The capitulation of gold bugs continues. ASA Gold and Precious Metals, a closed-end fund we used to own, continues to send me updates 4 years on. Today they reported that insiders own 1.25 mn of its shares, acout 16.5% of the total out. That is down from 1.4 mn in the previous quarter.

In London trading this morning, Galantas Gold, a UK share, rose over 46%. That may be the bell they ring at the bottom, or not.

Capitulation in Gold?

Today in London, gold hit last year's double low at $1180 per oz. One reason may be that Chinese markets are closed for a week-long holiday. But Adrian Ash of bullionvault.com warns:

“We're not there yet.

“In gold, betting on US futures and options is quieter. Open interest fell last month to 5-years lows. While the big hot-money traders are holding near-record fistfuls of bearing bets, their net position, as a group, remains positive to the tune of 200 ton-worth of NY contracts.

“One extreme does stand out. Smaller speculators, private investors trading gold derivatives throught retail brokers, did flip to net bearing last week—the first time since Jan.

“These guys don't tend to be ahead of the game. So far, since the latest positioning data was gathered last Tues., they have made money betting gold prices will fall. [Gold fell 1.5% in dollars last week.]

“That's likely to entice new traders to place more bearish bets. Gold's big low at $1180 per ounce is clearly thir target, especially with China's bargain-hunting wholesalers out of the market until Weds.”

Adrian writes for our advertiser, www.bullionvault.com which runs a system for US and other investors to buy physical gold cheaply, legally, and safely. It is sponsored by the World Gold Council which also sponsored SPDR Gold ETF, GLD.

Hacking Horrors!

The hacking horrors continue. I spent hours on the phone this morning with a kindly and nice Filipina with excellent English, Arvy. She does customer service for HSBC, where I have my personal bank account.

Yesterday when preparing the porfolio tables I was denied on-line access to my accounts, something she has corrected. Sunday is not a good day for banking but what with a total crisis Friday and Yom Kippur Saturday, there was no alternative.

But Arvy and I have discovered other hacking horrors and security lapses at HSBC. Here is an example of how careless my bank has been.

In August, when we returned from London, I found that I had been issued a new Visa card replacing my old Mastercard from the bank. They seem to have switches credit and debit card companies. I duly activated the new cards.

Today with her help I could view all the open credit cards linked to my also hacked former check account. Not only was there the illicitly penetrated August Visa card and the as-yet-undelivered new Visa card. There is also that supposedly cancelled Mastercard! The bank left it active.

Worse still, the old cards have been left active in order that funds coming into my check account from companies whose shares I own that are not in my HSBC brokerage account (which was switched to the new check account Friday) would be credited. How to switch these turns out to be a major hassle.

The inflows were only described as dividends with the amount. No information goes to the customer on where the dividend payor hangs out. Nor how to contact the payor.

So while I can contact my autopay credit cards on my own to get the money I pay out switched to my new check account, I cannot get autopay switched for funds coming in.

This is a much harder task than switching autopay credit cards; I have the credit card information already. I set up mini-transfers to test if the switches are active. I got HSBC's own brokerage arm to make its payments to my new check account. I switched my discount brokerage bank transfer system.

But there are dozens of others!

Since this breach of security was the bank's fault, I am asking that HSBC provide me with a list including telephone numbers covering all the payments into my account in the past quarter and information on how to switch them over. Even if the bank helps this will be a tough task. AARGH!!

In its British homeland, HSBC Holdings will join 11 other banks to create a retail client trading facility for corporate bonds called Neptune. This is an attempt to pull up the underwater side of British (and US) bank investor services.

Under new US capital requirement rules, banks no longer have either the incentive or the ability to keep bonds in inventory. Neptune will help UK banks (including JP Morgan Chase and Goldman Sachs) share their bond inventories and make their systems communicate better.

Because no reader has accepted the challenge to name our new Irish pick, the contest is hereby ended. I may write up the new share, probably tomorrow. Martin Ferera has another small cap idea from Canada. And Max Deml, the Austrain Oeko-Invest renewable fuel expert, has a newly listed Norwegian renewables holding company stock idea. None of these are yet sure picks.

Meanwhile we have news from Israel, Ireland, India, China, Brazil, Mongolia, Jordan, Canada, Australia, Mexico, and Hong Kong.

Tencent and WUBA

*Tencent bought more 58.com, NYSE-WUBA, operator of a Chinese online classified ad market for both consumer and wholesale business. TCTZF picked up nearly 20% in July and now has upped its stake to 24.6%, after buying more shares at an average of $36.66/sh in Sept. Buying WUBA is a way to horn into the Alibaba businesses and analysts expect more buys as the Craigslist copycat fell in the latest sell-off to $35.78/sh this morning.

*Teva (TEVA) is reducing its R&D efforts to focus on new discoveries of ethical patent drugs for respiratory and central nervous system diseases. It hopes to shut in or sell off 14 research projects in different areas, saving $500 mn/yr after a “strategic review” under its third CEO in 18 months. Erez Vigodman is a Tel Aviv U graduate in accounting and economics and a CPA and a graduate of the Harvard Business School. This is an accountant's strategy, trying to guess what will sell and where Teva has a competitive edge. The stock is down today on the news. Standard & Poor's reiterated its “hold” rating.

The R&D saving will be backloaded: $150 mn next year and $200 mn in each of the 2 following years. TEVA also expects to bring up its revenues to $4 bn/year with 30 products it will continue to research and bring to market by 2019 in the two retained areas of work.

Separately, a rumor that Teva wants to merge with Mylan is making the rounds. Mylan is one of the companies competing with Teva in two key areas: with a generic of Copaxone, TEVA's blockbuster multiple sclerosis drug which is facing the patent cliff, and in generics overall, which is the Israeli firm's main business. Mylan is one of the 4 contenders to make generic Copaxone for the US market. Wells Fargo's Michael Faerm says the thought of the Israeli firm making deal with a Pennsylvania company of comparable size may be too much even for a high-flying Israeli CPA to pull off. MYL may want to sell however; it had planned to buy discarded drugs from Abbott Labs, GlaxoSmithKline and Aspen (of Britain and South Africa resp.), and Sanofi (of France). But all these deals depend on benefitting from the now-banned US tax inversion rules.

Mr. Faerm was quoted on the GlobesIsrael.com website as calling a MYL deal “unlikely.” Moreover “it would not solve TEVA's growth problems”. TEVA market cap its $47 bn and MYL's under $19 bn.

Teva meanwhile still awaits its day in court—the Supreme Court. On Oct. 15 the Supremes begin hearing Teva's case for extending its Copaxone patents. Teva will report Oct. 30 and talk about all these matters.

*GSK stands ready to gear up to produce vaccines against 2 varieties of Ebola virus on an industrial scale after completion of the phase I trials (proving safety in humans, but not if the jab works). The US National Institute of Allergy and Infectious Diseases, part of the NIH, and GSK are carrying out phase 1 trials in West Africa and the UK now. Phase II (effectiveness and dosage studies) can begin early next year. For some reason, the trials are not being held in Texas.

*Compugen is presenting at 3 US conferences about immune checkpoints to block cancer and autoimmune diseases. CGEN will present info on the targets it discovered with data searches (in silico) CGEN 5049, 15052, and B7/CD 28 against cancer; and CGEN 15001 against rheumatoid arthritis, MS, and type 1 diabetes in NYC, MD, and Boston in the next 6 weeks. CGEN is Israeli.

Hikma Beat But Not Its ADR

*Our best performing stock last week in London trading was Hikma Pharmaceuticals, the Global Depositary Receipt of the Jordanian company whose primary listing is in Dubai. It rose 10.5% in London trading last week and 48.4% YTD. This came after a Dubai real estate company crash took down that Persian Gulf market. However neither the drop nor the recovery were visible in the HKMPY ADR trading.

*Irish Alkermes reports that director Robert Breyer bought 110,000 shares last month. Insiders buy stock for only one reason, to make money. They sometimes sell because they need the cash. ALKS.

*Mysteries abound over the ADR of Benitec which was “half-cocked” according to Dr KSS, the medical expert at stockgumshoe.com, where I got the idea. We bought its unsponsored ADR and they were converted into sponsored ones at a 5:1 ratio. The company is run from Sydney Australia, half a world away, to quote Dr. KSS who writes for www.stockgumshoe.com

The new ADRs have “no chance of uplisting in the foreseeable future” because they are “not functionally supported” and “without market-makers,” Dr KSS writes. He remains “a fan of Benitec's science” but also criticizes the design and delay of BTEBY's forthcoming trials for fear of the FDA, about which I have no expertise. The good doctor is particularly irked because Benitec's board chairman Peter Francis is not replying to his e-mails.

Benitec uses ddRNAi (DNA directed RNA interference or silencing) technology to avoid the risks of DNA therapies. I think Dr KSS should write to Dr Peter French who is managing director and CEO of BTEBY rather than to the chairman or to chief medical advisor Craig Lewis (no relation). I will send each of them a copy of this note.

Performance Sports Peforms

*BNS's brokerage arm commented on Performance Sports Group, the NYSE-listed former Bauer Performance Sports. “We are encouraged by this year's new product technological introductions” in field hockey, baseball bats, lacrosse, softball, and soccer. The broker analyst, writing from Jacksonville FL where PSG held its shindig also likes “dual branding” whereby PSG gets more sports fans, and its leveraging of technology across multiple sports. An example is how moisture management for hockey uniforms is now being used to line ice-skates, gloves, and protective gear not just for hockey but also for lacrosse and baseball and softball. Easton base/softball also is getting performance upgrades in bats, which are lighter and have a bigger sweet spot and this also can be rolled out for hockey sticks and lacrosse shafts, the analyst wrote. His target price for PSG is $19/sh and he will upgrade from cold Toronto once the Q1 results are out, the first since Easton was acquired.

*Daniel Steward Brokers analyst Sophie Blandford rates Paddy Power plc a buy with a target price of Euros 69 (vs a current price of euros 57) for the leader in British and Irish online and mobile bookmaking. Its bookie expert says PDYPF (PAY in Britain) “trades toward upper end of peer group multiples” because it “has the scale, firepower, and regulatory profile to keep growing in regulated markets”. To which I would include the USA. However, Paddy has a 22.6 p/e ratio and a 19x forward one, more than double that of Ladbrokes or William Hill which are more dependent on bookie shops in Britain, and less advanced in tech. She figures that Paddy can grow its 18% (in euros) this year.

*The unexpected rise of the right-wing candidate Aécio Neves in the Brazil elections has naturally boosted the shares we own there and the currency. Vale is up nearly 5%. VALE.

*Cosan rose nearly 10%. CZZ.

*Finnish Nokia rose 3.4% today in London trading. NOK.

Fund notes:
*Investor has completed the partial divestiture of its stake in Lindorff to Nordic Capital, which produced SEK 6.8 bn in cash proceeds. It retains 9% of Lindorff plus a 58% conditional 8% shareholder note worth euros 200 mn. IVSBF is a holding co. recommended because there is no longer a Scandinavia Fund; it invests on behalf of Skandivaska Eniskilde Bank's controlling Wallenberg family and others who buy the fund shares.

*Mysteriously, our Mexican REIT, Fibra Uno, FBASF, is up over 2.5% as well in UK trading. Somebody there is putting all of Latin America into the same bag. Or it may just be that Bank of America-Merrill Lynch analyst Alan Ades is upbeat on the Mexican peso and bolsa.

*I quote the price and NAV of Canadian General Fund in C$s (loonies) not US ones. The US ones given in Barron's are from Thursday night, leaving out Friday currency moves. So I use the Toronto Globe and Mail.

*Rio Tinto Group and the Mongolian govt are at loggerheads again having failed to meet the end- Sept. deadline set by lenders for the expansion of the Oyu Tolgoi project. The delay hurts our Mongolian Growth Group, MNGGF here, and YAK in Toronto, a fund.

Neiges d'antan

*Daniel Stewart Brokers have set a new target price for AIM-quoted China Chaintek at 80 pence plus forecast a 2 pence/sh issue of a scrip dividend (new shares) in lieu of a dividend. The stock is now at 74 pence, the broker writes. I have no idea what will happen with E-trade having removed CTEK-LSE share from its Global Trading system.

*Analyst Simon Willis at Stewart has a 50 pence target price for Naibu Global which is trading at GBP 0.28 now. The stock trades at 50% of its earnings. As noted already, NBU-LSE has cut its interim dividend and its net cash stands at more than its market cap at GBP 33 mn vs 16 mn. What is missing from the broker's report is any information on the down-rating of trading at the AIM for these two shares which makes them impossible for US discount brokerage customers to own. They no longer have continuous trading in London but only 4 daily auctions, only 2 when Wall St is open.

*Oops. Thanks to reader BK, I realize that I failed to include in recent tables the purchase of Infosys on June 17 at $53.77 as an Indian turn around. Correction will be posted today.