Last night we went to a brilliant play we missed earlier, the adaptation of 1984 by Robert Icke and Duncan Macmillan now in London's The Playhouse under the arches of The Embankment. Inevitably, and a bit fatuously, the revival referenced recent events like the Edward Snowden revelations and how our internet and social media use leads to our lives being monitored.

For a pro writer like me, the key takeaway from the performance was the importance of language, with the hero employed in the Oceania Recdev to advance Newspeak, removing words from Oldspeak (aka English) to make it impossible to say or even think against dictatorial Party doctrine.

Snowdon is not a hero like Orwell's Winston Smith, in my view, among other reasons because his persecution is inefficient! Marketers are not Big Brother! Contemporary social media traps are easier to escape than 1984.

Take Facebook's decision to favor notes from those people “friended” over news or sales notes. This is intrusive and biased but it is hardly the thin edge for imposing dictatorship on us.

Asia was mixed today with Sydney, Tokyo, Hong Kong, Karachi, and Bombay all up, although Tokyo barely, and Shanghai down. In London trading today, the FTSE 100 is up over 0.53% while the smaller FTSE 250 is down fractionally. European markets are all buoyant. Johannesburg and São Paulo are down.

However, world stock markets are on the way to chalking up their worst performance since January for June according to Reuters. On the other hand, Dow-Jones's Marketwatch says today is the most bullish day of the year and calls some shares ready for a 98% rise in market price.

Two major bits of news for my US holdings, not in the Model Portfolios of course. Alcoa (AA) will split in two defying attempts by its Australian jv partner Alumina Ltd (AWC) to block the spin off of the upstream assets. And GE Capital, having exited financial operations, is no longer on the US “too big to fail” list.

More for paid subscribers follows with news from Spain, Britain, Denmark, Canada, Mexico, Israel, India, Singapore, China, the Philippines, Brazil, Fin-, Hol-land, and Colombia.

Banking

*I paid $3.32 per share yesterday for Virgin Money as it rose 19.3 pence while I was writing up the idea, to GBX 242.3 (GBX is market code for British pence). Moreover sterling recovered nearly 3% as well so we may have been hit by a “dead kitten bounce” in the pound. Time will tell.. The VM UK share is still down GBX 32.5 from a week ago, before the Brexit vote came in.

Consumer spending is now expected to decline because of concern about the UK economic future and higher food prices, according to new polls. So maybe credit is not the growth engine I expect. Note also that buyers of other Virgin lines like music are also being sold VM products and credit cards.

*Once again, Banco Santander (SAN) failed its annual US stress test, along with Deutsche Bank (DB) because of “broad and substantial weaknesses” in their capital structure. Both Euroland banks's US arms will be barred from paying dividends to their parents or doing buybacks because of concern about the capital adequacy of their US banking arms, which Uncle Sam wants them to separately incorporate, so he can check on their liquidity. Morgan Stanley (MS) was told to sharpen its pencil and improve its numbers by year-end, the only US bank sanctioned.The Financial Times mocked the exercise: “does my capital look too big in this?” but it is serious.

US banks have more or less doubled their capital under the new post 2008 rules and 31 of them are now able to pay shareholders as much as $96 bn. European banks are in a different situation.

While only two banks failed the stress test, in fact lots of foreign banks face higher costs for doing business in the USA, which will require them to raise capital in the USA. In addition to stress test expense at least $30 mn each time for compliance and administration, foreign banks will also have to spend $200-300 mn to beef up their capital, according to UK analysts at Sanford Bernstein, a specialized brokerage.

Adding to the risks is the possible impact of Brexit on these banks' London arms, which will no longer be easily accessed from Spain, Germany, Switzerland, or France. Moreover, the US public and government taste for litigation can also be costly, as DB and its Swiss fellows have learned.

Banks which already have separately incorporated US arms, like HSBC (where I bank) and BNP, thanks to acquisitions in the US. However, it is unlikely that the costs will force any major player from Europe to abandon the US market. SAN is off 2.91% in Madrid today.

Industrials

*Barron's Asia blog today questioned the potential of a car-crash in lithium, citing worried Macquarie analysts. However, our Orocobre seems to be the exception tipped by Sydney's Tribeca investments fo the next 3-5 years. The daily writes: “to catch the rally buy lithium miners with projects that are already producing.” It adds:

“One that meets the criteria is Brisbane's Orocobre, whose stock price has almost doubled since Barron's Asia last wrote about the business in early March. The company extracts lithium from salt lakes at its Salar de Olaroz project in northern Argentina, which it jointly owns. Orocobre is ramping up production here and could eventually produce more than 17,000 tonnes of lithium carbonate yearly. This output came online just as lithium prices have started their steep climb.

“However, the stock's recent rally has fueled concerns Orocobre's price is overcooked. That led analysts at Citi to downgrade the company to a Sell. Others see a bit more upside, though. Dundee's [David] Talbot just upgraded the stock to a Buy, with a price target of A$5.10 a share. 'Orocobre receives a premium valuation from investors and deservedly so,' he says, given it's the first junior miner to successfully start lithium production in the last 20 years.

“Orocobre could also benefit from lower costs as Argentina's new reform-minded government eases up on import restrictions. Talbot thinks the shares could re-rate on a plan to make lithium hydroxide directly from brine pools. Both lithium carbonate and hydroxide can be used in electric vehicle batteries, but the process for doing so with lithium hydroxide can be quicker and more efficient. If Orocobre goes down this route, it could solidify its position as the 'go-to lithium producer stock for investors,' believes Talbot.” While OROCF is the official ADR the easier way to buy the lithium and borax producer is via its Canada traded ORL share.

*CX announced today that Cemex Hldgs Philippines, an indirectly wholly-owned sub of Cemex España, SA, priced today on in Asian markets its IPO of 2,032,980,830 common shares at a price of 10.75 Philippine Pesos/sh. Net offering proceeds to Cemex will be ~$506.8 mn. I bought back CX at $6 and it closed at $5.9 yesterday.

*Precision measurement specialist Renishaw (RNSHF) sales are 95% outside the UK, notes Martin Ferara who advocates the share. RSW, traded almost exclusively in London, is up 10.9% to Tues. night, and up 2.8% YTD—in sterling of course.

*Before today's lower opening in São Paulo, both VALE and Cosan (CZZ), our hot Brasileiras, hit new 52-week highs in reais, up 4.7% and 2.9% respectively on boosts in raw material valuations after the price of crude briefly topped $50 again yesterday. Vale may sell its fertilizer arm to Mosaic for ~$3 bn.

*Abhimanyu writes from India:

Tata Motors (TTM) recovered some losses and was today's best index performer in Bombay yesterday, as the index pared its losses ‎from Brexit. TTM cloimbed another 2.72% today boosted by the 28% pay rise the government gave civil servants.

Oil and Gas

*Delek Group (DLKGF) may have another bid for its Israeli insurance operation, Phoenix, which it seeks to sell to invest in developing offshore gas and because of Israeli anti-trust rules. A half-year ago, the Fosun Group pulled out of talks because of Israeli regulatory mistrust and its problems in its native China. Now another Chinese private sector non-insurance conglomerate is rumored to be interested in Phoenix, which has failed to sell 4 times since it was put on the block. Among the people turned down, were Jared Kushner, the son-in-law of Donald Trump, and AmTrust, both of the USA. DGRLY used to be a financial conglomerate itself before getting the gas bug.

*Colombian Ecopetrol (EC) will take back the concession of Pacific Rubiales next March as part of the restructuring of the latter with Catalyst Capital Group. The Canada small cap discovered the huge oil gusher in Colombia but last the money to develop it. EC is the national champion.

*Anyoption, a fellow-writer on www.Talkmarkets.com, in which I have invested and to which I contribute, calls BP plc one of the 3 best stocks to invest in post-Brexit.. BP was raised to overweight from equal weight by Morgan Stanley today.

[Anyoption also tipped Barclays and Banco Bilbao Vizcaya BBVA Bancomer's Mexican sub raised NMP 4 bn yesterday ($211.5 mn) from sale of a 3-yr bond. I am not sure about BCS and BBVA. And why only shares with a name beginning with a B?]

Internets

*Gemalto (GTOFF) digital security was selected to provide its LinqUs On-Demand Connectivity (ODC) subscription management solution and embedded SIMs for KDDI, a leading operator in Japan with over 40 million subscribers, to enable secure connectivity for connected cars and Internet of Things applications worldwide. As a result, KDDI can now provision any requested operator's profile on connected cars equipped with pre-embedded eSIM, allowing automakers and solution providers to offer seamless remote subscription for the lifecycle of the car. Motorists can access optimized real-time information about traffic and nearby amenities, navigation, vehicle diagnostics, and emergency services, anytime, anywhere. GTOMY is Dutch.

*The ADRS of sorting and reverse vending machine maker Tomra (TMRAF) of Finland hit a new 52-wk high yesterday.

*Precision measurement firm Renishaw sales are 95% outside the UK, notes Martin Ferara who advocates the share. RSW, traded almost exclusively in London, is up 10.9% to Tues. night, and up 2.8% YTD—in sterling of course.

*Nokia was upgraded to buy from hold by Goldman Sachs today. NOK is Finnish but far from finished. We told you first.

Drug Dealers

*Fierce Pharma reports, based on Ad Age: that half the top 10 spending increases for the year came from pharma firms. Danish “Novo Nordisk (NVO) ranked highest of those at No. 4 with a 195% spending increase year-over-year to reach $261 mn. [Canada's] Valeant Pharma (VRX) was No. 5 with an 88% increase to $441 mn. [It is a key holding of Pershing Square Hldgs (PSHZF) which we own. It is ] followed by GlaxoSmithKline (GSK) at No. 6 with a 56% increase to $948 mn in ad spending.

“Novo hiked its spending partly because of new competition for its GLP-1 diabetes drug Victoza and its newly launched basal insulin Tresiba. Valeant laid out big money for its toe-fungus med Jublia, while GSK has been pushing its new suite of respiratory meds as it tries to build up sales in advance of copycat competition for top-selling Advair.” 

GSK today started a phase I clinical trial for GSK3359609, an investigational inducible T-cell co-stimulator (ICOS) agonist antibody. Its ICOS enhances T-cell responses and results in an increased anti-tumor immune system response. The study is a two-part clinical trial to evaluate the safety and pharmacokinetic/pharmacodynamic properties of GSK3359609 in patients with advanced/recurrent solid tumors. It also seeks to set a dose suitable for development -- as monotherapy in Part 1 and in combination with pembrolizumab (Merck's Keytruda®). Anti-tumor activity will be evaluated as a secondary endpoint in the study.

*Reckitt Benckiser (RBGPF) hit another 52-wk high. It was downrated from overweigh to equal weight today by JP Morgan-Cazenove, UK brokers, with a GBX 7000 target price, below its current price of GBX 7260. GBX stands for UK pence in which stocks are traded.

Funds

Abhimanyu writes about our Singaporean REIT investing in India:

Ascendas India Trust (ACNDF) will invest $95 mn spread over two years in Indian real estate builder Paranjape Schemes, half cash and half via listed straight bonds, to gain a stake in a commercial project in Pune. [Ed: This will add a 4^th city to ACNDF's existing trio of Bangalore, Chennai, and Hyderabad. The share in Singapore is CY6U. It is a fave of NRI—non-resident Indians.]

*Name and mandate changes are coming for Pimco funds, not yet for our Pimco Global Dynamic Income Fund (PDI) but for some of its fellow closed-end funds. Pimco is a sub of Allianz CE (AZSEY), the German insurer.