After Martin Luther King day there is a lot of catching up to do, because world markets were open yesterday. News and guidance did not halt because of the holiday.
Today bitcoin lost about 20% of its value with other crypto-currencies also down. Meanwhile the US dollar picked itself up from a 3 year low against other major currencies. Brazil’s index hit a new high and the Dow moved over 26,000. There was a l
The big shock explaining the rush into greenbacks and reais was a supposed dividend aristocrat, Carillion, a UK government contractor which upped its dividend for 16 years in a row, filing for bankruptcy. This was the result of its debt to its own pension fund and off balance sheet liabilities coming in at about £900 mn it does not have.. Its largest clients were parts of the UK public sector where it bid aggressively for contracts which lost money.
The company, formerly called Tarmac, issued upbeat forecasts of its results until the middle of last summer. Until last year, its stock was steadily backed by the British analyst “consensus” as it sank deeper and deeper into debt, according to today’s Financial Times.
Inevitably, one of our non-British companies was among those left unpaid. We have news from Spain, Canada, Britain, Israel, Brazil, Netherlands, Switzerland, Australia, Ireland, China, Hong Kong, Germany, India, Australia, South Africa, Zambia, Kenya, Japan, China, South Korea, Brunei (a first), Senegal, Iraq, and Argentina. One of my stock tips was picked up by Wall Street’s Best Investments today.
Banking
*One victim of Carillion was Banco Santander, a heavy-hitter in Britain, which took provisions for bad debt of £47 mn for the first 9 months of 2017 vs only £21 mn for the prior year 9 mos. SAN rose despite this.
*Among the 9 banks the Colorado Fire & Pension Association is suing for conspiracy to fix Canadian interbank offer rates between 2007 and 2014 is Bank of Nova Scotia, BNS. It was tipped by Morgan Stanley as neutral with a C$95 target price. BNS was the stock I picked for Wall Street’s Best editor Nancy Zambell because it gains whether ADRs do well or not, being a creator of hedges.
