managing director at consulting firm LMC Automotive in Shanghai.
"Dongfeng doesn't have much technology and little experience in managing overseas operations," said Mr. Zeng. "Even if they had controlling share in PSA, how are they going to manage a company like that which is facing big trouble?" he asked.
A decision by the French state to buy into Peugeot would require prior approval by the European Union commission, which would need to ensure it doesn't amount to unfair, trade-distorting state aid. Peugeot's local rival Renault was once totally state-owned, but the state's interest has since been whittled down to 15%.
Alcatel Job Cuts Pose Test for French
Hollande Faces Dilemma Over How to Make France More Business-Friendly
PARIS—In France, old habits die hard.
Witness the pas de deux between Alcatel-Lucent SA ALU.FR -1.29% and the French government.
The ailing Paris-based telecom-equipment maker said last week that it had to slash some 10,000 jobs world-wide, including 900 in France, closing offices in cities like Toulouse and Rennes.
Within hours, several members of François Hollande's government, including the president himself, suggested that the French cuts were too deep.
The next morning, Mr. Hollande's prime minister threw down the gauntlet: He was prepared to use a new labor law to block the layoffs if Alcatel didn't reach a compromise with its unions.
The threat was remarkable because the law, which took effect just three months ago, had been touted as a boon for business, allowing companies to be more nimble in restructuring, partly by making it easier for them to cut pay and working hours in difficult times. Instead, the government was using it to prod Alcatel to dial back job cuts.
The episode lays bare a deeper dilemma facing France's year-and-a-half-old Socialist government: how to be more pro-business without alienating left-wing factions of its party and the electorate.
Mr. Hollande, like his peers across Europe, is struggling with economic growth that is too weak to overcome such ailments as rising debt and mass unemployment.
That's squeezing weaker companies, such as Alcatel-Lucent, and pushing healthy ones to shift resources to faster-growing parts of the world.
The Socialist president has made several moves to address concerns that France's laws are too rigid and costs too high. But he is battling a perception problem. Foreign investors think France isn't a good place to do business. French executives, meanwhile, are fed up with a steady diet of high taxes and lament the government's heavy hand in the executive suite.
The issue stems partly from Mr. Hollande's strategy of towing the middle ground: delivering enough stern rhetoric to please his left-wing parliamentary majority and hoping that investors aren't listening. As the Alcatel-Lucent situation shows, that balancing act is hard to pull off.
The government's threat to block Alcatel's restructuring plan frustrated France's business establishment, which read it as a sign that the same old script applied to the new, supposedly more-flexible labor system. "We shouldn't politicize this situation," said French business lobby chief Pierre Gattaz. "Alcatel-Lucent must do everything it can to adapt, restructure and survive."
Investors, who have pushed down Alcatel's shares, concluded that government heavy-handedness could raise the eventual cost of the company's restructuring and drag it out, both undesirable outcomes for a company racing to turn itself around.
Nor did unions take much heart from the government's support for scaling back the layoffs. "I appreciate it," said Hervé Lassalle , a representative at Alcatel's CFDT union, which represents most of the company's French workers. "But I am not sure how much of this is theater."
French officials stressed that the government is seeking to pressure Alcatel to reach a deal with its unions under the new labor law, something Alcatel has said it intends to try to do anyway.
Alcatel spokeswoman Régine Coqueran-Gelin declined to comment on the government's position. "Our focus is on the plan," she said. "There is a real urgency."
The line between theater and reality gets complicated in a country where the government casts a long shadow over the business world.
Apart from the stakes the French state still holds in many companies it considers "strategic," successive governments have routinely butted into boardroom affairs, seeking to influence everything from acquisition plans, to layoffs or broader strategy.
But, saddled with debt, the French government no longer has much money to throw at struggling businesses and often runs into European Union restrictions when it seeks to intervene.
Often French politicians make a lot of noise with little impact. In July 2012, when unprofitable auto maker PSA Peugeot Citroën unveiled a plan to slash more than 8,000 jobs and close a factory in France, the government pressured the company into months of negotiations before finally allowing the plan to proceed largely intact.
Last November, Mr. Hollande threatened to temporarily nationalize a steel plant owned byArcelorMittal MT +1.43% after his firebrand industry minister, Arnaud Montebourg , told the steel giant's boss he was no longer welcome in France. In the end, ArcelorMittal went ahead with the closure.
But France's apparently dirigiste economic policy isn't entirely a charade. In May, YahooInc. YHOO +0.83% dropped its plan to acquire the French online-video website Dailymotion after Mr. Montebourg insisted he wouldn't let an American company take majority control.
In the case of Alcatel, the government understands the desperate need for a turnaround. The company, born out of the ill-fated 2006 merger of France's Alcatel and Lucent Technologies of the U.S., has suffered losses in all but one of the years since.
In fact, part of Alcatel-Lucent's struggle in Europe stems from the highly competitive market environment that the EU—with France's consent—has created across the continent, opening it widely to Asian suppliers who have been shut out of the U.S. because of security concerns.
Alcatel's latest cuts, spearheaded by its new chief executive, Michel Combes , represent its sixth restructuring plan in six years. The company has already axed more than 20,000 jobs since the merger.
"We are not blind," said Mr. Lassalle, the union representative. "Alcatel is in a catastrophic situation."
The government has acknowledged as much. It is eager to avoid the failure of a major employer whose roots date to the 19th century.
The stakes are high, and not just for Alcatel-Lucent. If France's new labor code proves it is easier for companies to restructure, the upside could be significant—just as France's economy and Mr. Hollande himself need a boost.
But if the government's clings to its interventionist credentials, companies could conclude that reform in France happens in name only.
Greece govt has proposed that international lenders allow it to roll over €4.4B in outstanding bonds to help cover the funding shortfall in 2014 - Greek press - Athens expects to be financed until H2 of 2014, at which point it will aim to enter the private bond market.
China in £800m Manchester airport deal George Osborne on Sunday announced that the Beijing Construction Engineering Group had entered the £800m project toredevelop Manchester airport as the chancellor kicked off his five-day tour of China. BCEG will join Carillion and the Greater Manchester Pension Fund to build a business district at the airport. It is the first of a series of deals that the chancellor is expected to unveil on a visit that Britain hopes will unlock a wave of Chinese investment in UK infrastructure.
Mr Osborne is also expected to sign a deal allowing a state-owned Chinese company to build nuclear power stations in the UK and have its reactor design approved by British regulators. Under the deal, the government will give its backing to Chinese General Nuclear Power Group entering EDF’s planned new nuclear plant at Hinkley Point. State-owned BCEG is investing £12m for a 20 per cent equity stake in the airport joint venture. The showcase project could help it win other high-margin construction contracts in developed countries. Chinese state-owned construction companies are engaged in fierce competition to expand overseas, but many still lack experience operating in countries with high labour costs and complex regulatory systems. "We interact with virtually every large company in each sector here as well as some of the strong commercial companies, so we can promote this project and promote Manchester so as to bring more Chinese companies to Manchester, either as investors or to do business," said Xing Yan, who heads BCEG’s international business. BCEG is backed by the state-owned Industrial and Commercial Bank of China, the world’s biggest bank. Mr Osborne pitched the deal as evidence that his government wanted to spread investment across the UK. "I am determined that Britain does not repeat the mistakes of the past that saw investment and growth only concentrated in the City of London, important as it is; but instead to make sure investment from China flows to all parts of the country. Our economic plan is about securing a recovery for all parts of the country," said Mr Osborne. China’s stake in the new Airport City "enterprise zone" in Manchester will be one of the country’s biggest investments in the UK outside London. The project will transform 150 acres of scrubland and parking into 5m sq ft of offices, shops and parkland, creating an estimated 16,000 jobs in the next 15 years.
- George Osborne, UK chancellor The investments come after a strained period between China and Britain. Diplomatic ties suffered early last year when David Cameron’s decision to meet the Dalai Lama, Tibet’s spiritual leader, in London angered Beijing. The Chinese government subsequently cancelled numerous meetings with senior UK ministers, leading to concerns that the UK could lose out to France and Germany in its efforts to tap into Chinese investment. Relations between the two nations have been restored in recent months and cemented at the G20 summit in St Petersburg this month when Xi Jinping, China’s president, invited Mr Cameron to visit Beijing. The prime minister will lead a trade delegation to China later this year. Ed Davey, energy minister, began the rapprochement last month with a 10-day tour to China to drum up investment in Britain’s energy markets.
- France to Extend Nuclear Power Plant Lives by 10 Years, JDD Says French govt preparing to allow Electricite de France SA to extend the life of its nuclear power plants to 50 years from 40 years, Journal du Dimanche reported, citing unnamed people close to the government. * Decision to come before end of year: JDD * President Francois Hollande to hold a meeting on nuclear-power policy Nov. 15: JDD * Office of Energy Minister Philippe Martin refused to comment: JDD
- U.K. ‘Extremely Close’ to Nuclear Deal With EDF, Davey Says "We’re extremely close for a deal with EDF," U.K. energy secretary Edward Davey said in a BBC Television interview today * Says: "If and when we get that deal I’ll announce it to parliament, and I think I’ll be able to show it’s extremely good value for money for consumers" NOTE: EDF May Agree to U.K. Nuclear Deal in Weeks, Minister Says
Air Liquide, Linde Could Rise 20% in a Year
The two are likely to benefit from good demand for industrial gases in both developing and developed markets.
Industrial-gas companies are often touted as the last unregulated utilities, generating reliable returns without price regulation. The two largest European players, Air Liquide(ticker: AI.France) and Linde (LIN.Germany), offer a good opportunity to play a mediocre macroeconomic environment. Both have a strong pipeline of projects going online in the next year, steady growth in developed markets, and exposure to industrializing emerging markets, which could boost their shares more than 20% in the next 12 months.
The industry operates as a de facto oligopoly, with two U.S. outfits, Praxair (PX) and Air Products & Chemicals (APD), and the two European companies commanding most of the market. With high technological and capital barriers to entry, the status quo is unlikely to change soon, and the growth in emerging markets is big enough to support all players for now.
French gas supplier Air Liquide is larger by stock-market capitalization than Germany's Linde—42.2 billion euros ($57.1 billion) versus €36.6 billion—although Linde in July overtook it by sales when the companies reported first-half results. Air Liquide trades at 16.9 times forecast 2014 earnings of €5.89 a share. The French group historically fetches a premium to Linde because its average return on capital invested is about 10%, compared with Linde's 6%. Linde shares trade at 15.3 times forecast 2014 earnings of €9.25.
Barron's (European Trader, Jan. 28) wrote favorably about Linde last January, and the stock has risen almost 6% since then. Linde closed on Friday at €143.60. Air Liquide shares are up a similar amount year to date and ended the week at €99.95.
The companies operate in many of the same markets. A large proportion of their income comes from installing industrial-gas plants at a client's site, on a take-or-pay contract. That means the customer must either take the product at the current price or pay the supplier a penalty. This guarantees revenue, but also means that Linde and Air Liquide are responsible for a substantial upfront capital investment, which creates a barrier to entry for the competitors.
Thornburg Investment Management's associate portfolio manager, Rolf Kelly, sees rising demand for industrial gases in developed markets. "As crude oils get heavier and of poorer quality—for example, tar sands—you need incrementally larger amounts of hydrogen to strip out the impurities in the fuel," he says. And the growth of industrial processes that are more efficient or cleaner in oxygen instead of air is driving demand for that gas.
In addition, an aging population in developed lands implies steady growth for health-care-related gas products, such as oxygen.
Linde's $4.6 billion buyout of U.S. health-care gas supplier Lincare last year almost doubled its North American sales, and Air Liquide's smaller but more plentiful home health-care acquisitions in Europe and Australia in the past 12 months are testament to both companies' expectations of growing demand in that segment. Air Liquide's health-care business grew 4.2% in 2012, to €2.48 billion.
Bertie Thomson, a senior investment manager at Aberdeen Asset Management, doesn't believe that slowing growth in emerging markets will affect Linde, in which it is a top-20 shareholder. "Most areas they sell gases into are pretty stable, like health care and midlevel industrial activity and even food production. The more volatile areas like steel production and electronics are generally where they have the longest contracts and significant amounts of contract protection," he observes. Wolfgang Büchele will take over from CEO Wolfgang Reitzle next year, taking on Linde's cost-saving program designed to save €750 million to €900 million by 2016.
Air Liquide has been through several rounds of reform already, hence its higher return on capital and premium to its German competitor. Jeremy Redenius of Bernstein Research expects Air Liquide's "earnings and revenue growth from projects to dramatically increase in 2014 and 2015, which will capture investor attention over the next six months." He expects more muted gains from Linde's new projects. "Catalysts [for Air Liquide] over the next six to 12 months include major project announcements, a positive update on project pipeline at the third quarter [reported on Oct. 24] and full year, and continuing improvement in the European macro environment," he adds.
Barron’s Saturday summary: positive on KLIC, SRC; cautious on SHLD, PBPB, CDE
Cover story: Report on municipal bond market says Despite ominous headlines about municipal bondsgiven Detroits bankruptcy and Puerto Ricos problemsmost of the $3.7T market is in excellent financial condition, with states being among the strongest credits in the muni market; State and local governments face problems with unfunded pension and healthcare obligations, but their total financial obligations generally look manageable, when measured against revenue, personal income, and the size of state economies, and investors may have overreacted about problems; States in the best shape regarding debt and unfunded pension liabilities as a percentage of GDP include Nebraska, Iowa, South Dakota, North Carolina, and Nevada; the worst are Massachusetts, Alaska, Hawaii, Illinois, and Connecticut.
Features: 1) Negative on SHLD: Retailer has been operating in the red for several years and expects more losses, while Wall Streets bullish case, based on perceived value of companys real estate, may be misguided, with property portfolio worth less than predicted. 2) Positive on ALL, COF, CELG, SJM, OXY, SNA: Six stocks are among the few for which earnings estimates have been revised upward, bucking the overall trend of lower guidance, and all look reasonably priced relative to earnings. 3) Positive on KLIC: Profitable and low-profile maker of semiconductor capital equipment is sitting on cash equal to more than half its market value, has a dominant position in its sector, and shares look cheap, offering potential upside of 50%. 4) Traditional infotech suppliers are under siege from new cloud computing rivals, says Tiernan Ray, but not all technology winners will be good for investors, as some have been bid up to excessive valuations (positive on GOOG, AMZN, AMD, AMCC, CIEN, SPLK, VZ; negative on JNPR, NTAP, ORCL, SAP, HPQ, CSCO, EMC). 5) Positive on SRC: Real estate investment trust owns thousands of buildings around the country and has a 99% occupancy rate, but shares, which yield a juicy 7%, trade at a deep discount to competitors and could rally 30% or more.
Trader: - Negative on PBPB: Shares are grossly overvalued, trading at 114 times trailing earnings, an astronomical valuation given companys history of growth or what is reasonable to expect from a small restaurant chain, with fair value probably closer to IPO price than current one; - Negative on ANGI: Company is cutting membership fees in order to attract more subscribers, shares are expensivethough perhaps not overvaluedand insider selling points to bearish outlook; - Negative on JOSB-MW deal: Potential benefits of tie-up pale in comparison to the risk for investors in what would be a futile bid for synergy best watched from the sidelines.
Small Caps: - Cautious on CDE: Shares have tumbled over the past year amid operational problems and decline in price of silver, and high costs add to companys vulnerability, but selloff looks overdone, and shares could see major upside.
Mutual Funds: - Interview with Richard Freeman, Portfolio Manager, ClearBridge Aggressive Growth Fund, who says any manager who doesnt pay attention to value is a fool (top ten holdings: BIIB, UNH, APC, AMGN, CMCSK, WFT, FRX, CLB, SNDK, CREE); Interview with Jim Rogers, investor, author, and co-founder of the Quantum Fund, who lives in Singapore and is investing in China, Russia, and Myanmar, agriculture, and Chinese airlines (top holdings include FU, HOLI, MSM Holdings, Nok Airlines).
European Trader: Positive on Air Liquide, Linde: Industrial gas companies offer a good opportunity to play a mediocre macroeconomic environment, with each offering a strong pipeline of projects going online in the next year; £3.30 per share Royal Mail IPO, priced at high end of range, is massively oversubscribed, and some private investors will lose out.
Asian Trader: Investors looking for an Asian market thats likely to benefit most from a pickup in demand from the U.S., Europe, and Japan, and an uptick in Chinese growth, should consider Taiwan shares (positive on EWT, TSM, Hon Hai Precision Industries, Pegatron, Inotera Memories, Fubon Financial).
Emerging Markets: For China investors, owning an actively managed fund is probably better than holding an ETF focused on large stocks, many of which arent direct beneficiaries of Chinas rising middle class (positive on MCHFX, FHKCX, OBCHX).
Commodities: Owners of wells and mineral rights are benefiting from growth in U.S. crude production, a situation Derren Geigers Caritas Royalty hedge fund is taking advantage of.
Streetwise: Cautious on HOLX: Turmoil surrounding Affordable Care Act and management turnover havent helped shares, but adoption of its breast-imaging technology should eventually pick up as hospitals replace old mammography equipment; RBS analyst Glenn Novarro predicts shares could be worth $24-31 in a takeout.- SourceTradeTheNews.com
Roche to Dismiss Novartis Merger Reports, SonntagsZeitung Says
Roche CEO Severin Schwan will dismiss speculation about a merger with Novartis on a conference call with journalists and investors on Oct. 17, SonntagsZeitung reports, without saying where it got the information.