E Sh-tdown To End

*The first big bid was for water and sewage pipeline integrity company, Pure Technologies, of Canada, PPEHF, by acquisitive US newbie Xylem, a generalized water infrastructure firm. PPEHF shareholders get to vote on the deal Jan. 24, Weds. We will tender and drop coverage because XYL is a US firm.

*Last year's mergers included that of Aberdeen Asset Mgm with Standard Life Insurance in Britain, and of Potash of Saskatchewan and Agrium (AGU) in Canada. We continue to own the successor companies, Standard Life Aberdeen, SLFPY, and Nutrien, NTR. Scotiabank's Ben Isaacson has raised his target price for NTR to $60 mainly because he expects NTR to get a good price for its take in Chilean Soquimich, which it has to divest. Deutsche Bank upgraded SQM to buy today.

*Ford Equity downrated Banco Latinoamericano de Comercio of Panama to hold from buy. BLX.


*Bloomberg reports today that our E.On, ute EONGY of Germany, is among the potential bidders for solar assets in Italy owned by Terra Firma Capital, a UK hedge fund. The other bidders for Rete Rennovabile include BP plc. UBS argues that higher interest rates are not bad news for utes.

*Cosan of Brazil made a new 52-wk high today at $10.72. While mainly a cane sugar refiner, it also operates gas stations and logistics facilities, and makes ethanol from cane bagasse (waste). It announced an Investor Day in NYC Mar. 16, but the main reason for the jump is that Brazilian inflation fell to 2.9% in Dec., its first drop below 3% since 1999 when inflation targeting was adopted by the CB. Interestingly, regulated prices which affect CZZ in gasoline, cooking gas, and power, showed lower inflation than the country overall in 2017 according to BofA-Merrill Lynch. Food prices last year actually fell 0.8% which includes sugar of course,.

*While fear of higher priced aviation fuel has cut the stocks of many western airlines, China Eastern Airlines shares are up 3.64%, because CEA is about to get a huge inflow of passengers for the Chinese New Year and because it apparently hedged its forward fuel buys.

*Schlumberger Ltd is up on Jefferies and Atlantic Equities raising their target price for SLB after Halliburton reported good results today. SLB, an energy exploration and operations tech firm which reported last week, is also rated outperform by Crédit Suisse with a new target price of $86 vs $71. SLB also reported in its conference call that it will exit seismic and its WesternGeco will stop bidding on contracts and might be divested at less than what it cost.

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