E Taking A Long View

You might be interested to know why this Renaissance person likes HSBC. First of all it yields 5.4%, a nice bit of change, boosted by the share underperforming. Secondly, he or she thinks HSBC has an edge as a potential part of a Saudi Aramco IPO—presumably if it is partly placed in Hong Kong, where HSBC and its sub Hang Seng Bank are major players.

But he or she also cheers on HSBC's decision to close its small and expensive branch networks in Malta, Bermuda, and Uruguay. I have used the Bermuda HSBC ATM, and Bermuda and Uruguay are tourist destinations. But all three countries where HSBC is exiting are also well-known tax havens, which may have something to do with the shut-ins.

Internets

The Hong Kong outfit gaining from a pending India deal, by Walmart, is Tencent which owns a stake in the US giant's target, Flipkart, the Indian e-commerce alternative to Amazon. Other owners of Flipkart include South African media-cum-internet firm Naspers, NPSNY, which owns 31.2% of TCEHY and its own pile of FLIP stock. Also likely to gain from a FLIP bid are Softbank and Microsoft. One of our writers pitched Softbank but I got scared. I do own Microsoft.

There is only one woman on the board of Autoliv, proving that it is an American rather than a Swedish company, Xiaozhi Lu, who is the former chief engineer at GM China. ALV's rump passive safety side (when electronics is spun off to shareholders) expects to boost its sales to $10 billion by 2020, from about $6 billion last year, mainly from sale of more safety components per vehicle to growth markets like China (and India.)

Berenberg Capital Markets put a sell on Infosys. Indian INFY is being kept from using its global staff to replace US tech support. We told you first.

Pharma

After Takeda held a press conference spelling out its ability to buy Shire Pharma, analysts from Sanford Bernstein now expect a bid after the Japanese firm said it was “willing to push its debt higher” in order to seal the deal. Bernstein’s Wimal Kapadia wrote he thinks a bid is now “more likely than not.” SHPG is in trouble because of hemophilia competition from Roche and an empty cash position later paying too much for Baxalta. Of course the key question is how high Takeda will go. Kapadia thinks, after a survey by Bernstein, that Shire shareholders want £42 or $175/sh to start talking and £45 or $190 to sing. We also want cash and less than half our price in Takeda shares.

Kapadia says Takeda can probably get a deal if it goes to 5x leverage and issues more Japanese shares, keeping former Shire-owners in a minority, important in Japan. Takeda is also selling its Brazil pharma unit, Multilab Indústria e Comércio de Produtos Farmacêuticos, according to Reuters, for cash. Shire is Irish with its prime listing in London which means something has to be done before Brexit.

After a phase I trial of only 5 patients,Danish Novo Nordisk signed up to license a sickle cell disease drug from EpiDestiny worth $400 million. It gives NVO world rights to EP101, an epigenetic treatment about to start phase II. Researchers at the Cleveland Clinic and the University of Illinois began testing an oral combo of tetrahydrouridine and decitabine in 2012. A recent 8-wk trial linked the combo to higher levels of fetal hemoglobin, a biomarker that correlates to better sickle cell outcome. Sickle cell disease is hereditary and much more prevalent among those of African heritage than Americans of other races. Another similar disease afflicts people of Mediterranean background, called beta-thalassemia. NVO is also getting a license for beta-thalassemia.

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Vivian Lewis 2 years ago Author's comment

I always inform my bank if I plan to travel to foreign lands to make sure that my credit cards will work and I can get money from local ATMs. The problems arise DESPITE my warning the bank. I think it is poor internal communications and overuse of cheap Asian labor.

Kurt Benson 2 years ago Member's comment

I've had the same problem. I remember one time there was several thousand dollars of fraud on my account. But then another time I was unable to use my credit card because of a "suspicious charge" for $1.50. A charge I had actually made. Baffling.

Gary Anderson 2 years ago Contributor's comment

Fascinating discussion of HSBC and international banking glitches. It is also a great argument why going cashless can put travelers at risk in the future.

Vivian Lewis 2 years ago Author's comment

yup