Thursday, December 29, 2011

Huge Natural Gas Find for Noble in Cyprus. Turkey Threatens to Block Development. Isreal and Cyprus to Become Energy Powerhouses.

For those looking deeper into the oil and gas industry, Cyprus has announces a massive natural gas discovery in its southern waters. Great news for the tiny nation state, and for the European Union as it desperately needs to diversify its energy imports.

The Wall Street Journal has reported that the find amounts to 30 years of natural gas use for Cyprus, and that it is attached to the 16 trillion cubic feet of gas located in Israel's Leviathan Field. The discovery was made by America's Noble Energy (NYSE: NBL), and it is sure to be a huge boon for the economy in the region.

Ethnic tensions in the region, however, are sure to ignite as the Turkish north and Greek south of the island nation will dispute over new found riches. Turkey does not recognize the independence of Cyprus and it has dispatched a naval escorted research vessel to conduct further tests in the region.

Cyprus' new natural gas find, currently known as "Cyprus Block 12," will help to make the country a net energy exporter to its European Union neighbours, and probably support the Greek-Cypriot south in its continued efforts for independence.

Thursday, December 8, 2011

Bell Announces Share Buyback and Dividend Increase. The Company is Flush With Cash and Contributes Extra Money to DB Pension Plan.

Great news for Bell Canada (TSE: BCE) investors as the company announced an increase in its dividend by 5%, and a $250 million share buyback program.

The buyback program will be paid for with existing cash reserves. In addition, the company will make a voluntary $750 million contribution to the company's defined benefit plan for its employees. This will ease the burden of its defined benefit pension plan in future years. To be sure, over the last 5 years, the company has been gradually relieving itself of its Defined Benefit plans with the introduction of more Defined Contribution pension plans for its employees.

The defined contribution pension plans require that employees select from a number of investment choices and, though BCE contributes money to the plan, take responsibility for their own retirement savings. With populations living longer, and many workforces shrinking, defined contribution plans help employers save money by relieving them of the responsibility of caring for their employees into their old age.

With its dividend still above 5%, and the company flush with cash, BCE remains a good investment for many individuals in today's marketplace.

Full Disclosure: Matthew J. W. Clarke owns or indirectly controls shares in BCE.

Apple Faces Anti-Trust Suit Over its iBookstore in Europe. Microsoft and Amazon Must be Loving This.

A formal antitrust commission has been opened against Apple (Nasdaq: AAPL). The European Commission has filed a suit against Apple for e-book collusion in the European market.

iBookstore, News Corp (Nasdaq: NWSA), CBS (NYSE: CBS), and Pearson's (NYSE: PSO), among others, may have "engaged in anti-competitive practices affecting the sale of e-books in the European Economic Area." This complaint may been brought on by previous complaints by Amazon (Nasdaq: AMZN) about fixed price agreements between publishers and Apple in the region. 

Apple charges 30% to sell e-books through its iBookstore, which leaves publishers with ultimate pricing control, while Amazon prefers to retain pricing control for its own retail site.

How much the technological marketplace has changed since the advent of the first PC Wars between Apple and Microsoft (Nasdaq: MSFT). Where previously Microsoft was always the target of antitrust suits, now Apple has gained enough size and clout in the marketplace to be a viable target themselves. As investment website Motley Fool stated, "Bill Gates must be loving this."

Wednesday, December 7, 2011

Niall Ferguson Discusses Euro-Crisis, the Failure of the Euro, and the Chance of a Chinese Rescue.

Niall Ferguson labels the Euro as a "terrible idea," but one which now has to be saved out of necessity.

In a recent CBC interview, Ferguson notes that the continent's leaders have a deplorable understanding of what is needed to fix the crisis, and that they have made far too many mistakes already to expect that much will come of their efforts this week. Also, he notes that since there is no formal procedure to dismantle the monetary union, there would be inevitable chaos should it unwind. Thus, Germany and France have largely been left holding the bag on the debts of Greece, Italy, Portugal, Spain, and Ireland... and maybe more to come.

He also says that he can imagine a situation where the Euro-Crisis becomes so bad that the United Kingdom, not a current member of the monetary union, could leave the EU altogether.

Some experts believe that China might come in to save the day, but Ferguson claims that the country is so risk-adverse and afraid of being embarrassed by failure, that they will act very lightly, if noticeably at all.  

Wal-Mart and Foreign Retail Barred from India. Foreign Direct Investment Stalled. Is this Best for the Population?

Wal-Mart (NYSE: WMT) and other multinational retailers have been forced to wait even longer to enter the Indian marketplace.

Just last month, the Indian government announced plans to allow foreign retailers the option to own up to 51 percent of local supermarkets in major cities. This was seen by foreign companies as a positive sign of further international growth opportunities in the midst of slowing business and consumer activity in their home markets.

The government initially believed that more foreign competition and investment would result in lower prices for consumers and increased investment in infrastructure development in the country. However, government opposition parties and protesters declared that the expansion of foreign retailers in India would hurt small business and independent family owned retailers.

With the Indian economy slowing, and foreign direct investment in the country declining, many observers have suggested that India needs more foreign capital in order to help rectify a current account deficit.

To be sure, the Indian economy might benefit from increased levels of foreign direct investment, but there is definitely something positive to be drawn from the fact that Indian lawmakers are actually considering whether or not foreign domination of the retail sector will actually be the best thing for the local populations.

Monday, December 5, 2011

BlackBerry Bold 9790 Launch Causes Frenzy in Indonesia. Dozens are Injured... Brand is Exploding in the Developing World.

Dozens of Research in Motion customers were injured as more than 5,000 people line-up and stampede for the chance to buy a BlackBerry Bold 9790 in Jakarta, Indonesia.

The $540 phones were being sold at half-price to the first 1,000 customers, which caused a shopping frenzy. Indonesia is a country of over 240 million people and the BlackBerry is the hottest and most popular smart phone in the country. Its BBM, or BlackBerry Messenger service, is increasing in popularity and currently has 6 million users in the developing nation.

Clearly, though BlackBerry is under heavy pressure in North America and Europe as Apple and Android steal market-share, Research in Motion is doing very well in developing nations. Latin America and Asia are keen adopters of the BlackBerry, and the shopping frenzy, though causing some bad press for RIM management overseas, is a clear sign of a vibrant market and business for the company.

(Full Disclosure: Matthew J.W. Clarke owns or indirectly controls shares in Research in Motion TSE: RIM).

Friday, December 2, 2011

Research in Motion (RIM) Will Fail to Meet Year-End Guidance. Large PlayBook Writedown Costs the Firm Millions.

Research in Motion (RIM), dips below $17 U.S. per share in pre-market trading on the Nasdaq. The company has announced that it will be forced to take a $485 million write-down on the sale of over 150,000 PlayBook tablets and their inventories. It no longer expects to hit its full-year guidance of $5.25 - $6.00, but will still be profitable.

Thursday, December 1, 2011

Loblaws Opens at Maple Leaf Gardens.

Maple Leaf Gardens has re-opened this week. Loblaw Companies Ltd. has developed a flagship supermarket to take advantage of the historic nature and appeal of Toronto's iconic hockey arena.

The store is 85,000 square feet and has an impressive array of choices. There is a 2,000 square foot kitchen, and ACE Bakeries, recently acquired by Loblaw (TSE: L), has an in-house factory to ensure everything is fresh and readily available.

Monuments to the Gardens and historic moments include tributes to The Beatles, Winston Churchill, Wayne Gretzky, Elvis Presley, and the Toronto Maple Leafs.

The company states that they are not sure where they are going next, but this type of conversion is something that they might complete again in another city. To be sure, it is very good press.

Warren Buffet Highlights 7 Stocks for Investment Potential. Two Stocks Stand Out as Different from the Others.

Warren Buffet has highlighted 7 stocks in the last quarter as good investments in the current market climate. Of the 7 stocks, 2 represent substantial departures from his previous investment discipline.

1. Buffet recently acquired over 32 million shares of IBM. Such a large investment in a technology company is a first for Mr. Buffet, who generally sticks to bread and butter stocks like with little need for increased levels of research and development. The prime example here is his long-running, and very successful investment in Coca-Cola.

Buffet's investment in IBM is centred around the fact that IBM generates a lion's share of its revenues from repeat and subscription based maintenance and service contracts. IBM has shed its consumer business (hence the advent of Lenovo laptops in North America), and decided to concentrate on corporate clients that sign long service contracts and are often less fickle to changes in technological trends or fashion.

Buffet has also purchased over 9 million shares of Intel. This stock has a great dividend, high cash flow generation, and excellent prospects in the growth of its server business. Intel's revenue increased 19% last quarter, which is evidence to the company's ability to execute well for shareholders in a difficult economic climate.

Full Disclosure: Matthew J.W. Clarke owns or indirectly controls shares in Intel (INTC).