Luxury cosmetics demand in Africa

Estee Lauder (>> Estee Lauder Companies Inc) plans to expand its presence in sub-Saharan Africa by rolling out its $1 billion brands, Clinique and MAC, to tap into strong demand for luxury cosmetics among the region's middle class, a company executive said on Wednesday.

"The potential of Africa, we believe, is extremely positive and we wouldn't be entering unless we believe that there was long term sustainable growth," she said.

"Our target consumer is the emerging middle class, the established middle class and that affluent African consumer who's probably extremely well traveled and very brand savvy."

However, the main hurdle to the company's growth in Africa is the lack of retail infrastructure outside South Africa.

"We would probably be going a lot faster if there was the availability of retail space," Fox said. "The concept of department stores doesn't really exist outside of South Africa. I think there are great opportunities for retailers and for mall developers in sub-Saharan Africa. Brands want to be there."

http://www.4-traders.com/ESTEE-LAUDER-COMPANIES-IN-12437/news/Estee-Lauder-eyes-buoyant-cosmetics-demand-in-Africa-17142777/

UK Treasury ahead with tax breaks for fracking firms

Chancellor George Osborne has pledged to make Britain's tax regime the "most generous for shale in the world" as the Treasury pressed ahead with promised tax breaks for fracking firms.

A new tax allowance will see a certain portion of income from each shale gas “pad” — or production site – receive an effective tax rate of 30pc, rather than 62pc.

The tax break is similar to those on offer to oil and gas explorers in technically-challenging and less economic fields in the North Sea, where they have been credited with revitalising interest.

The British Geological Survey said last month there could be 1,300 trillion cubic feet of gas in northern England alone. If just 10pc could be extracted it could meet Britain’s needs for more than four decades.

Water UK, which is demanding an urgent meeting with shale companies to discuss its fears, warns: “Shale gas fracking could lead to contamination of the water supply with methane gas and harmful chemicals if not carefully planned and carried out.”

It suggests aquifers could be contaminated by fracking, by leaks from wells, or by poor handling of chemicals or waste water on the surface.

The group also warns that “the fracking process requires huge amounts of water, which will inevitably put a strain on supplies in areas around extraction sites”.

http://www.telegraph.co.uk/finance/newsbysector/energy/10189932/George-Osborne-pledges-most-generous-tax-regime-for-shale-gas.html

Israel’s Deepest Well Targets 1.5 Billion Barrels of Oil

Houston’s Noble Energy Inc. (NBL) will probe 6,500 meters (4 miles) below the Mediterranean seabed later this year, targeting as much as 1.5 billion barrels of crude, equal to about 15 years of Israeli demand.

While explorers have found enough natural gas in the past five years to turn Israel into an exporter, a major oil discovery would break new ground. The Middle East’s third-largest economy spends about $10 billion a year importing 98 percent of the oil it uses. Domestic production would increase tax revenue, boost the country’s balance of payments and reduce vulnerability to supply disruptions.

The key to finding Israel’s offshore energy deposits has been technology -- developed in places like the U.S. Gulf of Mexico and Brazil -- to drill in deeper waters and further under the seabed. 

http://www.bloomberg.com/news/2013-07-17/israel-s-deepest-well-targets-1-5-billion-barrels-of-oil.html

EU bans BASF pesticide over bee health fears

The European Union added a pesticide made by German chemical firm BASF to its blacklist of substances suspected of playing a role in declining bee populations.

Member governments banned the use of agricultural insecticide fipronil to treat maize and sunflower seeds, the European Commission said.

The restrictions take effect from December 31 but seeds which have already been treated can be sown until the end of February 2014.

The ban follows similar EU curbs imposed in April on three of the world's most widely used pesticides, known as neonicotinoids, and reflects growing concern in Europe over a recent plunge in the population of honeybees critical to crop pollination and production.

http://www.4-traders.com/BASF-SE-6443227/news/BASF-SE-EU-bans-BASF-pesticide-over-bee-health-fears-17105385/

MORE FOCUS ON EARNINGS

Next week marks the first big week of second-quarter earnings, and it is sure to bring both joy and misery to Wall Street.

Investors will concentrate on market fundamentals after weeks when Federal Reserve policies have dominated the market. If they see companies are still struggling, stocks could take a fall.

"We're in the terminal stages of a Bernanke-driven bubble," said Walter Zimmerman, technical analyst at United-ICAP in Jersey City, New Jersey. 

The S&P's 17.8 percent advance in 2013 is largely attributable to the central bank's accommodative policies. The major indexes made impressive gains in the week: the Dow <.DJI> up 2.1 percent, the S&P <.SPX> 3 percent higher and the Nasdaq <.IXIC> up 3.5 percent. It was the third straight week of gains for all three, and the best week for the S&P and Nasdaq since early January.

"The Fed has been able to prevent a big selloff so far, but eventually the economy will have to catch up to the market or the market will fall back to match the economy," said Scott Armiger, who helps oversee $5.6 billion as portfolio manager at Christiana Trust in Greenville, Delaware.

Next week about 70 S&P 500 companies will report results. If the results indicate that companies' earnings are still weak despite intervention by the world's major central banks, shares could slump.

Companies can appear to look good when they beat a lowered earnings bar, but signs of weakness will hurt a market that is hovering near all-time highs and seeking new catalysts to spur further gains.

http://www.4-traders.com/INTEL-CORPORATION-4829/news/As-earnings-take-over-fundamentals-to-be-tested-17086030/?countview=0

The best and worst Investments of 2013

The first six months of 2013 were a great time to be an electric-car aficionado who owns an oil well. It was a lousy time to be a gold miner and it remained an awful time to be a Spanish banker. That is, at least, if you judge by the performance of financial markets.

The Best U.S. Large-Cap Stock is Tesla Motors, a company with huge ambitions in electric vehicles but no profits until this year. It's up 217 percent through the end of June and rocketed another 12 percent in the first week of July.

The Worst U.S. Large-Cap Stock is Newmont Mining Corp.go, a gold mining company that plunged 35.5 percent in the first half of the year. The stock fell alongside the price of gold, which was down 26.3 percent as of June 28 and off 23.5 percent as of July 11. Gold was not the Worst Commodity of 2013's first half -- that would be silver, which has dropped 34 percent year-to-date. The Best Commodity this year is oil, up 14 percent through July 11.

Outside the U.S., the Best International Stock* is literally recovering from disaster. Up 149 percent in the first half of the year, the Tokyo Electric Power Company, or Tepco, was the operator of the Fukushima atomic power station destroyed in Japan's 2011 earthquake and tsunami. Now, it wants to restart one of the plants idled after the tragedy.

The Worst International Stock* so far this year is Spanish bank Bankia SA, down 88 percent. Bankia was also the worst international stock of 2012, as it was pummeled by Spain's real estate collapse.

http://www.bloomberg.com/news/2013-07-12/the-best-and-worst-investments-of-2013-so-far-.html

Buyouts in the Italian luxury industry

“There’s going to be a proliferation and an acceleration of buyouts in the luxury industry,” Milton Pedraza, chief executive officer of the Luxury Institute LLC, a New York-based research and consulting firm, said in a phone interview. “They have high profit margins, but they need the capital to open stores all over the world and they need the expertise very often to globalize. The money is out there today and luxury is extremely attractive.”

It’s becoming increasingly difficult for Italian companies to secure financing amid the economic downturn, according to Francois Arpels, managing director of Bryan Garnier’s branded luxury goods practice in Paris. That’s making them more willing to explore deals with larger companies, he said in a phone interview.

After LVMH announced the $2.6 billion transaction, shares of Italian luxury retailers surged, with Ferragamo and Yoox SpA (YOOX) closing at records and Brunello Cucinelli SpA and Tod’s rising as much as 4.5 percent and 2.8 percent. Shoemakers Ferragamo and Tod’s are the most likely next targets, Equita Sim SpA said. Online retailer Yoox and Loro Piana-rival Cucinelli offer sales growth through 2015 of 88 percent and 45 percent, according to data compiled by Bloomberg.

Tod’s and LVMH are already connected. LVMH owns 3.5 percent of the shoemaker.

Gianni Versace SpA has said it expects to decide by October or November if it will sell a minority stake publicly or privately to fund growth.

Yoox, the 1.1-billion euro operator of e-commerce stores for brands such as Armani and Zegna, also could be a potential target, according to Chiara Rotelli of Mediobanca SpA. The retailer could be valued at 31.9 euros a share in a sale, the Milan-based analyst estimated in a July 10 report.

Cucinelli (BC), a maker of $1,820 cashmere sweaters, may lure buyers with its growth opportunities in China and thriving menswear line, Wu said. Cucinelli, with a market value of 1.4 billion euros, is projected to increase revenue to 406 million euros by 2015, according to analysts’ estimates compiled by Bloomberg.

http://www.bloomberg.com/news/2013-07-12/ferragamo-seen-as-target-after-loro-piana-deal-real-m-a.html