“U.S. consumers did not boost their spending in June and their incomes failed to increase, further evidence that the economic recovery slowed in the spring. And Americans saved at the highest rate in nearly a year.”
Separately, Advisor.ca reported the following about Canadians based on the Russell Financial Health Index:
“The findings of the survey show that investors are also more concerned about having sufficient income to cover their essential expenses and the financial impact on medical and healthcare needs.”
In my opinion, the wealth management sector stands to benefit from the trend towards increased savings while sectors reliant on consumer spending are not likely to see robust growth.
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During the week, the following news items were of relevance to some of the companies we follow:
- The Adani group of companies is comprised of businesses that surround the consumption of energy in India. From fuel sourcing (coal mining) to logistics (ports, shipping, pipelines, rail) to power generation and distribution to trading (coal, oils and electricity), the synergies within the group facilitate market leadership, growth and enhanced profitability.
- Mundra Port & Special Economic Zone reported its results for its first quarter ended June 30, 2010. Compared against the corresponding quarter in the prior year, Revenues increased 35%, Operating Income before Depreciation increased 31% and Earnings Per Share increased 24%. Cargo volume to 12.6 million metric tons, an increase of 28% year over year and 21% sequentially versus the immediately preceding quarter.
- Adani Enterprise Limited (“AEL”)(parent company of Mundra Port & Special Economic Zone and Adani Power Limited)
- Announced the acquisition of the Galilee Coal Project in Australia from Linc Energy. The Galilee Coal Project is reported to represent 7.8 billion of coal reserves and, when completed, annual production capacity of 60 million tons per year. In addition to increasing AEL’s market share position in coal trading in India, this acquisition serves to secure additional coal supply for Adani Power Limited’s power generation needs and will also provide further cargo volume growth for Mundra Port.
- On August 2, 2010, Bloomberg Business Week reported that Adani Enterprises Limited had secured orders from Indian cement companies ACC Ltd., Grasim Industries Ltd. and Jaypee Cement Ltd for a combined total of 400,000 tons of coal to be imported from South Africa.
- Adani Power Limited reported its results for its first quarter ended June 30, 2010. Earnings Per Share of Rs. 0.53 for the quarter compared against Rs. 0.82 for the full year ended March 31, 2010.
- Berkshire Hathaway Inc. reported its results for the quarter ended June 30, 2010. Earnings per Share of $1,195 compared against $2,123 in the prior year. The decline was more than accounted for non-cash Derivatives Gains/Losses. The majority of these derivatives, which don’t mature until 2018 or later, create mark-to-market gains losses each quarter. Excluding these gains/losses, Earnings before Income Taxes and Equity Method Earnings per average share outstanding increased to $3,105 from $1,569 in the corresponding quarter of the prior year.
