A long, dragged-out, Lehman Brothers settlement with Fannie Mae coming to fruition, hype on the legal-marijuana industry and general speculation about an economic recovery is fueling stock volume on the most active penny stocks.
Lehman Brothers Settles With Fannie Mae
In the mortgage sector, Fannie Mae (OTC Bulletin Board: FNMA) shares continue to be a very active stock. The government-sponsored enterprise, charged with stabilizing the secondary mortgage market, traded 7,628,050 shares Jan. 31.
In part, this could be due to Judge James Peck approval on Jan. 29 of Lehman Brothers Holdings Inc.’s settlement with Fannie Mae over $18.9 billion in mortgage claims. Fannie Mae will receive a general unsecured claim of $2.15 billion against Lehman. Under Lehman's Chapter 11 payment plan, this amounts to a recovery of about 25 cents on the dollar, or about $537.5 million.
In addition, Fannie Mae and others’ optimistic outlook for the 2014 housing market is fueling its spike in volume. In a Jan. 13 statement, Fannie Mae’s Chief Economist Doug Duncan said that despite the rise in mortgage rates since the spring, many housing indicators posted strong gains at the end of 2013 and consumer housing attitudes are strengthening, "all of which bodes well for continued but measured housing recovery in 2014."
In addition, Fannie Mae’s sister company Freddie Mac (FMCC), is planning to sell $1 billion of securities tied to the risk of homeowner defaults, almost matching the amount issued since the deals began last year. This is according to a person with knowledge of the transaction.
FNMA shares closed at $3.11 up 2 cents from its closing price of $3.11 the previous day.
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Legal-Marijuana Hype
Plandai Biotechnology (OTCQB: PLPL) stock volume continued to soar as one of the most active penny stocks on Jan. 31, with 9,117,976 changing hands, more than 16 times its three-month average volume of 557,911shares.
The sudden flurry of activity appears to be triggered in part by the Seattle and Australian-based company, which produces proprietary botanical extracts, recent entry into the legal marijuana business. In fact, on Jan. 30, Plandai announced that it had entered into an agreement with Diego Pellicer and Diego Pellicer Worldwide to brand its Phytofare(TM) Cannabis extracts.
The release when on to tout Diego Pellicer, saying that it has been the leading name in cannabis products for more than 100 years.
"Being able to sell the Plandai cannabinoid extracts under the Diego Pellicer name brings immediate name recognition and branding into the medicinal cannabis industry," Plandai CEO Roger Baylis-Duffield said, in a written statement
Much Media Hype
The media showed up in large numbers at a Seattle press conference where marijuana entrepreneur and Diego Pellicer co-founder Jamen Shively announced he would be creating the first retail brand of marijuana in the United States.
Shively, a former Microsoft executive, was flanked by the former president of Mexico, Vicente Fox as he presented his plans to capture 40 percent of the worldwide marijuana market and answered a host of questions from the media.
Whether all the hype will translate into solid revenue remains to be seen. But one thing is for certain, investors appear to like what they hear.
On Jan. 31, shares of PLPL closed at $2.41, up 89 cents from $1.52, the previous day’s close.
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Does Impending China Slowdown Rears Its Ugly Head?
Another of the most active stocks Jan. 31 was AIA Group, Ltd. (OTCPINK: AAGIY). The Hong-Kong-based insurance company traded 1,268,444 shares, more than 10 times its three-month average of 126,449 shares.
The closed-mouthed company has not issued any releases or government filings lately and there is no news about the company coming across the wires. Because the company’s wholly-owned main subsidiaries or branches operate in Asia Pacific - Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, some may speculate that the sudden activity is tied to investors’ fears of a possible Asian economic slowdown with China in the lead.
However, this would be pure speculation.
On Jan. 31, shares of AAGIY closed at $ 18.88, down 12 cents from $19.00, the previous day’s close.
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Emerging Smartphone Markets?
Tokyo Electron Ltd. (OTCPINK: TOELY) was also a very active stock Jan. 31, with 1,692,568 shares changing hands, more than three times its three-month average of 544,384 shares
Although the Tokyo based semiconductor company hasn’t issue any releases or made any news lately, in its last quarterly report of Sept. 30, 2013, the company talked about an ongoing worldwide economic recovery affecting its business.
"In the electronics industry, the primary area of the Tokyo Electron (TEL) Group’s business activities, demand for smartphones continues to grow, particularly in emerging economies, and sales of mobile devices including tablet PCs is firm. As a result of the global expansion of mobile devices, cloud services are growing, and demand for memory used by data centers is rising," the report concluded.
On Jan. 31, shares of TOELY closed at $ 13.41, unchanged from the previous day’s close.
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