In trading on Thursday, agriculture & farm products shares were relative laggards, down on the day by about 1.4%. Helping drag down the group were shares of Origin Agritech Limited (SEED), down about 10% and shares of Cresud Sacip YA Adr (CRESY) trading flat on the day.
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy — they expect to make money. So let’s look at two noteworthy recent insider buys.
How to set up your charts for price action trading on MT4 –
Being one of the most commonly used charting platforms for spot FX trading we’ll focus on Meta Trader 4 for this tutorial. Being such a versatile platform, MT4 allows traders a variety of options in the way they can lay their charts out. The easiest and most logical way to set up your charts for price action trading is to use a different profile for each currency pair you actively trade. Using a separate profile for each pair allows you as a trader to solely focus on a specific pair without running the risk of having your judgment influenced or clouded by other crosses.
After opening up our MT4 platform, the first thing we want to do is click on the default tab in the status bar as shown below. MT4 will then bring up a list of all profiles we have saved. We then want to click on the first in the list which is Default. This will open a default profile which we will later customize to our price action trading format.
The next step we have to take is opening 4 of the same chart for our default profile. We simply click on the new chat tab (or file -> new chart). This will bring up a list of the pairs our broker will allow us to trade. We then open 4 charts for the same pair. We can confirm we’ve opened 4 charts by looking just above the status bar at the bottom of the screen as seen below.
The third step we have to take is arranging our 4 charts so that they are all visible on the screen at the same time. To do this we click on the ‘window’ tab on the top tool bar and then select either: Tile horizontally or Tile vertically. Our charts are then displayed as seen below, with each one taking a quarter of the screen.
In our fourth step we have to change the Timeframe for each chart on our screen. To do this we simply have to click on each chart separately and then change the timeframe using the tabs at the top of the screen as seen below. We can also click (Charts -> periodically) from the main tool bar which will allow us to change the timeframe. The timeframes we use for price action trading are: 1hr, 4hr, Daily & Weekly. Setting our charts up in this way allows us to see the price for each pair on one screen using different timeframes allowing for better analysis.
We now have our first profile set up. The next thing we need to do is save it as a new profile. To do this we click the default tab in the status bar at the bottom of the screen. We then click on ‘Save profile as…’
We then save the profile using a name we can associate with the pair we’re saving. In the eur/usd example we’ve used we will save our new profile as ‘EUR/USD. We then click OK.
We now have our 1st profile saved. Every time we open MT4 we can simply click the profiles tab on the status bar at the bottom of our screen to open a list of our saved profiles
We have to repeat the process for each pair we want to trade or analyze remembering to save a new profile for each one. Once we set up our charts for each pair we simply click the profiles tab on the status bar allowing us to easily change between charts.
The method for chart layouts we’ve explained in this tutorial is an easier way to analyze each currency pair we trade without over complicating our analysis with numerous different pairs on the same screen. This layout also allows for clearer chart viewing and easy switching between pairs.
The National Bank of Serbia cut its 2-week repo rate by another 25 basis points to 9.50% from 9.75% previously. The Bank said: “Inflation stayed on a downward path, ending 2011 somewhat lower than expected by the National Bank of Serbia, mainly due to the one-off effect of methodological changes in the calculation of fruit and vegetable prices. Inflation is expected to continue down and possibly undershoot the target tolerance band at the end of the first quarter. A part of this fall will be short-lived, resulting from the above methodological changes and other effects such as that of the administrative cap on trade margins and the so-called base effect of high monthly inflation rates recorded in the same period last year. This taken into account, inflation is expected to stabilise around the target in the third quarter of the year.”
The Bank also cut the interest rate by 75 basis points in December and November, 50bps in October, and 50bps in September, after pausing in August, while previously the Bank reduced the 2-week repo rate by 25 basis points to 11.75% at its July meeting, and cutting the rate 50 basis points at its June meeting to 12.00%. Serbia reported inflation of 7% in December, down from 8.7% in October, 10.5% in August, 12.1% in July, 12.7% in June, 13.4% in May, 14.7% in April, and just above the bank’s inflation target range of 3-6%.
The Bangko Sentral ng Pilipinas cut its overnight borrowing rate 25 basis points to 4.25% from 4.50% and the overnight lending rate to 6.25% from 6.50% previously. The Bank said: “the inflation outlook remains comfortably within the target range, with expectations well-anchored. Latest baseline forecasts indicate that average annual inflation rates are likely to fall within the lower half of the 3-5 percent target range up to 2013. Pressures on global commodity prices are seen to continue to abate amid weaker global growth prospects. However, the impact of strong capital inflows on domestic liquidity and the effect of geopolitical tensions in the MENA region on global oil supplies will continue to pose upside risks to inflation.”
The Philippine central bank held the rate unchanged at its December meeting, and last raised its interest rate in May this year by 25 basis points to 4.50%, and increased reserve requirements by 100bps in July. The Philippines reported annual consumer price inflation of 4.8% in November, compared to5.2% in October, 4.8% in September, compared to 4.7% in August, 4% in July, 4.7% in June, 4.5% in May and 4.3% in April. Inflation is currently tracking just inside the Bank’s inflation target range of 3%-5%.
Source: ForexYard
The US dollar saw substantial gains against several of its main currency rivals today, following a better than expected US Unemployment Claims figure. The weekly unemployment figure came in at an almost 4-year low and well below analysts earlier predictions. The news helped boost faith in the US economic recovery and turned the USD bullish against both the Japanese yen and Australian dollar.
The USD was not as fortunate against riskier currencies like the euro. The EUR/USD was trading above the 1.2900 level, following a successful Spanish debt auction. Risk appetite was also helped by gains on Wall Street and reports that the IMF is increasing its funding for countries adversely affected by the euro-zone debt crisis.
Turning to tomorrow, traders will want to pay attention to a British retail sales figure as well as US Home Sales data. Both are forecasted to come in above last month’s readings, which if true may help riskier currencies extend yesterday’s gains. In addition, any positive news out of the euro-zone, particularly regarding Greece’s ongoing debt talks may lead to further losses for the USD against the euro.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
Disclaimer: Trading Foreign Exchange carries a high level of risk and may not be suitable for all investors. There is a possibility that you could sustain a loss of all of your investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with Foreign Exchange trading.
by Carl Delfeld, Investment U Senior Analyst
Thursday, January 19, 2012: Issue #1690
First impressions are sometimes dead on.
Visit any emerging market country like Malaysia, Brazil, or Poland, and by the time you leave the airport and arrive at your hotel, you’ll have a pretty good idea of its economy.
Modern and reliable roads, airports, water, power, telecommunications and ports are to an economy what a healthy circulatory system is to our health.
Pretty damn important, I would say.
This is why I beat the drum for concentrating on infrastructure projects when representing the United States on the executive board of the Asian Development Bank in Manila.
This is one area that China has gotten right – spending 10% of its GDP on infrastructure. If anything, they risk overdoing it with plans to build 97 new regional airports by 2020.
Every country has its weaknesses and strengths. For example, only 5% of Brazil’s roads are paved, while South Africa has the fourth fastest-growing mobile-phone market in the world.
So why don’t governments go all-out to put in place a first class infrastructure?
First, infrastructure projects cost big bucks and the political payoff is many years down the road. Limited budgets and short-term politics works against putting up the capital. These projects also seem to be rife with corruption and mismanagement, making them unpopular with taxpayers.
India’s Gaping Needs
Let’s focus in on India, a country whose infrastructure needs seem endless.
The Private Economy of Mr. Adani
India’s roads, power and ports are so bad that entrepreneurs are seizing opportunities by taking matters into their own hands.
Mr. Gautam Adani, whose family owned a small textile firm, invested $11,000 in 1993 on some land around Mundra, an overlooked stop on the 600-year-old Indian Ocean trade route.
Adani Enterprises then built a jetty, a container terminal and a 40-mile railway to link with the national network. It has become the largest private port in India. Next, his company invested in coal production in Australia, bringing coal back to fire two power plants he helped finance. One of the plants has a capacity of 4,620 mega watts, the largest thermal plant in India.
Mr. Adani is now the seventh richest man in India. Bravo.
Speculators may wish to look at Adani Enterprises trading on the Bombay Stock Exchange. It has been a bit of a rollercoaster and has pulled back with India’s weak stock market over the last year.
An easier and broader play on private companies active in emerging markets infrastructure is the PowerShares Emerging Infrastructure (NYSE: PXR) exchange-traded fund.
PXR is a balanced hybrid with a developed country and emerging market companies driving growth. Giants like ABB and CAT sit aside Taiwan Cement. The leading country allocations are China, Taiwan, Brazil, South Africa and Indonesia, with U.S. companies at 5% of the basket. PXR is up 7.5% so far in 2012.
Good Investing,
Carl Delfeld
Article by Investment U
by Steve McDonald, Investment U Contributing Editor
Thursday, January 19, 2012
An ideal buying opportunity in corporate bonds is shaping up, and it could be huge.
According to a recent study by the Securities Industry and Financial Markets Association (SIMA), the implementation of the Volcker Rule’s proprietary trading proposals on banks could result in a sell-off in bonds and losses of $90 billion to investors.
The good news – the sell-off has nothing to do with the credit worthiness of the bond issuers.
Essentially what the Volcker Rule would do is make it much more difficult for banks to own and trade bonds of all types in their accounts. The result would be that banks would no longer be market makers in bonds, and the number of market makers could be as low as one for smaller issues.
One market maker means no competition, and we all know what that means for the market.
SIMA worded it this way in their report:
“An overly restrictive implementation of the Volcker Rule [as proposed] would artificially limit banking entities’ ability to facilitate trading, hold inventory at levels sufficient to meet investor demand and actively participate in the market to price assets efficiently – reducing liquidity across a wide spectrum of asset classes.”
Until lately all the talk about reinstating the Volcker Rule only concerned how much the big banks – Goldman, J.P. Morgan and Morgan Stanley – would lose. SIMA put the cost at $43 billion in increased costs and $4 billion in increased transaction costs.
But the really big number is how much bonds could drop in value if the rule is implemented and the number of market makers in bonds is reduced.
Some smaller issue bonds have already sold off well below prices that accurately reflect their underlying fundamentals for no other reason than the possibility of a reduced number of market makers.
All of this sounds very discouraging unless you look at it from a buying perspective. It’s a buyer’s paradise!
Remember, the perfect situation for any investment is to buy it when it’s significantly underpriced, especially if it’s inaccurately priced. That’s exactly what we have in a few small-issues, and could have throughout the market.
Whether corporate bonds are underpriced because of an overreaction to bad news or, as in this case, in anticipation of bad news, buying them cheap means a big payday.
Here are two small-issue bonds that have sold off since last summer because of the threat of the Volcker Rule limits. The returns are bordering on crazy!
Two Bonds Already Selling Off
The Alion bond has a coupon of 10.25% and matures in February 2015. It meets my usual requirement of an ultra-short maturity, just three years.
A 10.25% coupon would be a good buy at par, or $1,000 per bond, but this is selling now for about 50, or $500 per bond. That’s down from 91 last spring.
Here’s where current yield really kicks in…
Current yield is the interest you actually earn based on how much you pay for a bond. If you pay par, you get the coupon, or 10.25%. But at a cost of 50, you get 10.25% divided by your cost of 50, or 20.5%.
And that’s just in interest! You also get par, or $1,000 per bond, at maturity for another 100% capital gain.
Keep in mind, about the only reason this bond is down is because of the threat, not the implementation, of the Volcker Rule limitations. The underlying fundamentals are not the cause of the bulk of this sell-off.
Another example of an oversold bond is Geokinetics.
This bond has a 9.75% coupon and was selling last spring for par, or $1,000. It has a maturity of just less than three years, December 15, 2014, and is way over sold. It’s priced at about 71, or $710.
At 71 it will pay par at maturity, or $1,000 per bond, or about a 41% return. The current yield is 9.75% divided by the cost of 71, or 13.73%.
13.73% a year from a bond that was selling for par last spring plus 41% at maturity! That’s a deal and a half!
About the only thing better than earning 13.75%, or 20% plus, for the next few years is getting the capital gains even sooner. That’s exactly what I think will happen. Here’s why.
Already Priced In…
First, Treasury officials from the U.K., Canada and Japan along with the Bank of Japan have all stated in recent articles that restricting banks from owning and trading bonds will hinder liquidity in the bond markets, undermine growth, have an adverse effect on government bond trading and cause a funding drought.
Obviously the big banks here at home have been saying the same thing since the idea was introduced, but hearing it from outside third parties should carry more weight with legislators.
Second, most of the people I know in the bond business don’t think the limitations on banks owning and trading bonds will happen; it doesn’t make any sense. It has too many negative effects on the markets, the economy and banking.
For small-issue bonds, the market has already priced in the worst-case scenario. That’s the best news I’ve heard in years!
This is a once-in-a-decade opportunity. While these aren’t the highest rated bonds I’ve ever mentioned in this column, both are worth more than their current price. Just holding them for several interest payments and whatever capital gain you could realize this year alone would put you light years ahead of just about any other investment out there.
Unlike any other investment, bonds have that nice little extra feature called a maturity date. That makes them so much easier to own when they’re down. It gives you a light at the end of the tunnel.
I wish I had a dollar for every client or reader who has ever said to me, “I know it’s down, but I don’t care. I will collect the interest and just hold it to maturity.”
In the case of the Alion and Geokinetics bonds, you could do exactly that. Just leave them alone and collect the money.
Aren’t bonds wonderful?
Good Investing,
Steve McDonald
Article by Investment U
Blackbaud (NASDAQ:BLKB) agreed to acquire Convio (NASDAQ:CNVO) in a cash deal for $16-per share.The deal represents a 49% premium over Convio’s close on Friday.The company said it expects the acquisition to be accretive to Blackbaud’s 2012 adjusted EPS, and contributing to free cash flow.Both boards approved of the deal, which is expected to close during the first quarter.
Morgan Stanley announced that it lost $275 million, or 15 cents per share, versus a profit of $600 million, or 41 cents per share, in the same period last year. Analysts had expected a loss of 57 cents per share.
