While there will not be an ADR, Saudi Binladen, a $ 2.7 bn-sales family-owned construction and building materials company, plans to do an initial public offering of about 20% of its shares before the summer heat sets in. The firm is controlled by the Bin Laden family, a local business dynasty, one of whose members created Al-Qaeda. I’ll give it a miss.
Following up on my speculation yesterday on why Mohamed El-Erian quit Pimco, it appears that no fewer than three executives are required to replace the former CEO and co-Chief Investment Officer (shares) at the California bond house. One of them is the new deputy chief investment officer, senior man in share, Andrew Balls, a British analyst, former correspondent for The Financial Times. But his post is not only because of his journalistic experience. He is the brother of the shadow (Labour Party, opposition) Chancellor of the Exchequer, Ed Balls, certainly richer and reportedly smarter. Ed Balls, his brother, has the unenviable task of attacking the rather successful economic policy of the British coalition government in Parliament.
The real issue is succession planning for the head of Pimco, Bill Gross, who is 67. He is the public voice of the investment house, a bond bull, not exactly fashionable today. Pimco needs to lure in investors to its funds. Will Mr. Balls become his heir-apparent?
The Great Wall crashed. On Tuesday afternoon Jan. 21, Chinese netizens could not access the Internet, the largest outage by number of users (over 600 million accounts out.) The outage was blamed on a malicious cyber attack by China’s Computer Network Emergency Response Center. However, censorship-tracker services now say the Chinese language web went down because of China’s Great Wall (to stop politically incorrect web sites) had gotten out of hand. Techies say the Chinese Internet gateway domain servers had been contaminated, perhaps only failing at one point. But because all Chinese-language connections are funneled through the servers to stop porn, gambling, and dissident comment, much of the country went down.
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*Our China play, search engine and gaming site Tencent, was relatively unscathed by the cyber outage compared to some rival services because it has its own internal censorship system in place. More open-ended Internet and telephone services, notably Alibaba, which is plotting an IPO, and Baidu, took longer to recover. But this casts a shadow over the whole China Internet hoopla. TCFZF is a Hong Kong company but it operates mainly in China.
*IAM Gold reported yesterday and as if there weren’t problems enough for the Canada gold miner with lower demand, its all-in 2013 cost of gold production (including finance charges and overhead) came in at the high end of its forecasts, at $1235/oz overall, and at $1,175/oz at the mines it owns and operates. One source of comfort is niobium, a metal in high demand, where sales rose 13% (vs an estimate of 8% for 2013), and prices rose 20%. However, this side product is not yet over 20% of total sales by IAG.
