Rosenberg: Cash is no longer king

Not so long ago, when asset prices evolve according to what was the state of the economy. Now, however, this dependence is reversed and asset prices affect economic development. The Fed also completely changed the relationship between stocks and bonds. We find thus in a situation where the weak economy and profits. Rates which are discounted, but it is increasingly shifted into negative numbers. Dividend income shares in the S & P are also compared to government bond yields threefold, and this further increases the attractiveness of stocks. Before 2009, yet we saw no correlation between changes in the Fed’s balance sheet and the stock market. Now it is at least as strong as the correlation between corporate profits and stock prices. I doubt that the “wealth effect” is the correct response to a wide range of challenges facing the economy. There is no doubt but that the Fed is able to influence asset prices and intends to do so until the unemployment rate drops significantly.

The results of the Fed’s policy is clear: the stock market from its base grew by 116%, real estate prices as measured by the Case-Shiller gained 4%. Even though economic activity remains weak and depression deepens. Ben Bernanke also wanted to achieve a reduction in yield corporate bonds. They actually did so at their minimum, risk spread income government bonds, but corporate bonds rated BBB still attractive. And it is another part of the market, where Bernanke wants to cause the rally to support the return of the risk and reduce the cost of capital. I do not know how much it will help the economy, return on investment in this segment, but his policy should be supported.

My opinion on the development of the stock market has been conservative in the past, but I have never claimed that investors should hold mostly cash. This may be the best safeguard against loss of capital value, but does not make anything. In the current environment of zero interest rates cash is king, it is cash flow. In the stock market, it means that we have to focus on dividend growth and dividend yield. They might serve such a large Canadian banks and technology companies in the U.S..

For these reasons, I find it attractive and precious metals mining company. Those also helps that the growth of money supply growth exceeds its rate of extraction of gold and silver. Although the gold in the last decade has generally led to better stock than mining companies. Now, however, this trend reverses, the reason they are their attractive valuation, increasing profit margins and increasing attention devoted to the management of cash flow. And these titles also offer the most attractive feature of good stock investment present, therefore the dividend.

author is David Rosenberg, chief economist and strategist at Gluskin Sheff.

(Source: FT)

Patria Online

From today, the oil export duty will fall by 3.4% – to 404.5 USD / t 01.11.2012 08:45

export duty on crude oil from today – November 1, 2012. – Decreased by 3.4% – to 404.5 USD / t to 418.9 USD / t in October 2012. An executive order signed by Prime Minister Dmitry Medvedev.

preferential rate of export duty on crude oil from fields in Eastern Siberia, LUKoil two fields in the Caspian Sea, as well as Prirazlomnoye Gazprom from 1 November 2012. amount of $ 199.4 / t vs. 210.1 USD / t the previous month.

preferential duties on high-viscosity oil, approved by 10% of the total duty on oil from November 1, will be reduced to 40.4 USD / t from 41.8 USD / t in October.

flat rate of export duty on light and dark oil products, except gasoline, calculated by the method of “60/66/90″, November 1, 2012. will be $ 267 / t vs. 276.4 USD / t in October. In this case, the duty on petrol, kept at 90% of the duty on oil in November fell to 364.1 dollars / ton (377 USD / t in October 2012.).

duty on liquefied petroleum gas (LPG) from November 1, will be U.S. $ 192.4 / t vs. 172.5 USD / t the previous month.

Recall, October 1, 2011. was the transition to a new methodology for calculating export duties on oil and oil products – the so-called system of “60/66/90.” The export duties on light and dark oil products now unified and is calculated by a factor of 0.66 (66%) of the rate of duty on oil. Simultaneously reduced export duty on oil by reducing percentage of the difference between the price of oil and the cost of monitoring to cut operating above 65% to 60%. The coefficient of calculating the rate of protective duties on gasoline is 0.90 (90%).

Trading results on MICEX by the 10 most traded securities 10/31/2012 01.11.2012 09:00

Issuer last transaction (Euro) Rel. variability.% Max. Price (Euro) Min. Price (Euro) trading volume (Euro) trading volume (units)
Gazprom 144.90 -1.47 148.20 144.52 6735690742 46124070
Sberbank of Russia 91.79 0.65 92.20 91.20 4782770155 52078220
Rosneft 232.70 0.26 233.70 230.06 2580302149 11115850
MMC Norilsk Nickel 4830.00 1.15 4895.00 4797.00 1817871304 374,421
LUKOIL 1904.00 0.26 1949.50 1897.00 1584379920 827,818
Uralkali 247.38 1.64 249.97 242.00 1296745355 5226840
VTB 0.05 -0.82 0.06 0.05 1153480380 20972660000
SurgutNG etc. 19.40 -2.11 20.04 19.38 880 485 426 44926800
Severstal 383.90 0.73 390.20 381.30 648 945 537 1685430
SurgutNG 27.23 0.66 27.44 26.86 624 269 998 22964300

Data provided by OAO “Moscow MICEX-RTS Stock Exchange”. Redistribute the information only with the permission of “the Moscow stock exchange”

Baumgartner skydive record holder will stand trial

<- First paragraph ->

Read: A jumper from South Africa set a record for high-speed flight.

turns out 2 years ago on a highway near the football stadium in Salzburg champion fought with the Greek truck driver. Stuck in traffic, the man gave a fight with the owner of cars. Felix Baumgartner tried to stand up for the victim, resulting in a Greek athlete and exchanged a few blows, transmit “” The fight then stopped, and after a while the instigator sued Baumgartner.

See PHOTO on.

In April 2012 the first case was heard in the first instance. At the trial of Felix Baumgartner said he would not touch a wounded alien. However, the court, recognizing extremals guilty, ordered to pay material damages in the amount of 1,500 euros. Appeal parachutist consider Nov. 6.

Also: Fearless skydiver reached the speed of sound in flight.

As reported in “Pravda.Ru”, his recent jump Felix Baumgartner immediately broke three world records: the highest flight in the stratosphere, the high-altitude parachute jump and fastest free fall. Austrian became the first parachutist, who broke the sound barrier. As stated on the website of the organizer jump, Baumgartner climbed to an altitude of about 38.6 kilometers in space capsule attached to a balloon.

entire flight took about 10 minutes, and the free fall lasted 4 minutes and 20 seconds. It is estimated that 48 seconds after the jump rate of fall Baumgartner exceeded 1193 kilometers per hour – the speed of sound in normal conditions. The maximum speed that the athlete has been achieved during the fall, was about 1342 kilometers per hour, according to “Khakassia-Inform”.

On the main events, see the News Release

Felix Baumgartner: jump from space

Pravda.Ru – The World

Premarket: Market takes a break


On Wednesday, October 31, the Russian market has increased slightly MICEX index rose by 0.28% – to 1425.7 points, the RTS rose by 0.37% and reached 1435.38 points. Trading volume on the Moscow Stock Exchange on the day up 447.75 billion rubles. Asian stock markets on November 1 Unity dynamics is observed.

This is a partial text of the news. Read more on the website Quote.Ru

Finance – Rambler-News

U.S. will take to the relationship

After a lull

all the attention will be focused on the publication of statistics from the U.S.

Following the main trading session, the MICEX index rose by 0.28% to 1426 points, while the RTS index rose 0 , 37% to 1435 points. Growth leaders were TGK-9, Novatek and Aeroflot, and in the fall of leaders – AvtoVAZ, IDGC of Center and Volga Region and IDC prefecture Surgutneftegaz.

Surgutneftegaz sends regular dividends on preferred shares of about 7.1% of the net profit, so it is a significant reduction in negative for the company’s shares, which are attractive to investors relatively high dividend yields of securities of other companies in the sector. My forecast dividend per preferred share is 1.67 rubles., Which implies a dividend yield of 8.6% based on current prices. For comparison, last year the Surgutneftegaz paid by 2.15 rubles. per preferred share, and the yield exceeded 12%. The target price for ordinary shares of 30.63 rubles., Preferred – 18.38 rubles.

Among corporate news that will be of interest to investors today, it is worth noting a few.

Rosneft will issue statements for the first nine months of 2012 according to IFRS. Rising oil prices, coupled with a reduction in export tax will have a positive impact on EBITDA and net profits of oil companies. Negative impact on the financial performance of Rosneft will weaken the ruble. According to my projections, the company’s revenue in the 3rd quarter of 2012 will amount to 732.4 billion rubles., That would be 2% higher revenues in the 2nd quarter. EBITDA increased by 72.4% to 153.4 billion rubles., Rosneft’s net profit will rise to 101.9 billion rubles. In the first nine months of 2012, Rosneft will show revenue growth of 12.3%, to 2.1984 trillion rubles. The company’s EBITDA fell by 18% to 407.4 billion rubles. Net income decreased 24% compared to the same period in 2011 and reach 205.9 billion rubles. Rosneft improvement in the 3rd quarter of 2012 compared to the second quarter may have a moderate positive impact on its shares. The target price is 288 rubles.

possible that Sistema place in London recently repurchased under buyback of paper. However, in the present moment and the shares and GDRs are traded systems near its lows, so the share offering can not be successful. Rather, funds are raised for further mergers and acquisitions. You can also assume that the additional issue can be placed to stabilize the liquidity system, which may be forced, as a guarantor, to repay their debts “daughter┬╗ – SSTL. Considering not a very large amount of additional issue, we expect a neutral market reaction to its approval. Price target on shares of Sistema – 33.81 rubles., However, in spite of the significant growth potential, while it is better to sell the paper to resolve the situation with licenses SSTL in India.

Today, November 1, will be very interesting in terms of the release of macroeconomic statistics, which can have a significant impact on world markets. Let me remind you that the hurricane “Sandy” in the U.S. amended the schedule published in the U.S. macro data. In particular, scheduled for Wednesday output indicator ADP employment for October will be released today. The consensus forecast for this indicator is 135 thousand, while a month earlier it was at 162 thousand will come out and other data from the U.S. labor market. So, will be published of the volumes of initial claims for benefits for the unemployed, and the number of people already receiving it. I recall that in September, the unemployment rate in the U.S. has decreased markedly to a level of 7.8%, and a further significant improvement in the job market is not expected.

in the U.S. will also be published a series of data which will shed light on consumer demand in the world’s largest economy. This is the index of consumer confidence, which is expected to have grown from 70.3 points to 72.5 points in October, as well as data on sales of passenger transport and an index of comparable sales in retail outlets. The improvement of these indicators could be an indirect confirmation of the effectiveness of another round of quantitative easing and provide substantial support for the stock market.
will be released and the data on stocks of gasoline and distillates from the EIA. Distillate stocks are expected to decline and a slight increase in gasoline stocks. Decline in oil prices during the hurricane in the United States, which took place against the background of reduced demand for raw materials must come to naught, as the residents of one of the most populous U.S. territories will be returned to normal. Brent is a slight increase was observed yesterday. Morning, November 1, Brent reduced price of $ 107.4 per barrel.

As of 8:00 Asian markets show moderate growth after the publication of the fact that industrial production in China rose for the first time three months. Japanese Nikkei gaining 0,36%, Hang Seng in Hong Kong is growing by 0.6%, while China’s Shanghai Composite – on 1,77%. Futures on the S & P down 0.25%. Market sentiment from Investkafe – “neutral” score of 4.5.

Apparently, Russian trading floors expects the decline at the open. During the day, all the attention will be paid to the statistics coming out, which can give rise to growth stocks.

Investkafe – Top analytical publications

“Do not universal and equal”

“head of the Russian Central Electoral Commission, known mainly because it helps to deceive Putin Russian citizens, criticized the U.S. electoral system,” – wrote in his blog at The New York Times, Andrew Rosenthal.

“U.S. election – not straight, not universal, not equal” – quoted by Vladimir Churov.

“Always a little funny when Russian leaders have criticized the U.S. for democracy” – says Andrew Rosenthal. During the Cold War, every time the United States condemned the human rights violations in the Soviet Union, the Kremlin starts talking about Leonard Peltier, of Dakota Indians, sentenced to two life sentences for the murder of two FBI agents.

is possible that the Peltier convicted unfairly, but you can not compare it, how to deal with them and with the prisoners of the Gulag, said the reporter.

“It is easy to dismiss comments from Churov as Hannibal Lecter next lecture on how to behave at the table” – ironically Rosenthal. There is a big difference between the American and Russian elections, but that does not prove that Churov completely wrong, as its author. He cites as an example the case when officials in Iowa and Texas threatened prosecution OSCE observers, if they approach too close to the polls.

Churov rights is that the electoral college – not the best way to choose the president, and the American election laws “inconsistent and archaic,” says Rosenthal.


Russian financial system stability is bad / / Monitoring / rating

World Economic Forum (WEF) released yesterday, “Statement of Financial Development Report 2012.” In the ranking of the world’s financial centers of Russia in comparison with 2011 has kept low 39th place out of 62 possible. Russian authorities’ efforts to transform Moscow into the global financial capital, analysts WEF again appreciated.
However, against the background of the “stagnation” of global finance and no significant change at the top of the rankings. Top 5 in comparison with last year’s study has not changed: Hong Kong, USA, UK, Singapore, Australia. According to the authors, the financial systems of countries around the world have entered the phase of stagnation, which makes recovery of the global economy. Some improvements are observed only in the banking system – in terms of capital adequacy ratio of non-performing loans to total issued.
Ranking of countries with the most developed financial systems and capital markets, the WEF is the fifth year. With its creation included about 120 different factors of financial development. Among them – the business and institutional environment, financial stability, market conditions, access to finance and the development of the banking and non-banking financial services. The maximum score for each indicator – seven points, the mean value and determines the final score and rank. Score to the leader, Hong Kong, – 5.31 points, Russia – 3.3 points. The situation in other countries except Russia BRICS is different. China for a year lost four positions in the ranking, dropping to 23rd place from 19th, Brazil dropped two positions – up to 32 th place, India – four (40 th place), taking place next to the Russian Federation.
According to the authors, Russia still does not provide the required level of access to finance for business (53rd place on this indicator). Relative strengths of the Russian financial system identified by such factors as the business climate (32 th place), financial markets (35th place, especially the stock market, a situation which has improved), non-banking financial services (8 th) securitization (third place) and mergers and acquisitions (7th place). To the chagrin of the Russian authorities, the weaknesses attributed unfavorable and deteriorating all the regulatory environment (59th), the development of the banking sector (58th) and the relative instability of the financial system (41-th place in the first place because of the situation in the banking sector).

By the end of the U.S. session posturagannoy of optimism has disappeared

By the end of the U.S. session posturagannoy from optimism no trace 01.11.2012 09:35

Stock trades in the U.S. on Wednesday, October 31 – in the first session after a long break in the exchange, caused by the passage of Hurricane “Sandy” – ended mixed dynamics in the leading index. Due to the bad weather in New York, many companies have postponed the publication of financial results.

October 31 published data Managers Association in Chicago on business activity index in October 2012. and statistics from the U.S. Department of Energy (US Department of Energy) on commercial stocks of crude oil for the next reporting period.

During the session lower prices characterized by high-tech companies and companies operating in the health sector. Quotes of pharmaceutical giant Pfizer dropped by 2.2%, contributing to a reduction of the index of “blue chips” Dow, a computational framework that includes the company. Shares of Hewlett-Packard office equipment lost in value 1.7%.

played Exchange reports carmaker Ford Motor (quotes rose by 8.24%), chip maker AMD (-0,97%) and retailer Home Depot (+2,23%). Retailers, as the airline or hotel business enterprise, were severely affected by the hurricane. On the first day of the exchanges investors pay attention to the representatives of these sectors to assess the impact of “Sandy” in the business environment.

media giant Walt Disney shares fell 1.9% on the background information that the company has agreed to buy Lucasfilm, which released the legendary “Star Wars.” Combined transaction (cash + stock) Walt Disney cost of 4.05 billion dollars in cash. Compensation for the rest of the demand from Walt Disney production of 40 million new shares.

increase in value of shares of public companies and the financial sector contributed some “balancing” exchanges.

Prior to the opening of the trading session announced its financial results and the American automobile giant General Motors (GM). Performance of the company exceeded forecasts of experts and of GM shares jumped in price by 9.54%. Meet market expectations and financial report MasterCard (the operator of the payment system of the same name): quotes of the close of trading gained 1.76%.

The outcome of the October 31, the Dow Jones fell by 10.75 points (-0.08%) – up to 13,096.46 points, the NASDAQ fell by 10.72 points (-0.36%) – to 2977.23 points, while the S & P gained 0.22 points (0.02%), rising to 1412.16 points.

Submitted RBC news