E Boxing Day

Besides real estate and builder firms, Lloyds Bank, and UK multinational corporations, Aurora has oddball placements about which I know nothing, Vesuvius, an engineering firm, financials operation Randall and Quilter, and Headland, a maker of carpets. It also invested in the pub group Wetherspoon, subject of a favorable article by 'Bagehot' in the current double issue of The Economist, praising its good management and new-mode pubs where you can eat and chat even if you are neither drinking alcohol nor male. (Old-mode ones are shuttered all around Mudchute Manor, two more since Sept.)

The Aurora share closed on Christmas Eve at GBX 173, while the NAV was 172. (GBX stands for British pennies, in which UK shares are commonly priced.) So it is barely over NAV. You should not buy until Wednesday morning when London will be open, if briefly.

*Our play on Argentine recovery, GlobalX Argentina ETF, ARGN, will be hit today after the sacking of Alfonso Prat-Gay as finance minister yesterday. He became the scapegoat for the failure of the Macri government to achieve growth in the year 2016 after the latest honest numbers show there was a 4% drop in output from 2015 despite El Presidente's promises . The central bank resisted cutting interest rates for fear of inflation, and Prat-Gay was unable to persuade it to reverse course.

*Founder Tom Herzfeld has bought just under 9% of the outstanding shares of Herzfeld Caribbean Fund, CUBA. We sold when the talks with Castro set up by the Pope pushed CUBA to a huge premium over its NAV. But after the Trump victory and the hard slog of real dealings together it fell to a 10%+ discount at ~$6.75 when NAV was $7.50+. So Tom may be right that it is a good time to buy back CUBA. He is buying for long-term gains according to what he told the US SEC.

*Canadian General Investments, thanks to a stronger loonie, gained over 19% YTD in NAV making it the 8th best member of the US Closed-end Fund Assn. (CEFA) but not as good as gold fund ASA (sold too soon). But CGI still trades at a record 31.7%+ discount to its NAV of C$28.17 at a mere C$19.23. It trades south of the border in the USA as CGRIF. It is closing the year 14.7% in cash.

*A final fund note. Former Western Assets EMD shares are now showing in my account as Western Assets ESD. It is a bad time of year for back-office accuracy and speed.

Drug Stocks

*The latest word from Gali Weinreb at the globesIsrael.com website is that TEVA is only a side show in the US 20 state attorney-general investigation of generics price fixing. He says the Heritage Pharma staffers shopped Mylan for price fixing and only one email mentions a chat with another generics maker in the case of a diabetes drug, the only one where TEVA might be implicated. An Israeli legal expert from Barnea & Co, Dr Zvi Gabbay, informed the globes writer that both defense and prosecutors have an interest in doing a deal as trials by jury “can go wrong” for either.

Oil and Gas Deals

*Delek Group (DGRLY) has closed on the sale of two offshore fields, Tanin (crocodile) and Karish, which are sold to Greek private company Energean Oil & Gas, including also the stake of US firm Noble Energy of Texas. It is unclear how the deal will be accounted for under Israeli GAAP, according to the DGRLY release.

Delek also invested £42.77 mn, about $52.68 mn, in London AIM-listed Faroe Petroleum, an oil and gas exploration company operating in UK and Norwegian North Sea waters. It currently produces 9000 barrels of oil equivalent (BOE) per day which will be doubled with new investment from Israel. Seller was Dana North Sea Oil & Gas Exploration.

Moreover Delek and Noble think the Leviathan offshore deposit, for which they had to sell Tanin and Karish under Israeli competition rules, on which drilling is due to start in Q1 2017, may hold oil as well as gas, at lower strata.

Finally Delek said it is still continuing talks on providing gas from Tamar to the Shorouk LNG plant in the Egyptian Nile Delta.

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Chee Hin Teh 3 years ago Member's comment

Thanks for sharing. Merry Christmas