Article By RoboForex.com

Analysis for April 25^th, 2014

EUR USD, “Euro vs US Dollar”

Euro is trying to return to level of 1.3857. After reaching it, price may start forming another descending structure with predicted target at level of 1.3750. During this descending movement, pair is expected to form continuation pattern, which may help us to specify the target.

GBP USD, “Great Britain Pound vs US Dollar”

Pound is moving upwards and may reach level of 1.6820. Later, in our opinion, instrument may start falling down to return to level of 1.6756, move upwards to reach level of 1.6905, and then start more serious correction.

USD CHF, “US Dollar vs Swiss Franc”

Franc is falling down towards level of 0.8800. After reaching it, price may form ascending structure to reach level of 0.8880 and then return to level of 0.8830.

USD JPY, “US Dollar vs Japanese Yen”

Yen completed correction with target at level of 102.15. We think, today price may move upwards to reach level of 103.10 and then continue falling down inside descending trend towards level of 100.00.

AUD USD, “Australian Dollar vs US Dollar”

Australian Dollar is extending its five-wave descending structure. We think, today price may consolidate and form reversal pattern to start new correction towards level of 0.9370.

USD RUB, “US Dollar vs Russian Ruble”

Ruble continues moving upwards. We think, today price may reach level of 35.82. Later, in our opinion, instrument may form another descending structure towards level of 34.78 and then continue growing up to reach level of 36.60.

XAU USD, “Gold vs US Dollar”

Gold reached new minimum and completed ascending impulse. We think, today price may form descending correction towards level of 1238 and then continue forming another ascending wave with target at level of 1357.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By WallStreetDaily.com

I don’t believe in the devil, but then again…

Every time I have the misfortune of speaking to a Comcast “customer service” agent, it forces me to reconsider.

My latest encounter concerned an “internal audit” that Comcast (CMCSA) said it recently performed on my account.

During its “audit,” Comcast discovered that I was receiving “too many channels.”

Not to worry, I was told…

Comcast apologized for its error, and then told me I could keep the channels by simply paying more money.

Gee, thanks!

It turns out that Wall Street Daily’s Editor-in-Chief was on the bad side of the very same “audit.” As were plenty of other folks around the country.

(Unsurprisingly, The Consumerist just awarded Comcast its “Worst Company in America” award.)

What just happened is symptomatic of a bigger problem. That is, an industry behemoth having too much leverage over its customers.

It flies in the face of free-market capitalism, right?
Well, an upstart company called Aereo could bring the entire cable industry to its knees.

Aereo has been intercepting TV broadcast signals and sending them to the public for only $8 per month.

The company is being sued by the cable industry, with a Supreme Court decision expected in June.

Along with the ruling comes a classic low-risk/high-reward investment opportunity.

You might consider buying a few Comcast 2014 $52.50 put options, since the cost is so nominal. Those puts would pay off big if the Supreme Court rules in Aereo’s favor.

Capitol Hill Daily’s Editor-in-Chief, Christopher Eutaw, is closer to this storyline than anyone else.

Interested in cutting your cable provider out of the equation? As Chris reveals, you won’t believe what Aereo is doing!

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Onward and Upward,

Robert Williams,
Founder, Wall Street Daily

Transcript:

Robert Williams: Hi there, Robert Williams here, Founder of Wall Street Daily. I have in the studio with me Christopher Eutaw of Capital Hill Daily. Christopher just broke a fascinating story on what’s happening in the cable industry recently, and I wanted to get his take on it. Chris, get us up to speed on what’s happening right now and why this is important for our readers to understand.

Christopher Eutaw: Okay. There’s a case in the Supreme Court right now between a company called Aereo Inc. – that uses antennas to stream over-the-air television to users – and they’re being sued by the four major networks: ABC, NBC, Fox, and CBS.

RW: Okay. Well tell us what exactly does this company Aereo do, Chris?

CE: They’re using small antenna farms to rebroadcast over-the-air television from the major networks. Users pay a subscription fee to get shows streamed to their devices.

RW: Okay. So if I understand you correctly, you don’t need the cable company if you have an account with Aereo, Chris – is that right? And how much does this monthly access cost?

CE: That’s correct. For $8 a month Aereo will broadcast all network television to you, streaming over any device.

RW: Does this include channels like HBO and Showtime? What channels are we talking about that you can access for $8 a month with this company, Aereo?

CE: It does not include things like HBO, Showtime, ESPN. But it does include anything that would be on ABC, NBC, Fox, CBS, or PBS.

RW: Do you need an antenna or cable box or anything like that? Do they have satellites? What are they doing?

CE: You don’t need any equipment. Aereo promotes itself as an equipment rental company, essentially. They use their own satellite forums to capture over-the-air television and stream it to you.

RW: Okay. Now they’re being sued by Comcast or the cable industry as a whole?

CE: By a conglomerate of the cable networks as a whole.

RW: Chris, sounds like a classic David and Goliath. This has gone all the way to the Supreme Court, correct?

CE: That’s correct. Aereo won a ruling at a lower court level, and it’s now in the Supreme Court. And they heard arguments on Tuesday.

RW: Chris, what would it mean if the cable industry were to lose this Supreme Court judgment?

CE: It would be a significant blow to the cable industry. The networks would lose perhaps billions of dollars in revenue from rebroadcasting fees, which other services have to pay them in order to rebroadcast their programming. But Aereo essentially skirted around the law that forces them to pay rebroadcasting fees.

RW: Okay. So there may be a short-term trading opportunity ahead of this Supreme Court judgment, Chris? What’s the timeframe? When are we expecting a decision by the Supreme Courts, and I’m just gonna cut right to it, which way do you think this is gonna fall, ’cause it sounds pretty big?

CE: Yeah, well the Supreme Court decision’s coming in June, perhaps in early June. And at this point it’s hard to tell which way it’s gonna fall. The two sides are very closely contested. But if the networks were to lose this case, it would be a huge blow to revenue for them. Comcast in particular would take a blow as both a proprietor and the owner of NBC, so they could look to take a big hit if the networks lost this case.

RW: And what’s the timeframe on the decision?

CE: It’s early June 2014.

RW: Chris, you’re probably closer to this story than anybody. I want to just kind of pin you down on this. Are we talking 50/50? What are the odds that Aereo can win this case?

CE: Well you know normally in this situation the big guy is gonna win this case, and that would be the networks. However, Aereo is in kind of a unique position. In the way they’ve interpreted the copyright law, that would make it so that an Aereo win would not be shocking at all. I’d say 50/50 right now.

RW: There you go. You just heard it from Christopher Eutaw of Capitol Hill Daily. Chris is closer to this story than I think anyone else. If any additional information comes to light ahead of this critical Supreme Court decision, you’ll hear about it first here at Wall Street Daily. I’m Robert Williams.

The post The End of Comcast’s Disgraceful Reign? appeared first on Wall Street Daily.

Article By WallStreetDaily.com

Original Article: The End of Comcast’s Disgraceful Reign?

By CentralBankNews.info
    Fiji’s central bank held its benchmark Overnight Policy Rate (OPR) steady at 0.5 percent, saying the outlook for foreign reserves and inflation remain stable at the moment but it would “re-align monetary policy if in its assessment there are challenges to its twin objectives.”
    The Reserve Bank of Fiji, which earlier today revised upwards its 2014 economic growth forecast to 3.8 percent from a previous 3.0 percent, has held its OPR rate steady since November 2011.
    In March Fiji’s inflation rate fell to minus 0.2 percent from 0.2 percent in February, largely due to basis effects and the impact of free primary and secondary education that was built into consumer prices  last month, the bank said.
    As of April 24, Fiji’s foreign reserves were US$ 1.652 billion, or enough to cover 4.4 months of imports.
    In 2013 Fiji’s Gross Domestic Product expanded by 3.6 percent, up from 2.2 percent in 2012.

    http://ift.tt/1iP0FNb

By CentralBankNews.info
    Fiji’s central bank raised its 2014 growth forecast to 3.8 percent from its November forecast of 3.0 percent due to higher than expected fiscal stimulus and revised economic data.
    Barry Whiteside, governor of the Reserve Bank of Fiji, said the outlook for 2014 growth is forecast to be broad-based and all sectors except for fishing and aquaculture are expected to expand.
    “If the 2014 growth projection is realized, this will be the firth consecutive year of positive growth, an achievement last recorded between 1992 and 1996,” Whiteside said in a statement.
    Fiji’s growth in 2013 is estimated at 3.6 percent and the longer-term growth projections for 2015 and 2016 remain unchanged at 2.4 percent, the central bank said.
    The central bank’s previous forecast from November was based on Gross Domestic Product data based on a 2005 base while the new forecast is based on a 2008 base, which includes new sectors and a change to the weighting of various sectors.
    Fiji’s central bank has maintained its overnight policy rate at 0.5 percent since November 2011.

    http://ift.tt/1iP0FNb

By MoneyMorning.com.au

Keep your eyes on the government, they say. If the Chinese government decides to provide even the tiniest support through fiscal means or monetary means, the market would rally.

True in the past, but not this time!

Why? Because Hu (the ex–president) and Wen (the ex–premier) are gone!

Here’s a little history…

Just look at 2009 and 2012. 2009 saw the biggest stimulus package in Chinese economic history. It drove both the property market and secondary industries to even higher levels of hysteria.

This effectively ended the ‘market restructuring’ effort in 2008 (which was aimed at reducing overcapacity and depressing property prices). So this isn’t the first time the government has tried to balance the market (in fact, they have been trying to do it for over 15 years; starting from the time of Deng Xiaoping).

So for the next three years after 2009, the Chinese market became more unbalanced, until a double dip hit the scene.

What did the Chinese government do in response? They lowered interest rates and they provided subsidies to almost all oversupplied industries. Needless to say, this led to another round of production growth, which delayed market rebalancing.

By the time Xi Jinping took over, people were totally sick of the then Chinese premier Wen Jiaobao (Hu Jintao hardly appeared in press conferences, so people knew he was a weakling).

The western press proved to have great timing, with a number of special investigative reports on Wen and Xi’s massive family assets (including overseas assets). The Wall Street Journal and Bloomberg were both banned in China as a result.

Oh how they (the Chinese people) hated the Chinese leadership! So, in a big going–away gesture, Hu ‘unleashed’ China’s first aircraft carrier, which had been only a rumour for many years.

However, some of us in China knew the government was building it. I could see it in Dalian’s port from my hotel when I was there!

The new president, Xi, is supposed to fix all these problems.

This is why you shouldn’t count on any huge stimulus. Everybody has been frustrated for so long over the inaction of the last government that they aren’t going to make the same mistake. People are simply fed up!

All you need to look at is money supply. Money supply has been decelerating sharply since mid–2013. You see a policy–induced slowdown in the demand for credit in properties and secondary industries.

While secondary industries have not felt much direct policy influence from Beijing, they have certainly been left alone to sort out their own mess (apart from some provincial level deals to relieve their financial strains).

That brings us to the issue of China’s banks…

Are Chinese banks a good buy?

If the money supply growth is slowing, does that mean trouble for China’s banks? And if so, does it make sense to short–sell China’s banks? After all, banking is the business of supplying money.

China’s banks have stayed cheap for some time. Institutional investors have always been fond of them. Flit through a few fund reports and you will find that their top holdings are Chinese banks; and a significant proportion of their portfolios are in Chinese financials.

So on a value basis, what do these banks offer?

Good historical revenue growth; good historical EPS (earnings per share) growth; high profit margin; great return on equity; good dividend yield; low leverage.

So this sounds like a screaming buy! That’s arguably the position of funds, usually investing in value stocks.

However, Chinese banks have underperformed the All Ordinaries in the last few years. So why would you invest in them?

You probably need to take a step back when looking at these banking stocks, and remember that advanced country (equity) indices have been supported by easy money. The additional capital that has gone into indebted advanced economies took the forms of both debt and equity. A significant amount of that flew out of those countries and found home in high rating, high interest rate and stable economies such as Australia. The sentiment effect cannot be neglected as well.

How about China’s credit system? Since Fitch’s rating change and a whole wave of credit system risk warnings from banks and funds, China’s credit woes have been in the spotlight. Recent news with a corporate bond default and money market rate fluctuations seem to confirm some of the fears. This has undermined support for banking stock prices.

It’s true that China’s provincial level debt has hit a brick wall, simply because their financing mechanism is unsustainable. However, China’s ‘visible’ debt to GDP number has been improving, now forecasted to be 22.3%. Its credit rating at AA– (S&P), Aa3 (Moody’s) is sound.

This rating is defined by S&P as follows: ‘An obligor rated ‘AA’ has very strong capacity to meet its financial commitments. It differs from the highest–rated obligors by only a small degree.’

From the People’s Bank of China’s (PBOC — China’s central bank) own presentations in a conference, I could clearly see that they are well aware of the shadow banking risk — and we are seeing good progress against that.

There has been tightening of banking credit qualities; tightening of banking credit volume; and curbs on real estate financing. From my friends who run shadow banking operations in China, they are definitely affected by the policy push, and are switching to products aimed at small to medium enterprises. This is exactly where the PBOC wants them to be.

China’s debt is going to grow. There is no doubt about that. Financing China’s next phase of urbanisation requires provincial level financing to be worked out, through municipal bonds, corporate bonds and other bond products.

China’s banks aren’t going to collapse due to a potential collapse in the system. Their bad debt coverage is fine; their product types are simple with limited securitisation; and ‘the big brother’ is very watchful of risks in the banking sector.

Simply put, despite the mostly negative view on Chinese banks in the market, at these price levels you should have a great run with Chinese banks.

Ken Wangdong
Emerging Markets Analyst, Money Morning

From the Port Phillip Publishing Library

Special Report: Mining Boom Act II

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By MoneyMorning.com.au

By MoneyMorning.com.au

As regards economics and markets, and when events happen around the world, one of the best things you can do is always go back to the chart, if one exists. Charts tell a story. 

And if you’ve ever seen many of the examples the great trader WD Gann gives in all his books, there is one thing you will learn. And it’s the only thing that surprises a market is an earthquake. Markets know things before it is public news — always. 

This is why we traders buy breaks across new highs, or short–sell breaks into new lows, especially along a line–up of past tops (or bottoms). When a share breaks into new highs, let me tell you, the market knows good news is coming. If the company has earnings, such breaks will generally run for some time and persist often for years. 

So have a look at the Malaysian Airline System (MAS) charts, listed on the Malaysian stock exchange. I’ve taken one from Bloomberg and the other Yahoo.

Click to enlarge

Now MAS has been in a downtrend since the best part of 2008, and fell 18% after flight 370 went missing, March 9th. But you can see a clear break into all time new lows, Feb 19th, on substantially increased volume. In other words, markets discounting future news. The actual event itself was the low. 

I find that quite significant. To give you an idea I can show you similar charts in September 2001. Somebody(s) knew 9/11 was coming as well, enough to affect the relevant parts of the markets involved. 

Here’s just two examples…

Click to enlarge

The chart of MAS indicates the possibility of a prior knowledge of events to come as regards Malaysia Airline Systems; more will come out about it in due course. 

We may never get to the bottom of it though, because this would involve the release of sensitive military data from one (hostile) nation to another, and this is never going to happen. Plus there will be reputations to protect.

And Malaysia is not particularly a bastion of openness. Regardless, watch developments; they will unfold in set counts from the date of the flight disappearance, March 9th, and probably the MAS chart itself. 

When things happen, get into the habit of consulting your charts. You must learn how to read a chart; you will find it a very useful skill. 

Phil Anderson,
Contributing Editor, Money Morning

Ed Note: The above article was originally published in The Daily Reckoning.

From the Archives…

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By MoneyMorning.com.au

Source: Peter Byrne of The Energy Report (4/24/14)

http://www.theenergyreport.com/pub/na/andrew-coleman-wants-to-know-if-you-are-ready-for-the-global-oil-surplus

As North America continues to produce more oil and gas than the world knows what to do with, Raymond James Analyst Andrew Coleman thinks the sector is likely to remain sluggish. But if investing is a bit of a poker game, you need to learn to read the table if you want the best chance at a winning hand. In this interview with The Energy Report, Coleman explains the international supply/demand disparity and tells us which oil and gas producers he values highest in an uncertain energy market.

The Energy Report: We are at the end of Q1/14; how is the oil and gas space faring?

Andrew Coleman: Overall, the space was helped by stronger domestic gas prices as we came out of the cold winter. The Q1/14 numbers have not been fully reported yet, but gas prices were up to $5 per thousand cubic feet ($5/Mcf) at bid week. As a result of this increase, a number of gas-weighted exploration and production (E&P) companies outperformed the market.

TER: What changes do you see on the table for Q2/14?

AC: From the macro standpoint, we at Raymond James have been asking ourselves, “How and when will gas storage begin to replenish?” The answer to that question will dictate how the gas market reacts during the next three to six months. Clearly, the strength of the winter weather sales and the reduction in storage levels make us much more positive on 2014 gas prices than on 2015 gas prices. We think there will be enough coal switching to keep gas prices from getting too frothy. We also believe the E&P industry’s ability to bring new supply to the system will help close the storage gap. So, while we recently increased our 2014 gas price deck, we left 2015 unchanged.

TER: Are we looking at a global glut for oil and gas?

AC: That’s certainly been the sentiment at Raymond James for the last 24 months. Supply coming from the North American shale plays has overshadowed demand growth. The market remained tight last year due to supply curtailments made by the Organization of Petroleum Exporting Countries (OPEC) in the Middle East. And in the months to come, I think we’ll continue to see growth in North American production volumes and a trend toward oversupply, with the first pricing disruption coming from a widening Brent/LLS spread.

TER: What role are the Saudis and Chinese playing in the current oil and gas environment?

AC: Prior to the shale oil development boom, there was one marginal producer of oil—Saudi Arabia—and one marginal buyer of oil—China. However, the discovery of U.S. shale oil deposits introduced the country as a second marginal supplier. It is our view that Saudi Arabia will cut oil production to keep the market balanced, but there’s a question as to how much the Saudis will cut. The recent Saudi cut of 1 million barrels of oil per day was more than we expected in the short term. Will it cut more? A part of the answer depends upon the health of China’s growth trajectory, as the country’s slowed progress has given way to concern for the robustness of its oil demand.

TER: Will the North American shale fields keep producing for the long term?

AC: Raymond James recently published an article that attempts to answer that question, analyzing the Bakken Shale. We used our type-curve models to forecast what it will take on a rig count basis to get Bakken production to slow its growth rate. The report shows that the rig count would have to be cut by more than 50% in order for production to show a noteworthy decline. Growth is being driven by a combination of pad drilling (e.g. faster cycle times) and downspacing (e.g. higher-density drilling).

It used to take 60 days to bring a new well online in the Bakken, but now, the average time is half that. And even if the productivity of the rock in the basin is declining, producers don’t have to deal with infrastructure bottlenecks, such as transportation issues. Roads and other infrastructure were built throughout the Bakken during the first few years of the boom and those efficiencies are helping to offset any potential risks to reservoir productivity at this point. That scenario is likely to continue through the end of this decade.

TER: In your previous Energy Report interview, you discussed a number of exciting North American E&P companies. What are some of the names you’re following today?

AC: EOG Resources Inc. (EOG:NYSE) is the best run and most respected E&P company out there. It’s been my Top Pick for some time because it has a great balance sheet and the fastest growing large-cap E&P profile in the sector and the stock certainly reflects these strengths. It’s a dominant player in the Eagle Ford play, where it has experienced huge growth. It’s also one of the pioneers in the Bakken and is testing acreage in the Permian Basin. Given that Raymond James’ commodity outlook for the next two years models West Texas Intermediate (WTI) oil moving toward $75/barrel ($75/bbl), I see EOG as a great defensive name. It offers good production growth on a debt-adjusted basis.

TER: Do you think the stock is an attractive buy at the present time?

AC: Absolutely. It’s hard to argue with the company’s level of execution. Considering our overall risk aversion at Raymond James, EOG is a best-of-breed at almost any size market cap.

TER: What’s the main way that Raymond James factors risk into commodities analyses?

AC: The risk is that we are pricing WTI in the mid-$70/bbl range next year. The Bakken and midcontinent supply puts pressure on the Brent and WTI spread.

TER: Is that what makes Raymond James risk averse?

AC: Yes, that supply environment makes us cautious on E&Ps. We aren’t as cautious as we were two years ago, when we thought the WTI would drop to $65/bbl, but we’re still cautious, and we are not seeing enough growth on the demand side to offset that risk.

TER: How about another E&P name investors should keep an eye on?

AC: QEP Resources Inc. (QEP:NYSE) has a number of catalysts on the near-term horizon. In Q2/14, we expect it to finish the bid process for assets that it has targeted for divestiture. Last December, the company purchased properties in the Permian Basin for $950 million ($950M). Utilizing like-kind exchange rules, QEP is seeking to divest its Midcontinent properties to take advantage of the tax benefits it can gain by high-grading its portfolio. It also has saleable assets in the Cana and Granite Wash Basins, and we expect the proceeds from these two asset sales to potentially top the $950M that management spent in the Permian. These deals could be announced in 2–6 weeks and will help QEP deleverage and plow some money back into operations in order to generate production growth.

Interestingly, QEP is also on the cusp of finalizing its midstream business separation plan. We expect to see a filing with the Securities and Exchange Commission (SEC) soon, which will detail how it plans to go about that process. You may recall that JANA Partners LLC acquired shares of QEP stock late last year. QEP subsequently agreed to take on additional board members. Now, it seems everyone on the board agrees with Management’s plan to spin off the midstream business and to fully separate it from the rest of QEP.

The proceeds from the midstream separation—and the proceeds from its asset divestitures—could drive the company to trade at a much more attractive E&P multiple since it will be poised to generate more production growth. We could potentially see a $10/share increase.

TER: Are there any other companies that pique your interest?

AC: Last month, Energy XXI (EXXI:NASDAQ) announced that it will acquire Energy Partners Ltd. (EPL:NYSE). This is part of a plan to create the largest pure-play Gulf of Mexico shelf producer. In my view, this will allow Energy XXI to boost its low-risk inventory, effectively resetting the clock on its development plans. It is similar to what happened after the firm’s acquisition of properties from Exxon Mobil Corp. (XOM:NYSE) in 2010: the increased inventory allowed it to have a deeper backlog and to be more selective with its development plans. This deal with Energy Partners allows Energy XXI to do the same thing. In the short term, it will find low-hanging fruit to monetize, generating more production growth and cash flows over the next 12–24 months.

TER: Is the financing market robust right now for small energy firms that need operating capital?

AC: There is definitely some appetite for new issuers on the public equity side. We have seen a large number of energy-only initial public offerings in the last few months, including RSP Permian Inc. (RSPP:NYSE), Athlon Energy Inc. (ATHL:NYSE), Antero Resources Corp. (AR:NYSE) and EP Energy Corp. (EPE:NYSE). I can’t speak for the private equity market, but generally the circle of life in the E&P space continues. I don’t see any major headwinds aside from the normal concerns about what direction commodity prices will take, which is the top driver in the E&P space.

TER: Will there be an increase in the pace of mergers and acquisitions (M&A) in the E&P sector?

AC: That is hard to say. Generally, M&A picks up when operators feel they can buy properties cheaper than they can organically spend to find/develop them. Lower service costs and commodity price stability would suggest that we’ll see more organic options. Smaller deals remain more likely, in my view, than larger-scale ones for the time being.

TER: Andrew, thank you for your time.

AC: Thank you.

Andrew Coleman joined Raymond James Equity Research in July 2011 and co-heads the exploration and production (E&P) team. Since 2004, he has covered the E&P sector for Madison Williams, UBS and FBR Capital Markets. Coleman has also worked for BP Exploration and Unocal in a variety of global roles in petroleum and reservoir engineering, operations, business development and strategy. Coleman holds a Bachelor of Science in petroleum engineering from Texas A&M University and a Master of Business Administration in finance and accounting with a specialization in energy finance from the University of Texas at Austin. He is a director for the National Association of Petroleum Investment Analysts (NAPIA) and a member of the Texas A&M Petroleum Engineering Industry Board, the Independent Petroleum Association of America’s (IPAA) Capital Markets committee and the Society of Petroleum Engineers (SPE).

For additional comments on EOG Resources Inc. (EOG:NYSE), QEP Resources Inc. (QEP:NYSE), Energy Partners Ltd. (EPL:NYSE), and Energy XXI (EXXI:NASDAQ) from newsletter writers, money managers and analysts, click on their respective links or visit The Energy Report.

Want to read more Energy Report interviews like this? Sign up for our free e-newsletter, and you’ll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Interviews page.

DISCLOSURE:

1) Peter Byrne conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: None.

2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Energy XXI. Streetwise Reports does not accept stock in exchange for its services.

3) Andrew Coleman: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has a financial relationship with the following companies mentioned in this interview: Energy XXI. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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By CentralBankNews.info

By CentralBankNews.info
    Global bank lending shrank for the seventh consecutive quarter in the final three months of 2013 as euro-denominated credit continued to fall, boosting the total decline in international credit to $2.3 trillion, or 7.7 percent, since the end of March 2012, according to the Bank for International Settlements (BIS).
    But while total cross-border lending fell by $93 billion, Swiss-based BIS said the 0.3 percent contraction from end-September to end-December was considerably smaller than in the previous two quarters when the decline averaged $519 billion, or 1.8 percent.
    The worldwide lending pattern in the fourth quarter showed a further decline in euro-denominated while loans extended in U.S. dollars and yen rose, said BIS, known as the central banks’ bank.
    Euro lending fell by $325 billion, or 3.3 percent, while dollar-lending grew by $49 billion, or 0.4 percent, and yen-lending rose by $62 billion, or 5.3 percent.
    The sharp fall in euro-denominated lending is part of the broader global trend that has been seen since the global financial crises.
    The outstanding stock of euro-denominated claims, including intra-euro lending, has shrunk by $1.8 trillion, or 21 percent, since peaking at $8.8 trillion at the end of 2008. This fall accounts for nearly two-thirds of the overall fall in the stock of global cross-border in the same period.
    This decline since March 2008 and December 2013 has been widely distributed across euro zone countries and sectors, with claims on banking offices down by $1.2 trillion, or 32 percent, and those on non-bank borrowers down by $180 trillion, or 8.3 percent.
    Euro area banks accounted for the overwhelming majority of the decline in lending during the same period while loans by Swiss banks shank by 36 percent. In contrast, euro-denominated lending by U.S. and Japanese banks rose by 49 percent and 21 percent, respectively.
    Lending by UK banks, which had expanded from end-March 2008 to end-June 2012, then fell sharply, or by 36 percent, from mid-2012 to the end of 2013, BIS said.
    Despite the outflow of capital from many emerging markets since the U.S. Federal Reserve last May said it was preparing to reduce its asset purchases, cross-border lending to emerging markets grew by $95 billion, or 2.7 percent in the fourth quarter, boosted by strong growth in lending to China.
    Lending to China, primarily short-term lending, rose by $85 billion, or 11 percent, raising the share of international claims on Chinese borrowers with a remaining maturity of less than one year to 79 percent end-December from 56 percent end-2007 and 76 percent end-2010.
    Claims on the rest of emerging Asia rose by $36 billion, or 4.0 percent in the fourth quarter, including a $4.4 billion, or 5.6 percent, rise in loans to Indonesia. Lending to Korea shrank by $3.0 billion, or 1.6 percent, while claims on Indian borrowers was stable in the fourth quarter in contrast to a decline in the previous two quarters.
    In contrast to higher lending to borrowers in Latin America and the Caribbean, lending to emerging Europe, Africa and the Middle East fell by $12 billion, and $20 billion, respectively from end-September to the end of December last year, with loans to Russia contracting by $11 billion, or 6.1 percent.
    By the end of 2013, on the eve of the unrest in Ukraine, foreign banks’ claims on Russia stood at $219 billion on an an ultimate risk basis – which reflects guarantees and collateral and thus reduces risk – with French banks accounting for the largest stock of outstanding claims at $49 billion and Italian banks with claims of $29 billion.
    But BIS said most of the claims by French and Italian banks were based on loans extended by the Russian affiliates of those banks and typically funded locally. In contrast, most of the loans extended by U.S. banks were cross-border claims.
    In addition to the foreign claims on Russian residents, BIS said banks had other potential exposures, such as derivatives, guarantees and credit commitments, totaling $151 billion.
    The foreign exposure of major international banks to Ukraine amounted to $24 billion on an ultimate risk basis at the end of last year, with European banks accounting for more than 90 percent of of those claims. The majority of those claims, or $15 billion, comprised local claims of foreign bank’s Ukrainian affiliates and other potential exposures to Ukraine by major banks totaled a further $19 billion.
     International lending to Latin American and Caribbean borrowers rose in the fourth quarter, but only by $5.5 billion, or 0.9 percent, partly reversing sizable declines in lending in the second and third quarters of last year, BIS said.
    Lending to Mexico grew by $8.6 billion, or 7.5 percent, while claims on Brazil fell by $5.0 billion, or 1.6 percent, from end-September to end-December.

    http://ift.tt/1iP0FNb

Source: George S. Mack of The Life Sciences Report (4/24/14)

http://www.thelifesciencesreport.com/pub/na/charles-duncan-2014-is-for-careful-stock-pickers-not-dart-throwers

Veteran Senior Biotechnology Analyst Charles Duncan of Piper Jaffray & Co. sees platform companies as the perfect way to play a consolidating market. We’ve had a big run in biotech, and Duncan believes now is the time to identify, through careful diligence, companies that can advance in a more temperate market. In this interview with The Life Sciences Report, Duncan discusses five biotech and specialty pharma innovators poised to produce therapies enabled by versatile and scalable technology platforms that target multiple disease indications.

The Life Sciences Report: Charles, you are a veteran biotech sellside analyst. What differentiates your work from that of other analysts in the field?

Charles Duncan: I am firmly committed to being a biotech generalist, but I am a neuropharmacologist by training, and have a fair amount of experience in that area—that’s where I can differentiate my work from other analysts. Analysts generally gravitate toward oncology and therapy areas with a well-bedded set of success factors in the clinic. By contrast, I deal with relatively complicated sets of endpoints, at least in terms of clinical development in neurology. I have more comfort and experience in this area than most on the Street.

One example is Acadia Pharmaceuticals Inc. (ACAD:NASDAQ), a company that I assisted in taking public while at a previous firm. We currently cover it here at Piper Jaffray, where we have it rated Overweight, which is the top rating in our system.

We were involved in not only interpreting the Phase 2 trial data of its compound pimavanserin in Parkinson’s disease psychosis (PDP), but also its initial Phase 3 data. We were frankly disappointed in that first Phase 3 study, so we got involved in understanding the changes made to the Phase 3 protocol, and in helping investors become comfortable with the second Phase 3 trial. That study read out well, and there was a dramatic transition from the $100–150 million ($100–150M) market cap level to roughly $2 billion ($2B) today.

TLSR: Can you elucidate a theme about your work?

CD: Thematically, we’re focused on small-cap neurology and oncology innovators. I believe small caps generally outperform larger caps over time. We have some coverage in gene therapy, as well as in other clinical areas and special situations where we believe we can conduct diligence and get a handle on a differentiated viewpoint.

TLSR: In the April 3 edition of Nature, there’s a short news article entitled “Drug Development: The Modelling Challenge.” Preclinical drug development is about translating research from animal models to human clinical trials. But in the case of neurocognitive disease, it’s hard to understand preclinical data because investigators can look at the signs of disease, but the animals can’t tell the investigators their symptoms. That’s clearly the biggest problem preclinical investigators, analysts and investors face in neurodegenerative disease, isn’t it?

CD: That absolutely is the case. Animal models have better predictive value in some areas: An example would be in antiviral drug development, where it’s pretty easy to gauge efficacy in animal models. When investigators are able to eradicate the virus, or at least reduce viral load, there is direct predictive evidence. There are other diseases—even oncology or hematology—where animal models demonstrate good predictive value for later success in humans.

<href=”#quote” target=”_blank”>”By the end of 2014, you’re going to have some pretty good news flow out of BioDelivery Sciences International Inc.“

But in the case of neurocognition and behavioral studies, including pain, it is much more subjective. Also, skeletomuscular disorders, such as weakness, can be very subjective.

TLSR: Let’s continue with Acadia. Even with the recent and significant pullback in the biotech space since the end of February, Acadia is still up about 165% over the past 52 weeks. It is truly one of the great success stories of the past year. What’s the next milestone we could see from the company?

CD: The next step for Acadia is to file its new drug application (NDA) for pimavanserin in PDP. We anticipate that will occur by the end of 2014.

TLSR: You have a lot of names under coverage, and I’d like you to cover a few of them. Could you go ahead and address BioDelivery Sciences International Inc. (BDSI:NASDAQ), please?

CD: We have BioDelivery Sciences rated Overweight. I consider this company to be a neuro innovator, and we think it is pretty interesting. It has three drugs in late-stage development, meaning Phase 3 or later. One of them is a drug for opioid addiction called Bunavail (buprenorphine + naloxone in soluble film for buccal mucosa). The NDA was submitted at the end of July 2013, and is pending review at the U.S. Food and Drug Administration (FDA). The Prescription Drug User Fee Act (PDUFA) date is in June 2014, and we anticipate this product will be approved. It would compete in a marketplace where the current market leader is called Suboxone (buprenorphine + naloxone sublingual film; Reckitt Benckiser Pharmaceuticals Inc. [RBGPY:OTCPK]), which did $1.5B in 2012 revenue. That’s pretty interesting market potential for a film-based drug that you put on the inside of your cheek, where it releases naloxone and buprenorphine and reduces the craving to seek out stronger opiates.

TLSR: Naloxone is a narcotic antagonist. Is that to help keep respiration up, or is it to antagonize the central effects of the narcotic?

CD: It’s more the latter. Naloxone also reduces craving. Buprenorphine is an opiate derivative, but it has a far different and interesting activity profile; it can be used to treat chronic pain. The naloxone, as you said, is really about modulation of the central activity—the reward pathway.

TLSR: Do you expect Bunavail to be approved on the June 7 PDUFA date?

CD: I’m not overly focused on that date because I know the agency has its hands full. I would like to see Bunavail approved then, and would anticipate approval within three months of that date. I usually use PDUFA dates as targets—with a three-month leeway.

TLSR: Although it’s been weak over the past month, like almost all biotech and specialty pharma stocks, BioDelivery Sciences is up about 80% over the past 52 weeks. Is the Bunavail approval baked into the stock, or do you believe there’s still upside with approval?

CD: I think there is upside, but that’s a good question. The drug is not yet approved, and there is still that regulatory risk. With approval that risk comes off the table and the stock should go up, assuming a logical market and a logical response. The greater source of upside is associated with the product’s market potential and timeline to market penetration, which has been a key point of debate among institutional investors. I believe that Bunavail could be a superior product to the reference product, Suboxone.

TLSR: You have led me right into my next question: What is the real value proposition here? Is Bunavail superior to Suboxone?

CD: I believe it’s a superior product. It hasn’t necessarily shown that yet because BioDelivery Sciences is utilizing the 505(b)(2) regulatory pathway, which means you only have show equivalence to the comparator. I believe we will see similar activity with a reduced amount of drug showing up in a patient’s gastrointestinal tract and, therefore, a reduced chance of side effects, such as constipation. The upside comes from the product getting into the market, in seeing its adoption and uptake, and in seeing that third-party payers will reimburse its use. At this point, we model Bunavail to take roughly 20% of the market. Certainly, we’d like to see physicians willing to write for Bunavail relative to their writing pattern on Suboxone.

I should mention that BioDelivery Sciences owns Bunavail outright, which is important. We believe the company could market the drug with a relatively small, capital-efficient sales force.

TLSR: You mentioned three late-stage drugs. What about the other two?

CD: Another drug under development is BEMA (BioErodible MucoAdhesive) Buprenorphine. This drug is under development, with partner Endo Pharmaceuticals Inc. (ENDP:NASDAQ), for moderate to severe chronic pain. Earlier this year, we saw a successful Phase 3 readout of BEMA Buprenorphine in a certain cohort of chronic pain patients who were naďve to opiates. We would anticipate a second Phase 3 to read out roughly midyear in a second cohort of patients who are opiate-experienced and chronic pain sufferers. If Phase 3 reads out positive, then we would anticipate Endo to fast-forward an NDA for that drug, perhaps even by the end of this year. In addition, Endo would need to pay BioDelivery a fair amount in milestone payments with the completion of the Phase 3, and then filing. That would be a good thing.

The third drug is topical clonidine gel, which the company in-licensed. It will be developed for painful diabetic neuropathy. The company’s Phase 2/3 study will read out at the end of this year. By the end of 2014, you’re going to have some pretty good news flow out of BioDelivery Sciences.

TLSR: You also follow Inovio Pharmaceuticals Inc. (INO:NYSE.MKT) and Threshold Pharmaceuticals Inc. (THLD:NASDAQ). Could you take those one at a time, and tell me your value proposition for each?

CD: We’ll talk about Inovio first. We have it rated Overweight. There are some pretty interesting Phase 2 data that could come in roughly midyear. This readout is going to be very important, but Inovio’s platform is broadly applicable for both cancers and infectious diseases, as both prophylactic and therapeutic vaccines.

The Phase 2 trial is testing the therapeutic vaccine VGX-3100 in cervical intraepithelial neoplasia (CIN), or cervical dysplasia resulting from human papillomavirus (HPV), the most common sexually transmitted infection in the U.S. This study is arguably the most rigorous test of Inovio’s platform thus far, because it is a double-blind, placebo-controlled study. It will be looking at the ability of VGX-3100 to downgrade the dysplasia from CIN 2/3 or CIN 3 to a more normal tissue, CIN 1 or less. Favorable data, I believe, will result in Inovio expanding into head-and-neck cancer, which is also caused by HPV in some patients. This trial could be a major clinical validation of the power of Inovio’s broadly applicable platform. Though this is an early-stage story, we’ll soon have the greatest validation that the company has had in its history.

TLSR: Charles, most everybody refers to VGX-3100 as a therapeutic vaccine, but I’ve always wondered if it could be considered a prophylactic immunization. Certainly there is that hoped-for therapeutic activity in which it would regress the dysplasia. But it is also proposed to prevent cervical cancer formation. Could it be thought of as a prophylactic, as well as therapeutic, intervention?

CD: That’s a great observation, and you’re right. There is kind of a dichotomy in this particular case. I would consider VGX-3100 a therapeutic vaccine, because it turns out that these cancers are the result of HPV and cervical dysplasia.

In some ways, however, it’s both prophylactic and therapeutic. I would say that when I use these two terms, I make the distinction from the kind of vaccine people get in the fall to prevent influenza. That is prophylactic. The prophylactic vaccine stimulates the immune system to recognize an antigen you could be exposed to in the future, whereas a therapeutic vaccine is used to recognize active antigens causing disease, like the proteins that VGX-3100 is targeting. But it’s a great observation because VGX-3100 is serving as a therapeutic vaccine in terms of regressing the cervical dysplasia, and a prophylactic vaccine that reduces the potential for cervical cancer.

However, to make a further distinction, we have companies under coverage that have vaccine candidates to treat established cancers. These are certainly therapeutic, and different from VGX-3100.

TLSR: You said we would be seeing a data readout from Inovio’s Phase 2 trial in the middle of this year. Given that this stock is up 400% over the past 52 weeks, could we see significant upside if we get that statistically significant validation?

CD: My view is yes. It’s a cautious yes, in that we don’t know when that value will be recognized because the biotech market has already been on a tear. I definitely think that 2014 is a year for consolidation and for stock picking, not a scattershot market where everything goes up. People will be turning their eyes toward value, and not only value relative to the absolute potential of one product. I think the value in Inovio will be seen and driven by the use of its platform in other cancer indications, such as head-and-neck cancer.

Also, Inovio signed an interesting partnership with Roche Holding AG (RHHBY:OTCQX) last November, whereby it is looking at prostate cancer with its therapeutic vaccine INO-5150 and hepatitis B virus with INO-1800. Both of these are preclinical programs. Roche made an upfront payment of $9.2M, with potential milestones worth more than $400M, plus double-digit tiered royalties on product sales if these programs make it to the market. Also, I should note that the deal with Roche is only for those two indications. It’s not for access to the entire platform. If another company was interested in a broader technology license or a certain indication, I think it could probably get that with Inovio—if that other company was committed and had the financial resources to put behind the program.

TLSR: Go ahead and address Threshold Pharmaceuticals, please.

CD: Threshold Pharmaceuticals is an oncology innovator that has partnered with Merck KGaA (MKGAY:OTCPK). I’ve covered Threshold for several years, as I have Inovio, Acadia and BioDelivery.

Threshold has a very innovative platform focusing on hypoxia-activated drugs for oncology. These drugs have a warhead or payload of chemotherapy attached that is activated within a low-oxygen (i.e., hypoxic) environment, which is a property of all solid tumors and some hematologic marrow cancers. In solid tumors this condition is characteristic because an established tumor may be walled off in tissue that is not well vascularized.

A drug that is only activated in that kind of environment could be pretty interesting because it could deliver a relatively higher concentration of chemotherapy into a tumor mass. This could result in greater efficacy. And when you think about it, it could also result in a reduced side-effect profile because a physician might be able to eliminate or reduce some of the systemic delivery of the chemotherapy.

TLSR: In effect, then, a hypoxia-activated drug is actually exploiting the weakness of current chemotherapeutic agents, which cannot get into the tumor mass because the surrounding tissue may be necrotic, with no vasculature to deliver the cytotoxic payload. Is that it in a nutshell?

CD: Yes, exactly. But there is something else. It makes sense to look at paradigms in which the use of Threshold’s drugs, such as its lead candidate TH-302 (hypoxia-activated prodrug releasing bromo isophosphoramide mustard) could be combined with Avastin (bevacizumab; Genentech/Roche Holding AG), or other vascular-disrupting agents. If it’s not TH-302, it could be a next-generation compound or something else that the company is working on.

TLSR: Charles, you have noted the relationship between a hypoxic environment and metastases, which are the true killers in solid tumors. Would you address that?

CD: This is a very important consideration in cancer therapy. Micrometastases are those cells that break away from the primary tumor. When they seed into distal tissues, they may not be able to attract blood flow, and they may therefore be in a hypoxic environment. These micrometastases often come back to haunt patients with a vengeance. A hypoxia-activated drug may be the way to get to these killer cells, which tend to be more resistant to chemotherapy than the primary tumor.

TLSR: Where is TH-302 in its development cycle right now?

CD: Toward the end of 2015 you could see Threshold’s soft-tissue sarcoma study read out. That could be a very exciting time for the company. The current timeframe for the NDA submission is the very end of 2015. An interim analysis could come roughly the end of this year or early next year, but we wouldn’t anticipate that to be sufficient to accelerate the timelines. In addition, the company has an ongoing pancreatic cancer study, which is being managed more by Threshold’s partner, Merck KGaA. It doesn’t take a long time, unfortunately, for events (defined as time from patient randomization to death) to accrue within a pancreatic cancer study. We’ll wait and see when that reads out.

TLSR: Can you address one more company?

CD: Orexigen Therapeutics Inc. (OREX:NASDAQ) has a very late-stage product pending review at the FDA for the treatment of obesity. We would argue that Orexigen’s drug Contrave (naltrexone + bupropion) is very likely to be the best drug with the best timing and the best partner of the three very visible obesity drugs out there. The other two drugs are Qsymia (phentermine + topiramate) from Vivus Inc. (VVUS:NASDAQ), which I cover and have rated Underweight, and Belviq (lorcaserin HCl) from Arena Pharmaceuticals Inc.’s (ARNA:NASDAQ), which is covered by my colleague, Ted (Edward) Tenthoff here at Piper.

The historical challenges for the obesity market have been well reported, and those issues are driven by a concern about the clinical value and safety in treating obesity with drugs. We think that Orexigen’s Contrave is going to be a drug for which patients have much greater tolerance and will want to persist in their dosing, and, therefore, it’s going to be the best overall drug.

TLSR: Orexigen has been weak, not just since we’ve been in this biotech slump, but all year, even when others have been up as doubles and triples. Orexigen is flat versus one year ago. What is the reason for this relative weakness?

CD: I think the weakness is primarily driven by the negative perspective that institutional investors have generally associated with the obesity market. Although it is increasing, the adoption of Qsymia and Belviq has been weak. In addition, there has been both clinical risk and regulatory risk. The clinical risk has recently been dealt with via Orexigen’s large cardiovascular outcomes trial. It recently told the world that Contrave met its primary safety endpoint at the interim analysis. The regulatory risk is still perceived by some investors, but I don’t think that risk is very high. I think the greatest concern is commercial risk.

TLSR: You think there is a competitive risk between Contrave and the other two drugs, Qsymia and Belviq?

CD: Yes. We think that, in the short term, Contrave may not have better uptake than the other two drugs. But in the longer term, looking out a couple of years, I think Contrave will be the winner. The other thing that differentiates the Orexigen story from the two comparables is that the company has the potential to get approval for and launch Contrave in Europe. Neither of the other two products is positioned for that, because neither has completed a cardiovascular outcomes study.

TLSR: It’s been a pleasure speaking with you. Thank you.

CD: Thank you, too.

Dr. Charles Duncan is a managing director and senior research analyst at Piper Jaffray & Co. focusing on small- and mid-cap emerging growth biotechnology companies. Duncan brings more than 18 years of sellside experience and has been recognized by industry sources, including the StarMine Analyst Awards, as being among the best analysts for his fundamental and timely analysis. He is a graduate of the University of Wisconsin and holds a doctorate in neuropharmacology from the University of Colorado.

Read what other experts are saying about:

• BioDelivery Sciences International Inc.
• Inovio Pharmaceuticals Inc.
• Threshold Pharmaceuticals Inc.

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DISCLOSURE:

1) George S. Mack conducted this interview for Streetwise Reports LLC, publisher of The Gold Report, The Energy Report, The Life Sciences Report and The Mining Report, and provides services to Streetwise Reports as an independent contractor. He owns, or his family owns, shares of the following companies mentioned in this interview: Inovio Pharmaceuticals Inc.

2) The following companies mentioned in the interview are sponsors of Streetwise Reports: Inovio Pharmaceuticals Inc., Threshold Pharmaceuticals, BioDelivery Sciences International Inc. Streetwise Reports does not accept stock in exchange for its services.

3) Charles Duncan: I own, or my family owns, shares of the following companies mentioned in this interview: None. I personally am, or my family is, paid by the following companies mentioned in this interview: None. My company has or may have a financial relationship with the following companies mentioned in this interview: Acadia Pharmaceuticals Inc., Orexigen Therapeutics Inc., Vivus Inc., Arena Pharmaceuticals Inc., Genentech/Roche Holding AG, Merck KGaA, Inovio Pharmaceuticals Inc., Threshold Pharmaceuticals, Endo Pharmaceuticals Inc., Reckitt Benckiser Pharmaceuticals Inc., BioDelivery Sciences International Inc. I was not paid by Streetwise Reports for participating in this interview. Comments and opinions expressed are my own comments and opinions. I had the opportunity to review the interview for accuracy as of the date of the interview and am responsible for the content of the interview.

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