In the fourth quarter of 2008,
The Global Spin-Off Report highlighted a series of announcements that had been made, within a relatively short period of time, regarding the postponement or cancellation of several planned spin-offs in the wake of the sudden upheaval in the financial markets. One year on, with access to the credit markets easing, the pipeline is beginning to build up again. The past two months have seen a series of announcements that promise a heavy schedule of global spin-offs within the next six months.
Over the past two months, there have been several new additions to the pending situations covered in the
The Global Spin-Off Report Monthly Calendar, particularly in Asia/Australia: Grasim Industries (GRASIM IN, India), which is spinning off its cement business; Macquarie Infrastructure Group (MIG AU, Australia), which is splitting itself into two; and CSR (CSR AU, Australia), which will de-merge its sugar business. The Asian spin-off list could be augmented by Hong Kong-based conglomerate Swire Pacific, which announced on November 2, 2009, that it is considering the possibility of spinning off, by way of distribution to shareholders, its property division, one of Hong Kong’s leading property landlords and property development companies. Following in the footsteps of EnCana (ECA CN), which revived its plan to separate its emerging oil-sands business from its natural gas operations (a de-merger executed at the end of November 2009), Cable & Wireless (CW LN, United Kingdom) has formally revived its plan to split its businesses into two, targeted for March 2010. Many other significant spin-offs have recently been announced or revived over the past several months. All of these are closely monitored in
The Global Spin-Off Report Monthly Calendar. Each spin-off is subjected to in-depth fundamental research, and published upon in a full report prior to the spin-off transaction.
December 2009
"We're in a new situation; we're going to be driving a lot of business to the exchanges." - Representative Barney Frank, chairman of the Financial Services Committee, during recent debate on derivatives legislation.
The notional value of all derivatives world-wide, according to the Bank of International Settlements, exceeds $600 trillion. The P/E ratios of the publicly trading exchanges clearly do not embrace the potential for the derivatives clearing business, despite the intention of the U.S. government to quickly pass legislation requiring these clearing activites. In March of 2009, the Chicago Mercantile Exchange and Intercontinental Exchange were granted permission from the U.S. government to clear derivatives. Both exchanges have begun clearing these instruments, with the Interncontinental Exchange already clearing about $2.6 trillion worth of CDS. Current Wall Street earnings estimates make no provision for the potential growth of the derivatives clearing business.
Murray Stahl of the
Horizon Research Group has been publishing investment research on the exchanges since 2003, and has written numerous essays on the operational leverage and unappreciated growth potential of these businesses.
The Contrarian Research Report and
The Stahl Report continue to recommend many of the most promising companies in this space. A discussion of the derivatives clearing industry was recently published in
The Stahl Report Compendium in December 2009.
The Political Impact Report, published by the
Institutional Research Group (IRG), specializes in combining in-depth equity research with political and legislative insight. In November of 2009, IRG published a comprehensive report anlayzing each provision of the financial services legislation, and the potential impact, both positive and negative, on specific financial services companies. The eventual benefiits of derivatives clearing was recently detailed in a comprehensive report recommending the purchase of the Chicago Mercantile Exchange.
Academic evidence has established that opportunistic earnings manipulation is more pervasive and financial statement quality is generally poorer outside the United States. Through an in-depth analysis of internal control weaknesses, accounting policy changes, and working capital,
Voyant Global seeks to identify foreign companies that are poised for significant share price underperformance. The combination of an accruals-based quantitative process followed by in-depth accounting policy and working capital analysis routinely highlights deteriorating situations long before they become apparent to the rest of the Street. The universe includes over 4,500 global companies with market capitalizations in excess of $1 billion. The primary markets of focus are the United Kingdom, Germany, France, Sweden, Japan, Hong Kong, China, and India.