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The Corliss Group Barcelona and Hong Kong Financial News

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Bershidsky's View From Europe

Investors pour money into European securities.

According to Goldman Sachs research, U.S. pension funds and other institutions invested $65 billion in European equities in the first half of 2013, the highest since 1977 in that period. Now, there is a boom in European corporate bonds: In the last two weeks, $29 billion has been invested in 39 issues of these securities. Switzerland's Nestle and Norway's Statoil were among the issuers, raising a combined $2.4 billion. Europe is clearly the new investment fashion, even though equities have appreciated significantly since last year and worries about the state of the European economy have not been dispelled. Investors now fleeing emerging markets to invest in Europe may soon have to deal with a ripple effect, though: A third of the big European companies' revenues come from emerging markets.

Russian opposition in biggest electoral success since before Putin.

About 7000 election campaigns ended in Russia on September 8, the biggest of them for Moscow mayor. Kremlin appointee Sergei Sobyanin narrowly avoided a second round of voting against opposition leader Alexei Navalny, who is refusing to recognize the result, claiming fraud. In at least four cities, including the important city of Yekaterinburg in the Ural Mountains, President Vladimir Putin's United Russia party suffered defeats. Western-style election campaigning and public politics are returning to Russia after a 13-year lull caused by Putin's undisputed leadership. Though his grip on power is still strong, the opposition is beginning to gain momentum.

France to tax households an extra $13 billion in 2014.

France's 2014 budget is entering the final round of discussions, with corporate taxes planned at roughly the same level as this year and an extra $13 billion in levies on households. These come from the cancellation of income tax exemptions for the parents of students, a rise in pension contributions, the inclusion of corporate health insurance in the income tax base and a spate of other measures. While Francois Hollande's Socialist government has realized that it cannot keep raising taxes on business if it wants unemployment to go down, it is about to deal a new blow to economic growth by undermining demand.

Berlusconi faces ouster from Senate.

A special committee of the Italian Senate is to meet today to consider expelling former Prime Minister Sylvio Berlusconi from the Senate, because of his recent conviction for tax fraud. The decision seems predetermined, because 14 of the 23 committee members have said they would vote for expulsion. Berlusconi is appealing to the European Court of Human Rights to overturn the ban from public office that comes with his conviction, but the Senate is unlikely to wait for the slow judicial process in Strasbourg to take its course. If Berlusconi is kicked out of the Senate, his People of Liberty party may quit the ruling coalition, plunging the country into political turmoil and raising the possibility of a new election. While Berlusconi remains tremendously influential in Italian politics, it is a matter of principle for his rivals to prove that the law applies to him, too. If the vote goes as expected and Berlusconi's party leaves the coalition, the government may still be saved by forming a new alliance without an election. That would be the best outcome for investors hoping for a measure of stability in a country so far unable to match the modest economic rebounds seen in Germany, France and the U.K.

GlaxoSmithKline sells soft drink brands for $1.8 billion.

Two of the U.K.'s most popular soft drink brands, Lucozade and Ribena, generated about $660 million in sales last year for the pharmaceutical group GlaxoSmithKline. Now, the group has agreed to sell the brands to Japan's Suntory for $1.8 billion. GlaxoSmithKline has been thinking about divesting Lucozade and Ribena since February. The sports drink and the blackcurrant juice cordial may have been considered health-related products decades ago, but in recent years GlaxoSmithKline has had to drop Lucozade ads that claimed it improved athletic performance, and Ribena has been criticized for a high sugar content. Despite the brands' high nostalgia value in the U.K., they did nothing to enhance GlaxoSmithKline's image as a healthcare company, so the decision to sell them to Suntory, a company with a lot of experience and clout in the drinks industry, is a logical one.

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