>>> Barron's weekend summary: Positive on PII, VOD, BWA, NVO, BEL, PNRA; Cautiou

Barron's weekend summary: Positive on PII, VOD, BWA, NVO, BEL, PNRA; Cautious on TSCO, BEAV 

Cover story: Retirement experts Ann Marie Etergino of RBC, Ross Levin of Accredited Investors, Mary Deatherage of MS, and Judy Fredrickson of UBS discuss how investors can maintain their wealth in retirement and provide for their heirs. 

Tech Trader: Analog chip makers TXN and NXPI have wowed investors with dividends and debt-fueled deals, and sharesalong with those of MCHP and CRU Shave bested the Philadelphia Semiconductor Index, but when investors return their focus to products and technologies, the landscape may change. 

Trader: Investors are likely to bide their time after the Fed communications blackout ahead of the FOMC meeting, but the markets precipitous drop on hints of just one hike doesnt bode well; Positive on PII: Company has a good long-term track record, and though another oil price collapse would hurt it, the worst appears to be over and it may be a good time for investors to buy; Positive on Goldman Sachs Group Pfd A, Goldman Sachs Group Pfd SHS D, Morgan Stanley Pfd A, Bank of America Pfd E, GMAC Capital Trust I: These adjustable preferred stocks offer a decent yield and potentially less volatility than fixed preferreds when rates go up. 

Profile: Scott Wolle, manager of the Invesco Balanced-Risk Commodity Strategy fund, sees commodities as more than an inflation hedge (top 10 holdings: gold, silver, copper, sugar, aluminum, cotton, soybeans, unleaded gasoline, soy meal, Brent crude). 

Features: 1) Positive on VOD: Companys shares have dropped over concerns about exposure to the European wireless market, but growing revenue, underappreciated developing-market assets, and a potential merger with Liberty Global could bring 33% upside; 2) Positive on BWA: Auto supplier will benefit from the growth of the electrical car market, where demand for its components is growing at an annual rate of 50%; shares are cheaper than usual, and could rise by 30%; 3) Positive on Novo Nordisk: Danish pharma, the industry leader in diabetes medications, faces increased competition and turmoil in the U.S. market, but plans to counter this by expanding into other lucrative pipelines; 4) Short seller Ben Axler, who targets companies with a research activism strategy, has launched Spruce Point Research Activism Partners, a hedge fund that will invest on his ideas before he shares them with the public. 

Small Caps: Positive on BEL: At a recent $11, shares of luxury hotel chain have the potential for major upside, while the downside risk seems limited. 

Follow-Up: Cautious on TSCO: The long-term bullish case for the retailer is intact, but after management lowered guidance, regaining investors confidence could take time, and investor may be wise to sell now; Positive on PNRA: While rival MCD has cut expectations, investors believe Paneras revenue could rise 7% next year to $3B, up from $2.8B this year; Cautious on BEAV: Most of the good news about the company is priced into shares now, and bad news could send them down. 

European Trader: Positive on Greencore Group: Irish company, the U.K. market leader in manufacturing ambient, or chilled, convenience and private-label foods, is likely to keep providing profits for investors. 

Asian Trader: Years of prosperity have attracted investors to the Philippines, but new president Rodrigo Dutertes efforts to clean up crime and drugs could rattle the markets in unexpected ways. 

Emerging Markets: The long-awaited cease-fire between the Colombian government and rebel forces wont improve the countrys near-term economic situation, which may get worse before it gets better. 

Commodities: Despite a recent boost in the platinum market, oversupply and weak prices are likely to continue amid heavy recycling and weak demand from China and other areas of the world. 

CEO Spotlight: Anand Mahindra of Mahindra Group has boosted competitiveness by focusing on improved efficiency, and linked pay more closely to productivity. 

Streetwise: Positive on CLR, NFX: A recent earthquake in Oklahoma isnt likely to affect the oil companies, and investors are betting they will be able to cut costs and drill more in the Scoop and Stack regions of the state.

>>> What to look at this Week End - 10th & 11th of September 201

Weekly Performance
Dow -1.81% S&P -1.98% Nasdaq -1.94% Russell -1.66% Brazil -0.41% Nikkei +0.24% Hang Seng +3.58% CSI +0.12% Shanghai +0.38% EuroStoxx -0.86% FTSE -1.71% CAC -1.12% Dax -1.03% Ibex +1.31% MIB -0.16% SMI -0.36%
September trade finally ushered in some volatility after the long slog higher for much of the summer. Early on in the week volumes remained light and movement remained minimal coming on the heels of a disappointing August employment report last Friday. An uptick in M&A announcements after the Labor Day holiday did little to juice equity markets. Corporate debt offerings surged as company's looked to roll over financing costs ahead of a potential Fed rate hike. US data continued to come in soft, highlighted by the August ISM Services reading that touched its lowest level since 2010. The weaker readings helped push Treasury markets higher, keeping a lid on yields through midweek.

Macro :
- EU Turns to OECD for Advice on Financial Transaction Tax Plan
- Fed’s Kaplan Says Monetary Policy Won’t Fix Slow Growth: Reuters
- Sweden Eyes Slice of Apple EU13b Tax Bill: Nyhetsbyraan Direkt
- Swiss to Tell EU Immigration Deal Means No Talks Needed: SZ
- Central Bank Governors, Supervisors Back Basel Steps: Statement

Keep an eye on :
- AF FP : Air France CEO Says Cost Cuts to Be Needed More Than Ever: JDD
- ALO FP : Alstom Job-Cut Methods Unacceptable, French PM Tells Europe 1
- ANTO LN
- AAPL US : Apple Said to Be Rethinking Strategy on Self-Driving Cars: NYT
- AAPL US : Iphone 7 Sold Out in H.K. Minutes After Pre-Order Starts: SCMP
- BMPS IM : Padoan Says He’s Confident That Paschi Capital Plan Will Succeed
- BMPS IM : ECB Will Review New Paschi CEO Run on Tuesday: Messaggero
- BMPS IM : BofA’s Morelli Gets an Informal ECB Nod for Paschi Role: Ansa
- BMW GY : BMW Plans ‘Major Restructuring’ of Executive Board: Handelsblatt
- COL SM : Colonial Says Line 1 Release ‘Confined’ w/ Repairs Ongoing
- MUV2 GY : Munich Re Sees Ongoing Strong Competition Amid Ample Capital
- QIA GY : Qiagen Says It Will Defend U.S. Intellectual Property Position
- RWE GY : RWE’s Innogy Said to Plan to File for $2.2b IPO Next Week
- SRG IM : Snam, Allianz Place Joint Bid in OMV’s Gas Unit Sale, Sole Says
- SCMN VX : Swisscom Should Be Privatized, Sunrise Chairman Kurer Tells SaS
- TSLA US : Ex-Tesla Maps Leader Bill Chen Joins Uber: The Information
- UBER IPO : Uber, Drivers Jump-Start Settlement Talks After Pact Denied
- WMT US : Wal-Mart May Be Interested in Retailer Esselunga: Repubblica
- WB US : Weibo’s Largest Holder Alibaba Reports 68.1% Class A Stake

FT : Bridgewater draws $22.5bn as it opens to new money

Bridgewater draws $22.5bn as it opens to new money

Bridgewater, the world’s largest hedge fund, has attracted $22.5bn after taking the unexpected step of opening its active funds to new money for the first time in seven years.
The move, which was prompted by the launch of a new strategy and a decline in assets due to market losses, gives existing clients a significant increase in their stakes in the fund.

The inflows mark a striking contrast to the pattern seen in many other parts of the hedge fund industry, where many funds have experienced redemptions as a result of market losses.
It also shows the loyalty that Bridgewater continues to command from many of its clients, in spite of suffering unusually large losses in a flagship fund this year.
“I know they’ve had a rough patch with Pure Alpha,” said Robin Diamonte, chief investment officer at United Technologies and a longtime Bridgewater client who added money in recent months. “But it’s unprecedented times, and things are not going to work. With managers like this, you just hold on.”
This development is likely to be closely watched across the industry — not least because it highlights the degree to which unusual market conditions and losses are forcing even the most successful hedge funds to shift their strategies.
Bridgewater, founded in 1975, operates three main funds: its actively-managed Pure Alpha fund, the $62bn All Weather “risk parity” fund, and Optimal Portfolio, a fusion of the two which launched in February 2015.
The passively-managed All Weather fund has risen 13.5 per cent in value this year, while Optimal Portfolio has remained flat. But the $69bn Pure Alpha fund has fallen 9.4 per cent.
At $154bn, the Westport, Connecticut-based company is already the world’s largest hedge fund. Even so, clients rushed into its Optimal Portfolio fund offering as it opened last year.
However, what is unusual is that in the past six months, after Pure Alpha had lost money, it has pulled in new money. Bridgewater wanted to keep its asset size broadly stable, according to people familiar with management’s thinking.
“Every investor’s going to have up years and down years. What we look at is whether the investor is sticking with their strategy, whether their process continues to have integrity, whether their strategy seems to be appropriate,” said Bruce Zimmerman, chief investment officer at the University of Texas Investment Management Company.
Pure Alpha has generated about 12 per cent a year since 1991, and has not had a losing year in the last 15.
“When someone’s going through a down period, sometimes that presents opportunities, like this one did,” Mr Zimmerman said. “It presented the opportunity for us to be able to deploy more capital with a very long-term trusted partner that has been able to deliver for us, so we were pleased to take advantage.”
This year clients have added more than $11bn to the company’s funds. The total new money over the past two years is just $2bn shy of the total assets managed by Ken Griffin’s Citadel, or just $3bn more than Brevan Howard.
Bridgewater told clients in its most recent investor letter that no one source from the more than 100 markets in which Pure Alpha trades was a disproportionate contributor, but the fund lost money in global bonds, Japanese equities, and European equities. The fund was caught wrongfooted with forces of deflation “overwhelming” those of expansion, according to the letter.
The company has faced scrutiny this year amid media reports of a leadership scuffle, and for its unique culture of “radical transparency”. Bridgewater is in the midst of a 10-year transition period from its founder Ray Dalio, and in May brought in former Apple executive Jon Rubenstein to take over from Greg Jensen as co-chief executive officer, alongside Eileen Murray.

FT : Apple ruling could drive US corporate tax reform

Apple ruling could drive US corporate tax reform

The case presses Washington to act swiftly on an outdated system

The European Commission’s ruling that Apple should pay Ireland more than €13bn in back taxes has prompted yells of outrage in the US. The US Treasury accused Brussels of “overriding national tax authority”, while the White House press secretary has fumed at the “unfairness” of the move.
Americans could usefully channel some of their outrage at the state of their own corporate tax system. At 35 per cent, its headline rate is among the highest in the developed world, and 13 percentage points above that of the EU average. Some companies pay full whack. Others — generally those large and wealthy enough to support networks of overseas subsidiaries — pay lower rates than the norm. The glaring loophole is that worldwide income is only taxed on repatriation. This leads to an absurd situation where some $2tn in US corporate profits is warehoused offshore. Apple alone accounts for a startling $200bn of this sum — much of it siphoned through the now compromised Irish conduit.

A rational reform would either tax worldwide income wherever it is generated, or else shift to the territorial system used by most of the other developed economies. Ideally it would be the former, as this would avoid beggar-thy-neighbour competition between countries while not favouring foreign over domestically generated income — and vice versa. Either way, the present mish-mash of the two shortchanges the taxpayer and gives companies perverse incentives to stash away the profits they earn abroad. The only real beneficiaries are accountants and lawyers.
The best solution would be for an OECD agreement in which countries agree to carve up the tax base so it better reflects where economic activity happens. Some of the recent work on base shifting and profit erosion has moved towards that goal. But Washington cannot simply wait on some overarching international compact.
Grand reform may still be beyond a bitterly divided Congress. But the legislature should at least act to resolve the unhelpful distinction between repatriated and unrepatriated foreign income. The headline rate needs to be brought down too. A good starting point would be the 28 per cent President Barack Obama has proposed.
Neither candidate in the presidential election has offered much of a firm prospectus. While the Republican candidate Donald Trump has fizzed with bold ideas — suggesting, for instance, a 15 per cent corporate tax rate, just 2.5 percentage points above Ireland — his thinking reportedly remains fluid. His Democratic rival, Hillary Clinton, is circumspect. She has dismissed Mr Trump’s proposals as offering help mainly to millionaires such as himself.
With so much corporate cash piling up overseas and companies continuing to shift domicile abroad through so-called “inversions”, reform cannot wait forever. The Apple case ought to spur things forward. The company’s boss, Tim Cook, has rightly observed that the EU ruling is not about how much Apple pays in taxes, but about who collects them. It is a reminder that the US taxman does not necessarily have first dibs on the income parked offshore by American companies. Not only has €13bn in tax been allocated to a reluctant Ireland by the commission; a number of other EU states are also considering slotting in their own claims.
It is in Washington’s interest to clear up these ambiguities. The first step should be to close loopholes that encourage avoidance, thus reducing the incentive for US multinationals to play off different jurisdictions. Alone among nations, the US has the heft to drive the global tax debate. For this to be felt, it needs deeds as well as words.

(Handelsblatt) BMW Plans Board Shakeup, Change in Electric Cars Strategy

Premium automaker BMW is planning a major restructuring of its executive board and a shift in its electric mobility strategy, according to information obtained by Handelsblatt.

BMW declined to comment.

The automaker plans to merge its marketing and sales operations for the brands Mini and BMW and replace Friedrich Eichiner as chief financial officer.

Nicolas Peter, a close confidant of Chief Executive Harald Krüger, will take over the company’s finances from Mr. Eichiner. Mr. Peter currently serves as BMW’s head of sales in Europe.

BMW is also planning major changes in its electric mobility strategy to keep up with U.S. rival Tesla. In addition to the fully electric “i3” models, which have been in production since 2013, BMW will also offer fully electric versions of the Mini, the BMW3 series and the X4 SUV, which is built in the United States.

The supervisory board is expected to approve the new electric models during a two-day meeting at the end of the month.

BMW faces increasingly stiff competition from Tesla in the electric car market. The U.S. e-car maker has received 400,000 pre-orders for its Model 3 sedan alone. BMW’s i3, on the other hand, has struggled with falling sales in the first half of the year.

Read the full story in Handelsblatt Global on Monday

WSJ : Big Pharma, Not Small Investors, Is Driving Biotech Values Now

Big Pharma, Not Small Investors, Is Driving Biotech Values Now

Big biotech’s need for growth is great news for small biotech companies, with firms such as Gilead shopping

The needs of big drugmakers are driving the stock-price outlook of smaller biotech companies. That suggests the brightening investment environment could stick around.

The biotech market has heated back up after an ugly start to the year. Placid markets have lowered the cost of issuing equity, and deals are back on the table now after a lull.

The recent sale of Medivation to Pfizer fetched $14 billion including debt, far more than investors expected, with no shortage of suitors. Despite Friday’s selloff, the Nasdaq Biotechnology Index has returned 8.5% over the past six months. Smaller companies generally have done better.

Gilead Sciences executives said at an investor conference that the company feels an urgency to look at outside deals and that they would be willing to take a risk on a company developing a class of new cancer drugs known as PARP inhibitors.

That nod came with some big caveats—the price has to be right, for instance—but it was enough to send shares of Tesaro and Clovis Oncology up 7% and 15%, respectively.

Buying stocks on deal speculation appears foolhardy, but big drugmakers must replace maturing products continuously.

Gilead, facing a sharp reversal in revenue growth this year and with nearly $25 billion in cash and securities plus easy access to the investment-grade bond market, is motivated and able to act.

With such companies on the hunt, finding long-term biotech bargains is a challenge.

>>> Forte Village close to be sold to Chinese investors

Forte Village close to be sold to Chinese investors

Forte Village, the Italian resort on the island of Sardinia, is close to be acquired by unnamed Chinese investors, Il Sole 24 Ore reported. The report, which quoted unnamed sources, said that Morgan Stanley has circulated teasers among investors and Asian buyers are interested.

The resort will close 2016 with revenues of EUR 72m.

The sellers are two brothers, Musa and Mavlit Bazhaev, entrepreneurs in the oil and gas sector that bought the resort in 2014 for EUR 310m. Out of that sum, EUR 100m was for operating business, EUR 180m for real estate assets and EUR 30m for planned investment. The two brothers are asking for EUR 500m. EBITDA margin is 39%. EBITDA for 2015 was EUR 26m, while in 2016 it is expected to be EUR 28m.

Il Sole 24 Ore

(BofA-ML) The Flow Show - Bond proxies are passé

--> EM bandwagon continues: 10 straight weeks of EM equity inflows + 10 straight weeks of EM debt inflows…but no EM equity sell-signal from BofAML EM Flow Trading Rule this week (needs huge $10bn inflows next week to trigger)

* Asset Class Flows
- Equities: small $0.2bn inflows (inflows in 4 of past 5 weeks)
- Bonds: $6.1bn inflows (inflows in 21 of past 23 weeks)
- Commodities: $1.1bn inflows (first inflows in 4 weeks)
- Money-markets: $12.8bn outflows

*Equity Flows
- EM: 10 straight weeks of inflows ($1.9bn)…but no sell-signal for EM equities forthcoming
- Europe: $1.2bn outflows (record 31 straight weeks of outflows; but pace of outflows slowing)
- Japan: $0.2bn inflows (inflows in 5 of past 6 weeks)
- US: $1.2bn outflows
- By sector: 9 straight weeks of utilities outflows ($0.4bn); 7 straight weeks of telcos outflows ($71mn); first outflows from REITs in 10 weeks ($92mn)

* Fixed Income Flows
- Largest outflows from Govt/Tsy funds in 6 months ($1.9bn) (9 straight weeks of outflows)
- 10 straight weeks of inflows to EM debt funds ($1.2bn)
- $3.9bn inflows to IG bond funds (inflows in 26 of past 27 weeks)
- $1.7bn inflows to HY bond funds (inflows in 9 of past 10 weeks)
- 51 straight weeks of inflows to Munis ($0.9bn)
- 13 straight weeks of inflows to TIPS ($0.1bn)
- 2 straight weeks of outflows from MBS funds ($0.2bn)