The problems of Deutsche Bank (DB), which fired its own Herr Mueller last week, are not yet at an end. Yesterday an erroneous transfer from the German bank to an outside account went out, to pay the equivalent $35 billion. The recipient was honest and told the bank about the money received so it could swiftly unwind the transaction.

I grouse a lot about the difficulty of making SWIFT transfers from the USA, but probably all that bankerly caution and delay is better than making a $35 bn buck mistake.

Consulting with our bond expert failed to explain a very long and complicated exchange offer from an Israeli company on the bond marketfiled with our SEC. It looks to both of us as if the “note exchange” amounts to exchanging one note for another with identical coupons and duration, so I suspect it involves terms, provisions, and conditions for the loan.

Since the Israeli market is closed until Sunday there is nothing I can now write about. I will get the prospectus when it is issued. The mystery filer for a bond conversion is Teva. The mystery should be solved Monday. This is another reason for caution over TEVA.

More follows from a Friday behaving like a Thursday, with 6 big news breaks, including 3 corporate results plus lots of lesser news. The big news companies are from Sweden, The Dutch Antilles, Panama, China, Ireland, and Argentina, with news also from Hong Kong, Britain, Japan, Israel, Switzerland, China, Belgium, and Brazil.

*Investor, the Swedish holding company we use as a pseudo-Sweden fund, today reports a drop in Q1 profits y/y because its capital gains did not rise by SEK 26 bn kronor (~$3 bn) this year as they did last. So net profit for the quarter was a mere SEK 4.4 bn compared to SEK 30.4 bn. And net asset value went up sequentially all of SEK 8 mn to SEK 440 mn in the Dec. quarter. IVSBF is the Wallenberg family holding for its SEK Bank and other giants including Ericsson, ABB, Mölnlycke, and Atlas Copco. It also owns a chunk of the Nasdaq stock exchange.

It also operates through specialized subfunds like Patricia Industries and EQT.

Its adjusted NAV was flat but NAV growth was boosted by the subfunds. In the quarter it upped its holdings in listed-core investment ERIC-Q to 7.2% of the shares out by investing SEK 12 bn. Patricia acquired 86% Samova, a US healthcare products distributor, for $513 mn.

IVSBF CEO Johan Forssel heralded “the benign climate” and forecast continued upbeat macro growth which “remained healthy in many industry segments and geographies”.

*Schlumberger (SLB) thanks to North American oil patch growth beat consensus in its Q1 results by $20 mn in sales and a penny/sh in earnings. We will take what we can get as today Pres. Trump said he will not accept high oil prices and the price per barrel actually dropped. Somebody believes in Trump's tweets! Apart from North America sales grew in he Middle East, European North Sea, Asia, and Russia but fell in Latin America and Africa. Note that Russia already was chopping its output to boost prices during the quarter and that its now being subject to sanctions will further boost demand for new supplies elsewhere in the world.

The Dutch Antilles HQ'd French hydrocarbon drilling services and finance firm saw sales of $7.871 bn, down 5% sequentially but up 12% from prior year. Its non-GAAP profits also rose from Q1 2017 but also fell from Q4 2017, at $1.069 bn, mainly because of lower gross margins, and despite lower operating expenses for R&D and adminstrating costs. Interest costs were flat sequentially and taxes sharply lower.

Net income came in at $525 mn or 38 cents/sh, vs a loss of $2.255 bn or $1.63/sh in the year earlier Q1. Adjusted net also at 38 cents beat the FactSet consensus of 37 cents. EO Paal Kibsgaard blamed “transitory factors” for the drop from Q4 like lower activity in North America and planned for startup costs for, “equipment mobilization, reactivation, and redeployment [for] contract wins.”

Kibsgaard forecast that its wellhead services will be in greater demand because the market is no longer in balance so “the only major sources of supply growth to address production decline and strong worldwide demand are Saudi Arabi, Kuwait, the UAE, Russia, and US shale” the last of which he said is “showing signs of production challenges.” SLB itself warned of supply challenges this year pushing up oil prices. SLB shares fell fractionally in the premarket and are down 8% in the past year.

D.M. Martins forecast that SLB will hit $90 in the next 1-2 years.

*Banco Latino-Americano de Comercio (BLX), the Panama multilateral trade finance bank controlled by Ex-Im bank and its foreign counterparts, reported sharply lower profits in Q1, $1.45 mn vs $23.5 mn in Q1 2017. EPS fell even more sharply to 37 cents from 60 cents. By almost all banking metrics the bank was down: return of equity off 40% y/y; return on assets off off by a third; net interest margin at 1.68% vs 2.02%. However interest spread also fell because of more careful loan issuance and the banks efficiency ratio came in at 47% vs 20% a year ago.

The drop was blamed on a $4.8 mn variable compensation expense in Q1 but of course if you look at the numbers even adding it back comes nowhere near $23.5 mn, hitting only $6.25 bn. Other factors blamed were seasonality and lower spreads on short-term lending—the latter it should have adjusted for. Actually a key factor in the fall in profits were that BLX did not get any new syndication mandates like last year.

New Bladex CEO N. Gabriel Tolchinsky admitted results were below expectations, but also said “we have a robust syndications pipeline.” Investment banking deals are lumpy. That Bladex lost 5.2% on this result is way overdone. It is a mid-sized bank with a new CEO who wants to clear the decks.

Tech

*Tencent (TCEHY) recovered Friday up 4% in Hong Kong to HK$416. It gained from Tim Merel's Seeking Alpha article which says it accounted for over $4 of every $10 invested in game companies worldwide in 2017, overcoming yesterday's tech drop.

*But anticipating a deal between the two Koreas led to a selloff in Japan which took down Fanuc by 2.5%, to ¥26,205/sh. That comes to $24.28 in real money.

*Mercado Libre, the Argentina-based Latin American Amazon rival, was hurt by an increase in postage fees in its largest market, Brazil. The rise affects not only the internet vendor but all sellers using the post to deliver goods. But Credit Suisse worries that starting in the current quarter, the correios impact will “exert a headwind” on MELI. It will also hurt newbie Amazon itself in the land of the Amazon River.

For MELI, the delivery hike makes its plan to build its own logistics and delivery network more urgent, and CS expects that this will nip its profit growth. However, CS still rates Mercado an outperform with a growth target over the next 5 years of 16% and a target price for the current FY of $15.1 based on sales of $1.958 bn and adjusted EPS of 83 cents. “Street numbers are too low and do not credit for the various products on the market.”

CS based its end-2018 valuation on a discounted cash flow of 11% and a terminal growth rate of $400. MELI is down 2.1% here.

*Renishaw frustrates UK analysts because they are not given much access. So Peel Hunt called RNSHF “a superb business” with “a premium rating” but then rated it a mere hold because “its communication with the market had not always been sufficient for it to feel completely comfortable with its forecasts.” The first it refers to the market and the second refers to Renishaw. Rating it hold was actually an upgrade as earlier Peel rated it underweight. The key reason for the change is increased healthcare earnings where RNSHF is expected to break even this year.

Renishaw itself anticipates full year sales of £575-605 mn and pre-tax profits of £136-146 mn. The Peel Hunt analyst expects £601 mn in sales and profits of £144.5 mn, which shows that he found the company forecasts more or less okay. The p/e ratio is at a premium, 24.6x estimated 2019 earnings. To get such a rating for a hold is a sign of broker arrogance. RHSHF will report on May 10 on its last FY. I will be in England but will not go to the investor day. Thanks to Martin Ferera for sending me this self-satisfied note.

Pharma

*Insiders at GlaxoSmithKline bought lots more ADRs after its stock went ex-div, led by its general counsel and compliance officer according to filing with the SEC.

*Novartis lost 3.3% Thursday after reporting on its Q1. Our gamble by buying before the results came in went wrong.

Industrials

*Your editor who prides herself on reading Portuguese, was puzzled by a note from Cosan Ltd (CZZ) which seemed to have been about Relefantes, which looks like the word for elephants in the language she studied at the Fundcacao Gulbenkian. But it turns out to have been a misprint by the PR of the Brazilian firm, which is delisting its Brazilian depositary shares to cut costs and will only have ADRs after the switch. Cosan SA is an offshore Brazilian company and its stock fell fractionally today but is up sharply over the past year. It will continue to operate mostly in Brazil and it is up ~90% in the past 12 meses. If its sole listing is here perhaps the ADR fee will no longer nip our dividends which are not very elephantine ~1%. Cosan lost 1% because its being solely an offshore outfit meant it is being sold from funds tracking Brazilian shares.

*China Eastern Airlines fell sharply today, by 4.4% after it reported an unexpected drop in year/year domestic freight revenues and a modest increase of only 1.75 basis points in its passenger load factor, from 83.2% to 84.95%., both for March But the big reason for the fall in CEA stock is because 8 of the ten new aircraft it added to its fleet in the month of March was Boeing 737 planes like the one flying for Southwest Airlines which blew up its engine here Tuesday. It is probably unfair but CEA's plans to turn Shanghai into a hub for flying from Europe or the US to the antipodes will be more difficult if passengers are worried about the safety of its planes. 261 of CEA's 634 total narrow body fleet are Boeing 737's. The others are from Airbus. But in fact the company has more non-listed aircraft held under trust so the Boeing bite may be larger.

Miscellaneous

*Anhaeuser-Busch Inbev consensus 2018 earnings forecast fell to $5.12, off 2 cents because an analyst cut his BUD forecast. BUD is Belgian.

*Virgin Finance is up 5.8% Friday in UK trading, hitting the equivalent of US$3.9369 per VRGDF share.