Today the big news is about money and oil. Forward crude oil rose 6% breaking the downtrend. The Swiss central bank (CB) ended its attempt to stop the franc from rising above 1.20 against the euro (to protect its export markets for chocolate, Swatches, and banking services.)

The unpegged Swiss franc then proceded to rise as much as 40% above the euro interday. The euro hit a record low. Swiss bond yields turned negative across the board, meaning you pay to hold Swissie paper rather than getting a return. For Swiss holders, gold fell by 23%. For others it boomed.

And, oh, the US dollar lost as much as 14% interday in London trading. The move makes it almost certain the the Mario Draghi ECB quantitative easing program will be launched Jan. 26, after yesterday's EU judiciary ruling against German objections. (Finland is still quarreling but nobody pays attention to Finns.)

Our advertiser, Adrian Ash of www.bullionvault.com [1] called the news “violet Thursday” (after the color of the SwFr1000 note). He also called the currency upheaval “Soros in reverse.” In 1992, Hungarian-born American speculator George Soros bet around $1.5 bn that the pound sterling could not be kept aligned with the exchange rate mechanism of the Eurozone (the predecessor to the euro.) He bet it would fall because of weakness in the British economy and made a fortune as the Bank of England desperately defended sterling with ever-higher interest rates. But the market won, as it did again today against the Swissie. (Adrian writes about money. If you want to buy physical gold cheaply and legally, visit our site to click through to www.bullionvault.com/ Like the main US gold exchange-traded fund, it is sponsored by the World Gold Council, a miner grouping aiming to get more investors to buy gold. It is highly respectable with security and low trading margins, unlike other outfits in the precious metals arena. And it's British.)

A bit overwhelmed by the Swiss, Abhimanyu Sisodia reports:

The Indian CB surprised the markets yesterday with a 25 basis point cut in the repo rate at which it lends money to commercial banks. As a result banks have started lowering loan interest rates. The World Bank economists released a forecast for 2015 predicting that Indian growth will catch up with China's in 2016-7. Indian growth in the next fiscal year (starting April 1) is expected to hit 6.5%. The Sensex (stock market index) had its best single-day performance since May 2009. The rupee gained 46 paise (rupee cents) against the US$.

The richest Chinese investor of them all is Guo Guangchang who runs Fosun International, buyer of foreign assets. Fosun doesn't buy positions, but control of companies. Guo's alleged model is Warren Buffett.

Guo's recent purchases include Club Med, the French prepaid holiday camp operator; St John, a US fashion house for ladies who lunch; posh Italian menswear group Caruso; Israel's Alma Lasers (for beauty treatments); Saladax, a biomed firm; and the building where my mother used to work, 1 Chase Manhattan Plaza, the former executive offices of the bank later merged with JP Morgan. Morgan had a venerable pile on Wall Street whereas the Chase skyscraper, built in the 1950s, had became redundant.

I am upset that Mr. Guo changed the name of the building to 28 Liberty Plaza. The number is lucky in Chinese as 8 sounds like “wealth” and 28 is “double wealth.” Liberty harkens to the Statue in NY Harbor which can clearly be seen from the higher floors where David Rockefeller (and my mom) worked. I am not sure what China thinks about liberty. As an immigrant from Nazi Germany my mom was firmly in favor of it.

Another Buffett note: Bill Ackman told Bloomberg TV yesterday morning that he considered following the Oracle of Omaha into ownership of shares of British supermarket chain Tesco. Ackman founded and runs top-performing Pershing Square Capital, a hedge fund. He said he had not discussed his idea with Buffett. But he dropped the idea thinking back on his difficulties with retail in the past, when he put money into JC Penney.

However I suspect neither Buffett nor Ackman ever moved beyond the TSCDY accounts (now revised downward because of misreported sales and profits) to actually visit a UK supermarket.

Defying the sage once led me to doing it again, a bit more than a year later, when we bailed out of Posco, PKX, the South Korean steelmaker despite Buffett anointing the firm with his presence. This time we took a loss. I did not visit the main steel mill in Pohang but just considered the way demand was falling. I took a loss but were he to sell now, Mr Buffett would take one nearly 4x as high.

More about what the currency changes mean for our Indian and Swiss stocks along with a new pick from Martin Ferera, and more news from Finland, the Netherlands, Israel, Britain, South Africa, Australia, Colombia, Mexico, Portugal, and Canada:

The Economist Is Our Guru

Martin Ferera (born in what is now Zimbabwe, then still Rhodesia) writes from Canada quoting a respected British magazine we both read religiously. This week's Economist wrote:

For decades commodities have shaped Africa's economic growth... But that is slowly changing. Despite big commodity price falls this year (oil is down by 50%), the continent will grow by 5% in 2015 (and more in the following years.)

Few African countries will fall into recession in 2015—unlike other commodity exporters such as Russia and Venezuela. Why is Africa doing better than many expected?

Two reasons stand out. First, the continent's economic growth is coming from other places [than commodities]. Governments have worked hard to make life easy for investors. The World Bank’s annual 'Doing Business report revealed that in 2013-14 Sub-Saharan Africa (SSA) made more regulatory improvements than any other region.

Foreign investment into Africa rose by 5% in 2012 and 10% in 2013. Foreign investors are becoming more interested in the non-resource sectors of African economies: a third of intra-African foreign investment is in financial services.

Over to Martin:

My latest idea is indeed sub-Saharan African, financial services giant Old Mutual Group (OML in London; ODMTY on the Pink Sheets). Old Mutual, est. 1845 in South Africa, is now domiciled in the UK and a constituent of the UK FTSE 100 index with a market cap of £8.4 bn ($12.75 bn). It is among the largest African financial services providers with a dominant position in South Africa and its neighbors.

OML aims to become 1st or 2nd in established core growth markets elsewhere in Africa by 2020: Nigeria, Ghana, and Kenya (with combined population of 250 million) are the targets.

OML is complex. The largest division is Old Mutual Emerging Markets (OMEM) which includes the original southern African life insurance and savings operations and a 52% stake in South Africa's Nedbank (No. 4 bank there). OMEM also includes small and growing businesses in Colombia, Mexico, and India.

Second comes UK-based Old Mutual Wealth, one of the faster growing investment management groups in the UK and Europe.The third leg is an 80% stake in recently spun-out US-based Old Mutual Asset Management (NYSE-OMAM), a multi-boutique asset manager. [More on these below.]

In H1 2014-5 (the FY runs to April 1), life insurance and savings produced 47% of adjusted operating profit (AOP); banking 29%; asset management 23%; and property & casualty insurance 1% . Total AOP was £424 mn.

By geography it was less balanced with African AOP 69%, almost all from South Africa; UK-Europe 21%; US 9%; and others 1%. OML invests for growth, most recent by a £60 mn purchase of a 23% stake in UAP, a Kenyan and Ugandan insurance and savings group [ed: owned by a French insurer.]

Africa presents both opportunities and risks.

OML via Nedbank has a 20% stake in West Africa-based Ecobank. Its CEO recently resigned after being accused of fraud. The Ecobank-Nedbank offers banking in the largest number of African countries, and usually is the biggest bank. Nedbank (NDBKY), with tier 1 capital of ~12%, is producing high single-digit growth and has a loan loss ratio below 1%. OML overal achieves a return on equity of ~15% and its ambitious target is to grow this to 20-25% in OMEM by 2020.

Like The Economist, Old Mutual is bullish on African growth, estimating that by 2020 nearly 130 mn African households will have income of over $5000/yr, compared to only 85 mn in 2008. It forecasts African consumer spending will hit $1 trillion.

Already, over 600 mn Africans use cell phones, usage sure to grow. OML already offers savings and financial services via cell phones, based on Vodafone's m-pesa and other technology. Old Mutual budgeted ZAR 5 bn (~$450 mn) for African bank expansion but has only spent 14% so far. It also established a jv with Australian bank-infrastructure specialist Macquarie to run several Africa infrastructure funds, under the monicker AIIM. [Ed. We own closed end Macquarie First Trust Global, MFD, in our yield portfolio, from the Oz specialist.]

BofA-Merrill Lynch estimates that Old Mutual's emerging market operations' underlying growth rate is 20%, and that of developed markets about 10%. It says OML is trading at a wide discount to the sum of its parts from a conglomerate discount.

In partial reaction, last autumn OML sold 20% of its US-based OMAM on the NYSE. Since then the shares gained ~10%, valuing OMAM at $1.9 bn. The IPO proceeds financed the purchase of UK investment manager Quilter Cheviot for £585 mn. Earlier it bought Intrinsic, a network of 3,000 independent investment advisers. CEO Julian Roberts also poached star fund manager Richard Buxton from the old-shoe fund giant Schroders 18 months ago.

Britain's fragmented market for investment services and new laws freeing up pension investment creates opportunities for discretionary managers like QC, giving it an edge over traditional pension or annuity providers. OML's UK-Europe Old Mutual Wealth arm could be worth as much as $4.5 bn as a stand-alone business (based on valuations of listed independent UK wealth managers Charles Stanley or Brewin Dolphin). So on paper at least, British and US businesses could account for nearly half the group assets, despite, despite generating under 30% of profits.

This means OMEM trades at a substantial discount to the UK and US divisions, despite having much greater potential. OML has been rationalizatng under Scottish CEO Roberts, promoted from 8 years at other jobs in OML in 2008. I expect further disposals and re-structuring. OML offers a yield over 5% for FY 2014-5 and Merrill expects the dividend will grow to 7% in the next FY. Moreover, the payout is more than twice covered. Merrill sets the target price at 220 pence, up 15% from current level, and expects the dividend to be 10.9 pence. British analysts are pencilling in pre-tax profits of £1.5 bn for 2014, rising to £1.7 bn the next fiscal year.

The UK Sunday Times recently named OML a top pick for 2015, forecasting growth “from its stronghold in South Africa, Nedbank.” The newspaper wrote CEO Roberts “aims to use this as the launchpad for a new pan–African financial services champion”, adding: “Africa’s middle class is growing rapidly. If the Asian example is anything to go by, sales of Old Mutual’s investment products should take off there.” And given the conglomerate discount “if Roberts opts to break it up, watch the share price soar."

There are risks - not least Africa’s political and economic instability, plus volatile currencies not only in South Africa. Moreover, OMEM outside South Africa is about potential rather than earnings. Nonetheless, the UK and US arms provide some downside protection.

[Vivian adds: You may have to put in your order in Britain because the sponsored ADR is pretty illiquid with wide spreads.]

India Stocks

• Sesa Sterlite is up 2.8% in US trading today, still at a loss from our buy price. Abhimanyu explains why things are looking up for SSLT:

The rate cut could help with its debt burden. SSLT, producer of both copper and oil (hitting the lowest prices since 2009), has been reeling from the global commodity selloff. Also helping SSLT, Pres. Pranab Mukherjee approved a reform allowing iron mines to be auctioned, after this was halted because of a scam. SSLT has unused capacity as India's largest iron exporter. Rising oil prices may help too. Better Indian growth and a stronger rupee offer opportunities.

• On Infosys, Abhimanyu writes: INFY announced it would dedicate half of its $500 mn Innovation Fund to invest in India. The stock fell all the same.

Schweitze Aktionen

• One Swiss share is up on the currency effect. Zurich Insurance rose 3.8% although ZURVY reports in US dollars, not Swissies. Exporters are upset. CEO Nick Hayek of Swatch (SWGAY) said: “Words fail me. Today's SNB [Swiss National Bank] action is a tsunami for the export industry.” But the deflationary impact of the SNB move should help ZURVY which has considerable fixed income SwFr assets.

• Novartis is up 3.3%; it is an exporter with Euroland its nearest market. It is moreover due to report Jan. 27 on Q4 2014. NVS was among the firms worried about a strong franc, but drugs are less price-sensitive than funny watches. It therefore is not up as much.

Other Stocks

• Fellow drug peddler Teva is a likely buyer alongside NVS sub Sandoz for privately-owned Boehringer Ingelheim's Roxane Labs, a US generics maker. Bloomberg says Roxane might fetch $2.4 bn. TEVA reports Feb. 5.

• Performance Sports Group (PSG) is up nearly 8% today after reported adjusted net income/sh of 24 cents (US), up 20% over 2013-4 Q1, beating polled analyst estimates. The numbers are not comparable as it issued much more stock to be NYSE-listed last summer. It uses an August FY as a former winter sports specialist. To end-Nov., sales of hockey gear rose 7% but the big boom was in baseball/softball, thanks to an acquisition, over 24x up. Hockey-mad teenagers mean hockey still accounted for $113.4 mn of the $172.3 mn sales. The new importance of baseball and softball should pay off with less seasonality in future FY metrics.

• Schlumberger reports after the close today. It will not be pretty. Dutch SLB prepared by declaring a 50 cents/sh dividend, up 25% from the 40 cents before, to be paid April 10. That makes the yield 2.6%.

• Nokia is down ~3% on rumors that BlackBerry is or is not under offer from Samsung; NOK was a potential bidder. Then everyone denied everything and all 3 cellphone makers saw a price fall, BBRY by 20%.

• Portugal Telecom (PT) is back in the market but its bonds are under attack with credit default swap levels for its 5-yr notes up 44% since Dec.

• Thanks to the intervention of the Finance Ministry in to try to settle the regulatory dispute over its alleged cartel, Delek Group (DGRLY) rose today in Israeli trading.

• Bombardier (BDRBF) stock crashed today after it cut its sales estimates, by about 20% so far. We sold in time. The Canada aircraft and rail carriage maker cited low Learjet sales as the biggest problem, but the rout is general, also affecting its commuter planes.

Fund note: We will be able to spend money using credit cards in Cuba, and fly directly rather than via Canada as I did to visit the country. Still not enough reason to pile into Herzfeld Caribbean Basin Fund, CUBA, at a whopping premium.