By www.CentralBankNews.info     Zambia’s central bank held its policy rate steady at 9.25 percent, saying inflationary pressures should continue to moderate in April due to improved seasonal supply of food, mainly fish, vegetables and beef.
    The Bank of Zambia, which raised its policy rate by 25 basis points in 2102 but has held them steady this year, added that a continued supply of maize to millers by the Food Reserve Agency should also help keep inflation low in April.
    “This notwithstanding, cost-push pressure associated with the lagged pass-through effects of the depreciation of the Kwacha are likely to pose upside risks to the inflation outlook for April 2014,” the central bank said, adding these risks had been weighed in the decision to hold rates steady.
    Zambia’s inflation rate fell to 6.6 percent in March from February’s 6.9 percent.
    In 2012 Zambia’s Gross Domestic Product expanded by 7.3 percent from 2011.

    www.CentralBankNews.info
   

By www.CentralBankNews.info     Romania’s central bank held its policy rate steady at 5.25 percent, saying inflation is expected to continue to follow a downward trend due to a persistent negative output gap and reach the ceiling of the central bank’s inflation target by the end of this year.
    The National Bank of Romania (NBR), which has held rates steady since a 25 basis point cut in March 2012, said annual inflation fell to 5.65 percent in February from January’s 5.97 percent. The adjusted core2 inflation rate was 3.1 percent in February, just below January’s 3.2 percent.
    The NBR targets annual inflation of 2.5 percent, plus/minus one percentage point.
    Romania’s Gross Domestic Product expanded by 0.1 percent in the fourth quarter from the third for annual growth of 0.3 percent, up from a 0.3 percent contraction in the third quarter.

    The central bank said a widening of the negative output gap had slowed in the fourth quarter and monetary indicators point to lending to the private sector to remain in negative territory, as in the euro area and in most countries in this region.
    “As domestic political and financial tensions eased, the NBR carefully calibrated the monetary policy instruments, also by shifting from firm to adequate liquidity management, which led to an improvement of liquidity conditions on the money market and hence drove interbank rates considerably lower,” the central bank said.

    www.CentralBankNews.info

By www.CentralBankNews.info     Taiwan’s central bank held its benchmark interest rate steady at 1.875 percent, as expected, saying the current stance was appropriate as the country’s economy was “experiencing a mild recovery along with muted inflationary pressures.”
    The Central Bank of the Republic of China (Taiwan), which has held its discount rate unchanged since June 2011, said economic activity had picked up since the fourth quarter due to better-than-expected exports and private consumption.
    The government’s budget, accounting and statistics directorate has revised upwards its forecast for first quarter Gross Domestic Product growth to 3.26 percent and “bolstered by the world’s moderate economic expansion, exports and private investment will likely drive the domestic economy to grow by 3.92% in the second quarter and 3.59% for the entire year,” the central bank said.
    In December, the bank said it forecast 2013 GDP growth of 3.15 percent.
    For the first two months of this year, consumer price inflation averaged 2.05 percent but core inflation only grew by 1.25 percent, the bank said.

    It added the government projects 1.99 percent inflation for the first quarter, then 1.40 percent in the second quarter due to recent falls in international commodity prices and base effects of last year’s fuel and electricity price hikes. For the full year, inflation is forecast at 1.37 percent.
    The central bank has tightened controls on mortgages and land financing to keep property prices from rising too fast and it said that it was keeping a close watch on real estate lending and urged financial institutions to ensure sound operations and thus preserve financial stability.

    www.CentralBankNews.info

Wednesday, December 19, 2012

STORMY WATERS:Analysts expect the central bank to leave interest rates alone, and urged caution as risks from abroad could derail Taiwan’s nascent economic revival

aipei, March 16 (CNA) Taiwan’s central bank said Friday that it expects inflationary pressure in Taiwan will ease this year partly due to stabilizing grain and energy prices in the global market.

In addition, as growth in local vegetable and fruit prices is likely to slow due to a high comparison base recorded in 2012, and domestic communications fees are trending lower, the upward pressure in consumer prices is expected to be mitigated in 2013, the central bank said.

The comments echoed a forecast made by the Directorate General of Budget, Accounting and Statistics (DGBAS) in February which said the local consumer price index (CPI) for 2013 is expected to grow 1.37 percent, down from an increase of 1.93 percent recorded in 2012.

In addition to the slower growth in the local CPI forecast by the central bank and the DGBAS, the Taiwan Institute of Economic Research and the Chunghua Institute for Economic Research, two of the major think tanks in Taiwan, expect local consumer prices will rise 1.53 percent and 1.57 percent, respectively.

Global Insight, a worldwide economic institute, has also anticipated Taiwan’s inflation will ease to 1.5 percent in 2013, while it has forecast that global inflation will fall to 3 percent this year from 3.2 percent recorded in 2012.

As the central bank’s concerns over inflation has been reduced, market analysts said, the bank will likely leave its key interest rate unchanged in the upcoming policymaking meeting scheduled for March 28, in a bid to keep liquidity ample to boost the economy.

Several foreign banking groups, including Barclays, Standard Chartered Bank, and Australia and New Zealand Banking Group Ltd., have forecast the central bank will leave the interest rates intact in the meeting.

In the previous policymaking meeting held Dec. 19, the central bank maintained its key discount rate at 1.875 percent, the rate of accommodations with collateral at 2.25 percent and the rate of accommodations without collateral at 4.125 percent.

Meanwhile, the central bank said it will keep a close eye on the movement of the Japanese yen, which has fallen sharply as the Bank of Japan continues to ease liquidity to depress the currency.

The weakness of the yen has triggered a currency depreciation competition in the region with the central banks in Taiwan and South Korea stepping in to allow their currencies to fall in an attempt to protect their country’s global competitive edge, analysts said.

The local central bank said the Taiwan dollar appears relatively stable compared with the South Korean won, but it emphasized that it is determined to closely monitor the foreign exchange market and 



aipei, March 13 (CNA) Several foreign banks predicted Wednesday that the local central bank will leave key interest rates unchanged in a policymaking meeting scheduled for March 28 as local inflation remains mild.

Among the foreign banks, British banking group Barclays Plc said it expects the central bank to keep liquidity ample in an effort to further lift the economy, although local economic fundamentals have shown some signs of recovery.

In February, the government raised its forecast for the country’s economic growth for 2013 to 3.59 percent from a previous estimate of 3.53 percent, citing an increase in exports and private consumption. In 2012, the local economy grew by just 1.26 percent from the previous year.

The government also anticipates that the local consumer price index for 2013 will rise 1.37 percent from a year earlier, down from an annual increase of 1.93 percent in 2012.

Barclays said the forecast of a 1.37 percent increase in local consumer prices means local inflation will be in check so that the central bank is likely to leave the discount rate unchanged at 1.875 percent in the upcoming policymaking meeting.

The British bank also raised its forecast for Taiwan’s annual gross domestic product (GDP) growth to 4.0 percent from a previous prediction of 3.4 percent.

Raymond Yeung, a senior economist with Australia and New Zealand Banking Group Ltd. (ANZ), agreed that Taiwan will have contained inflation and that the central bank is likely to keep its key interest rates unchanged in the first quarter.

For its part, Standard Chartered Bank, another British financial institution, said the central bank has no urgent need to tighten its monetary policy in the first quarter, adding that it is unlikely to raise key interest rates before the middle of the year at the earliest.

Earlier this month, Standard Chartered maintained its forecast of Taiwan’s GDP growth at 3.9 percent.

The foreign banks also said the central bank could address the issue of rising real estate prices at the March 28 meeting and come up with further measures to rein in property prices.

In the previous policymaking meeting held Dec. 19, the central bank maintained its key discount rate at 1.875 percent, the rate of accommodations with collateral at 2.250 percent and the rate of accommodations without collateral at 4.125 percent.

If the central bank does not alter the key interest rates in March, it will be the seventh consecutive quarter in which they have rem

Central bank unlikely to change key interest rates in 2013: Barclays 2012/12/21 18:15:17

Taipei, Dec. 21 (CNA) Taiwan’s central bank is likely to leave key interest rates unchanged throughout 2013 because it wants to keep domestic markets liquid and push the local economy on the road to recovery, British bank Barclays Plc said Friday. Growth remains the focus of policymaking, Barclays said in a market comment, though the central bank’s concerns seemed to have eased “slightly” amid improving economic prospects. With signs of stabilization in China, the U.S. and the eurozone, the central bank has turned less pessimistic over the outlook for the world economy, it said. Barclays predicted that Taiwan will see improving exports, consumption and private investment in 2013, and inflation should be “more benign” at around 1.2 percent, compared with 1.93 this year, as prices of international raw materials stabilize. At a quarterly policymaking meeting Dec. 19, Taiwan’s central bank maintained its discount rate at 1.875 percent, its secured loan rate at 2.25 percent and its unsecured loan rate at 4.125 percent. It was the sixth consecutive quarter that the central bank left key interest rates unchanged, hoping that sustained low interest rates will pull the domestic economy out of its doldrums.

By www.CentralBankNews.info     The Czech Republic’s central bank left its benchmark two-week repo rate steady at 0.05 percent and said rates would remain at its current level of technically zero “over a longer horizon until inflation pressures increase significantly.”
    In a statement following a meeting of the Czech National Bank (CNB) board, the bank said it was also ready to use foreign exchange interventions “if further monetary policy easing becomes necessary.”
    The CNB, which cut rates by 70 basis points in 2012 but has held them steady this year, said its forecast calls for a slight decline in market interest rates and then a rise from mid-2014 and inflationary pressures are not expected to rise and there were “no tangible risks of such an increase in inflation pressures” at the present.
    Inflation in the Czech Republic fell to 1.7 percent in February from January’s 1.9 percent. The CNB targets inflation of 2.0 percent, plus/minus one percentage point.
    The Czech economy more than forecast in the fourth quarter and in 2012 Gross Domestic Product shrank by 1.2 percent, the bank said.

    Fourth quarter GDP contracted by 0.2 percent from the third, the sixth quarterly contraction in a row, for annual shrinkage of 1.7 percent, up from 1.5 percent in the third quarter.
    The CNB said data from industrial production, construction output and retail sales in January point to subdued economic activity and the labor market remains weak.

    www.CentralBankNews.info

London Gold Market Report
from Adrian Ash
BullionVault
Thurs 28 Mar, 08:50 EST

The GOLD PRICE slipped back to $1600 per ounce Thursday morning in London, heading into the 4-day Easter weekend 1.3% higher from the start of March.

Silver bullion was flat for the month at $28.65 after recovering yesterday’s sharp 2.3% drop.

European stock markets shrugged off overnight falls in Asia to trade 0.5% higher by lunchtime, while commodities ticked lower.

The Euro currency meantime crept back above $1.28 – a four-month low when broken on Wednesday.

North Korea today kept open a key border crossing despite cutting the last of 3 telephone “hotlines” to the South, citing “hostilie action” by Seoul and Washington, on Wednesday.

“Gold lived up to its status as a safe haven again after all yesterday afternoon,” says Eugen Weinberg’s team at Commerzbank in Frankfurt, noting the two-month high at €1260 per ounce hit by gold in Euro terms.

“The uncertainty over the Cyprus crisis…should lend support to gold demand.”

Queues at Cyprus’s banks were reportedly “calm and orderly” today as a near 2-week bank holiday was replaced by the first exchange controls in a Eurozone state since the single currency was launched in 1999.

Daily ATM withdrawals are limited to €300, with check-cashing banned, overseas transfers restricted to €5,000 per month, and a limit of €1,000 on cash carried out of the country.

Overseas customers withdrew 18% of their Cyprus bank deposits last month, new data showed today.

Germany’s Spiegel magazine yesterday reported that “suspicious transactions” involving Cyprus government and central-bank personnel on the eve of the first, disastrous bail-out proposal are now being investigated.

Gold’s failure to break above $1620 per ounce – now seen by several chart analysts as where a downtrend in Dollar gold prices now comes – is “a little concerning” says a note from Swiss refiner and finance group MKS, “especially considering the uncertainty surrounding Cyprus last week.”

But although Cyprus “will likely fade from the headlines” counters the latest note from brokers INTL FCStone, “the unusual circumstances behind the country’s rescue will likely linger.

“In addition, the Italian situation should come back to unsettle the markets further, offering yet another prop for gold.”

Center-left politician Pier Luigi Bersani, who won the largest share of votes in Italy’s inconclusive election last month, was due today to update President Napolitano today on his failed attempts to build a coalition government.

Exchange-traded gold trust funds will meantime end March with their largest quarterly outflow since such products were launched a decade ago, according to Reuters data, down 7.2% to 2197 tonnes.

Those holdings hit an all-time record of 2366 tonnes in early December.

Gold prices in the first quarter of 2013 were heading today for a 3.5% drop in Dollars, a rise of 3.2% in Sterling, and no change from the end of December in Euro terms.

US Treasury bonds today eased back but kept 10-year yields beneath 1.90%.

Ten-year UK gilt yields continued to hold below that level, offering investors a 4-month low of 1.76%.

So-called “junk bonds” saw record new issuance in the first 3 months of 2013, according to the Dealogic consultancy, with higher-risk borrowers raising $148.6 billion from investors seeking higher yields – up by one quarter from Jan. to March last year.

Adrian Ash

BullionVault

Gold price chart, no delay   |   Buy gold online

Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold and silver in Zurich, Switzerland for just 0.5% commission.

(c) BullionVault 2013

Please Note: This article is to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it.

By WallStreetDaily.com

Sorry!

I figured it’s best to get the apology out of the way up front. Because, inevitably, some readers are going to be offended by the fact that I’m talking about patents again. (See here, here, here, here, here, here and here.)

But patents really do matter that much.

Heck, without airtight patents, Apple (AAPL) wouldn’t have been able to revolutionize the world the way it did, since it’s likely the iPhone never would’ve happened.

So, like a good parent, I’m going to keep pounding it into your heads every chance I get – until every last one of you gets it.

I’m confident you’ll thank me for it later.

And here’s why, courtesy of the number crunchers at MDB Capital Group, Intellectual Asset Management (IAM) and Barron’s.

Do You Need Any More Proof?

MDB is the only investment bank on Wall Street that focuses exclusively on intellectual property (IP). And IAM is the publication of record for all things IP.

Recently, the two combined their expertise to develop a unique data set, the US Patent 100.

What does it do?

Essentially, it ranks and analyzes the largest U.S. patent holders.

And their research uncovered two important findings.

First, of the more than 140,000 unique U.S. patent holders, a mere 311 companies control over 50% of all U.S. patents.

Second, if we focus just on the US Patent 100, they control over 33% of all patents.

A quick extrapolation of this study – along with last year’s study from the United States Patent and Trademark Office (USPTO) and the Economic Statistics Administration – suggests that a handful of patent holders employs millions upon millions of people.

And, more importantly, they generate trillions of dollars in annual revenue (and profits).

Simply put, patents ultimately produce profits – and, in turn, boost share prices.

The takeaway for investors couldn’t be more straightforward. We should always strive to identify key patent holders early on. That way we can share in the profits as the market (eventually) realizes the value of each company’s IP.

Speaking of…

Is Wall Street Finally Catching On?

A recent article in Barron’s reveals that Wall Street might finally be figuring out the connection between patents and profits, too. (Better late than never, I guess.)

In “A Rewarding Development,” Jack Hough cites a “landmark study from Georgetown.” It found that companies that spend aggressively on research and development (R&D) enjoy fatter margins and higher stock prices, based on 50 years’ worth of data.

Hough concludes that investors should “watch for high-tech businesses with surging R&D spending.” By doing so, Hough adds, “They effectively buy into new products or services before they’re launched, or even announced, and long before Wall Street has built them into earnings forecasts.”

Close, Jack! But that’s not exactly the case.

You see, any company can aggressively spend money on R&D. But the simple expenditure doesn’t mean a breakthrough is going to materialize any time soon. If ever.

Heck, it could take several years – and millions of dollars – for R&D efforts to yield a new product or innovation.

In other words, high R&D spending doesn’t guarantee the development of anything valuable at all. It just guarantees that money is being spent.

On the other hand, patents and patent applications are proof positive that R&D spending has been fruitful. So it’s really by tracking patent filing activity – not merely R&D spending, as Hough suggests – that we can “buy into new products or services” long before the market realizes their ultimate value.

Bottom line: You can’t afford to ignore intellectual property any longer.

As MDB’s Chief IP Officer, Erin-Michael Gill, concludes, “Investors can use patent activity as a proxy for innovative activity” and to make “more informed investments.”

Indeed! And that’s exactly what I’ve been preaching and practicing since 2008, when I first started recommending patent-rich technology companies to WSD Insider subscribers. With admirable results, I might add.

We’ve locked in gains on IP-rich companies of 36%, 72%, 126%, 48%, 66%, 152%, 166% and 120%, just to name a few.

So if you’re looking to capitalize on the increasing relevance and value of patents in the market, I encourage you to sign up for a risk-free trial to WSD Insider.

For a limited time, we’re offering a 45-day, all-access pass to our research. Including our work on two companies that are the least-known – yet fastest-growing and technologically relevant – patent owners.

As I just told subscribers, they represent the “surest bets in the world” as the rest of Wall Street wakes up to the value of patents. Don’t miss out.

Ahead of the tape,

Louis Basenese

Article By WallStreetDaily.com

Original Article: One Dirty Investing Secret Wall Street is Clueless About

By MoneyMorning.com.au

We saw some fairly serious selling pressure in Europe last night with attention turning to Italy, where it looks like they’ll have trouble forming a government. An Italian bond auction also fell short of expectations and so interest rates there headed sharply higher.

The banks of Europe have been hit over the last few days since the announcement of the Cyprus deal and the bumbling honesty of the Dutch Finance Minister Dijsselbloem (say that three times quickly).

The banks that are attached to the teat of the ECB via the LTRO (Long Term Refinancing Operation) are the main ones coming under fire, as you would expect.

But once again we were saved from the gates of hell by the US market, which opened down but then steadily rallied all day long to close pretty much flat on the day on very low volume and the lowest average trade size of the year.

Credit markets in the US are not being dragged along for the ride to the upside, and whenever a divergence opens up between credit and equities you can be sure it is equities that are living in dream land…

How to Trade the Market

But the fact is the old saying about the market is right. ‘Where the market goes that’s where it is.’ It sounds like a silly statement when you first read it, but when you think about it there is some good advice to be gleaned.

Our perception of the market is not the market. Whether or not the market is a completely fraudulent, manipulated farce (which it is) doesn’t matter. What matters is the price and only the price. We have to play by the rules we are given and there is very little point in jumping up and down when the price action doesn’t agree with our expectations.

Fighting the market is a losing game ultimately. Who is your opponent when you are fighting the market? It doesn’t take too long to work out that you are fighting yourself. The market is always neutral.

It doesn’t really care if you make a million dollars or lose your shirt. The battle is always internal. Every skip of the heart as prices move is caused not by the market but by our reaction to it.

As Marcus Aurelius, an Emperor of Rome and one of the great Stoic philosophers, put it, ‘Stop perceiving the pain you imagine and you’ll remain completely unaffected. External things are not the problem. It’s your assessment of them. Which you can erase right now. If the problem is something in your own character, who’s stopping you from setting your mind straight?’

And just to force the point home he also said, ‘I can control my thoughts as necessary; then how can I be troubled? What is outside my mind means nothing to it. Absorb that lesson and your feet stand firm.’

Marcus Aurelius fought battles with the rampaging Germanic hordes in the last decade of his life while he wrote the aphorisms above in an amazing book called The Meditations. If anyone has the right to give us advice on how to cope with the vagaries of life it is him.

I think we all know that it would take a super human effort to remain unaffected by everything that occurs externally from us. We are emotional beings filled with ego. It sounds great in theory to stand aloof from the market and make decisions without an ounce of internal disturbance.

I think the best we can hope for is to understand how irrational we can be in the face of a gyrating market and create as many rules as necessary to place a straightjacket around our impulses.

That is really the basis of technical analysis for me. It is not a crystal ball. It is just a windsock that gives you a hint of the underlying forces driving the market.

It helps to create lines in the sand where I can accept that I am wrong quickly rather than relying on hope, which we all know ‘springs eternal’. If you are interested, have a look at a presentation I have done about my trading approach and why I think there are some great trading opportunities coming up. You can view it here.

What I find intriguing about the current rally is that my trending indicators all turned up late last year but I chose to ignore them because I am fundamentally bearish. The feeling that, ‘I am right and the market is wrong,’ is a hard one to shake. The market, of course, is always right.

This then throws up the challenge to let go of all ‘views’ about the market and to rely purely on your technical indicators for all trading decisions. There is no doubt that whatever your view on the market happens to be there will always be a period where the market will make a fool of you.

The bulls get killed in bear markets and the bears are skewered in bull markets, like now. I don’t know of anyone who is bullish in bull markets and bearish in bear markets and constantly gets the shift in trends right. No one.

There’s a Difference Between Trading and Opinion

Most market commentators aren’t traders. They just wax lyrical about the markets and their views but they never say when they are proven right and when they are proven wrong. No targets and no stop losses, just sweeping views that make it impossible to pin them down later for being wrong.

Actually trading the markets is a completely different kettle of fish. Volatility is so intense that you can be completely right about your big picture view, but if your timing is out you lose money. You can get stopped out of a stock and then watch in horror as it turns around almost immediately and heads in the direction you expected.

When that happens should you jump back in? It’s moments like these that no one tells you about before you start trading. The learning curve when entering the markets is immense and really it’s never ending because the market itself is always changing.

The rise of High Frequency Trading (HFT) has changed the structure of price action, perhaps forever if the regulators aren’t willing to step in and level the playing field.

Another factor affecting asset markets is of course the worldwide money printing and ZIRP (zero interest rate policy) of the major central banks.

This is a new world that we live in. How long this game lasts is really anyone’s guess. I think there are many people that know it can’t go on forever but as always it all comes down to timing.

My ‘view’ is that we are close to a major market top, but as I said above ‘views’ aren’t worth all that much. While the trend remains up in the US markets I will just have to accept the fact, and wait until my charts tell me that the trend has changed.

So get prepared for the headlines screaming that all is well and new all-time highs have been reached in the S+P 500. But don’t believe for a minute that the price of the market is a true reflection of the state of the real world.

Murray Dawes
Editor, Slipstream Trader

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From the Port Phillip Publishing Library

Special Report: Australia’s Energy Stock BLOWOUT

Daily Reckoning: In Gold, Not Cyprus, We Trust

Money Morning: Silver ‘$100 Within Two Years’

Pursuit of Happiness: Learn This Lesson from Cyprus Before it’s Too Late

By MoneyMorning.com.au

Mining executives often like to describe their business as an exercise in earth moving. Maybe because they are not geologists they downplay the challenge of finding the stuff in the first place.

Instead they concentrate on the physical challenge and cost of digging it up, sorting the metal from the ore and taking it to the nearest railway line or shipping terminal.

Sometimes this process runs smoothly. In countries with established mining industries, with modern transport networks and power grids, mining is a simple business. But today’s miners are increasingly going where no miner has gone before, and they are finding that the necessary infrastructure does not exist.

One of the most exciting new mining regions is in West Africa, on the borders of Cameroon, Gabon and the Republic of Congo. Such is its wealth of iron ore that it has been called the new Pilbara – the rich iron ore region of Western Australia – but it is several hundred miles inland and unless a way can be found of getting the ore to the coast, commercial development will not be possible.

Why go to the trouble? Well, because of the potential for huge gains, of course. I’ll point to a few very attractive prospects today…

Let the Chinese Pay for It

A new note from Investec highlights the extent of the challenge in West Africa.

‘There are multiple hurdles facing development of projects. The key issues include the almost complete lack of infrastructure and the vast amount of capital required to install it; the relatively small sizes of the companies involved; the high sovereign risks (exacerbated by multiple borders); demanding operating conditions and assorted ownership… Each of the companies involved in the region lacks the critical mass in its own right to justify the capital risk in developing the respective asset.’

What is needed then is either some form of co-operation or else somebody with very deep pockets indeed. For the latter, the deepest pockets seem to be Chinese, and hopes for the region have been centred upon Hanlong Mining.

Controlled by Sichuan-based billionaire Liu Han, Hanlong launched a bid back in 2011 for Sundance Resources (ASX: SDL), which hopes to develop the massive Mbalam iron ore deposits straddling the border of Cameroon and the Republic of Congo.

Hanlong received a provisional approval from the Chinese National Development Reform Commission, provided that it brought in a ‘large Chinese partner’ capable of funding the $5bn cost of developing the mine and the necessary infrastructure.

This is a very major investment indeed. SDL is proposing a 510km heavy-gauge railway from Mbarga to the Cameroon coast, with a 70km extension south of Mbarga to Nabeba. This would run to a new port south of the existing facility at Kribi, capable of accommodating the 300,000 deadweight tonnage cape-sized ships.

China Harbour Engineering company, a subsidiary of a Chinese state-owned enterprise, signed a memorandum of understanding in 2010 to manage this project, while an outfit called China-Africa-Construction signed another MOU at the same time to scope the rail development and the required rolling stock.

You Should Keep an Eye on This Story

Again, this is no simple matter. The railway must cut through dense rainforest and make a 600 metre descent to the coastal plain. Seven bridges must be built along the way. Already the matter is stalled. Since launching its bid for SDL in July 2011, Hanlong was first forced to up the price and has then negotiated it down again in line with the falling price of iron ore.

The deal still has not been finalised and to add a bit of spice to the affair Liu Han has reportedly been arrested by Chinese police. ‘Until we get an explanation I’m a bit concerned,’ said SDL chairman George Jones, mildly.

Now there has been a fresh development.

SDL is reported to be discussing a sale of the Mbalam project to Glencore (LSE: GLEN), which already owns the nearby Avima project. ‘Consolidation of the assets could provide the critical mass to stimulate a development decision by Glencore,’ says Investec.

Key to this, however, would be confidence that the transport links could be built, a particularly thorny challenge in view of the number of interested parties.

Dealing with one African government is hard enough. To get three to agree on the building of a new rail and port system, and access to it, is a diplomatic challenge of mega proportions.

For investors this is an important story. But my guess is that it will be a long time before wagons of iron ore are trundling through the West African jungle.

Tom Bulford,
Contributing Editor, Money Morning

Publisher’s Note: This is an edited version of an article that originally appeared in MoneyWeek

From the Archives…

Why You Should Buy This Falling Stock Market
22-03-2013 – Kris Sayce

Stock Market Warning: Part II
21-03-2013 – Murray Dawes

New Developments on Whether You Can Get Your Mortgage Cancelled
20-03-2013 – Nick Hubble

Your Retirement or Your Mortgage?
19-03-2013 – Nick Hubble

Get Used to This Stock Market Action, It’s Set to Last…
18-03-2013 – Kris Sayce

By Jim Nelson

Here’s a prediction…

If you are searching for stocks that yield super-high dividends, you’re probably making a big mistake.

That’s because high yielders are much more volatile and tend
to underperform larger, safer dividend payers with longer histories of
dividend payments.

The first step to building a bulletproof income portfolio is not to reach for yield into riskier stocks. It’s to start with a solid foundation. To buy only the safest dividend stocks.

These stocks should make up the “bedrock” of your portfolio.

Take a look at the chart below. It shows the performance of three
important indexes since the start of the 2008 crash, all reset to a
baseline of 100. They are the S&P 500 (blue line), the S&P 500
Dividend Aristocrats Index (green line) and the S&P High Yield
Dividend Aristocrats Index (red line).

View Larger Chart

As you can see, the Dividend Aristocrats Index wins hands down. This
index contains only S&P 500 companies that have grown their
dividends every year for at least 25 years.

Only 51 companies — a hair over 10% of the entire index — qualify. That’s the kind of “bedrock” you’re looking for.

The High Yield Dividend Aristocrats Index selects its constituents
from the S&P Composite 1500, a larger group of stocks that includes
many riskier plays. Also, it requires only 20 years of dividend
increases. That’s how it can find higher-yielding stocks than the
Dividend Aristocrats Index.

But sticking to larger, longer-paying dividend stocks would have made
you 14.4% more on your investment than if you had stretched for those
high yields. And it outperformed the S&P 500 by an impressive 32%.

The reason is simple. High-yielding stocks often don’t stay that way for long.

Typically, the reason they have higher-than-average yields
is they carry more risk and have less growth potential than their
rivals. So they bump up their dividend payments to attract investors.
Other times, these higher yielders are paying out too much of their
earnings through dividends and can’t sustain their payout ratios.

Take beauty products maker Avon Products Inc. (NYSE:AVP),
for example. Its board was recently forced to cut the company’s
quarterly dividend from 23 cents to just 6 cents per share. That’s a
massive blow to income-hungry shareholders.

This is why I recommend that readers of my income advisory service, Income & Dividend Report, start off by building a solid bedrock of income.

That means buying shares in companies that have long histories of
raising their dividend payments. I also look for large-cap companies
with strong earnings growth, products that their customers can’t live
without and strong management teams.

These companies are best placed to weather market storms. They are
also best placed to continue growing their earnings — which they must
do if they are to keep paying out higher dividends.

One my favorite “bedrock” dividend payers right now is consumer products maker The Clorox Co. (NYSE:CLX), which owns household brands such Pine-Sol cleaners, Poett home-care products, Fresh Step cat litter and Glad trash bags.

Clorox has been paying a growing dividend for 35 consecutive years.
And it has continued to lay the foundation for future dividend hikes by
entering new, fast-growing emerging markets.

Make this — and stocks like it — the bedrock of your income
portfolio. And don’t get suckered by high yielders that can’t sustain
their dividend payouts.

Sincerely,

Jim

P.S. Clorox is a great way to start building a bulletproof income
portfolio. But there are even more solid and safe dividend stocks out
there. I recently recommended two of these super-safe stocks to Income & Dividend Report readers. To find out how to get access to them and to start receiving future recommendations, follow this link.