Emmanuel Macron won the French election and as a result the Tokyo stock market gained 2.3%. South Korea, which votes for a new president also saw stocks rise. However, the defeat of the right-wing populist Marine Le Pen is viewed as bad news for the US Administration and Wall Street futures are down. Paddy Power Betfair, the Irish bookie firm, is up because it finally managed to set the odds correctly on an election, after losing money with Brexit and Trump. We sold it last year as punters cashed in on votes for Hillary Clinton PDYPF allowed before the actual poll date.
So too are French stocks, off 0.8% because now the untested political newbie will have to figure out how to govern. Particularly afflicted are bank shares. The likelihood that Pres Obama two days after Donald Trump won the election warned his successor against hiring Michael Flynn (as two former national security experts told the New York Times) shows how arrogant The Donald is. I hope the more experienced politician Macron will do better.
Sentidocomun.com.mx reports that an Odebrecht official jailed in Brazil admitted bribing a Pemex executive with $5 mn to win a construction contract in Mexico. A corruption scandal has led to the dismissal of a Politburo member and official at PetroVietnam according to AsiaTimes, the first time a Vietnam apparatchik has been ousted for accepting bribes.
Here in the US, bribery is more subtle. The US Securities & Exchange Commission has gone after the seekingalpha.com website for printing “fake news†articles boosting the prices of about 200 stocks with articles that had been paid for by companies without informing readers of the payments. Other publications which engaged in the same undisclosed paid promotions include Benzinga, TheStreet.com, Investing.com, and Forbes. The articles were published between 2008 and 2014, and generated huge share price gains.
The SEC has charged 3 listed companies, two CEOs, and 9 writers for fraud and hit them with fines of up to $3 mn. Ten other individuals are still in the SEC’s sites for stock price manipulation using supposedly independent “free†websites which publish articles for which “writers†were not paid.
The SEC investigation, according to the Financial Times, focused on a stock promotion firm called Lindingo operated by movie actress Milla Bjorn. It orchestrated the publication of 400 articles about 11 listed companies earning at least $1 mn for its owner. Most of the shares promoted were in biotech like ImmunoCellular and CytRX.
We never publish promotional one-sided articles to boost share prices at www.global-investing.com/ We pay our writers and charge our subscribers. There is no such thing as a free lunch.
A warning: robotic computer-run index-tracking exchange-traded funds can be lured into buying pumped-up stocks because their portfolio simplistically tracks an index. Unless human beings look into why there were market moves upward, they may be generated fraudulently. Mechanistic ETFs can be manipulated and lose money for passive investors.
