The H1 figures on depositary receipts were published by Citi which calculated that the capital raising issues were up by 178% from the prior year 1^st half to $1.5 trillion, an astonishing increase showing that speculative spirits are on the rise. The total includes new issues of Global Depositary Receipts here in London, as well as issues in the USA.

While trading was up by volume by about 4% y-o-y, it rose 18% by value to $1.8 trillion, barely more than the new issues volume. Almost all the increase was in London where the most traded DR in the world has its home. That is Gazprom, the Russian pipeline company which has been in the news. It also trades on the pink sheets in the USA as OGZPY, but this is a minor market. Trading in London was also boosted by exchange factors, the rise of sterling. In all mostly Russian DR's in London accounted for most of the volume increase. Among the other top 10 Ruskaya shares was Sberbank and VTB Bank, number 4 and 5 by volume.

Brazil was another major trading source, with Petrobras and Vale number 2 and 3, and Oi, of which more below for paid subscribers, no. 10. Finland was the home of the only developed country stock among the top 10, Nokia, which is cheap but did produce huge volumes and ranked 6^th.

The quality of issues has not kept up with the volume. There are now again over 1600 unsponsored depositary receipts, as before the global financial crisis hit. But the market has shifted geographically. Now 46% of the volume is in Emerging Middle East and Africa shares; 29% in Latin America; and 25% in Asia.

The new issue market was more discerning with China raising the most money at 45% of the total followed by Russia with 14%. The oddest new issue was Georgian (the country, not the state) where JSC TBC Bank raised $263 mn. At least Georgia is a friendly country, unlike Russia and China.

Today's inversions news is a takeover for privately-held Russell Stover, a US candy-maker, from Lindt & Spruengli. Tax-evading chocolate by Christmas! The execs at RS presumably have negotiated for posts after the Swiss take over. The advising investment banks make money with the deals. But are these tie-ups good for the economy overall?

More follows from Portugal, Israel, China, Russia, Britain, Japan, Ireland, Switzerland, Finland, and The Netherlands including a share sell.

*Chris Loew writes:

Sell Tsumura (JP 4540), Japan's leader in "kampo" or traditional Chinese herbal medicine, which is down about 12%. Though well run and profitable, Tsumura net profit will shrink in new fiscal year.
Sales rose 4.4% in FY2013 and can grow further as 4540 promotes studies to confirm herbal safety and efficacy. Traditional herbal medicine lack such data, so many doctors avoid prescribing them. Tsumura also holds seminars to teach doctors about using kampo. Some 80% of prescribing doctors are in individual practitioners who offer kampo for mild problems, as a placebo. Tsumura aims to indoctrinate hospital interns so as to win real prescriptions from professionals who dislike prescribing pseudo-scientific treatments.
Profits fell 2.9% last FY because the price of materials imported from China rose. Poor growing weather, increased local demand, speculative buying, and a weaker yen pushed up costs.
Tsumura cured some of the impact with offsetting improved productivity, mainly granulating drugs in two 12-hour shifts instead of three 8-hr ones, and increased use of robots handling factory material. It is also increasing its own herb farms to ensure steadier supplies.
In the last FY (to Mar. 2014), net income rose y-o-y by 17.4%, partially via one-off profitable securities sales. Tsumara forecasts net profit will fall 34.6% in the current FY, and while it promises a steady dividend, the drop would badly hurt its stock price. We have already qualified for this half-year's payout, so let's exit Tsumura before this prediction plays out.

*We own Vale and Nokia among the top 10 traded ADRs. We also own one of the best performing ones, Teva, up 105% in H1, having sold half during the boardroom squabbles last year, violating my old rule of Neva sell Teva.

*I swung for the fences with Portugal Telecom buying 3000 at $2.61-2, 1000 at $2.75, 1000 at $3.09, and 1000 at $3.13 (working backward in time). Over the weekend we learned that Otavio, the Marques of Azevedo, a powerful Brazilian magnate from Minas Gerais, stepped down from the PT board in order to get out of its stock, not as I wrongly wrote to be the fall guy. Under Brazilian law, stock sales have to be reported if they occurred during the lockup period for a merger, in this case between April and the end of this month. Without naming names, Brasilia revealed that some $20.5 mn worth of Oi shares, the PT target, had been sold in June.

Lockups are supposed to prevent owners of a stock in a takeover from arbitraging but apparently they are not illegal in Brazil. But once the Marques had stepped down he could further sell his PT stock without even having to report it to the authorities. This is an example of how rules apply across borders, since US and Portuguese law would have blocked the sales and his resignation.

While obviously I was enthusiastic for PT too soon, I think that the dynamics will work in our favor now. The Marques has no more stock to sell and I suspect his fellow-board members are not bailing out. If what happened in Cyprus is a precedent, and it may not be given that state sector elements are well-positioned at both PT and Oi, the holder of short-term notes from Banco Espirito Santo may have to accept a discounted return of its investment.

Muddying up matters further, the BES euros 2.1 bn capital increase in May was allowed by the Lisbon authorities, giving a good-business seal of approval to the bank despite its offshore peculations in Luxembourg and Angola, some of which the CB knew about.

Portugal's premier Passos Coelho affirmed today that Lisbon will not “bail out” BES. Another BES family member has now also resigned from its board, after the CEO stepped down earlier. Now the Bank of Portugal, the CB, has ordered the total bank top magement to be replaced. I am not yet ruling out a bailout by the great and the good, evenb without the Lisbon CB. The IMF and even the ECB may be called upon to back a purchase of BES since the deficit-laden holding company is not in Portugal but in Luxembourg, over the border in the original European Union.

A private-sector deal with a foreign bank, probably Credit Agricole, a participant in the bank's capital already, is now likely. The bank held at close-June euros 1.18 bn (or $1.6 bn) in loans to the Luxembourg family group, which controlled the bank, now unlikely to be repaid.

Another outcome might be the arrival of a takeover bid for PT, perhaps from Carlos Slim who is being forced to sell assets in Mexican telcos, but not in Brazil. Slim famously loves a bargain, and PT in my view is one now, especially if the Brazil deal goes flat since Slim has assets there already. Our Mexican source Eduardo Garcia says that Slim Friday indicated that the placement of his Mexican telco assets to be divested at govt order will include Brazil, but he did not talk about telcos there, only of energy, mining, and construction. Of course he is unlikely to tip his hand to www.sentidocomum.co.mx and the rest of the press. He had turned off his Blackberry during the interviews.

*The market brushed off news that Compugen had received the first $1.2 mn in milestone payments for 2 checkpoint anti-cancer drugs in preclinical study from Bayer AG last week following up the $10 mn paid earlier by the German firm. Today CGEN revealed that its tumor-associated microphage (TAM) platform had found 4 more immuno-dilatory proteins in addition to the ones in the Bayer deal. TAM in Hebrew means whole or full, and I feel about CGEN that we have been graced fully. It uses in silico (software) to find interesting proteins for blocking cancer and auto-immune diseases. Companies like Bayer want to save money by researching potential drugs which can act right against diseases.

*A combination of technical and fundamental analysis has led Timothy Lutts, editor of Cabot Stock of the Month, to cut Yandex to a sell. The tech side is that the share is stalled at about $36, its 200-day moving average. The fundamental side is that everyone now hates Russia, whereas he expected it would gain in approval after the Sochi Olympics. Since we do not only buy one stock a month we will still stay in YNDX. It is Dutch-incorporated and also operates in Ukraine and Turkey. My main reason for sticking with the share is that during periods of policial havoc, applying to all 3 countries, people use their search engines and social networks more rather than less. Mr Lutts' trade call was reported by Nancy Zambell in the Lutts-related newsletter, Dick Davis Digest, this morning. So even if you do decide to exit, do not exit today.

*Over the weekend when Tel Aviv was open, Delek Group revealed that the latest estimate for the size of the Leviathan offshore gasfield has increased 16% to 21.9 trillion cubic feet. As is already known, BG Group, beaten down BRGGY sold, is aiming to buy gas for liquefaction and supply in Egypt, where it has shut-in plants. Under Israeli law, so far, only 40% of the gas may be exported although the amounts found vastly exceed Israeli needs. The new estimates, as before, are from the respected Netherland, Sewell firm. Gas gives Israel some clout with Jordan, Egypt, and maybe even Gaza, assuming they are run by rational people, clearly not the case for Gaza.*

*Worried about Brazil World Cup enthusiasm, we sold our AmBev shares last year. Now the market is chattering about a merger of its parent, Anheuser Busch In Bev with SAB Stella Artois. Surely this would amount to a suds monopoly in many countries which would water the workers' beer? I think this merger is more unlikely to be consummated than the PT-Oi linkup.

*UBS, apart from advising chocolate mergers, also bought into another source of consumer growth, gambling, with a renewed 5.37% share in the stock of Paddy Power plc. Did PDYPF, the house, gain from the German world cup victory, I wonder? Do the Swiss know something more than we do? According to Voltaire, if you see Swiss jumping out of window, do the same, as there must be money in it.

*Zurich Financial meanwhile is buying $2 bn in so-called green bonds, definition uncertain. These will amount to less than 1% of the insurance company's fixed income-laden portfolio and will be denominated in dollars (its currency of account), euros, pounds sterling, and, of course, Swiss francs. Green bonds finance energy-saving and environmental projects but nobody knows exactly what the rules are. ZURVY.

*The terms of the Covidien takeover by Medtronic have been released. MDT will pay in cash and its own stock $93.22 per COV share of just under $43 bn in all. COV was only 1.8% below this price at Friday's close. Short-sellers have been wiped out. COV is restating its 2013 results with an 8K revision to our SEC, an indication that my initial ill-times half-sale of COV stock was not completely irrational, only mostly so. You may want to sell to get cash rather than MDT stock. I have sold my personal holding in MDT since this game began, mainly because that is what you do in a takeover, since it will be replaced with new shares. But my situation is unique as I owned both before the deal hit.

*A Chinese court has confirmed that the trial will be in camera for the two investigators hired by GlaxoSmithKline to find the person who acted as a whistle-blower revealing GSK corruption to get prescriptions. The pair, a married couple, are a former British journalist and his Chinese-American wife. They also got involved in trying to find out who had filmed the sex tryst of the head of GSK in China. GSK is a maker of ''ethical drugs''. However denying consular support to foreigners on trial is bad form, however stupidly they behaved.