Back To The Schreibmaschine!

German civil servants are now using typewriters to write sensitive documents, for fear of US spying on their computers. That is how allies view Uncle Sam's reach.

In response to my article boosting a gold service, www.bullionvault.com, I was asked if I recommended this company for non-US-based readers. It certainly makes sense for North Americans. If you are German you can walk into your local branch of Commerzbank and if you already have an account walk out with a bit of bullion to take home with you. So the service is not the best option for Germans. The gold market is disparate and the tax treatment of holdings ditto. You should consider your own situation and investment targets before buying any asset I or anyone else recommends.

On Monday, when the gold price fell by more than it has done all year, the inflow of funds into SPDR Gold Shares, an exchange-traded fund trading as GLD, was at the highest level since late 2012.

The British government has had a wide-reaching reshuffle on the Conservative for no reason I can discern, and whose significance eludes me as I do not understand the different trends in British Toryism.

Two new listings are a mark of the times, ever-greater love of internet equities and more diversification by country. Chatlines, the Japanese phone messaging system, is being listed there as LINES and will almost certainly have a corresponding American Depositary Receipt (ADR). And an online payments firm from Malaysia, part-owned by local magnate Vincent Tan, called MOL for money on-line, will issue ADRs. It offers e-payment to shop all over southeast Asia.

More follows from Ireland, Britain, Colombia, Portugal, The Netherlands, Jordan, Panama, Mexico, Spain, Jordan, and Israel. Tomorrow the blog will be hitting later as I have a morning interview about the London Gold Pool scandal.

*We recommend GLD, SPDR Gold, as a first way into the precious metal which may gain now that people fear Wall St is too high. But I am sure that sensible readers will also examine the www.bullionvault.com option, despite my nagging about it.

 *Eduardo Garcia writes in www.sentidocomun.co.mx about Mexichem:

“The largest maker of plastic tubes in Latin America and a major cpi producer won, alongside Enesa Energia (of Spain) and Invenergy Clean Power (of the US), a license to develop a co-generation plant for Pemex requiring and investment of $650 mn. The project, by Pemex's gas and basic petrochemicals arms, will add to the potential output at the Cactus gas processing complex near Villa Hermosa, Tabasco state, by generating steam and electricity. It will start up in H1 2018.

MXCHF did not indicate how much it will invest but hinted that there may be other investors. It is the only Mexican company in the deal apart from Pemex, formally Petroleos Mexicanos.

*Reader Dr MR wrote that he finally decided to buy Paddy Power plc, the Irish bookie and discovered that its bid/ask prices were $83-87 and the last trade had been at $69. He asked if $83 was a realistic price. I replied pointing out that PDYPF trades rarely in the US and that some brokers will not do trades at all, notably Charles Schwab, treating on-line betting as a crime. The huge spread is realistic given that Dublin trading is heavily institutional. I suggested a good-till-cancel order at a price the doctor is comfortable with, or putting in orders during the Dublin working day, which means he will have to get up early being a westerner.

After the sudden Swiss sale I reported on yesterday, the PDYPF price was boosted by a new institutional buy from Deutsche Bank reported to the Dublin Stock Exchange. Deutsche bought 5.84% of all the outstanding shares of Paddy directly plus another 0.31% of the stock indirectly, taking its new stake to 6.15% of all of Paddy. I assume this is related to Germany's World Cup win, aber was weiss ich? In my brokerage acct the stock is valued at $65.90 which is ancient history. To get a more current valuation use the Irish price in euros, which you can get from a service like Yahoo Finance or Bigcharts.

*Ecopetrol faces some heavy decisions. It is a minority partner in a new Gulf of Mexico gusher found in deepwaters by a consortium led by Royal Dutch Shell which offers it a new global side, but requires cash. The Rydberg field holds over 100 mn barrels of oil equivalent. EC is controlled by the Colombia govt. The total find in the area (in US waters) is over 700 mn boe but this is the first for the Shell group in which EC owns a stake of over 20%

Meanwhile in its homeland, there is pressure on EC to upgrade production at the country's largest oilfield by bringing in heating pipes using a technology from Pacific Rubiales, a Canadian minority partner in the field whose contract expires in 2 years. Using the system, called STAR, means a with with the oil workers union which claims that it causes water pollution and mini-earthquakes.

*Canadian and other triple- and quadruple-play bundled telco operators got a boost when yesterday Cogeco Cable, of Canada, wrote off a C$32 mn internet protocol TV project intended to use data networks rather than cable to deliver video. This boosted our Bell Canada, BCE. Lower competition from different delivery mechanisms allows prices to remain high. However, Canadian bundled services are over 10% cheaper than US ones.

*It is not an inversion, but Hikma plc joined the pharma takeover fray. The Jordanian-owned generic drug firm completed its acquisition of Bedford Labs, its generic injectables unit, from Boeringer Ingolheim of Germany. HKMPY paid $225 mn up front and may have to add up to $75 mn in milestones over thenext 5 years for the Bedford pipeline, contracts, IP, labs, and employees. In addition it has been given the right to acquire the Bedford Ohio factories of the acquired company pending US approvals. Hikma is dual-listed in Bahrain and London.

*Across the Allenby Bridge, Israeli generics giant Teva is suffering from renewed boardroom splits, reported on yesterday. I was not fully informed about the details of the FDA OK yesteday for albuterol, which is a new drug, breath-actuated dry powder to treat or prevent bronchospasm in obstructive airway disease and to prevent bronchospasm when patients exercise. It is approved for those aged 12 and over who suffer this consequence, normally from asthma.

*Meanwhile building on its respiratory franchise, GlaxoSmithKline began phase 3 trials for a 3-way combo of inhalable drugs from chronic obstructive pulmonary disease, called IMPACT, which will eventually enroll up to 10,000 patients.

*Brokers Johnson Rice raised Chicago Bridge & Iron to focus list from overweight. CBI is a Dutch builder of energy systems which has been subject of short-selling because of alleged accounting issues over its merger last year with SHAW.

*Panama's Banco Latino-Americano de Comercio, Bladex or BLX, declared a flat 35 cent per share dividend payable to end-July owners on August 5.

*Spain's Banco Santander will pay a dividend Aug. 11 to end-July shareholders of record of 20.0475 cents per share in one of three forms. Shares will be issued for a 0.035 cents/sh fee but not taxed; rights can be sold subject to a 0.0025 cents/sh fee; or a cash payout opted for, subject ot Spanish tax at 21% and a .0025 cents/sh fee. I take option 1. Note that it also works if your SAN shares are in a tax-sheltered account.

*My total loss on my Portugal Telecom pile of shares is now (just) under 25% after yesterday's further rise. The euros 897 mn commercial paper loan it made to Rioforte, a unit of Banco Espirito Santo comes due next Tuesday. Did Rioforte give the PT money to its family owners? Will Rioforte default in Luxembourg? And if so what will happen to the merger of PT with Oi?

The opinion of experts in Luxembourg (they exist) is that PT will be forced to accept stretched-out repayment in return for much higher rate of interest, the norm for loan re-negotiations. It all depends on the full terms and conditions of the deal which are not known.