Scotland turned out to be canny and not so brave. The same can be said for Alibaba (BABA), which came out at the top of its estimated range, but not a penny higher and promptly rose ~40% on its 1st day in public trading.

Another American Petroleum Institute record for US petroleum exports was shattered in August, which bodes ill for Scottish and Russian hopes to push up prices for European supplies. US exports at 4 mn barrels/day were up 7.5% from August 2013.

Another problem in the oil patch arose. To meet tougher US regulations for Keystone XL—if it is ever given a green light by the US Department of State—costs will go up 85% to $10 bn, according to TransCanada Corp., its builder. XL seeks approvals needed to build the pipeline to take Athabasca oilsands crude via Nebraska to link up with the US Gulf Coast.

To quote my favorite UK poet, Robert Burns, “the best-made plans of mice and men gang oft agly”. He was spared becoming a mere Scottish poet yesterday.

The European Union attempt at quantitative easing depends on banks taking up its offer of cheap money and lending it out. But the uptake has been below expectations. Similarly, Japan is having trouble pushing a string to get loans to be given to businesses for expansion rather than pay rises.

The latest Investor's Digest of Canada reprinted an article from this newsletter about a Canadian bank. Given that they get all the analysis Canadian brokerages produce, and many US newsletters like mine, I am very proud when they decide my write-up is the one to use.  (More on this below)

Since we stayed up late to watch the poll results come in, Friday's blog was short on macro and long on stock information. More follows from the United Kingdom of Great Britain and Northern Ireland, China, Brazil, Portugal, Italy, France, Denmark, Belgium, Canada, Bermuda, Sri Lanka, Kenya, Bangladesh, and Saudi Arabia.

*GlaxoSmithKline (GSK) was found guilty of bribery by a Chinese court and fined £300 mn, about $490 mn (the pound is all over the map today after the Scottish results.) While the largest fine ever imposed in China, it was below what experts had feared would hit GSK. It will pay from its £4 bn cash reserves this quarter. Its former China chief was sentenced to 3 years of prison but that was suspended so he will not be locked up.

GSK now faces further investigations in the US and Britain over corruption to garner sales in China and elsewhere. Today's Investors Chronicle's Mr Bearbull wrote that GSK is a “mature economy” share with an “aging population.” He writes that its “bosses can't bring themselves to admit that the good times have gone.” GSK stock is up today.

*In his last press conference before being replaced, the European Union antitrust chief indirectly said that the body will approve Liberty Global plc's takeover of Dutch cable firm Ziggo NV. Joaquin Almunia said “I don't expect any other negative decisions until the end of October” when he steps down.

The John Malone co. got into our portfolio by taking over Virgin Media. Today's Financial Times reports that LBTYA is busily trying to dampen expectations it wants to take control of ITV, of which it now owns 6.4%. Liberty CEO Mike Fries more or less said a full takeover is not on at an investor conference, and analysts point out why this is likely. First LBTYA stock took a hit when it bought the ITV stake in July. And ITV earnings depend on British broadcasing and on-line advertising, not “content” which Malone is reputedly after. Moreover the price of ITV would hit other deals, as it would cost about £8.6 bn of the £20 bn Liberty cash pool. ITV is being sold by another old robber baron, Rupert Murdoch. LBYTA is up 0.69% on the news.

*Also in today's FT, Richard Waters comes up with a solution for frustrated buyers of Alibaba: Buy into Tencent (TCEHY) instead. He writes:

“On a growth comparison, Alibaba at 55% over the past 6 mos has comfortable topped Tencent's 38% and is on track to overtake it. But Alibaba's operating profit margin has been slipping as its investments mounted. While the premium earnings multiple over Tencent at the IPO price looks deserves, a big lift in the aftermarket would quickly make Alibaba look expensive.” We own TCTZF. BABA shares rose 36% from its IPO at the opening today, $92.70 from the IPO price of $68.

*Vivendi (VIVHY) agreed to sell to Telefonica  its Global Village Telecom operation in Brazil for $9.3 bn. TEF will fold GVT into its Vivo brand mobile phone group to form Telefonica Brazil, in which Vivendi will have a small stake. Vivendi also opted to take over TEF's 8.3% of Telecom Italia which reportedly is interested in buying into the deal between Portugal Telecom SGPS and Oi. Its canny chief, Vincent Balloré opted to buy Italian rather than get more TEF stock. PT is off 2.2% today because this eliminates Vivendi from the Brazil mix.

But it makes it easier for Oil to join up with America Movil (controlled by Mexico's Carlos Slim Helu) to buy into TIM Participações of Brazil. Slim has been ordered to slim down his Mexican land and cell telephone system so he controls less than 50% in Mexico, vs 70% now, and he is looking for a way to spend the proceeds, preferably on a bargain. He famously likes bargains.

*NovoNordisk (NVO) won European Union approval for its combo of its Trebisa long-acting insulin and its Victoza which boosts the GLP-1 hormone that regulates insulin production in the body. Xultophy by name, the combo will be delivered in an injector pen early next year. The product beats rivals in taking down baseline blood glucose and is a potential blockbuster for NVO with a potential market of $1 bn/yr, according to FierceBiotech, a newsletter—if it gets US Food & Drug Administration approvals.Victoza alone has a $2 bn market share already.

It is resubmitting Tresiba to the FDA after it was turned down because of cardiac risks for which NVO is now testing. I reported on weekly dulagiglutide, a rival from Eli Lilly (LLY) Thursday. NVO CEO Lars Sorensen told the newsletter that the Lilly Trulicity drug “is slightly inferior to Victoza.”

*Galapagos' rheumatoid arthritis follow-on phase III trial of GLPG 0634 has begun of patients enrolled in the earlier phase I and II “Darwin” trials. About 90% of patients in Darwin 1 and 2 are being enrolled to receive more of the selective JAK1 inhibitor by their doctors after the first 6 mos., presumably because it works. This is the part of the Belgian drug research entity which employs our former Italy-based biotech maven. Darwin stands for Drug Against Rheumatoid Arthritis with Selective JAK 1 Inhibition. Darwin I tested one daily dose and Darwin II two. JAK1 stands for Janus kinase I, a human tyrosine kinase protein needed for cytokine signalling which has no other name than GLPG 0634.GLPYY.

*The Investor's Digest of Canada article (Sept. 12) was headlined: “Positives for BNS Are Global In Nature” and quoted me as saying Canda's “serious regulatory system” is how I want to invest in Latin America. It also quoted my writing that banking net income was up 8% over last year but was “nipped by higher expenses, mainly for performance-linked compensation to the bankers and tech investments.” They also quoted me as saying Canada profits “were essentially flat” as car and credit card receipts were up but offset by “lower reversals of provisions on commercial and retail loans reflecting higher loss rates". In a nutshell, Canadian expenses grew faster than business. BNS is Bank of Nova Scotia.  BNS  is one of my variant ways to invest in Latin America via a well-regulated market outside the region. I learned from Mark Mobius to watch out for stocks called Banco in South America, unless they are Spanish as is Banco Santander.

*Eduardo Garcia reports from Mexico City that Zurich Insurance has opened 3 client service centers in Mexico for auto and home insurance, business coverage, and other policies. Eduardo runs www.sentidocomun.co.mx which publishes daily, with which we trade.

*Your editor visited Doug Young's China Business Blog to read up on Alibaba and instead found out why our Austrian informant pulled the plug on Canadian Solar. We sold CSIQ after it was dropped by Oeko-invest which initially recommended it. Mr Young reported that it is investing in a new RMB 5 bn (C$800 mn) solar power fund to invest inside China, Sichuan Development Investment Mgm. He estimates that CSIQ is being required to pay up abut 25% and maybe more, an amount equal to its entire cash reserves. Pressure from China is also being brought to garner money for similar local partners of other solar funds, but as they are less profitable, the amounts they have to pay are lower. Mr. Young warns:

“Short-term self financing works well under health economic conditions in mature markets” and “has served Canadian Solar well in Canada.” But then he warns that the experience of Suntech Power, the first of the Chinese photovoltaic listed companies, now bankrupt, is an example of the risks. (We sold STP two years ago at a loss.) Mystery solved. I listened to Max Deml because he tipped CSIQ in the first place and watches solar stocks as part of his beat in Vienna. 

*Naibu Global International PLC (NBU:LSE) is up another 9%+ today, hovering under 27.5 pence per share after hitting a low of 17.25 at yesterday's opening. It is now selling at a p/e ratio of 0.50x earnings (it earned 49.25 pence in the last quarter.) It sells branded clolthes and sports shoes to adolsescent Chinese and other young people there under its Holiday Leisure brand, mostly via independent regional distributors and independent branded stores. NBU launched less sporty lines: Vital Campus for students, and Urban Business Traveler (including luggage.)

It ran into trouble hiring workers in its sneaker factory and had to outsource supplies from contractors which cut its profits in Q2, but it is opening an inland plant from its Fuzhou HQ to find labor. Its CEO, Huoyan Lin, via a Virgin Island trust, before the stock collapse owned 52.55% of the shares out

*Validus Holdings will present at the Financial Services Conference at JP Morgan Securities on Sept. 30. VR, a reinsurance firm in Bermuda, was recently tipped by Harry Geisel.

Fund news:

*Investor AB, the Sweden-based Wallenberg-linked investment vehicle which we own in place of a Scandinavian fund, as there is none, today bought from Fiskars Group most of the shares of Wärtsilä. Wärtsilä of Finland is 180 years old. Now IVSBF is its largest shareholder with just under 22% of its capital. This euros 5 bn sales company sells power plants and vessels for the energy market. It will pay euros 639 mn this year and further sums depeding on performance over the next 3 years.

IVSBF chairman is Jacob Wallenberg and through the Skandivaska Eniskila Bank and other foundations in the SEK group controls the group. Some of the controlling investors are pension funds of companies in which Investor invests—this is a closed loop.

*Morgan Stanley Institutional Frontier Fund, which we and many readers still own despite its having been converted into an open-end institutional fund, reported on its H1 and holdings. It is the only way into stuff I want to own, be it John Keells, the conglomerate in Sri Lanka; Grameen Phone in Bangladesh; or Safaricom in Kenya. It owns slews of  Saudi Participation notes which will turn into common shares under the market-opening plans of Riyadh. Its largest stakes are:

National Bank of Kuwait;

Nigerian Breweries;

Gulf International Service (Qatar);

YPF SA (oil drilling in Argentina);

Lucky Cement (Pakistan);

United Bank (Pak.);

Guaranty Trust Bank (Nigeria);

Emaaer Properties (UAE);

Qatari National Bank

and where Dracula keeps his money,

Banca Transilvania (Rumania.)

Its largest country positions are in Nigeria, Pakistan, Kuwait, UAE, and Saudi Arabia. When traded it was FFD and we own the mid-performing tranche, the class A, with lower fees and expenses than the pro market classes. It did not make gains in H1.

Friday in London trading China Chaintek managed to unhook from the perils of  Naibu with which it shares nominated advisor and broker Daniel Stewart. CTEK rose 14.86% in London trading today making it the best performer on the LSE. NBU also rose but that was perhaps sectoral and British retail boomed post-referendum.