Monthly Archives: June 2014

Eaton Vance Tax-Managed Global Diversified Equity Income Fund June 2014 Distribution

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BOSTON, June 30, 2014 /PRNewswire/ — Eaton Vance Tax-Managed Global Diversified Equity Income Fund (EXG) today announced important information concerning its distribution declared in June 2014.  This press release is issued as required by the Fund’s managed distribution plan (Plan) and an exemptive order received from the U.S. Securities and Exchange Commission.  The Board of Trustees has approved the implementation of the Plan to make monthly cash distributions to common shareholders, stated in terms of a fixed amount per common share. This information is sent to you for informational purposes only and is an estimate of the sources of the June distribution.  It is not determinative of the tax character of the Fund’s distributions for the 2014 calendar year. Shareholders should note that the Fund’s total regular distribution amount is subject to change as a result of market conditions or other factors.

The amounts and sources of distributions reported in this notice are estimates, are not being provided for tax reporting purposes and the distribution may later be determined to be from other sources including realized short-term gains, long-term gains, to the extent permitted by law, and return of capital. The actual amounts and sources for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations.  The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Distribution Period:  June 2014
Distribution Amount per Common Share:  $0.0813

The following table sets forth an estimate of the sources of the Fund’s June distribution and its cumulative distributions paid this fiscal year to date.  Amounts are expressed on a per common share basis and as a percentage of the distribution amount.

Eaton Vance Tax-Managed Global Diversified Equity Income Fund

Source

Current Distribution

% of Current Distribution

Cumulative Distributions for the Fiscal Year-to-Date1

% of the Cumulative Distributions for the Fiscal Year-to-Date1

Net Investment Income

$0.0813

100.0%

$0.6504

100.0%

Net Realized Short-Term Capital Gains

$0.0000

0.0%

$0.0000

0.0%

Net Realized Long-Term Capital Gains

$0.0000

0.0%

$0.0000

0.0%

Return of Capital or Other Capital Source(s)

$0.0000

0.0%

$0.0000

0.0%

Total per common share

$0.0813

100.0%

$0.6504

100.0%

1     The Fund’s fiscal year is November 1, 2013 to October 31, 2014

IMPORTANT DISCLOSURE:  You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Plan.  The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with ‘yield’ or ‘income.’  The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes.  The actual amounts and sources of the amounts for accounting and/or tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Set forth in the table below is information relating to the Fund’s performance based on its net asset value (NAV) for certain periods.   

Average annual total return at NAV for the 5-year period ended on May 31, 20141

11.82%

Annualized current distribution rate expressed as a percentage of NAV as of May 31, 20142

8.84%

Cumulative total return at NAV for the fiscal year through May 31, 20143

7.92%

Cumulative fiscal year to date distribution rate as a percentage of NAV as of May 31, 20144

5.15%

1 Average annual total return at NAV represents the change in NAV of the Fund, with all distributions reinvested, for the 5-year period ended on May 31, 2014. 
2 The annualized current distribution rate is the cumulative distribution rate annualized as a percentage of the Fund’s NAV as of May 31, 2014.
3 Cumulative total return at NAV is the percentage change in the Fund’s NAV for the period from the beginning of its fiscal year to May 31, 2014 including distributions paid and assuming reinvestment of those distributions.
4 Cumulative fiscal year distribution rate for the period from the beginning of its fiscal year to May 31, 2014 measured on the dollar value of distributions in the year-to-date period as a percentage of the Fund’s NAV as of May 31, 2014.

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Xinyuan Real Estate Co., Ltd. Announces Appointment of Chief Financial Officer

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Year-To-Date Winners: We Have Found The Market And It's Apple

BEIJING, June 30, 2014 /PRNewswire/ — Xinyuan Real Estate Co., Ltd. (“Xinyuan” or the “Company”) (XIN), a residential real estate developer with a focus on high growth cities in China, today announced the appointment of Dr. Manbo He as its new chief financial officer, effective June 30, 2014.

Dr. Manbo He joins Xinyuan from Kingold Group, a Guangzhou-based conglomerate, where he served as the group’s chief operating officer since 2011. Dr. He has extensive experience in accounting, financial reporting, operations and corporate governance, and has held various executive positions and served on the board of several Chinese conglomerates including Wanda Group, Tiens Group, and Holley Group. Dr. He holds a Bachelor’s Degree in Accounting, an MBA in Finance, and a PhD in Econometrics and is a Certified General Accountant in Canada.

Mr. Yong Zhang, Chairman of Xinyuan, commented, “We are delighted that Dr. He has joined our executive management team and believe that his financial experience and leadership are a great fit for Xinyuan during the current stage of our company’s development. Dr. He brings to Xinyuan over twenty years of experience in financial analysis, corporate finance, internal controls, and capital markets experience. We look forward to Dr. He’s contributions as a key member of our executive team as we continue to make progress with the growth of our real estate development initiatives. I’d also like to personally thank Helen Zhang for her excellent work and strong contribution to Xinyuan as interim CFO for the last seven months. Helen will remain as Financial Controller and executive assistant to the CEO of the Company and will continue to play an active role in Xinyuan’s investor relations initiatives.”

About Xinyuan Real Estate Co., Ltd.

Xinyuan Real Estate Co., Ltd. (“Xinyuan”) (XIN) is a developer of large scale, high quality residential real estate projects aimed at providing middle-income consumers with a comfortable and convenient community lifestyle. In China, Xinyuan primarily focuses its development projects in high growth cities, Zhengzhou, Ji’nan, Suzhou, Kunshan, Xuzhou, Chengdu, Shanghai, Beijing, Changsha, Sanya, and Hefei. The Company’s U.S. development arm, XIN Development Group International, Inc., is a pioneer amongst Chinese real estate residential developers, entering the U.S. market in 2012. Xinyuan is the first real estate developer from China to be listed on the New York Stock Exchange. For more information, please visit http://en.xyre.com/ir.html.

For more information, please contact:

In China:
Ms. Helen Zhang
Tel: +86 (10) 8588-9398
Email: irmanager@xyre.com

ICR, LLC
In U.S.: +1-646-308-1472
In China: +86 (10) 6583-7511
Email: William.zima@icrinc.com

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Should You Sell ETW And Buy EXG?

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Summary

  • ETW and EXG are global option income CEFs from Eaton Vance with 9%+ yields.
  • ETW and EXG have had very similar returns over the past year, but the discount for ETW has narrowed significantly over the past three months.
  • ETW’s discount of -3.3% is much higher than its 52-week average of -7.7%, while EXG’s discount of -8.45% is similar to its 52-week average of -8.33%.
  • In view of their similar investment mandates, a recommendation is made to sell ETW and buy EXG.

Introduction

Tax-Managed Global Buy-Write Opportunities Fund (NYSE:ETW) and Tax-Managed Global Diversified Equity Income Fund (NYSE:EXG) are option income close-ended funds (CEFs) from Eaton Vance (NYSE:EV) that have a global focus, and sport 9%+ yields. Both funds seek to achieve “current income with capital appreciation through investment in global common stock and through utilizing a covered call and options strategy.”

In the covered call strategy, the funds purchase common stock and write call options against the underlying indices. This provides a high level of current income, but limits the upside potential of the fund if the market moves up too rapidly (since the call options will have to be repurchased at a higher price). Hence, equity option income funds are expected to lag the index in a strong bull market, but to outperform in sideways or bear markets. Seeking Alpha contributor, Douglas Albo, writes extensively on various types of CEFs, including option income funds.

The main difference between the two CEFs is the percentage of option coverage of their stock portfolios. According to the latest information from Eaton Vance, ETW has 93% option coverage while EXG has 40% option coverage. Hence, ETW is the more defensive of the two funds.

Fund characteristics

Table below shows the top 10 holdings for EXG and ETW in descending order of portfolio size, as viewed on CEFconnect. Note that there is some degree of overlap between the two funds (common holdings italicized).

EXG ETW
Skandinaviska Enskilda Banken AB (OTCPK:SKVKY) Apple, Inc. (NASDAQ:AAPL)
Chevron Corp (NYSE:CVX) Microsoft Corporation (NASDAQ:MSFT)
Apple, Inc. Nestle SA (OTCPK:NSRGY)
Roche Holding AG (OTCQX:RHHBY)
Roche Holding AG
Ericsson Telephone Company (OTC:ERIAF) Novartis AG (NYSE:NVS)
Occidental Petroleum Corporation (NYSE:OXY) Qualcomm, Inc. (NASDAQ:QCOM)
Emerson Electric Co. (NYSE:EMR) Gilead Sciences Inc (NASDAQ:GILD)
Nestle SA
Google, Inc. (NASDAQ:GOOG)
Gilead Sciences Inc
Comcast Corp A (NASDAQ:CMCSA)
LyondellBasell Industries NV (OTCQB:LALWF) Intel Corp (NASDAQ:INTC)

There are some differences in the number of positions held, though their expense ratios are the same. Their low expense ratios is a definite advantage for these funds.

EXG ETW
Number of positions 147 461
Weight of top 10 positions % 14.5 19.3
Expense ratio 1.06 1.10

Both funds have also maintained steady payouts over the past 12 months.

Recent divergence

Until about three months ago, EXG and ETW have had very similar recent total returns. A one-year chart of the two CEFs from end-April 2013 to end-April 2014 is shown below.

EXG Total Return Price Chart

EXG Total Return Price data by YCharts

Since April 1st, however, ETW has far outpaced EXG, with a total return differential of 4.7%. This is quite significant considering that the two funds moved almost in lockstep in the 12 previous months.

EXG Total Return Price Chart

EXG Total Return Price data by YCharts

What was the reason for this divergence? The table below sheds some light on the situation.

EXG ETW
3-month price return % 3.44 9.43
3-month NAV return % 4.69 4.92
52-week historical discount % -8.33 -7.71
Current discount % -8.45 -3.31
Current yield % 9.57 9.09

Notice that EXG and ETW have had similar NAV returns over the past 3 months. However, the price of ETW has raced ahead that of EXG. The discount for ETW has now narrowed from a 52-week historical discount of -7.71% to -3.31%, a +4.42% differential. On the other hand, the discount of -8.45% for EXG is slightly greater than its 52-week historical discount of -8.33% (a -0.12% differential).

This can be clearly observed from the premium/discount chart for the two funds as well (from CEFconnect).

EXG

ETW

Investor implications

Closed-ended funds can trade above or below their net asset value because the number of shares in the fund are fixed. Hence, buying funds that are at a discount is a good way to get more “bang for your buck,” as you are buying assets of the fund at discount (obviously). Conversely, buying funds that are priced at a premium is generally not recommended as you would be paying more for an asset than what it is actually worth.

Therefore, the recent divergence in EXG and ETW allows a savvy investor to exploit the difference in discounts. Given that both funds have very similar 5-year average discount values (-8.18 and -8.09% for EXG and ETW, respectively), ETW could be considered to be modestly overvalued, since it is currently selling at a discount of only -3.31%. I expect the difference in discounts to narrow over time. If one agrees with this hypothesis, one should sell ETW and buy EXG, given they have similar investment mandates.

The same phenomenon is observed for Eaton Vance’s U.S.-based option income funds Tax-Managed Diversified Equity Income Fund (NYSE:ETY), which has about 50% option coverage, and Tax-Managed Buy-Write Income Fund (NYSE:ETB) and Tax-Managed Buy-Write Opportunities Fund (NYSE:ETV), which have about 100% option coverage. The discount for ETY is -6.95% while the discounts for ETB and ETV are much lower at -3.71% and -0.67%, respectively. In other words, the more defensive funds (the ones with higher option coverages) are getting more expensive relative to the less defensive funds.

What could one take away from this? One might infer that market participants are worried about an impending market correction, and are bidding up more defensive option income funds. This also might hinge upon whether one considers CEF investors to be “smart money” or “dumb money.” Nasdaq.com shows institutional ownership of EXG to be 15.88% and ETW to be 19.72%. Most of the Eaton Vance option income funds have institutional ownership in the 15-20% range.

Personally, I have sold my holdings of ETW (which has yielded a total return of 18% since my initial purchase 13 months ago) and rotated them into EXG to take advantage of the discount discrepancy of 5% that has emerged over the past few months. I am not worried of a market correction, and even if there were to be one, I would not expect EXG (which has 50% option coverage) to fare much worse than ETW (100% option coverage).

Readers are invited to share their thoughts on the cause of the emergence of the price discrepancy between more-defensive and less-defensive option income CEFs over the past few months.

Disclosure: The author is long EXG. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article. (More…)






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Eaton Vance Closed-End Equity Option Funds Declare Monthly Distributions

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BOSTON, June 13, 2014 /PRNewswire/ — Eaton Vance Management, the Boston-based investment adviser, today announced the monthly distributions declared on the common shares of eight of its closed-end equity funds (the “Funds”). The record date for this month’s distributions is June 23, 2014, and the payable date is June 30, 2014. The ex-date is June 19, 2014.  The distribution per share for each Fund is as follows:

Fund                                                                                 

Distribution
Per Share

Eaton Vance Enhanced Equity Income Fund (EOI)                          

$0.0864

Eaton Vance Enhanced Equity Income Fund II (EOS)          

$0.0875

Eaton Vance Risk-Managed Diversified Equity Income Fund (ETJ)       

$0.0930

Eaton Vance Tax-Managed Buy-Write Income Fund (ETB)       

$0.1080

Eaton Vance Tax-Managed Buy-Write Opportunities Fund (ETV)    

$0.1108

Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund (ETW)    

$0.0973

Eaton Vance Tax-Managed Diversified Equity Income Fund (ETY)    

$0.0843

Eaton Vance Tax-Managed Global Diversified Equity Income Fund (EXG)      

$0.0813

At this time the Funds believe that a portion of the June distribution may be comprised of amounts from sources other than net investment income.  If that is the case, you will be notified in writing.  Further information will be available prior to the payment date at http://funds.eatonvance.com.  The final determination of tax characteristics of each Fund’s distributions will occur after the end of the year, at which time it will be reported to the shareholders.

The Funds make distributions in accordance with a managed distribution plan. With each distribution, a Fund issues a notice to shareholders and a press release containing information about the amount and sources of the distribution and other related information.  A Fund’s distributions in any period may be more or less than the net return earned by the Fund on its investments, and therefore should not be used as a measure of performance or confused with “yield” or “income.” Distributions in excess of Fund returns will cause its net asset value to erode. Investors should not draw any conclusions about a Fund’s investment performance from the amount of its distribution or from the terms of its managed distribution plan. A Fund’s distribution rate may be affected by numerous factors, including changes in realized and projected equity market returns, option premiums, Fund performance and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in a Fund’s distribution rate.  Additional information about the Funds, including performance and portfolio characteristic information, is available at www.eatonvance.com.

The Funds are managed by Eaton Vance Management, a subsidiary of Eaton Vance Corp. (EV), based in Boston, one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates managed $285.9 billion in assets as of April 30, 2014, offering individuals and institutions a broad array of investment products and wealth management solutions.  The Company’s long record of providing exemplary service and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today’s most discerning investors.  For more information about Eaton Vance, visit www.eatonvance.com.

Shares of closed-end funds often trade at a discount from their net asset value. The market price of Fund shares may vary from net asset value based on factors affecting the supply and demand for shares, such as Fund distribution rates relative to similar investments, investors’ expectations for future distribution changes, the clarity of the Fund’s investment strategy and future return expectations, and investors’ confidence in the underlying markets in which the Fund invests. Fund shares are subject to investment risk, including possible loss of principal invested. No Fund is a complete investment program and you may lose money investing in a Fund. An investment in a Fund may not be appropriate for all investors. Before investing, prospective investors should consider carefully the Fund’s investment objective, risks, charges and expenses. 

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Tomorrow’s Ex-Dividends To Watch: DHY, MAV, MW

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Editor’s Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Tomorrow, Friday, June 13, 2014, 4:00 AM ET, 14 U.S. common stocks are scheduled to go ex-dividend. The dividend yields on these stocks range from 1% to 9.1%. All of these stocks can be found on our stocks going ex-dividend section of our dividend calendar.

Highlighted Stocks Going Ex-Dividend Tomorrow:

Credit Suisse High Yield Bond Fund

Owners of Credit Suisse High Yield Bond Fund (AMEX: DHY) shares, as of market close today, will be eligible for a dividend of 2 cents per share. At a price of $3.24 as of 9:35 a.m. ET, the dividend yield is 8.9%.

The average volume for Credit Suisse High Yield Bond Fund has been 283,800 shares per day over the past 30 days. Credit Suisse High Yield Bond Fund has a market cap of $316.8 million and is part of the financial services industry. Shares are up 5.5% year-to-date as of the close of trading on Wednesday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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Xinyuan Real Estate And Its Undeserved Label, American Style

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Year-To-Date Winners: We Have Found The Market And It's Apple

Summary

  • Xinyuan Real Estate has always been falsely categorized and labeled as a fraudulent company.
  • The general continuity of distrust between the Chinese and American financial belief systems.
  • American Accounting vs. Chinese Accounting.

George Soros stated, “I rely on a great deal of animal instincts.” It is a disposition that may have a lot to do with history as a sequence of random events and unpredictable choices, which is why the future is so difficult to foresee. If one looks at a company, one can see something, which is much larger in scale and ambition. But sometimes, there are trends that can push a company down by virtue of being labeled a fraud.

The American people look at China and respect and admire a nation that has accomplished something that we may never duplicate. Part of what makes China’s growth so appealing, is that we only see what we want to see, or believe what we are told. We do not know them well enough to discover their human frailties that may diminish them in our eyes. In some cases, we hear about their shortcomings and refuse to acknowledge them. We compare our insides to their outsides, when that comparison is made we always come up short.

Xinyuan Real Estate (NYSE:XIN), a company rooted in China, is the first Chinese real estate developer listed on the New York Stock Exchange. One Seeking Alpha co-author pleaded, “If anyone has additional information please, I’m all ears, I’m willing to pay for any evidence that Xinyuan is not legitimate.” The real question that needs to legitimize XIN of why it’s so undervalued and overlooked by institutions has more to do with the price below $5 and the inherent risks that institutions are not willing to take to purchase a company with a market cap less than one billion dollars.

There is a belief that the books are cooked. There is a belief that the developments in China do not exist. There is a belief that they do not have the experience in the United States to develop property. Shadow banking has reached its tentacles, sweeping the belief that ghost cities have become a norm of what China is and will be in the future. Why are ghost towns in China being constructed without attracting residents or businesses? China’s self-fulfilling prophecy of growth has more to do with the American expectation of their growth; failure to deliver will result in punishment. Not so much economically, but by national pride. That’s why some analysts believe their economic statistics are false and not to be trusted. Again, they are the second most powerful economic engine in the world and at times I do believe their statistics are inflated. This is something that Americans are unable to comprehend simply because their character cannot be measured with failure.

There are many companies in China that commit fraud and there are many that do not. Buildings will be built even though the Chinese consumer market cannot afford it. Retailers are unable to support the new developments. However, for Chinese real estate developers that cheat the system and rob consumers of their homes and wealth carries a stiff penalty unlike America. The fear is evident; a good example of this is the Shenhow Apartment Case of 2006. This involved real estate developers unable to secure financing to complete a development project that used a variety of means such as the creation of fake application documents for bank loans and bribing bank officials to approve the individual mortgage loan applications for the fake buyers. Since 2003, commercial banks have been prohibited under the guidelines of the People’s Bank of China (PBOC) from advancing loans to fund payments of land use rights. The PBOC also raised the reserve requirement ratio for large commercial banks by 0.5 to 20%. Local governments in China are clearly struggling with their finances, especially because of a decline in land transfer fees revenue the local government receives by selling land to developers. In the first half of this year, the amount of revenue received for land transfer fees in 300 cities was $652 billion yuan. Down 38% compared to the same period last year. In Beijing alone, it’s down 55.65%. This is to curb shadow banking from lending money to developers and decreasing ghost cities throughout the country, resulting in a reduction in the GDP.

China believes that it was the American real estate collapse that triggered the loss of confidence in international markets and the distrust of its own banking system. The previous practices of American banks between buyers and sellers, and fraudulent assessment of property unfortunately resulted in many Americans losing their homes. A particularly strange and somewhat eerie phenomenon arose as a result of China building purely for the sake of economic growth and America’s uninhibited belief that their own financial institutions have cleansed their hands from fraudulent activities. It is a dichotomy between two nations; one nation’s more virtuous than the other, one needs to be punished more than the other by being labeled fraudulent. American financial institutions are absolved by being superior and having the attitude of being right. Paul Gillis, an accounting professor at Peking University stated, “The US is used to making the rules and China is saying ‘we’re not allowing you to make all the rules’.” It becomes a question of sovereignty between two nations. As of May 24, 2013, Chinese and U.S. regulators entered into a co-operative agreement. The agreement permits joint inspections in China of audited firms that are registered with the Public Company Accounting Oversight Board (PCAOB) and to audit Chinese companies that are listed in the U.S. exchange.

Chinese companies are subject to Chinese laws just like American companies are subject to American laws. American accounting firms such as Ernst & Young, Deloitte, etc. that have branches in China are separate corporate entities that had to adhere to the laws of China or face penalties. Industries in China considered to be sensitive, such as advanced technological firms, are crucial to the economic development of the country. Observers speculate authorities may restrict access to these work papers in order to protect ‘state secrets’ that are crucial to China’s growth. Mr. Zhao, a professor of corporate finance at the UK’s Cranfield School of Management, stated “From the China side, everybody knows the accounting books are problematic. If the SEC can access the listed companies’ information in China, then Chinese citizens will start demanding state-owned enterprises to reveal this information.” The SEC’s strong-arm tactics are not working even when Chinese companies are faced with the problem of getting de-listed in the U.S. exchange resulting in American multinational companies being punished. If the dispute is not resolved, Chinese auditors could potentially lose their registration. This is known as the nuclear option. Companies in China would be incapable of having their accounts audited to comply with U.S. securities law and therefore would no longer be able to trade on U.S. exchanges. Unfortunately, the SEC is playing a dangerous game of bargaining. China believes American financial institutions are more trusted than their own. Michael Gisser, head of law firm Skadden’s Asia-Pacific practice, indicated: “There are companies that have not had any investigations, but nonetheless there is a loss of investor interest.”

The word “enough” sometimes preaches how tired everyone is. For Goldman Sachs, J.P. Morgan, AIG, Bank of America, redemption is not the billions that they have to pay the SEC for real estate fraud. These financial institutions have to count their blessings that they’re not de-listed, and more importantly the label of fraud isn’t attached to their reputation.

Seeking Alpha has provided my colleague and I to be the first to introduce new empirical methods for financial analysts and the general public to study the veracity and claims that companies make between what is real to that which is not real. Google Earth sequences display the past, present, and future developments. However, these methods may have far reaching consequences for the mining industry.

Looking at XIN, my colleague and I have painstakingly researched all 42 of their real-estate development projects. We did not travel to China. We went on Google Maps and Google Earth. The outline of each of their developments corresponds to the past where the land was not developed to the development of the project itself. An example of the Suzhou International City Garden is provided below:

(click to enlarge)

It is there for everyone to see. Even the foundations of the Williamsburg condominium project in Brooklyn located at Kent Avenue and South 8th Avenue have been put up:

(click to enlarge)

Another example of our findings includes the Zhengzhou Xinyuan Newtown pictured below in the middle of the map:

(click to enlarge)

Here is a more zoomed in map of the Zhengzhou Xinyuan Newtown:

(click to enlarge)

Another interesting aspect of XIN is its goal of using sustainable development when constructing its projects. XIN has been very selective on the markets that they are presently in or decide to enter. What is unique with respect to all their properties is that they must have a population of over 5 million, a stable demand, and sustainable land supply. That is why all their active and present projects have not been negatively impacted. The management team of XIN has become a prudent developer by incorporating discipline into their projects. The land acquisition for the first quarter totaled 376.3 million giving XIN a steady pipeline for future growth. As investors, you want to see strong progress for growth and revenue.

TPG Capital, a leading global private investment firm with over $59 billion under capital management, invested $108.6 million into XIN. Their due diligence had more to do with the hiring of Ropes & Gray LLP, a global law firm with offices located in the United States, Asia, and Europe that made the recommendation to TPG to invest in XIN because of their future growth. Ropes & Gray LLP have historically been very thorough in their research and have never been wrong due to their prestigious client-base. Ropes & Gray have recommended to TPG Capital to take Chinese companies private because of their low valuation. TPG Capital is known to purchase and privatize undervalued companies such as Chindex International Inc.

Helen Zhang, Interim CFO of XIN, gave some clue to American investors about her company. “The company is brilliant and it is our goal that the future coming years we would like to grow around 30% for the top-line and probably even more.” She also indicated that TPG capital is playing an important role in the investment decisions regarding larger-scale projects. In the XIN Q1 2014 earnings call transcript provided by Seeking Alpha, Matthew Larson of Morgan Stanley provided a perplexed sentiment confirming his need to raise the stock price and in his mind failing to do so. He added, “and by the way you raise your dividend, have bought back shares over the years you put focus such as Anthony Walton on the Board, people who I would assume to advantage your company and then finally the TPG involvement. You pretty much done everything you can in my mind, the only thing that I should follow ironically is the stock price, it went up for quite a while and then it’s given back. The irony is you done I think everything you could do within reason and as investors were hoping to see higher stock prices but that will hopefully come in the future.”

The only reason why XIN is trading less than its book value is because American economists and analysts don’t understand China’s national urbanization policy. The economists are more apt to label China’s real estate bubble as a harbinger waiting to trigger an economic collapse. For the economists, this is foolish. As part of China’s landmark urbanization plan, the country aims to push forward urbanization by putting people at the center and making sure all people can enjoy China’s modernization achievements. This plan aims to help 100 million migrant workers by providing work opportunities creating infrastructure and making more jobs available in the city. China’s goal is to optimize city layouts by enhancing the lead role of major cities and increasing the number of small and medium-sized cities. With green production and consumption becoming the mainstream in urban economic activities, China should strive to push for harmonious and pleasant living conditions in cities by making public services accessible to all permanent urbanites and pursuing better ecology, more clean air and safer drinking water. The goal of China’s urbanization plan is to provide strategic and fundamental guidance for the healthy development of urbanization across the country throughout this seven-year project.

If the mythical real-estate bubble is not an excuse to bring the markets down then what is? The exuberance that the financial institutions have that the S&P 500 will climb to the 2000 level. The hysteria people have that they will miss out on making even more money. The Feds, who are more concerned with the outcome of the NYSE rather than doing what’s right. History has shown that they are always behind the 8 ball. Stock analysts that perpetuate greed by evaluating companies at lofty heights assuming the public investor will pay for it. To sum it up, if you go back to George Soros’ animal instinct, it does have a bad habit of deceiving an animal because even the mightiest tiger in the jungle gets eaten alive because it has a false sense of security. We judge these financial gurus as heroes to mimic and be like them and to have their successes without their failures. Our reasoning and the public’s will to act is no different than the mightiest financial wizard in America and we should never sell ourselves short. There was a faint whisper of what lies ahead to the global financial institutions. Yellen speaking to New York University graduates at Yankee Stadium stated that the graduates must demonstrate great courage, adding that Bernanke “demonstrated such courage, especially in his response to the threat of the financial crisis.” Yellen is wrong; the courage was that the American public was willing to forgive even when they lost their homes and the confidence of rebuilding America. We recommend XIN as a strong buy, we attach its full book value of $12.50, and it’s the right thing to do.

This article couldn’t have been completed without my colleague Fiorenzo Arcadi, who extensively contributed a great deal of research.

Disclosure: I am long XIN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. (More…)






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The Zweig Total Return Fund, Inc. Declares Distribution And Discloses Sources Of Distribution – Section 19(a) Notice

This post was originally published on this site

NEW YORK, June 2, 2014 /PRNewswire/ — The Zweig Total Return Fund, Inc. (ZTR) today announced a monthly distribution of $0.091 per share, payable on June 19, 2014, to shareholders of record on June 12, 2014 (ex-date June 10, 2014).

The Fund has a Managed Distribution Plan (“Plan”) to pay 7% of the Fund’s net asset value on an annualized basis, consistent with its primary investment objectives and as required by the Internal Revenue Code of 1986, as amended. Distributions may represent earnings from net investment income, capital gains, or if necessary, return of capital. You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s Plan.

The following chart discloses information on the sources of the distribution:

Distribution Estimates

May 2014 (MTD)

Year-to-date (YTD) (1)

 

 

(Sources)

Per Share

Amount

Percentage

of Current Distribution

Per Share Amount

Percentage

of Current Distribution

Net Investment Income

$        0.050

54.7%

$        0.150

33.3%

Net Realized Foreign Currency Gains

0.0%

0.0%

Net Realized Short-Term Capital Gains

0.012

13.2%

0.099

22.1%

Net Realized Long-Term Capital Gains

0.029

32.1%

0.201

44.6%

Return of Capital (or other Capital Source)

0.0%

0.0%

Total Distribution

$        0.091

100.0%

$        0.450

100.0%

(1) YTD February 3, 2014 to January 9, 2015. (The distribution paid on January 9, 2014 was reportable for tax on Form 1099 in 2013)

Under the terms of the Fund’s managed distribution policy, the Fund seeks to maintain a consistent distribution level that may be paid in part or in full from net investment income and realized capital gains, or a combination thereof. Shareholders should note, however, that if the Fund’s aggregate net investment income and net realized capital gains are less than the amount of the distribution level, the difference will be distributed from the Fund’s assets and will constitute a return of the shareholder’s capital. A return of capital is not taxable; rather it reduces a shareholder’s tax basis in his or her shares of the Fund.

The amounts and sources of distributions reported in this notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send shareholders a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Information regarding the Fund’s performance and distribution rates is set forth below. Please note that all performance figures are based on the Fund’s NAV and not the market price of the Fund’s shares. Performance figures are not meant to represent individual shareholder performance.

May 30, 2014

Average Annual Total Return on NAV for the 5-year period ended this month (2)

10.49%

Current Fiscal YTD Annualized Distribution Rate (3)

6.88%

YTD Cumulative Total Return on NAV (4)

4.65%

YTD Cumulative Distribution Rate (5)

2.87%

(2)

Average Annual Total Return on NAV is the annual compound return for the five-year period.  It reflects the change in the Fund’s NAV and reinvestment of all distributions.

(3)

Current Fiscal YTD Annualized Distribution Rate is the cumulative distribution rate annualized as a percentage of the Fund’s NAV at month end.

(4)

YTD Cumulative Total Return on NAV is the percentage change in the Fund’s NAV from the first day of the year to this month end, including distributions paid and assuming reinvestment of those distributions.

(5)

YTD Cumulative Distribution Rate is the dollar value of distributions from the first day of the year to this month end as a percentage of the Fund’s NAV at month end.

Section 19(a) notices are posted on the Fund’s website at:

ZTR 19A Notices

The Zweig closed-end funds are advised by Zweig Advisers LLC.  For more information on the Fund, please contact shareholder services at 800.272.2700, by email at zweig@virtus.com, or visit us on the web at www.virtus.com.

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