S High Tide

Observing Passover on Monday kept me from selling the shares hit by bad news from Friday, the foreign banks believed to have been hurt by the distress sale of holdings by Archegos Capital Markets Friday after a margin call. The family office with a seriously dangerous name (which the Financial Times said was a Greek reference to Jesus) was hit by margin calls exceeding its capital. While Crédit Suisse and Nomura issued warnings that their earnings this quarter will be chopped, other banks which do not have the excuse of having shut for the weekend before the news was known may have losses.

(I never studied Greek so I have no idea what Archegos means. My father, forced to study Latin and Greek in his German Gymnasium, insisted that I study a modern language. I got a Latin diploma from Radcliffe which I cannot read.)

The Monday good news was that the huge container ship blocking the Suez Canal was freed thanks to the moon causing a high tide. This somewhat reduced the up move of Chinese exporter shares which can use the belt and road railway to ship to European markets, and eventually to our side of the Atlantic. But it also boosted a further move to consolidate ownership by a South African company, making up perhaps for the loss of around the Cape shipments to avoid the Canal. As our stock market is closed on Friday it seemed wise to prepare a notification to our paid subscribers for Tuesday after the 2nd day of Passover ended Monday night, with another good side effect of the full moon. The Friday closure is a tradition on Wall Street. When I worked on the Senate Foreign Relations Committee for Republican Senator Clifford P. Case, the son of a pastor, he commented: “It is considered inappropriate to trade stocks when your god is being crucified.”

Business newspaper article

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Finance

*AIA Group of Hong Kong is buying the life insurance arm of Bank of East Asia, according to Citi which put a buy on AAIGF which is increasing its regional footprint. BEA has 140 banks in Asia. The stock gained 2.5% in Hong Kong trading.

*Banco Santander has lost 1.8% not because of Archegos, but because it had to raise its offer price for the minority shares of its Mexican sub as I had forecast last week. SAN.

*Standard Life Aberdeen was a rare winner in the fund space. SLFPY gained 0.13%.

*Lazard Global Total Return & Income Fund, LGI, bought because my tip for the management company Lazard was ambiguous, has now gone up 0.53% to $19.34, a new high while Lazard, LAZ stock lost traction.

*CBOE Global Markets Inc. got SEC permission to offer interday auctions for US equities here, not just in Europe. The share gained 1.4%, a rare winner in this sector.

*Guilt by association with Nomura took down Sumitomo Mitsui Finance, SMFG, while Mitsubishi Finance, MSBHF, rose 0.37%. Knowing who works with whom in Japan is our weak spot. 

Commodities

*Antofagasta was rated bull of the day by investors intelligence, British chartists, and its stock rose in Britain, but apparently it did not trade here. ANFGF.

*Alimentation Couche-Tard, the chain of gas stations and fast food outlets, rose 3.33% today on no news. ANCUF.

*With that Empire State size tanker finally free, the price of oil on both sides of the Atlantic fell, which naturally also affected oil company stocks negatively. It also chopped the valuation of Azure Power which produces in Mauritius solar panels for India, AZRE, which dropped over 4%. Enphase Energy beat AZRE in a contract war in South Africa.

*Also suffering is rare earth and uranium miner Energy Fuels, UUUU, down 6.6% to $5.7 (US). Roth Capital set a target price of $6.5 but there will be a global mining virtual conference tomorrow.

*However Brazilian Cosan, now CSAN, lost a bit today despite gaining in European trading. It sells gasoline containing green ethylene in Brazil and Argentina in a JV with Royal Dutch Shell, RDS-B, which boosted its share last week.

*Norilsk Nickel NILSY in Russia was able to master flooding at 2 palladium mines in Siberia, which cut the price of platinum metals. Johnson-Matthey did not trade here today. JMPLY refines and sell platinum metals. Apart from gold, copper, and silver also fell in price today.

Drugs

*Small cap pharma stocks were almost all down on fears of US price controls for the sector. Sterling rose over the Euro on virus outlook. Glaxo is up on news that it will make up to 60 mn doses of the Novavax antigen jab against Covid-19 in England under license from Fujifilm Diosynth. Bristol Myers gained 0.7% and Novartis 2.7% following a report on the global market for drugs against chronic myeloid leukemia. NVS also gained on news that it invested alongside Ark Funds and Illumina, (a US share I own), on a Softbank SPAC merger of CM Lifesciences II with Exact Sciences Corp (EXAS).

*Novo Nordisk rose because a rival diabetes drug, Metiator, used for weight loss from Laboratoire Servier of France was ruled to have caused deadly reactions killing as many as 2000 people. The company was fined euros 2.7 mn for manslaughter and one of its executives was given a suspended prison sentence for fraud. The French drug regulator was also fined euros 303,000 for failing to react after a JV partner, American Home Products, now part of Pfizer, pulled Metiator from the market in 1998, after 22 years selling it, but France did rien until 2009. Servier is a not-for-profit foundation.

*Swiss Roche inched up a bit today as its arthritis steroid drug toclizumab helps prevent cytogen storms as well as a new US drug find, lenzilumab from US Humanigen Inc. RHHBY.

*Astra-Zeneca rose on Biden opening anti-virus pharmacy vaccination to 90% of US adults according to Josh Wingrove of Bloomberg who covers the White House. The US has not approved the AZN jab.

*Eisai of Japan, ESALY, fell a modest 0.25%.

*ZYMEZymeworks, which is run by a Canadian Muslim, was the worst performer on this holy day for diaspora Jews and many Christians.

Tech & Tel

*MultiChoice Group. MCHOY, which sells phone connections and ads in Africa, was our best performer Monday, up over 2%.

*Canadian CAE gained 1.63% after signing a deal to offer flight training to Leonardo of Italy for pilots and maintenance workers on the M-346 in the air and on the ground.

*BAE Systems, BAESY, gained 1% because it will use its flight control systems for airplanes to control the latest British submarine, the Dreadnought, announced yesterday in the UK Sunday papers.

*South Africa Naspers was up 0.31% to over $47. NPSNY.

*Cellphone systems vendors are down with the exception of AT&Tare down.

*Tomra Systems gained 2.1% following an upgrade last week. The Norwegian firm makes sorting machines for bottle return, drugs, and potatoes. Its latest sorts different plastics for recycling. TMRAY.

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William K. 1 year ago Member's comment

As thorough and as well written as always, Thanks VL. And I hope that your pasover celebration was as fulfilling as it should be.