The NY Times food section today focused on how to bake superior bread, appropriate for the end of Passover which idled this blog earlier this week. We stuck it out although my granddaughter, 11, could not live a whole week without pizza. Having already given up bacon and lobsters, Jews recall the exodus from Egypt by spending a week (8 days in the diaspora) without leavened bread.

Tomorrow I will ponder the outlook for gold. Today we have too much catch-up to do. Here is a perspective on the market shared by two mentors-followers:

Michael Kurtz of Nomura (Hong Kong) writes:

"Not only are the tarnished Biotech, Electric Vehicle, and Internet darlings at the centre of the latest pullback0 much smaller as a percent of the NASDAQ market cap (<25%) than were the original [AD2000] tech bubble's main characters (>75%), but their descent into disfavour also has not been accompanied by material stree or de-risking in other key markets: US high-yield credit spreads; emerging and frontier markets), or periferal European sovereign credits. Moreover, US equity sector correlations have remained reassuring lo9w (sub-70%) rather than spiking toward GFC [global financial crisis] highs (of ~90%). What happens in New Growth largely stays in New Growth." 
FIC Capital Inc. of NYC writes:

"Contrary to some market pundits, we do not view the current market pullback as presaging a larger correction to come or a broader slowdown in the economy given that the selloff has been concentrated among just a few sectors." (My CFA son works at FIC.)

 More (much more) follows from Britain, Switzerland, Hong Kong, Israel, Panama, Sweden, Italy, Ireland, Canada, Finland, Denmark, Colombia, and Mongolia.

*As most readers are aware of by now, a major trading of assets between British GlaxoSmithKline and Swiss Novartis was announced yesterday. GSK will give up its oncology arm to the Swiss firm which is specializing in cancer drugs, making the unit's research and marketing less costly, and giving GSK a nice pool of up to $16 bn ($14.5 bn up front and the rest milestones). GSK is well-down in the race for oncology meds, no. 17 according to the Financial Times. Cancer drugs contributed only ~4% to GSK profits according to Dow Jones. The NVS deal is an exit strategy.

Meanwhile GSK will acquire NVS's vaccines unit for $7.1 bn, again the weaker drug firm pulling out for a budding specialist. Moreover, the two firms will combine their ~$11 bn sales consumer healthcare line in a new jv GSK will control--and which it may buy Novartis out of.

The deal is complex but it also marks a change in how drug companies operate. The all-sector pharma company model of Jean-Pierre Garnier at GSK and Daniel Vasella at NVS has been abandoned in favor of specialization. Sir Andrew Witty, whom I have criticized here for failing to enforce ethical drug selling standards post-Garnier has at last come up with a major strategy change, to seek competitive advantage rather than to be all things to all men. The GSK stock rose 4.5% yesterday on the news. Panmure Gordon raised GSK two ranks from hold to buy yesterday. Fitch said neither firms' ratings would be affected by the deal.

Separately GSK and Theravance set up phase III trials of fluticason fuorate/vilanterol against chronic obstructive pulmonary disease aiming at approvals in Japan.

*Q1 at Banco Latino Americano de Comercio of Panama net income came in at $23.5 mn or 61 cents/sh, off $400,000 or one cent from prior year Q4. A huge jump in net interest income, up 23% y/o/y, boosted by higher interest charges, and fee and commission income up 78% (from a low base) offset lower loans and leverage and BLX's slow and steady exit from investment funds and asset management. Y/o/y the results were much more impressive, up 48% from Q1 2013.

BLX is re-focusing on funding trade and commercial lending to Latin American and Caribbean countries, the business for which it was founded by multilateral and government outfits like Ex-Im. It also is boosting its capital ratios which nibbled the bottom line. It will pay 35 cents/sh in quarterly dividends to shareholders of record April 28 on May 6.

*At Investor, the Swedish holding company, Q1 outcomes were mixed with net asset value closing the quarter up 5.7% at SEK 12.167 bn or SEK 16/sh thanks to fund distributions from two funds it manages. It alsao bought more shares in Asea Brown Boveri. However y/o/y profits fell 27% to SEK 12.163 bn in Q1, equal to SEK15.95/sh, with financial investments helping offset a plunge in the prices of listed stocks and also in leverage. The main reason for the fall was that there were payouts from multi-year investments in last year's Q1.

IVSBF is switching from reporting quarterly results to giving a simplified interim management statement under new Nasdaq OMX guidelines which make more sense for an investor building long-term businesses like the Wallenberg family fund. The new format also takes into account "geopolitical risk." Because there is no close-end Sweden or Scandinavia fund, we own Investor in lieu. Its largest holding (as of the close of March prices) were: SEB, Atlas Copco, ABB, AstraZeneca, Ericsson,Sobi, Electrolux, Saab, Wärstillä, and the Nasdaq OMX (stock market.) It also owns a healthcare fund and has begun a new venture in smaller-cap financial shares. Its CEO Börnje Ekholm bravely predicts higher dividends going forward.

*Contrary to my forecast, Teva did not fall in the rump Sunday Tel Aviv trading day and wound up higher as analysts persuaded the market that the US Supreme Court had not given generic rivals a head start in launching copy-cat Copaxone before it could rule on the patents. A copaxone generic launch would count as "at risk" and if the Supremes rule for Teva it could sue for billions.

Teva with OncoGenex launched its phase III trial of custirsen against metastatic castrate-resistant prostate cancer (MCEPC) which has US FDA "fast-track" designation as a combo therapy with catazitaxel/prednisone. Tel Aviv reopened yesterday as Israeli rabbis are sure when the New Moon occurred and Teva rose another 2.5% yesterday.

*Hot Israeli news. Turcas has informed the Istanbul Stock Exchange that it has opened talks with the Leviathan partners (led by Delek Group of Israel) to buy gas. The Turks may gazumph the Ozzies, and it surely makes more geopolitical sense. Meanwhile DGRLY is also aiming to provide gas to Cyprus.

*Tencent Holdings of Hong Kong successfully placed a whopping $2.5 bn (US) in its largest-ever debt deal and the largest ever offshore sale by a Chinese firm. TCTZF sold 3- and 5-yr paper yielding 1.15-1.65% over US T-bonds, and the demand was huge, a total of $12.5 bn buyers according to Dealogic. This bodes well for the 2nd half of the Tencent shelf registration for another $2.5 bn. DC reader GH wondered: "how could anyone in the USA buy such a bond? You're risking 100 cents on the dollar for puny return in a country what doesn't have the rule of law." Well, actually Hong Kong does have bankruptcy rules and there are bond rules imposed by the underwriters. But the idea that bonds are low-risk doesn't apply today. This is a prime example of what my son and Michael Kurtz cite as the non-contagion of the tech sell-off.

*Bavarian Nordic will receive $21.9 mn from the Pentagon's Biomedical Advanced R&D Authority (BARDA) for its freeze-dried Imavamune smallpox vaccine which works as well as a liquid. It will be commercially processed by a BARDA-selected company for FDA approval next year and possible commercialization the year after. BVNRY of Denmark will also get a new contract for milestones still under negotiation. It is presenting its Prostvac prostate cancer jab and other drugs in its cancer pipeline at the Chicago American Society of Clinical Oncology at the end of May. Prostvac is in phase III trials in men with asymptomatic or minimally symptomatic MCRPC.

*Barrick Gold founder and chairman Peter Munk yesterday told the Financial Times that the merger talks with Newmont should resume because gold mining investors want the lower costs and reduced political risk that the Canada- US combo could deliver. Mr Munk stressed savings if "cheek by jowl" mines work together in Nevada. We are owners of the ABX NAm bond 06849RAF9 and welcome cost savings which will improve our bonds' rating. Mr. Munk steps down at the end of the April.

*Friday Nokia will close its sale of its telephone devices sub to Microsoft.The prospect of lots of lolly had boosted NOK until it announced today the transfer of ~1/4 mn NOK shares to its equity incentive plans prior to the takeover. After China gave way only India is trying to block the euros 5.4 bn deal.

*Ecopetrol and Pacific Rubiales Energy, a Canadian oil driller in Colombia, will exchange technical information to produce a joint report on the STAR pilot project in the Quifa block in Llanos basin within 30-45 days. The two companies are working together on this field and both stocks are down on the news.

*HSBC Holdings has taken a 6.434% stake in Paddy Power plc on behalf of Internationale Kapitalanlagegesellschaft mbH (INKA) of Duesseldorf. PDYPF rose 2.5% in Irish trading today but as usual its US ADRs trade flat. LaterMassachusetts Financial Services reported that it had reduced its Paddy stake (in a half dozen funds) by just under 1% to 5.29%. The stock is an institutional favorite and the ADR is inactive mainly because US brokers hate Paddy's by-line in stock trading via UK-tax favored accounting-for-difference trading.

*According to Bloomberg, Mongolia runs an expat roach motel. If you work there you can sign in but you can't sign out. The corporate brass are treated as hostages for their companies and cannot exit Mongolia without permission to leave. This may either hurt or favor our Mongolia Growth Group shares as the firm leases housing and shopping properties suitable for developed country foreigners. MNGGF is traded in Canada as YAK. The country is full of coal, copper, and gold but foreign investment may not flow as fast given the Ulaanbaatar taste for banning departures.

*This morning I sold Mallinckrodt at $63.32/sh observing both Easter Monday and Passover. It turned out that Dublin was closed on Monday but omitted from the list of closures.

*I bought Benitec Biopharma, Australian developer of ddRNAi therapies, (BNIKF) at $1.15, well below my target price of $1.20.

*I'm trying to take some profits on A2A SpA, the Italian ute (AEMMY) mainly because Tim du Toit who wrote it up for us has abandoned the Eurosharelab newsletter business and now is writing only on assignment for institutional investors. I am in no hurry to sell but given the Italian ute's links to friend of Putin Oleg Deripaska in Montenegro aluminum I don't want to remain a shareholder long-term. A2A was an early tapper of euro bond markets and last year raised 500 mn in 10-yr notes at 190 basis points (1.95) over the interbank eurobor rate.

NB: Andrew the Webmaster is still ill and the site has stopped porting bolds. I replaced some of the missing attributes with underlinings to differentiate our recommended stocks and ones which just happen to be mentioned, which we don't own, and which are italicized. (This ported.)