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Big Business Sure to Benefit from Iran Nuclear Deal

The ministers of foreign affairs and other officials from the P5+1 countries, the European Union and Iran while announcing the framework of a Comprehensive agreement on the Iranian nuclear programme. Hailong Wu of China, Laurent Fabius of France, Frank-Walter Steinmeier of Germany, Federica Mogherini of the European Union, Javad Zarif of Iran, an unidentified official of Russia, Philip Hammond of the United Kingdom and John Kerry of the United States in the "Forum Rolex" auditorium of the EPFL Learning Centre, Écublens-Lausanne, Switzerland on 2 April 2015. — The ministers of foreign affairs and other officials from the P5+1 countries, the European Union and Iran while announcing the framework of a Comprehensive agreement on the Iranian nuclear programme. Hailong Wu of China, Laurent Fabius of France, Frank-Walter Steinmeier of Germany, Federica Mogherini of the European Union, Javad Zarif of Iran, an unidentified official of Russia, Philip Hammond of the United Kingdom and John Kerry of the United States in the “Forum Rolex” auditorium of the EPFL Learning Centre, Écublens-Lausanne, Switzerland on 2 April 2015.

The nuclear agreement carved out by Iran, the United States and five other world powers, if ratified, will lift an international embargo on Iran that will benefit not only the people of Iran economically, but some major corporations.

Iran has the fourth largest crude oil reserves in the world, and the second largest natural gas reserves. For the past several years this treasure has been largely unavailable due to the international embargo which was placed on Iran due to its illegal development of a nuclear weapons capability. A signed and sealed agreement will open these vast stores of resources to the world market, benefiting the corporations that do business in energy-related niches.

“Most likely European and Asian energy companies will see an increase in business—so companies like Total and Shell,” said Alireza Nader, senior international policy analyst at the Rand Corporation. “For American energy companies, it’s going to be tougher for them to go back in Iran.”

US companies are likely to avoid doing business in Iran for political reasons; companies don’t want to be associated with an extremist Islamic dictatorship, and will most likely stay away.

Tankers and oilfield services are also going to reap rewards from the opening of the Iranian economy. Chris Wetherbee, an analyst at Citi Research, said the embargo lift is a “net positive” for international tanker companies. Iran’s own aging fleet simply will not be able to compete, especially with additional energy supplies on the market. Investors agree: Scorpio Tankers and Navios Maritime Acquisition stocks both rose on Tuesday.

New Regulations Hope to Disable Mexico-US Money Laundering Schemes

New Regulations Will Help to Curtail Money Laundering. Photo courtesy Images Money

In response to what the Financial Times reports as over $10 billion in illicit funds that are laundered each year in the US, the US government has recently placed tough new controls on banks. The move is designed to slow down, if not stop, the entrance of narcotic profits from Mexican drug cartels into the US banking system. In their efforts to comply with the regulations several large US-based banks have recently begun to shut down their branches near the US-Mexican border.

The FT article, entitled “Mexico: Clearing Out,” describes members of the US banking industry claiming that legal, legitimate businesses and above-board financial transactions are being dragged into the fray, causing damage.

“The crackdown on money laundering has not necessarily curtailed the practice, but instead may simply have pushed it further underground. The up to $10bn in illicit cash that used to flow through the system is still going to the US, the senior Mexican banker says: “It’s just no longer on the radar.””

The final straw that forced US regulators to take strong action was revealed in an article in Breitbart Texas, discussing Mexican cartel money laundering within the US banking industry.

“World banking giant, HSBC, got caught with its hand in a money laundering scheme that helped drug cartels turn nearly a billion dollars in narco-cash into gold. HSBC only faced a fine for their complicity, but members of money-laundering organizations (MLO) are now facing up to twenty years.”

Although HSBC was heavily fined, none of the banking execs went to prison for their behavior, which enabled Mexico’s intense drug war.

Investors Cautious as Stock Market Continues Decline

Where is the market heading? photo by Rafael Matsunaga

During the week between January 8 and January 15 the stock market fell five sessions in a row, losing over 3 percent in its value. Whether that downturn is the much anticipated correction investors have been alert for, or it’s just a regular speed bump on the highway to more profits, is the question of the hour.

The last time the S&P shed 10 percent or more was over three years ago. Since December 29 that index has dropped by 5 percent up until last Thursday’s closing bell. What to make of these indicators is practically anyone’s guess at the moment. The downturn has made shares less pricey, with the price/earnings ratio of the S&P down to 16 on Friday. At the end of 2014 the P/E figure stood at 20.

American investors are also wary of the fall in commodities, not knowing if that collapse is telling them to buy or sell. Oil prices have also been tumbling, selling at under $50/barrel, a six-year low. The drop in gas prices as sparked a rise in consumer spending, creating a great mood for shoppers expressed in an 11-year high this month.

Other indicators, from the strength of the dollar to the price of copper, have left investors at a loss for interpreting the data. Some seem to believe it is just a bump on the road, and are buying some shares that look like bargains now.

“We’re in buying mode now, and are absolutely pleased to be able to pick up some stocks we’re excited about while investors are putting them on sale,” said Lamar Villere, a portfolio manager at Villere & Co, which has about $3 billion in assets under management.

Ed Keon, portfolio manager at Quantitative Management Associates, agrees with Villere.

“I believe it’s more likely to be noise than part of a broader correction,” said Ed Keon, a portfolio manager at Quantitative Management Associates, a Prudential Financial company, where he helps manage more than $60 billion.

Margaret Keane Head of Synchrony Financial

One of only two women running independently traded US banks valued at over $10 billion, Margaret Keane, 55, knows what it feels like to be unique.

She explained why she follows sports news, even though sports are not a real interest of hers:

“A lot of times I’m the only woman in the room,” said Keane, who leads Synchrony Financial. “If the Yankees won last night, you should know because it’s going to come up. You need to be able to banter with your male colleagues — you can fight that or you can get in the middle.”

Keane has been climbing the corporate ladder for thirty years, learning to build relationships and the ins and outs of finance. Starting in the call center at Citicorp, she managed to make it to the rarefied atmosphere of top level management where women are conspicuously absent. Now she is faced with a new and exciting challenge. Her company, Synchrony, until recently, was a part of General Electric. As of last July, however it has spun off as its own financial lending institution, becoming the largest bank in the US that is run by a woman.

The other woman in this special club is Beth Mooney of KeyCorp. Even though women hold about half the job in financial services, when you examine the upper echelons of executive positions women are only represented 12.4 percent of the time.

“There’s an enormous responsibility that comes with being a diverse leader,” Keane said in an interview at the firm’s Stamford, Conn., headquarters. “My job is to figure out how to get more women in leadership across our industry.”

Ameriprise Boosts Staff Across USA

Ameriprise Financial Inc announced that it has hired five new advisors to different locales across the country.

During the past several weeks the asset manager and brokerage firm hired John Ledford from Commonwealth Financial Network; Steve Jacobson from James Financial; Kevin Barnes who left ProEquities; from Morgan Stanley Ron Camisasca; and Sandra Hudgins joining from Merrill Lynch.

Ledford will be going to Ameriprise’s Orando, Florida office. According to Ameriprise he will have $138 million in assets under management. Jacobson will have $124 million in AUM, based in the New Orleans branch office. Stationed in Bentonville, Arkansas with $148 million will be Kevin Barnes. In Clearwater, Florida Camisasca will manage $96 million in assets, while Hudgins will control $100 million from the Dallas, Texas branch.

Four of the managers were taken on as employees, and the fifth, namely Kevin Barnes was hired as and independent advisor.

Ironic Criticism of US Issued from Egypt

In what many are interpreting as a not-so-veiled insult, the Egyptian Foreign Ministry issued a statement urging the US to “exercise restraint” while dealing with violent protests in Ferguson, Missouri. The statement is not only insulting, but also ironic, as it echoes the language used by the US towards Egypt during its own crackdown on violent Islamic protests last year.

Observers are unsure why the Egyptians, who generally do not criticize one of their most important sponsors, would choose to make such a biting statement.

In the wake of the hard-line crackdown on protestors last year in which hundreds of Muslim Brotherhood members were gunned down by Egyptian forces, relations between the US and Egypt became strained. The protestors were demonstrating against the forced ouster by the Egyptian army of democratically elected Muslim Brotherhood member President Mohamed Mursi in July, 2013.

Western countries remain suspicious of Mursi’s replacement, President Abdel Fattah al-Sisi, the army chief who ousted Mursi and then won the votes he needed to become president. Despite the US discomfort with al-Sisi they have continued to provide monetary and military support to the regime.

The statement released by Egypt came after protests denouncing the shooting of an unarmed black teen by a white policeman in Ferguson, Missouri became increasing violent and out of control. The statement made was uncomfortably close to a statement issued by the US in July 2013 in which the White House “urged security forces to exercise maximum restraint and caution” in dealing with protests by Mursi supporters. Egypt even added that the foreign ministry was “closely following the escalation of protests” in Ferguson.

GoPro Files for IPO: Hopes to Raise at Least $100 Million

GoPro, maker of wearable cameras designed to be used by extreme sports enthusiast and

others, has filed documents with regulators of its intention to sell shares of their company. The numbers of shares they intend to sell, and their price, have not yet been disclosed.

The company did say that they hope to pay off a $111 million debt with proceeds from their IPO, and with any additional money they raise, “it may use a portion of the net proceeds to acquire or invest in complementary businesses, technologies or assets.”

Net income in 2013 was $60.6 million, almost twice what it brought in in 2012. GoPro has sold over 8.5 million HD cameras since they first launched that product in 2009.

The company intends to list on the NASDAQ using the symbol “GPRO.” JP Morgan, Citigroup and British Barclays Bank will be working on the IPO. Nicholas Woodman, founder and CEO, and his family, are the largest shareholders, with 49 percent. The company stated that Woodman was a crucial player in the future success of the company.

“The loss of Mr. Woodman could adversely affect our business, financial condition and operating results,” the company said in a statement

FoxConn, a Taiwan-based manufacturer, has a minority share in GoPro. In 2012 they purchased the company for $200 million. That deal values the camera maker at about $2.25 billion.

Sterling’s Remarks Leading to Loss of Income for Clippers

In the wake of Clipper’s owner Donald Sterling’s alleged racist remarks several companies have taken action to either cut-off sponsorship funds completely, or to just temporarily withhold support until more clarity is established.

The first company to react to Sterling’s hate speech, which was first brought to light on the celebrity gossip/news site TMZ, was State Farm insurance. At first it seemed they were going to completely cut their ties with the Los Angeles Basketball team, but have since recanted, saying in an official statement that the brand would only be “taking a pause” from lending its support for the team.

Next came CarMax, which took a more extreme position, completely ending their relationship with the Clippers. After CarMax’s hardline stand Virgin America took a similar position and withdrew their sponsorship as well. Joining the avalanche of brands ending support for the LA Clippers was Mercede-Benz, cutting all ties completely. A presenting sponsor, the Chumash Indians has also decided to end ties with the beleaguered Los Angeles team.

“I would advise any of my clients to distance themselves completely from the situation,” said David Spencer, a sports marketing expert for Talent Resources. “I don’t see a negative of jumping ship at all. The only negative would be to stay on the sinking ship.”