David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Canada's Canopy Growth shares jump 11% on deal to develop industrial hemp farms in New York

    This article by Thomas Franck for CNBC may be of interest to subscribers. Here is a section:

    Canopy Growth has been granted a license by New York state to process and produce hemp with the help of efforts by Gov. Andrew Cuomo and U.S. Sen. Charles Schumer.

    Canopy Growth hopes to establish large-scale production capabilities focused on hemp extraction and product manufacturing within the United States. Depending on board approval of a specific site, Canopy plans to invest between $100 million and $150 million in its New York operations, "capable of producing tons of hemp" on an annual basis.

    The company is currently evaluating a number of sites in the Southern Tier of New York, which will become one of its first extraction and processing facilities outside Canada. Management hopes to announce the specific location within 100 days.

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    Newmont's Goldcorp Gamble May Need "Drastic Surgery" to Pay Off

    This article by Danielle Bochove, Caleb Mutua and Marvin G. Perez for Bloomberg may be of interest to subscribers. Here is a section:

    The cost to create the world’s largest gold company: A 17 percent premium for a $10 billion all-shares acquisition that faces some big-time challenges down the line.

    Newmont Mining Corp.’s deal for Goldcorp Inc. stands in stark contrast to the recent zero-premium merger between Barrick Gold Corp. and Randgold Resources. The key question: Why? In October, Goldcorp shares fell to their lowest since 2002 after the miner reported lower output and higher costs than expected.

    Since then the stock improved only marginally before today. The merged company will have the world’s largest production and reserve base, and the kind of liquidity and diversified assets required to attract institutional investors. At the same time, "Newmont has some difficult times ahead with drastic surgery needed at Goldcorp,” according to John Ing, an analyst at Maison Placements Canada.

    "In the short term and medium term, the deal is not good for Newmont," Ing said in an interview with Bloomberg News on Monday.

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    China's Slumping Trade Adds Pressure for Settlement With Trump

    This article from Bloomberg News may be of interest to subscribers. Here is a section:

    Chinese shipments are already under pressure from slowing demand from top trade partners -- Europe’s recovery is under question, with Germany triggering recession fears, Japan is facing a tougher 2019 and the U.S. itself forecast to see waning growth after a robust 2018. China’s exports to the U.S., European Union, Hong Kong, Japan and Taiwan all fell from a year earlier. South Korea’s exports--often viewed as a bellwether for world trade--fell in December.

    "There is a clear downward trend," said Zhou Hao, an economist with Commerzbank in Singapore who was among the few to accurately forecast a December contraction in exports. "This is not just due to the trade war and tariffs. On top of those, the major drag is slowing global demand."

    While China is no longer as dependent on trade, as the world’s largest exporter, factory output, profits and employment still hinge on demand from overseas. Its domestic appetite also affects production by commodity and machinery exporters around the world. Stabilizing trade is one of the goals the leadership set for 2019, on top of supporting employment, investment and the finance sector.

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    Just Markets January 2019

    Thanks to a subscriber for this presentation by Jeff Gundlach for DoubleLine which may be of interest. The latter half of the presentation, focusing on the high yield market and various debt markets is particularly interesting.

    Managing Risk and Uncertainty: The Future of Insurance

    I found this presentation by Angela Strange for private equity group Andreessen Horowitz quite fascinating and thought it might be of interest to subscribers. Here is a section from the summary:

    Human progress is defined by the desire to take risk — whether that’s getting married, buying a home, having kids, getting on a plane, taking a new job, even moving to earthquake country (where this talk originally took place, in Los Angeles, as part of the a16z Summit 2018).

    All of these decisions require evaluation under conditions of uncertainty, which is where insurance — really, distributed risk — comes in. So, in this talk, a16z general partner Angela Strange describes how pooling risk changes as we reinvent a legacy business like insurance through technology. What’s the impact at an individual, industry, and economy level? And how will new entrants finally disrupt the ultimate game of life

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    Ericsson Mobility Report

    Thanks to a subscriber for this report which reflects on the growth of the global telecommunications sector. Here is a section on India:  

    In India, GSM/EDGE-only has remained the dominant technology during 2018, accounting for around 56 percent of total mobile subscriptions at the end of this year. However, the country has experienced strong growth in the number of LTE subscriptions over the last couple of years, and at the end of 2018 LTE will account for close to 30 percent of all mobile subscriptions. As the transformation toward more advanced technologies continues in India, LTE is forecast to represent 81 percent of all mobile subscriptions at the end of 2024. 5G subscriptions are expected to become available in 2022. The Middle East and Africa comprises over 70 countries and is a diverse region.  It varies from advanced markets which have mobile broadband subscription penetration of 100 percent, and emerging markets where around 40 percent of mobile subscriptions are for mobile broadband. At the end of 2018, more than 20 percent of all mobile subscriptions will be for LTE in the Middle East and North Africa, while in Sub-Saharan Africa, LTE will account for just over 7 percent of subscriptions. The region is anticipated to evolve over the forecast period and, by 2024, 90 percent of subscriptions are expected to be for mobile broadband. Driving factors behind this shift include a young and growing population with increasing digital skills, as well as more affordable smartphones. In the Middle East and North Africa, we anticipate commercial 5G deployments with leading communications service providers by 2019, and significant volumes in 2021. In Sub-Saharan Africa, 5G subscriptions in discernible volumes are expected from 2022.

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