{"id":10732,"date":"2014-08-30T12:52:49","date_gmt":"2014-08-30T16:52:49","guid":{"rendered":"http:\/\/www.pgm-blog.com\/?p=10732"},"modified":"2014-08-30T12:52:49","modified_gmt":"2014-08-30T16:52:49","slug":"highlights-of-the-week-of-august-25-2014","status":"publish","type":"post","link":"https:\/\/www.pgmcapital.com\/nl\/highlights-of-the-week-of-august-25-2014\/","title":{"rendered":"Highlights of the week of August 25, 2014"},"content":{"rendered":"<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Burger-King-Tim-Hortons_1408983459236_7550681_ver1.0_640_480.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-10735\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Burger-King-Tim-Hortons_1408983459236_7550681_ver1.0_640_480.jpg\" alt=\"Burger King &amp; Tim Hortons Logo\" width=\"325\" height=\"165\" \/><\/a><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/223px-Sinopec.svg_.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignright wp-image-10740\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/223px-Sinopec.svg_.png\" alt=\"SINOPEC logo\" width=\"125\" height=\"129\" \/><\/a><\/p>\n<p><span style=\"color: #2c2c29;\">Dear\u00a0<\/span><strong style=\"color: #2c2c29;\">PGM Capital\u00a0<\/strong><span style=\"color: #2c2c29;\">Blog readers,<\/span><\/p>\n<p><span style=\"color: #2c2c29;\">In this weekend&#8217;s blog edition, we want to discuss some of the most important events that happened in the global capital markets, the world economy and the world of money in the week of August 25, 2014.<\/span><\/p>\n<ul>\n<li>Burger King acquires Tim Hortons and moves to Canada.<\/li>\n<li>Sinopec reports blockbuster earnings.<\/li>\n<li>Palladium closes above US$ 900.00 an oz, for the first time in 11 years.<\/li>\n<\/ul>\n<p><span style=\"color: #0000ff;\"><strong>BURGER KING ACQUIRES CANADIAN TIM HORTONS FOR US$ 11.4 BILLION:<\/strong><\/span><br \/>\n<span style=\"color: #000000;\">On Tuesday, August 26, 2014, an agreement was reached \u00a0between Tim Hortons Inc. (TSX, NYSE: THI) and Burger King Worldwide Inc. (NYSE: BKW) to create the world&#8217;s third largest quick service restaurant company. <\/span><\/p>\n<p><span style=\"color: #000000;\">The new combined company with approximately US$23 billion in \u00a0sales, over 18,000 restaurants in 100 countries and two strong, thriving, independent brands, will have an extensive international footprint and significant growth potential.<\/span><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/tim-hortons-burger-king-merger-official.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10738\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/tim-hortons-burger-king-merger-official.jpg\" alt=\"Tim Hortons &amp; Burger King\" width=\"400\" height=\"243\" \/><\/a><\/p>\n<p>The new global company will be based in Canada, the largest market of the combined company.<\/p>\n<p><span style=\"color: #000000;\">Under the terms of the transaction, which has been unanimously approved by the Board of Directors of both companies, Tim Hortons shareholders will receive C$65.50 in cash and 0.8025 common shares of the new company per Tim Hortons share. Based on Burger King&#8217;s unaffected closing stock price as of August 22, 2014, this represents a total value per Tim Hortons share of C$89.32 and based on Burger King&#8217;s closing stock price as of August 25, 2014, this represents a total value per Tim Hortons share of C$94.05<\/span><\/p>\n<p><span style=\"color: #0000ff;\"><strong>SINOPEC H1-2014 OPERATING PROFIT UP 11.8 PERCENT:<\/strong><\/span><br \/>\nOn Friday, August 22nd,\u00a022 August, 2014, <span style=\"color: #424242;\">Asia&#8217;s largest refiner by capacity,<\/span>\u00a0China Petroleum &amp; Chemical Corporation (&#8220;Sinopec&#8221; or &#8220;the Company&#8221;) (HKEX:386) announced its interim results for the six months ended 30 June 2014.<\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Sinopec-Service-Station.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10746\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Sinopec-Service-Station.jpg\" alt=\"Sinopec Service Station\" width=\"400\" height=\"285\" \/><\/a><\/p>\n<p><strong>Financial Highlights:<\/strong><\/p>\n<ul>\n<li>Operating profit was up 11.8 per cent year-on-year at 52.27 billion yuan.<\/li>\n<li><span style=\"color: #424242;\">Revenue fell 4.2 per cent to 1.36 trillion yuan from 1.42 trillion yuan year-on-year<\/span><\/li>\n<li><span style=\"color: #424242;\">Net profit for the first half of 2014 was up 7.5 per cent year-on-year<\/span><\/li>\n<li>Net cash flows from operating activities were 58.214 billion yuan, up 76.9% year-on-year.<\/li>\n<li><span style=\"color: #424242;\">External sales for chemical products, which account for 13.1 per cent of its turnover, was 177.2 billion yuan, a decrease of 1.7 per cent compared to the previous year.<\/span><\/li>\n<li>The Board of Directors proposed an interim dividend of 0.09 yuan per share, payable on september 30, on 2014, to share holders on record on September 23rd 2014.<\/li>\n<\/ul>\n<p><a title=\"Sinopec Announces H1-2014 Interim Results\" href=\"http:\/\/english.sinopec.com\/media_center\/news\/20140823\/download\/201408227e1.pdf\" target=\"_blank\">Source:<\/a><\/p>\n<p><span style=\"color: #000000;\">Moody&#8217;s Investors Service says China Petroleum &amp; Chemical Corporation&#8217;s (Sinopec Corp) 1H 2014 results continue to support its own as well as its parent&#8217;s, China Petrochemical Corporation&#8217;s (Sinopec Group), Aa3 issuer ratings and stable outlook.<\/span><\/p>\n<p><span style=\"color: #000000;\">&#8220;Looking ahead, Moody&#8217;s expects Sinopec Corp&#8217;s performance will remain stable in 2H 2014, given relatively stable expectations for crude oil prices,&#8221; says Lu, who is also the International Lead Analyst for Sinopec Corp.<\/span><\/p>\n<p><span style=\"color: #0000ff;\"><strong>PALLADIUM CLOSED ABOVE US$ 900.00 AN OUNCE:<\/strong><\/span><br \/>\nAlthough volumes have increased with approx. 60 percent, the precious metals, Gold &amp; Silver, still remain deeply lodged in the sideways range that has kept them trapped recently, as geopolitical pressures and a strong dollar have been unable to shift prices significantly in either direction.<\/p>\n<p style=\"color: #393a3f;\">Only palladium, which is the only precious metal, that didn&#8217;t experience a correction last year continues its rather relentless climb, for it to close today at US$ 902.00 an Ounce as can be seen from below charts.<\/p>\n<p style=\"color: #393a3f;\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Palladium-29-august1.gif\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10776\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Palladium-29-august1.gif\" alt=\"Palladium 29 august\" width=\"400\" height=\"254\" \/><\/a><\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/pd1825nyb.gif\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10778\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/pd1825nyb.gif\" alt=\"Palladium 5-year chart\" width=\"400\" height=\"244\" \/><\/a><\/p>\n<p><strong style=\"color: #0000ff;\">PGM CAPITAL COMMENTS:<\/strong><\/p>\n<p><strong><span style=\"text-decoration: underline;\">The Burger King &#8211; Tim Hortons Deal:<\/span><br \/>\n<\/strong>The newly created firm will be headquartered in Canada where the corporate tax rate is lower than in the United States. While Burger King denies it was motivated by lower taxes, the deal has revived the debate over so-called tax inversions, whereby U.S. companies use mergers to move overseas and avoid U.S. tax rates.<\/p>\n<p><span style=\"color: #444444;\">In July, the Obama administration estimated tax inversions could cost the United States as much as US$17 billion per year. One investor who stands to profit from the Burger King deal is President Obama supporter Warren Buffett. He lent Burger King $US3 billion at a lucrative 9 percent interest rate to help complete the deal.<\/span><\/p>\n<p>Below video explains details about the tax benefits for Burger King, when it moves its Headquarter to Canada.<\/p>\n<p><iframe loading=\"lazy\" src=\"http:\/\/www.democracynow.org\/embed\/story\/2014\/8\/28\/tax_dodging_whopper_burger_king_moves\" width=\"500\" height=\"300\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<p><span style=\"color: #222222;\">So, let\u2019s assume that by moving its HQ form the USA (and this is just an educated guess) the company will reduce its Corporate Tax with 2.5 percentage points. Taking Burger King\u2019s 27.5 percent current effective tax rate, we\u2019 estimate that the effective tax rate in the near future will be 25 percent. <\/span><\/p>\n<p><span style=\"color: #222222;\">In 2013, Burger King\u2019s income before taxes totaled US$ 322.2 million. That means a\u00a0<\/span><i style=\"color: #222222;\">theoretical\u00a0<\/i><span style=\"color: #222222;\">tax savings of US$8.1 million.<\/span><\/p>\n<p>As can be seen from below chart the shares of the company rose as a consequence of this merger and subsequent move of its HQ to Canada with approx. 20 percent, during the week of August 25th.<\/p>\n<div id=\"attachment_10768\" style=\"width: 510px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Burger-King.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-10768\" class=\"wp-image-10768\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Burger-King.png\" alt=\"Burger King all Time Chart\" width=\"500\" height=\"225\" \/><\/a><p id=\"caption-attachment-10768\" class=\"wp-caption-text\">Burger King all Time Chart<\/p><\/div>\n<p><span style=\"text-decoration: underline;\"><span style=\"color: #000000;\"><strong>SINOPEC:<\/strong><\/span><\/span><br \/>\nIn a statement on Tuesday, August 26th, a\u00a0<span style=\"color: #000000;\">Moody&#8217;s Investors Services Vice President and Senior Analyst\u00a0Chenyi Lu, said:<\/span><\/p>\n<blockquote><p><span style=\"color: #000000;\">&#8220;The improvement of Sinopec Corp&#8217;s 1H 2014, was in line with our expectations and was driven mainly by stronger profitability in its refining segment, which was in turn the result of the government&#8217;s reform of the pricing mechanism for refined oil products in March 2013&#8221;<\/span><\/p><\/blockquote>\n<p><span style=\"color: #000000;\">Looking ahead, Moody&#8217;s expects Sinopec Corp&#8217;s performance will remain stable in 2H 2014, given relatively stable expectations for crude oil prices,&#8221; says Lu, who is also the International Lead Analyst for Sinopec Corp.<\/span><\/p>\n<p><a title=\"Announcement: Moody's: Sinopec Corp's results for 1H 2014 support its Aa3 rating\" href=\"https:\/\/www.moodys.com\/research\/Moodys-Sinopec-Corps-results-for-1H-2014-support-its-Aa3--PR_307187?WT.mc_id=AM~WWFob29fRmluYW5jZTQyX1NCX1JhdGluZyBOZXdzX0FsbF9Fbmc%3d~20140826_PR_307187\" target=\"_blank\">Source:<\/a><\/p>\n<p>Based on the company&#8217;s fundamentals and with a Price to Earnings ratio of 12.3, Price to Book of 1,23 and a dividend yield of 4.4% we have a <span style=\"color: #008000;\"><strong>STRONG BUY<\/strong><\/span> rating on the stock of the company.<\/p>\n<p>As can be seen from below chart the stock of the company appreciated with approx. <strong><span style=\"color: #008000;\">555 percent<\/span><\/strong>, since it went IPO at the end of 2000.<\/p>\n<div id=\"attachment_10757\" style=\"width: 510px\" class=\"wp-caption aligncenter\"><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Sinopec-all-time-chart.png\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-10757\" class=\"wp-image-10757\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/Sinopec-all-time-chart.png\" alt=\"Sinopec all time chart\" width=\"500\" height=\"215\" \/><\/a><p id=\"caption-attachment-10757\" class=\"wp-caption-text\">SINOPEC All Time Chart<\/p><\/div>\n<p>Above chart also shows that the company has increased its dividend from HKD 0,0937 in 2004 to HKD 0.2789 per share, an increase of 197.65 percent during the last 10 years.<\/p>\n<p>It is also worth mentioning that the company had a stock split of 13:10 on July 2, 2013 and that its latest dividend payout of June 19 of the year is equivalent to its dividend before the split, which means that the company has raised its dividend in one year with approx. 30 percent.<\/p>\n<p><strong>Palladium:<br \/>\n<\/strong>Palladium, mostly used in catalytic converters in cars alongside platinum and in jewelery, has advanced 25% so far this year on concerns about Russian supplies and as supply was cut by a mine strike that ended in June in South Africa, the second-biggest producer.<\/p>\n<p><a href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/silver_canadian_maple_leaf.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-10760\" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/08\/silver_canadian_maple_leaf.png\" alt=\"silver_canadian_maple_leaf\" width=\"250\" height=\"250\" \/><\/a><\/p>\n<p>Tension over Ukraine led to the U.S. and European Union slapping sanctions on Russia, the top supplier.<\/p>\n<p>There have been no sanctions on palladium, which is heading for a third annual supply shortfall. Indeed, there is a risk that sanctions could lead Putin to use palladium as he has done in natural gas and secure higher prices for Russian exports.<\/p>\n<p>Due to the above mentioned fundamentals we have a <span style=\"color: #008000;\"><strong>BUY<\/strong><\/span> rating on Palladium.<\/p>\n<p style=\"color: #2c2c29;\">Last but not least, before following any investing advice, always consider your investment horizon and risk tolerance and financial situation and be aware that stock prices don&#8217;t move in a straight line and that sharp corrections may happen in the short term.<\/p>\n<p style=\"color: #2c2c29;\">Until next week.<\/p>\n<p style=\"color: #2c2c29;\">Yours sincerely,<\/p>\n<p style=\"color: #2c2c29;\"><a style=\"color: #807d7a;\" href=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/05\/Suriname-Times-foto.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9925 \" src=\"http:\/\/www.pgm-blog.com\/wp-content\/uploads\/2014\/05\/Suriname-Times-foto-150x150.jpg\" alt=\"Suriname Times foto\" width=\"96\" height=\"96\" \/><\/a><\/p>\n<p style=\"color: #2c2c29;\">Eric Panneflek<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dear\u00a0PGM Capital\u00a0Blog readers, In this weekend&#8217;s blog edition, we want to discuss some of the most important events that happened in the global capital markets, the world economy and the world of money in the week of August 25, 2014. Burger King acquires Tim Hortons and moves to Canada. Sinopec reports blockbuster earnings. Palladium closes<a href=\"https:\/\/www.pgmcapital.com\/nl\/highlights-of-the-week-of-august-25-2014\/\">[&#8230;]<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,25,23,9,24,10,19,12,26,13,27,15,16,22,1,32,18],"tags":[],"class_list":["post-10732","post","type-post","status-publish","format-standard","hentry","category-commodities","category-dividend-declaration","category-earnings-report","category-emerging-markets","category-energy","category-eric-panneflek","category-financial-news","category-inflation","category-logistic","category-market-volatility","category-news","category-pgm-capital","category-precious-metal","category-the-week-in-review","category-uncategorized","category-video","category-world-economic-outlook"],"_links":{"self":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/10732","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/comments?post=10732"}],"version-history":[{"count":0,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/posts\/10732\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/media?parent=10732"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/categories?post=10732"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pgmcapital.com\/nl\/wp-json\/wp\/v2\/tags?post=10732"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}