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Trade Interceptor wins the Best Mobile Platform Award
Trade Interceptor received the Best Mobile Platform award at the Forex Magnates Summit in London, reaching an important milestone in the company’s mission, which is to offer the best forex trading platform for retail traders.
Sofia, 20 November 2012. Trade Interceptor received the “Best Mobile Platform” Award at the Forex Magnates summit in London, a prestigious forex event where the biggest names in the industry shared their views about the market with over 500 forex professionals. Trade Interceptor was elected by a jury of fifteen industry experts among thirteen nominees.
“This is an important award for us, as it shows that Trade Interceptor is not only recognized as the best mobile trading platform among private currency traders but also by the industry professionals” says Rodolfo Festa Bianchet, CEO of Riflexo, the company which develops Trade Interceptor. He adds :“Our mission is very simple: to offer the best forex trading platform, and this award shows that we are on the right track”.
Trade Interceptor is currently the most downloaded forex mobile trading application on both the Apple App Store and the Android Google Play market, and counts over 255.000 registered users in 254 countries. As reported in the recent “Active Trader Market Report” from Aite Group, the most interesting aspect about Trade Interceptor is the unusually high level of trader satisfaction, evidenced by its numerous high ratings and trader praise on the iTunes Store and Android Google Play market.
The key features that Trade Interceptor users most enjoy are the possibility to trade trading accounts from different broker firms, the advanced charting and trading capabilities on all mobile and desktop applications, the possibility to trade from the charts, the robust array of order types, the trade execution performance, and a very responsive customer support and development team.
Trade Interceptor is powered by Riflexo, a software development company, which has been developing real-time trading solutions for financial institutions and professional traders for the last twelve years.
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About Riflexo
Riflexo Jsc is in the business of providing real-time trading solutions, systems and services to professional traders, financial organizations, and private investors worldwide. The company has a strong track record in the development of real-time trading applications, technical analysis systems, and mobile solutions. Clients include top tier banks, leading financial information providers, and brokers. Riflexo has signed alliances with fully regulated trading firms to provide private traders with an advanced, stable, and secure real-time desktop and mobile trading platform.
Media contact: E.Girodet
359 2 980 14 34
What I’m Thankful For…
Article by Investment U
Tomorrow, most of us in the United States will be with friends and family, sitting around festive tables filled with way more food than we need, sharing all of the things that we’re thankful for.
Yes, I’m thankful for my family, the abundant meal, puppies, rainbows and all of the heartwarming stuff like everyone else. But this is an investment e-letter, so here’s what I’m thankful for when it comes to the financial markets…
I’m thankful for this bull market that has been in effect since the lows of March 2009. Since then, the S&P 500 is up 108%.
Even better – as Alexander Green says, this is the most disrespected bull market in history. Despite the fact that the market has doubled in just three and a half years, there’s still a very high degree of skepticism.
According to the Spectrem Group, 48.6% of affluent investors (those with $500,000 or more of investable assets) are sitting on the sidelines. That’s a lot of firepower that can return to the market and push stocks higher once these investors decide they’re missing the party.
Low Interest, Low Inflation and Housing Recovering
I’m thankful for low interest and low inflation. While low interest rates make it tough for savers, it’s a great environment for investors. The low rates have driven stocks upward, and if you can get a loan, the banks are giving away money. Thirty-year fixed mortgages are available in the low threes. I recently obtained a loan at 3.25%. For someone who wants to pick up some investment real estate, you can’t ask for much better than that.
I’m thankful that housing is recovering. The National Association of Home Builders Index, a measure of sentiment, is at its highest level in six years. The eight-point jump in present sales was the largest since 2002.
When housing prices rise, people feel more confident. Even if they have no plans to sell, they feel wealthier and will be more comfortable spending more money, which sparks the economy.
Harnessing the Power of Dividends
The low rates also have awakened many investors to the power of dividend investing, particularly investing in dividend growth stocks. By investing in stocks with growing dividends, investors not only tend to own higher-quality companies, but the investment outpaces the ravages of inflation. That last statement is a critical point in my book, Get Rich with Dividends, which shows investors how to earn double-digit yields and/or returns over the long term.
By the way, that’s something else I’m thankful for – the fact that Get Rich with Dividends was so well received it became an Amazon.com bestseller, hitting No. 1 in “Investing.” So if you already read it – thank you very much.
If not, or you know someone who could benefit from learning how to conservatively create wealth and income for the long term, there are only 33 shopping days left before Christmas. Thank you in advance for filling loved ones’ stockings with copies of the book.
Cheers to All the Fearful Investors…
I’m also thankful for panicky investors. I love when people dump stocks because the market is falling, or because of an election, or because taxes may rise. Yes, those things can be scary, but in the long run, stocks go up. They always have and this time is not different.
There have always been troubles – the Depression, World War II, the Cuban Missile Crisis, double-digit inflation, terrorism, etc. But through it all, the market has continued to climb higher. When scared investors sell stocks, I go in and scoop them up. That’s how you make real money in the stock market.
I’m especially thankful for all of you who read this column. Without you, I wouldn’t be able to jump out of bed every morning, excited to go to work. It is truly a blessing to love what I do and to be able to write about whatever market topics I find interesting, It’s a dream job that, quite frankly, I never would have even imagined having 16 years ago, when I was first breaking into the industry as an assistant on a trading desk, having chairs flung over my head into a bank of monitors when the computer regularly locked up.
I’m thankful that, today, no one throws chairs over my head. I’m very thankful for that.
Lastly, as rancorous and difficult as the past few years have been, I’m thankful I live somewhere that has free elections and markets. Much of the world does not have that luxury. While the government, the economy and our markets have problems – serious problems – that need to be addressed, I would still rather contend with these issues than live in a place where my life and prosperity are determined by autocrats and dictators.
As has been said about both capitalism and democracy – they’re the worst systems, except for all of the others.
I hope you have a wonderful Thanksgiving holiday filled with good times, laughter and some good stocks in your portfolio.
Good Investing,
Marc
Article by Investment U
Warren Buffett is Rotating into Riskier Sectors; Should You?
If Warren Buffett is doing it, it must be good, right?
That’s actually horrendously bad advice. Warren Buffett is one of the greatest investors in history, but you should never blindly follow any investor–not even the Sage of Omaha. You don’t know what their rationale for buying was or what their sell criteria is, and you certainly lack the clout and control over management that Warren Buffett brings to a deal.
That said, if Buffett is buying it, it might at least make sense to do a little research. We may or may not end up buying what he’s buying, but it can’t hurt to pick his brain a little.
So, what is Buffett buying? A lot of gritty industrials.
RECENT REPORT SHOWS
Berkshire Hathaway (NYSE:$BRK-A) recently released its holdings for the third quarter, and three of the company’s four new buys were industrials: Deere & Co (NYSE:$DE), the producer of tractors and others heavy-duty equipment, Precision Castparts Corp (NYSE:$PCP), which is essentially a metal shop with a worldwide presence, Wabco Holdings Inc (NYSE: $WBC), a world leader brake and control systems for large commercial vehicles.
WHAT DID HE DUMP?
Interestingly, Buffett sold out or reduced his holdings in several consumer-oriented stocks. Most of Buffett’s most famous investments involve consumer product names–a Coke anyone–while his single greatest failure was an old-line industrial stock: the textile company Berkshire Hathaway itself.
BIG PICTURE
In any event, Buffett is clearly bullish on the global economy. He’s not playing it safe by buying defensive consumer names (though he does maintain large legacy positions in Wal-Mart, Procter & Gamble & Coca-Cola). He is buying companies that very much live or die with cyclical economic activity.
There are different ways to skin this cat, and Buffett’s industrial picks would not be my first choice. But, if you want to follow Buffett, buying the Industrial Select SPDR ETF (NYSE:$XLI) isn’t a bad option.
But if you’re going to play the “risk on” game, I would be more inclined to buy an emerging market ETF. Once good choice might be the MSCI Turkey ETF (NYSE:$TUR). Turkey is an attractive market right now for several reasons. It’s the most politically and monetarily stable it’s been in years, and it stands to be one of the prime beneficiaries of the eventual rebuilding of Syria. It’s also a dominant economy in the Eastern European and Middle Eastern markets, and its stocks are very reasonably priced at just 9 times earnings.
With fiscal cliff worries likely to keep the market choppy for a while, you may want to ease into this position over the course of the next few weeks. As always, general common sense rules apply. If global stocks look to be starting a new bear market, you do not want to own volatile Turkish stocks. I recommend using a 15% trailing stop to guard against that possibility.
Disclosures: Sizemore Capital is long TUR. This article first appeared on TraderPlanet.
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Nigeria holds rate, says tightening cycle still not over
By Central Bank News
Nigeria’s central bank held its Monetary Policy Rate (MPR) steady at 12.0 percent, despite expectations of a cut, saying there were still inflationary pressures and a rate cut now to support moderating growth would send the wrong signal to markets that the policy tightening cycle was over.
Despite a further easing in core inflation for the fourth month, the Central Bank of Nigeria said the “risk of food inflation remained hawkish” with a rise in headline inflation likely connected to floods on farmlands which poses an upside risk to near-term inflation along with imported food inflation.
Nigeria’s inflation rate rose to 11.7 percent in October from 11.3 percent in September while core inflation eased to 12.4 percent from 13.1 percent, well above the bank’s 10 percent inflation target.
The conflicting price signals from the latest inflation number has created uncertainty as to the appropriate policy stance, the bank said, adding the factors underpinning inflationary pressures were structural so a monetary response would not be appropriate.
“The Committee observed that while there were compelling arguments for monetary easing at this time based on the continuous moderation of core inflation, slowdown in GDP growth and evidence of fiscal prudence, the short-term gains may not be sufficiently adequate to overturn the long term implications of sending a wrong signal that the tightening cycle was permanently over,” it said.
The central bank said the global economy was still characterized by uncertainty along with decelerating growth and this would have implications for the domestic economy.
“Overall, the Committee believes that the fiscal gridlock in the US, the lingering euro zone financial and economic crisis, as well as the softening output growth in the key emerging Asian economies, could have serious implications for the domestic economy in the near-to-medium term
Nigeria’s statistics office has revised down the economy’s growth in fiscal 2012 to 6.61 percent from earlier projections of 6.85 percent, “indicating the economy is encountering growth challenges not previously anticipated.”
In the third quarter, Nigeria’s Gross Domestic Product expanded by an annual 6.5 percent, up from a rate of 6.4 percent in the second, but below the 7.4 percent in the third quarter of 2011.
The central bank said it had “noted with concern the continuing decline in the contribution of the oil sector to growth, in an area of strong oil price performance, which became apparent in the last half of 2011 and also the decline in the contribution of agriculture to growth since Q3, 2011.”
Nigeria’s central bank has held its policy rate unchanged since October 2011, but tightened its policy stance in July when its raised the Cash Reserve Ratio (CRR) to 12.0 percent from 8.0 percent.
www.CentralBankNews.info
For a Year-End Rally, Look to Spanish Banks
The world is a funny little place. For all the talk of Greece (or Spain…or Italy…or Portugal…) getting kicked out of the Eurozone, it is the United Kingdom—which doesn’t even use the euro as its currency—that may be the first political casualty of the euro crisis.
By this time next year, the UK might well have been kicked out of the European Union in all but name. A disagreement over the European Union’s budget—Britain wants spending capped at 2011 levels—may mark the unceremonious end to Perfidious Albion’s European experiment. (I can imagine the break-up speech now; “It’s not you, it’s me. We’ve just grown so far apart these last few years…we’re just so different…it was never going to work, you and me.”
With or without Britain, 2013 promises to be an eventful year in Europe. I expect it to be volatile, but I also expect it to be wildly profitable for investors willing to stomach it.
For the best shot at 50-100% total returns, I recommend take a look at Spanish banks, and particularly at Spain two premier global powerhouses: Banco Santander (NYSE: $SAN) and Banco Bilbao (NYSE: $BBVA).
Let’s take a look at the numbers. Santander trades for just 8 times expected 2013 earnings and at just 0.69 times book value. It also yields a fat 9.3% in dividends. BBVA trades for a comparable 8 times earnings and 0.71 times book and yields 6.8 %.
Both banks are cheap…but both banks are domiciled in Spain. Shouldn’t they be cheap?
Not exactly. Santander and BBVA get the vast majority of their profits overseas, and particularly from their growing Latin American subsidiaries. Both banks offer great “back door” access to one of the few areas of the globe still growing.
Yes, there is macro risk in buying a Spanish bank. Spain is at the center of the European sovereign debt crisis, and banks are at the mercy of their home country’s sovereign credit rating. So if Spain “blows up,” it will take its banks down with it.
I don’t see this happening. Spain will fight it as long as it can—perhaps another quarter—but it will eventually have to ask the EU and ECB for a bailout. And when that happens, I expect it to be a mundane, administrative detail, not a catastrophic market event.
Even outside of these two banking blue chips, there will be plenty of other opportunities to make money on Spanish banks in the year ahead. Wilbur Ross, the famous “vulture investor,” has been circling around Spain for months. According to Bloomberg, Ross is looking to make investments in smaller Spanish banks once they start shedding their bad debts. The United States, Ireland, and Britain have already gone through this process…and now it’s Spain’s turn. The Spanish government is in the process of setting up a “bad bank” to be a dumping ground for the country’s non-performing real estate debt. It’s expected to be up and running in early 2013.
Ross will probably focus on smaller Spanish banks, some of which don’t trade in the U.S. market with any volume to speak of. I intend to keep an eye on Ross’s moves (you can follow his moves too at Guru Focus) and may follow his lead when the time comes, but for now, Santander and BBVA remain the best bets for most investors.
Disclosures: Sizemore Capital is long BBVA and SAN.
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Shale Gas Will be the Next Bubble to Pop – An Interview with Arthur Berman
By OilPrice.com
The “shale revolution” has been grabbing a great deal of headlines for some time now. A favourite topic of investors, sector commentators and analysts – many of whom claim we are about to enter a new energy era with cheap and abundant shale gas leading the charge. But on closer examination the incredible claims and figures behind many of the plays just don’t add up. To help us to look past the hype and take a critical look at whether shale really is the golden goose many believe it to be or just another over-hyped bubble that is about to pop, we were fortunate to speak with energy expert Arthur Berman.
Arthur is a geological consultant with thirty-four years of experience in petroleum exploration and production. He is currently consulting for several E&P companies and capital groups in the energy sector. He frequently gives keynote addresses for investment conferences and is interviewed about energy topics on television, radio, and national print and web publications including CNBC, CNN, Platt’s Energy Week, BNN, Bloomberg, Platt’s, Financial Times, and New York Times. You can find out more about Arthur by visiting his website: http://petroleumtruthreport.
In the interview Arthur talks about:
· Why shale gas will be the next bubble to pop
· Why Japan can’t afford to abandon nuclear power
· Why the United States shouldn’t turn its back on Canada’s tar sands
· Why renewables won’t make a meaningful impact for many years
· Why the shale boom will not have a big impact on foreign policy
· Why Romney and Obama know next to nothing about fossil fuel energy
Interview conducted by James Stafford of Oilprice.com
James Stafford: How do you see the shale boom impacting U.S. foreign policy?
Arthur Berman: Well, not very much is my simple answer.
A lot of investors from other parts of the world, particularly the oil-rich parts have been making somewhat high-risk investments in the United States for many years and, for a long time, those investments were in real estate.
Now these people have shifted their focus and are putting cash into shale. There are two important things going on here, one is that the capital isn’t going to last forever, especially since shale gas is a commercial failure. Shale gas has lost hundreds of billions of dollars and investors will not keep on pumping money into something that doesn’t generate a return.
The second thing that nobody thinks very much about is the decline rates shale reservoirs experience. Well, I’ve looked at this. The decline rates are incredibly high. In the Eagleford shale, which is supposed to be the mother of all shale oil plays, the annual decline rate is higher than 42%.
They’re going to have to drill hundreds, almost 1000 wells in the Eagleford shale, every year, to keep production flat. Just for one play, we’re talking about $10 or $12 billion a year just to replace supply. I add all these things up and it starts to approach the amount of money needed to bail out the banking industry. Where is that money going to come from? Do you see what I’m saying?
James Stafford: You’ve been noted suggesting that shale gas will be the next bubble to collapse. How do you think this will occur and what will the effects be?
Arthur Berman: Well, it depends, as with all collapses, on how quickly the collapse occurs. I guess the worst-case scenario would be that several large companies find themselves in financial distress.
Chesapeake Energy recently had a very close call. They had to sell, I don’t know how many, billions of dollars worth of assets just to maintain paying their obligations, and that’s the kind of scenario I’m talking about. You may have a couple of big bankruptcies or takeovers and everybody pulls back, all the money evaporates, all the capital goes away. That’s the worst-case scenario.
James Stafford: Energy became a big part of the election race, but what did you make of the energy policies and promises that were being made by both candidates?
Arthur Berman: Mitt Romney, particularly, talked about how the United States would be able to achieve energy independence in five years. Well, that’s garbage.
Anybody who knows anything about oil, gas and coal, knows that that’s absurd. We were producing a little over 6 million barrels a day thanks to an all-out effort in the shale oil play. We consume 15 million barrels of oil a day and that leaves the gap of 9 million barrels per day. At the peak of U.S. production, in 1970, the U.S. produced 10.6 million barrels per day. Like I said, either the guy doesn’t know what he’s talking about, or is making a big joke of it.
Obama didn’t talk so much . . . He’s a hugely green agenda kind of president and I’m not opposed to that, but he’s certainly not for the oil and gas business. It wasn’t until he got serious about thinking about his re-election that he decided to take credit for what really happened.
James Stafford: Japan recently announced that they are going to be phasing out nuclear power. What are your views on nuclear? Are we in a position to abandon this energy source?
Arthur Berman: No. Japan is a special case. The disaster at Fukushima, the nuclear reactor, was right on top of a major fault. So, that was a dumb place to put it.
To wholesale abandon nuclear power because one reactor was incredibly stupidly planned, to me seems like a bit of a . . . well, I can’t tell people how they should react, but if I were a Japanese citizen, and the truth was that we have no oil, we have no coal, we have no natural gas, the next question is, “Well, if we get rid of nuclear, what are we going to do?”
It’s a really good question to ask. If you don’t have anything of your own, how are you going to get what you need? The answer is that they have to import LNG and that’s very expensive.
Right now, natural gas is selling in Japan for $17 per million BTUs. You can buy the same BTUs in Europe for $9 today, or in the US for $3.25
James Stafford: What about Germany’s decision to also phase out nuclear power?
Arthur Berman: For Germany to abandon nuclear… that decision is truly delusional because they haven’t had any problems over there. Nor is Germany particularly earthquake prone or tsunami prone. They have forced themselves into a love relationship with Russia.
James Stafford: What are your views on Canada’s tar sands? Are they a rich source of oil that the U.S. needs to exploit? Or do you think they’re a carbon bomb, which could do irreparable damage to the climate?
Arthur Berman: Well, that’s a very good question. I suppose they’re both, as are virtually all things that burn. Right? They’re a very rich source of oil. And they’re dirty. It requires a lot of natural gas heating to convert them into some usable form, a lot of processing, but here’s the thing, if the United States doesn’t buy that oil from Canada, do you think Canada’s just going to say, “Oh. Okay. Nevermind. We’ll forget about all this.”
No. They’re going to sell it somewhere else. They’ll probably sell it to Asia. So, the issue of the carbon bomb doesn’t get resolved by the United States not taking the oil.
So, to me, that’s off the table. Yes. I think it’s an incredibly sensible play to get your oil from a neighbour, and a neighbour who you trust, and it doesn’t require overseas transport and probably getting involved in periodic revolutions and civil uprisings.
James Stafford: Is there any technology, any development you see coming in the future that can help us get where we need to be? Is conservation really the only answer or do you have any hopes for some of the alternative energy technologies, such as solar or, even, some of these more advanced technologies such as Andrea Rossi’s E-cat machine?
Arthur Berman: Oh. I have all the enthusiasm for technology that you could ask for. I’m a scientist and I love technology but I heard a very good presentation several years ago on your exact question and the man who gave a talk said, “I’m going to give you a rule to live by. If it’s not on the shelf today, then a solution is no sooner than ten years in the future.” So, when you talk about E-cat and you talk about algae and all this kind of stuff, it’s not on the shelf today. So, that means it’s in some sort of pilot stage of testing.
Work harder guys. Work harder and faster because you’ve got a lot of work to do. So, yes, I’m enthusiastic. I think there are some great ideas out there but I don’t see any of them helping us in the coming five to ten-year period.
James Stafford: Environmentalists talk about the evil of fossil fuels, but have they really done their research to see how vital it is to pretty much everything that we base our modern lives upon?
Arthur Berman: Well, that’s exactly right. My oldest son and his family until recently lived in California, and in California people think electricity comes from the wall. They don’t have any idea that most of their electricity comes from horrible coal-fired power plants in New Mexico and Arizona. As long as they don’t have to see it, they don’t have a problem.
But, in this world, and in this life, we’re all connected and if you see something you don’t like, there’s a good possibility that whatever they’re doing there has something to do with something you’re using. So, this is an issue.
By. James Stafford of
Revealing the Hidden Profit Potential in These “Toll Collectors”
Article by Investment U
It’s tough making money in a flat market.
And with all the uncertainty looming, investors don’t really seem to know what to do with their investment dollars.
If the overall market doesn’t grow by itself, you really have to dig deep under the macro issues and into sectors to find fast-growing trends.
For instance, wireless tower companies comprise a sector that supports the telecom industry by leasing space on antennas to multiple carriers.
These companies are simply purchasing an asset and making it available to multiple carriers. The basic idea behind this business isn’t rocket science, but if you’re AT&T (NYSE: T), you just don’t want to offer your real estate to Verizon (NYSE: VZ) or Sprint (NYSE: S).
This is a cash intensive business that was below the carriers and needed to be outsourced. It generated cash, but racked up huge losses and piles of debt. The balance sheets of companies like Crown Castle International (NYSE: CCI) and American Tower (NYSE: AMT) looked terrible 10 years ago because they weren’t generating enough profit per tower.
The Data “Toll Collectors”
But that was during the dark ages, before the mobile data revolution. The thing that carriers didn’t count on however was that cell phones would eventually be used more for data than for voice. Now that Verizon and Sprint all have the iPhone, carriers have to compete on data speed, not just handset choice. This means investing in their networks to widen a path for the increasing wireless data traffic. And guess who the toll takers are on this wireless highway? You guessed it, the tower operators.
The tower companies don’t care whether more Google (Nasdaq: GOOG) Android handsets are sold than Apple (Nasdaq: AAPL) iPhones. In fact, as Apple and Google duke it out by making their phones MORE feature-rich, carriers have to foot the bill for the network upgrades.
The competition isn’t only between the handset vendors, though. Sprint is offering an all-you-can-eat data plan to attract AT&T and Verizon subscribers. By adding the application Pandora (NYSE: P) into the mix, I’ll never have to listen to commercial radio when I’m in my car again.
Revealing the Hidden Strength
The growth driven by carrier competition is enough to get excited about the industry – but two tactics these companies are implementing will continue to drive growth in the share prices:
1) Real estate acquisition
2) REIT conversion
If you look at Crown Castle’s last quarter, the company only generated $42 million in profits but a look behind the income statement shows $200 million in cash from operations. If you do a deep dive into a company’s financials, you often see hidden problems – not hidden strength.
One of the things the tower operators are doing with their excess cash is buying the land that the towers are located on. This reduces the risk of having to renew leases at much higher prices as well as reducing operating expense (which will make earnings look better).
Looking at American Tower vs. Crown Castle
American Tower has set a trend by converting its operating entity to a real estate investment trust (REIT). This is a substantial benefit for investors because it eliminates double taxation. As a REIT, American Tower pays out 90%of its taxable income to investors and you pay taxes at your individual rate. In the case of retirees who are paying exceptionally low tax rates, this could be a good source of low-tax income. AMT has seen its share price increase 23% this year since converting to REIT status and is the first in the group to do so.
While the new operating structure is convenient for shareholders, this may not be the best course of action for AMT’s competitors. Crown Castle International has publically stated that it will move toward REIT status as well, but not today. Due to the high level of tax advantaged operating losses building up on the balance sheet over the years, the company is already has tax shelters and there is little reason to make the conversion today.
A more likely time frame for the conversion is in 2015 as the “operating losses” run out and the company has to begin paying increased levels of income tax. This delay in REIT conversion might be better for shareholders in the long run. Since CCI is not expected to pay a high dividend at this time, the company can reinvest all available excess cash into new projects at a time when carriers are dramatically increasing LTE spending. So far, CCI has seen a 46% increase in its share price this year.
Given a choice between the two companies, Crown Castle looks to be a better investment – even though the stock has already had a strong run this year. The stock looks expensive on a P/E basis, but depreciation hides the earnings power. If you look at cash from operations rather than net income, the company generated $200 million rather than $43 million in the current quarter.
The company isn’t likely to attempt to achieve REIT status until the tax haven of old operating losses is exhausted. Until that time, the company will reinvest cash flow and leave a stronger operating model to generate dividends when the time comes.
Good Investing,
David
Article by Investment U
Euro Holding Gains Despite France Downgrade, Indian Banks Banned from Lending for Gold Purchases
London Gold Market Report
from Ben Traynor
BullionVault
Tuesday 20 November 2012, 07:30 EST
SPOT MARKET prices for buying gold traded above $1730 an ounce throughout Tuesday morning in London, up 1% for the week so far, while the Euro also held onto gains made yesterday despite news that a second ratings agency this year has downgraded France.
Gold rose by more than $20 during Monday’s trading, following reports that a deal may be done between US politicians on the so-called fiscal cliff.
“People are feeling a bit at ease about the budget talks in Congress,” says Yuichi Ikemizu at Standard Bank in Tokyo.
“But gold is in a tight range between $1,700 and $1,740 until we see a result of the talks at the year end, as the ‘fiscal cliff’ is the focus of the market.”
Silver meantime traded around $33.20 an ounce this morning, up more than 3% from last week’s close.
Most European stock markets ticked lower this morning, with the exception of Germany’s DAX, while commodities were broadly flat.
Moody’s last night became the second rating agency this year to downgrade France. Moody’s lowered its credit rating for France by one notch, from Aaa to Aa1, while maintaining a negative outlook.
“Moody’s is now giving France the same rating as Standard & Poor’s,” French finance minister Pierre Moscovici said Monday following the downgrade announcement.
“[This rating] has allowed us to live with low interest rates for many months.”
Although S&P stripped France of its AAA rating back in January, benchmark yields of 10-Year French governments bonds have fallen, from above 3% to close to 2%.
In its ratings rationale, Moody’s cites “sustained loss of competitiveness” and “deteriorating economic prospects” as reasons behind the decision.
In addition, Moody’s argues that France’s membership of the Euro and therefore its lack of monetary sovereignty could make it more difficult to deal with a rise in borrowing costs.
“While the French government’s debt service costs have been largely contained to date, Moody’s would not expect this to remain the case in the event of a further shock,” a statement from the ratings agency said.
“A rise in debt service costs would further increase the pressure on the finances of the French government, which, unlike other non-Euro area sovereigns that carry similarly high ratings, does not have access to a national central bank that could assist with the financing of its debt in the event of a market disruption.”
Eurozone finance ministers meantime meet in Brussels today, where they will discuss whether to approve payment of the next installment of bailout money for Greece. If they agree, national parliaments will then vote on the matter.
The Eurogroup is also expected to discuss policies aimed at improving Greece’s debt sustainability. Policies reportedly under discussion include cutting interest rates in loans to Greece and extending the time for repaying loans.
Germany has suggested a debt buyback of privately held debt at haircuts of 75%, CNBC reports, while Finland’s finance minister has confirmed politicians are also looking at using profits from the European Central Bank’s Securities Markets Programme, which formally ended in September.
Under the SMP, the ECB bought the debt of distressed sovereigns in the open market. Because it bought bonds that were trading below their par value, the central bank is due to make a profit on this debt if it is held to maturity.
Athens meantime rejected a demand yesterday by the International Monetary Fund to cut an additional 22,000 civil service jobs.
Spain meantime sold more debt than anticipated at an auction of 12- and 18-month Treasury bills this morning, raising €4.9 billion. The yield on the 12-month bills was down slightly compared to the last auction of such debt, although 18-month yields rose.
Spain has over €100 billion of debt due to mature in 2013.
In the UK, chancellor George Osborne is considering reducing tax relief on the pension contributions of wealthier people, ahead of next month’s Autumn Statement on the economy, the Financial Times reports.
India’s central bank meantime has banned banks from lending money for the purposes of buying gold.
“It is advised that no advances should be granted by banks for purchase of gold in any form, including primary gold, gold bullion, gold jewellery, gold coins, units of gold Exchange Traded Funds (ETF) and units of gold mutual funds” said a statement issued by the Reserve Bank of India Monday.
India is tradtionally the world’s biggest gold buying nation.
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Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK’s longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics. Ben writes and presents BullionVault’s weekly gold market summary on YouTube and can be found on Google+
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Turkey keeps policy rate, cuts short-term rates further
By Central Bank News
The central bank of Turkey kept its benchmark one-week repurchase rate steady at 5.75 percent but again narrowed its interest rate corridor and said it may narrow it further and even cut the policy rate if necessary for financial stability. The central bank also expects inflation to continue to fall.
The Central Bank of the Republic of Turkey said it would cut its overnight lending rate by 50 basis points to 9.0 percent but keep the lending rate at 5.0 percent. The interest rate on borrowing facilities for primary dealers via repo transactions would be cut by 50 basis points to 8.5 percent.
As last month, the central bank also reduced the lending rate on its late liquidity window by 50 basis points to 12.0 percent while the borrowing rate was retained at 0 percent.
“If deemed necessary for financial stability, a measured cut may be considered in the policy rate and the overnight borrowing rate in the forthcoming period,” the central bank said in a statement.
The central bank also said year-end inflation is expected to be lower than the forecast in the October inflation report due to a decline in unprocessed food prices, and it would continue to monitor the effect on medium-term inflation from recent increases in administered and energy prices.
In the October inflation report, the central bank cut its forecast for end-year inflation to 6.2 percent from 7.4 percent.
Turkey’s inflation rate eased to an annual 7.8 percent in October, the lowest rate this year. The central bank targets inflation of 5 percent but said last month that it expected inflation to remain above its target for some time due to the hike in administered prices.
The bank repeated its previous statement that domestic demand continues to follow a moderate pace while exports increased further despite the weakening global outlook.
“Overall aggregate demand conditions support disinflation and the current account deficit continues to decline gradually,” the bank said, repeating last month’s statement.
Turkey’s economy has continued to grow despite the global slowdown with second quarter Gross Domestic Product up 1.8 percent from the first quarter, for an annual growth rate of 3.2 percent.
Turkey’s central bank has kept its policy rate steady since August but continued to narrow the interest rate corridor which it varies daily.
A recent upgrade of Turkey to investment grade by a ratings agency has kept the central bank focused on holding down the lira currency which face upward pressure if international investors turn their attention to Turkish assets amid low rates in most advanced economies.
