E Better Than The Maestro

*Cosan of Brazil, a less flaky share, is up only 2.5% today.

*Hard-charging REIT Fibra Uno (FBASF) of Mexico is up 2.32% today on substantial volume on Wall Street. FBASF is a play on Mexican growth being able to survive whatever Trump ultimately decides to do about NAFTA.

*However after gaining at the opening today, Cemex (CXfell later on. It initially rose on rumors it might build what my children's cousin Toby calls Trumpety-Dumpety's wall, and because Mexican investment advisor Guillermo Rodriguez put a buy on CX yesterday.


*The Financial Times reports that Banco Santander (SAN) will abandon its plan to split off UK investment banking operations from its “ring-fenced” consumer banking businesses as had been required by the 2012 Vickers reforms, to be done by 2019. Of course this TBTF regulation was imposed before the Brexit vote which changes everying for SAN despite its heavy UK retail businesses acquired under the prior chairman,Abbey National, Bradford & Bingley, and Alliance & Leicester. Instead, SAN will use offshore UK sites (like the Channel Islands) and other EU ones to continue to offer the full range of services it does now.

*UK major banks are under pressure today as the Bank of England will publish new stress tests Weds giving more weight to the problems of Opec on which the Old Lady of Threadneedle Street has been expressing concern for a while. Mark Carney, its governor, has been warnings that the cartel's inability to control output creates banking risk.

In addition, Tesco (TESO) is down on a Times article saying that its own systems left its bank vulnerable to fraudsters stealing million from its bank sub customers. The impact of these developments is negative for large banks including Royal Bank of Scotland (RBS) which we own only through its non-cumulative preferreds, which we will collect on as long as the bank cannot be privatized.

Our Virgin Money (VRGDF) shares are off 0.75% in London trading today, modestly down in the bank selloff.

*Barclays (BCSsold its Asia wealth management on the cheap to Overseas Chinese Banking Corp of Singapore, for $225 mn, less than half of what it was valued at last Dec. 31, pre-Brexit. We own BCS non-cumulatie preferreds, not the common, and the cash inflow boosts confidence in their continued payment by slashing its risk-weighted assets. BCS earlier exited its Africa banking arm.

*Standard Life (SLFPY) shares gained nearly 3% today in London trading as yield-seekers bought it in place of banks. SLFPY pays out 6.25%.

Indian Givers

*Infosys (INFYis not likely to be sold despite my marking it for sale because I am too greedy to accept what I am being offered for my stock now. However the U​S share I would have bought more of had INFY been sold is doing much better, Cognizant Technologies (CTSH) of New Jersey, which does back office work in India too. Its 4% shareholder Elliott Management is meeting with management to try to get through a value-enhancement program which includes paying shareholders a dividend and create a stock buy-back program. CTSH is up over 8% today which is another reason not to sell INFY,

*With the dollar down and Indians looking for a new way to cache their cash, gold is back on the up including our SPDR Gold ETF, GLD.

*Aberdeen Asia Pacific Income Fund (FAX) only earned 52% of its YTD distributions from dividends and capital gains, with the rest coming to us as untaxable return of capital. 

*Its stablemate Aberdeen Global Income Fund (FCO) only earned 36% of its distributions paid to shareholders with the rest return of capital. These quirky figures are the result of steady distribution policies which are not really good for shareholders, unless they are too stupid to see what is happening in their funds. It is much better to sell stock if you need the proceeds rather than cutting your basis by the backdoor.

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