E Before The Blizzard, Stocks Recover

It’s off to the races.

Before recounting the latest mostly good news from our portfolio, here are good developments from India where, we hope, PM Narendra Modi will tackle political obstacles to his economic reform program rather than just talking about them. India cannot screw up its policies by decree, as China has done lately, because it is a democracy and the Congress opposition party controls its Upper House.

When I was last in China, over 7 years ago with a guided tour, the only way you can visit there, we were taken to lively performances by acrobats, dancers, soldiers, and students in cities we visited.

The music was almost always not Chinese, but from Bollywood movies. When we didn’t recognize the music, a couple of Indian- American doctors in our group pointed it out. Now Bollywood is really in style for China as Dalian Wanda, the huge and acquisitive Chinese real estate and entertainment company run by one of China’s richest men, Wang Jianlin. Wanda will invest $10 bn to build an industrial park in the north Indian state of Haryana. It will be called Wanda Industrial New City, and will cover 5 square miles. This project, to begin construction later this year, is the largest ever foreign investment in India.

What is important is that Wanda has managed to sign up an India state without interference from the country’s obstructive rubber stamp “raj” bureaucracy.

Here is a second sign of the times. India will allow vaccinations against 4 kinds of dengue fever without drug trials because of serious outbreaks, according to India’s Economic Times (quoted by Reuters.) The vaccine, Dengvaxia, is made by Sanofi of France and has also been given approvals in less bureaucratic countries like Mexico and The Philippines. By-passing India’s Drug Controller General, however, is very unusual.

Brazil troubles have hit Keppel (KPELY) of Singapore which halted work on behalf of a sub of Petrobras (PBR) in the sub-salt offshore fields. Its write-downs wiped out Q4 profits at S$230 mn (US$160 mn) and up to 40% of its order book, We told you first when we exited Keppel and I reminded readers of the yesterday before the new hit.

The big lesson of today is not to pay too much attention to analyst downgrades. The market moves according to its own dynamics. More from Singapore, Poland, Canada, the Netherlands, Denmark, Australia, Colombia, India, Italy, Brazil, Britain, Ireland, Japan, Belgium, and Spain. I’m off to the supermarket to stock up for the Big Storm.

Fund Notes

*The Wanda move has boosted our Ascendas India Trust. This REIT runs industrial parks in other Indian cities (Mumbai, Bangalore, Chennai, and Delhi) by 7.75%. It trades as ACNDF on the pink sheets or CY6U in Singapore.

*Standard & Poors has downgraded Poland which hurt our remaining MSCI Poland Investible ETF (EPOL). As with our half sale earlier the reason is Poland right-wing government moves against the independent press and judiciary which violates European Community rules. Sell the rest at $16.0111/sh.

Curiously enough yesterday our website was subject to a distributed denial of service attack from Poland, a country which has problems moving away from its autocratic past under Communism and earlier.

*Macquarie Global Infrastructure Fund (MGU) will pass on to shareholders foreign taxes it has paid, which they can possibly get back from Uncle Sam, or not. I was sent the release in error as it is not the fund we own, Macquarie First Trust Global, MFD. It may mean that the fund managers want to boost their abysmal performance by dividends you have to fight to collect. You have been warned. I am not selling despite the loss of 25.5% last year.