Saturday, August 28, 2010

Exploring Investment Opportunities In Peru


As the world fights hard to control global economic downturn and volatile markets more and more investors are now seriously considering investment options in emerging economies that can offer a much better return to their investments both in the short as well as the long term. Since most investors have already been looking at emerging economies for a long time, the most talked about emerging economies like BRIC nations have also been over invested and overheated. With the global population of the planet increasing by the day, it makes much more investment sense to look at nations with Commodity based economies rather than just investing in emerging economies as a fad.

Arguably one of the most important commodity based economies after Chile is the Latin American nation of Peru. Peru's government can definitely take a leaf out of Chile's book by offering more incentives by opening up and showcasing a cleaner and an investment friendly environment. If Peru can manage its policies accordingly, there is a potential for a lot of global investment in this Andean nation.

Peru is a country that features practically all of the planet's climates, with remarkable natural, mining, and power resources. According to FAO figures, Peru, the third largest country in South America has 7.6 million hectares with immediate agricultural potential, but less than 3.6 million are actually used. This paves the way for a good Agriculture based commodity segment as an investment opportunity.

The country’s top exports apart from Agriculture products include copper, gold, zinc and crude oil. Furthermore, the country’s Ministry of Energy and Mines estimates that only a 10% of the overall national territory with mining potential has been explored so far.

Peru is a member of the Asia Pacific Economic Cooperation (APEC), which facilitates the mechanism development of the economic-trade cooperation with other 20 powerful economies. Peru is, likewise, is one of the 5 country members of the Andean Community of Nations, which has more than 120 million inhabitants and an overall GDP of around US$ 300.00 billion.

  • Peru ranks fifth worldwide in gold production (first in Latin America), second in copper, and is among the top 5 producers of lead and zinc.
  • Peru has also signed agreements for the promotion and protection of investments (BIT) with 29 countries of Europe, Asia and Latin America
  • Around 8 million hectares are suitable for agricultural farming, 18 million hectares for pasture and 49 million hectares for sustainable forest activities (besides 54 million hectares of protection lands).
  • Peru is the leading exporter of asparagus and paprika in the world, the leading producer of fishmeal, oil, Alpaca and Vicuña fibers and is also the leading producer of silver worldwide.
Investing In Peru:

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Hang Seng BeES ETF: India's First International ETF

The fixation of investing in Chinese markets with as low as Rs.10,000 combined with the growing popularity of Exchange Traded Funds (ETFs) marked the launch of the Hang Seng Benchmark Exchange Traded Scheme (NSE Symbol-HNGSNGBEES) in February this year. The fund is the brainchild of Benchmark Asset Management Company India Pvt. Ltd, which carved a niche for itself in the Indian Mutual Fund Industry by successfully launching first ETF in Asia (not only India) Nifty BeEs. The company is also credited with launching the Gold ETF first time in India.

The Benchmark's open-ended ETF tracks Hong Kong's Hang Seng index, one of the oldest and among the most popular indices on the Hong Kong stock exchange. The index currently comprises 42 stocks and can have a maximum of 50 stocks. The ETF, which is also investing in mutual funds, or ETFs that track the Hang Seng Index themselves, is the first international ETF to have emerged out of India.

The daily net asset value (NAV) of a single unit of the fund is arrived at, by calculating the daily Hang Seng index close multiplied by the currency rate of Hong Kong dollar-Indian rupee and divided by 100.

Management Of The Hang Seng BeES ETF

Name of Company: Benchmark Asset Management Co Pvt. Ltd.
Phone: 91-22-66512727
Address: 405,Raheja Chambers,
Mumbai 400 021

Inception Date: 15/03/2010
Fund Advisor(s): Benchmark Asset Management Co Pvt. Ltd.
Fund Manager: Vishal Jain
Manager Start Date: 15/02/2010
Fund Manager: Payal Kaipunjal
Manager Start Date: 15/02/2010

Top 5 Holdings Sector %

HSBC Holdings PLC Financial Services 13.70
China Mobile Ltd. Telecommunications 8.87
China Construction Bank Financial Services 7.08
Industrial And Commercial Bank O... Financial Services 6.23
China Life Insurance Company, Ltd. Financial Services 5.11

The Hang Seng Stock Exchange:

Hang Seng Stock Exchange is one of the largest exchanges in the world. Hang Seng Index Charts, Hang Seng Futures, Hang Seng Historical Data are now determined and tracked on a real-time basis by Indian investors.

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Monday, August 9, 2010

Mexico Investment Guide: Mexican Stocks And ADRs

Mexico was in the international headlines for all the wrong reasons last year after the deadly outbreak of the H1N1 flu virus that sparked a global pandemic closing schools and businesses for two weeks in the country. The outbreak not only resulted in a big drop in tourism revenue of Mexico but also came as a major blow to the Mexican economy that had been already gripped by the effects of the global financial crisis. Mexico's capital market activity has hence slowly picked up from the lows of 2009 and is slowly but surely moving towards an economic resurgence. Testimony to the fact is that the Mexican economy has rebounded in the first quarter of this year, expanding more than 4 % from a year earlier after contracting 2.3 % in the last three months of 2009. With as many as six Mexican companies looking to go public this year, a rise in the Mexican IPO activity might just be the catalyst for speeding up the country's economic growth. Private-sector economists believe that Mexico is likely to grow at 4.2 % this year resulting in a strong rally in the BMV’s benchmark IPC index, which hit an all-time high of 34,134 points on April 15. During the past 12 months, the index has gained almost 50 % in value.

Before discussing the possibilities of investing in Mexico or including Mexican stocks in your investment portfolio, its important to understand the new dynamic changes at the Bolsa Mexicana de Valores or the Mexican Stock Exchange after it successfully offered its shares to the public and became a listed company on 13 June 2008. More than 13,600 individual investors bought shares in the IPO, making BMV a widely held public company. BMV (the company) trades on the Mexican Stock Exchange under the ticker code BOLSAA for it’s A shares. BMV is an actively traded stock, and from 1 February 2009 its A shares were included in the BMV's own IPC index of the top 35 Mexican stocks for the first time.

Overview Of The Mexico Stock Exchange:

The Bolsa Mexicana de Valores, also referred to as BMV or the Mexican Stock Exchange, is the chief stock exchange in Mexico. Located in Mexico City at Paseo de la Reforma, BMV is a private limited company. Shareholders of Mexico's stock exchange are all brokerage firms. BMV trades in debt instruments such as CETES (Federal Treasury Certificates); investment unit bonds, BONDES (federal government development bonds); Bankers acceptances, development bank bonds, warrants, debentures, stocks, mutual fund shares and so forth. The BMV-SENTRA Equities System allows for trading to take place electronically.

The Mexican Stock Exchange deals with 13 indices of stock prices. The IPC or Índice de Precios y Cotizaciones is the benchmark stock index and is the widest indicator of the stock market's complete performance. A number of companies are listed with the Bolsa Mexicana de Volores. Amongst the top companies on Mexico's Stock Exchange are Cemex (cement maker); América Móvil (wireless communications); Telmex (telecommunications); Televisa (media) and Grupo Corvi (consumer products distribution).

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Investing In Mexico: The Vibrant Latin American Economy

For years the most prominent feature of Mexico has been its exotic cuisine with all its varied flavors, colorful decoration, and variety of spices while investment options were never taken seriously. Investors for long have viewed other Latin American economies like Brazil and Argentina with more interest discussing plans possibly sitting in a restaurant serving Mexican cuisine. While Mexico doesn't quite enjoy the celebrity status of rival Brazil, there is no denying the fact that the country is undergoing something of an economic renaissance. With its last financial crisis more than 10 years behind it, Mexico is enjoying record foreign currency reserves and an investment-grade debt rating, thanks to much-improved fiscal discipline. It even boasts several companies listed on the New York Stock Exchange or NASDAQ and dozens of others that trade over the counter. Money managers are especially keen on stocks in the residential construction business as more and more Mexicans qualify for loans to build their own homes.

  • The Mexican economy rebounded in the first quarter of this year, expanding more than 4 % from a year earlier after contracting 2.3 % in the last three months of 2009.
  • Mexico’s international reserves reached a record $95.7 billion in March. The oil and manufacturing sectors are showing strong improvements and Mexican exports increased by 39% in March relative to March 2009.
  • The automotive industry, one of the most important industries in the country, is recovering strongly with production and exports up in the first four months of this year. The unemployment rate in the first quarter stood at 5.3%.
  • Rich in farmland, silver and copper, Mexico is the world’s 11th largest economy and is known for being a free trade economy that is heavily geared towards exports. Mexico’s trade is based on free trade agreements with more than 40 countries, including Japan, Israel, EU and various Central and South American countries.
  • Mexico provides security and legal protection for foreign investors through Bilateral Investment Treaties (BIT’s) negotiated with 24 countries and a skilled and competitive labor force.

Mexico’s peso has been a major gainer against the dollar in recent weeks as an economic recovery in the U.S. fuels demand for the Latin American nation’s exports. Mexico’s economy is looking at a 5% growth rate as it recovers from the recession this year. The official forecast is set at 4.1%. With as many as six Mexican companies looking to go public this year, a rise in the Mexican IPO activity might just be the catalyst for speeding up the country's economic growth. There are a number of ways to include Mexico in your investment portfolio. Here is a list of some the best performing Mexican ETFs.

Top 7 ETFs To Invest In Mexico

MSCI Mexico Index Fund (EWW): The index measures the performance of the Mexican equity market.

EWW Top Ten Holdings

1. America Movil S.A.B. de C.V. (AMXL): 23.66%
2. Wal-Mart De Mexico SAB de CV (WALMEXV): 9.09%
3. CEMEX SAB de CV (CEMEXCPO): 6.62%
4. Grupo Mexico, S.A.B De C.V (GMEXICOB): 4.94%
5. Grupo Televisa SA (TLEVISACPO): 4.67%
6. Fomento Económico Mexicano, S.A.B. De C.V. (FEMSAUBD): 4.67%
7. Telmex Internacional S.A.B. de C.V. (TELINTL): 3.74%
8. Grupo Financiero Banorte, S.A.B De C.V. (GFNORTEO): 3.61%
9. Telefonos de Mexico,S.A.B. de C.V. (TELMEXL): 3.34%
10. Carso Global Telecom (TELECOMA1): 3.12%

Expense Ratio: 0.52%

EWW Sector Breakdown

Telecom 34.88%
Industrial Materials 21.21%
Consumer Goods 13.59%
Financials 11.48%
Consumer Services 10.25%
Media 5.09%
Business Services 2.82%
Health Care 0.39%

Mexico Fund Inc. (MXF): The Mexico Fund, Inc. (the Fund) is a closed-end, non-diversified management investment company. The Fund's investment objective is to seek long-term capital appreciation through investment in securities, primarily equity, listed on the Mexican Stock Exchange. The Fund may invest in Mexican fixed-income securities and bank time deposits of Mexican banks.

Top 10 Holdings

America Movil, S.A.B. de C.V. 19.23%
Wal-Mart De Mexico SAB de CV 10.46%
Grupo Mexico SA De CV Gmexico 7.54%
Grupo Televisa SA 4.99%
Fomento Económico Mexicano, S.A.B. De C.V. 4.21%
Kimberly Clark de Mexico SA de CV 4.04%
Cemex S.A. 3.74%
Mexichem, S.A.B De C.V 3.74%
Grupo Financiero Banorte, S.A.B De C.V. 3.33%

Total Expense Ratio: 1.72

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The Colombian Growth Story: From Rampant Violence To Investments

As allegedly reported by the media and with a common perception of being a nation of rich in drug peddling, abductions and murders, the Republic of Colombia has undergone a remarkable transformation over the past decade. Colombia has been fighting to prove that it is a safe and worthwhile investment destination and has now put itself firmly back onto the investment map. Transforming itself from the Drug capital of the world to a nation attracting strong foreign investment in recent years, Colombia's strong fundamentals stand out. Not only has Colombia been recognized as one of the best pro-business reformers globally in recent years by the World Bank, the country's $130 billion economy, a world leader in the production of coffee, petroleum, textiles, and flowers, is growing at 6.8% a year, two full points faster than the Latin American average. Colombian economy has experienced tremendous growth, benefiting from a commodity boom and sound policies that stimulated growth. The Colombian economy is arguably the largest in Latin America after Brazil, Mexico and the forever in transit economy of Argentina, with one of the largest deposits of oil and natural gas deposits in Latin America.

The lush green tropical jungle country of Colombia has one of the largest deposits of green gem emerald mostly exported to jewelry producing nations. Named after Christopher Columbus by the South American liberator Simon Bolivar, the modern day Colombia continues to be a dark spot on their investment horizon or some investors. Even though, the country's notorious past acts as a speed breaker preventing foreigners from investing in this Latin American nation, the fact is that every indicator of violence in Colombia including homicides, kidnappings, and acts of terrorism have declined significantly over the past eight years.

• Terrorist acts are down 84% from 2002.
• Homicides have dropped 45 percent from 2002 through 2009 – the lowest homicide rate in 22 years.
• Kidnappings have dropped significantly, down 88% from 2002, also now at the lowest rate in 22 years.
• Today Colombia has a lower violent crime rate than many major U.S. cities.

Far from being a dangerous place to even visit, leave alone considering any thoughts of investment, Colombia is slowly but surely transforming itself into a Latin American success story with its free-market approach to its economy.

  • According to Bloomberg data, Colombia is forecast to attract about $10 billion in foreign direct investment this year, up from about $7.5 billion last year.
  • Colombia's stock market has increased 14-fold since 2001 with a still modest total capitalization of $59 billion.
  • Colombia is seen as a trustworthy ally by the United States amid its deteriorating ties with Venezuela and Ecuador. The U.S. has sent $5 billion in aid to Colombia since the year 2000 making it the 4th largest financial aid recipient of the U.S.
  • In the past 10 years, Colombia has slashed its inflation rate from 18% to 5%, and since President Alvaro Uribe was elected in 2002, unemployment has dipped from 16% to 13%.
  • Not only has Columbia been the best performing stock market this year, posting a double digit gain as opposed to all major markets that are down for the year, Colombia has blown away all challengers over the last decade posting an 34.5% annualized return.
  • Colombia has abundant natural resources, including gold, silver, copper, coal, oil, gas, and more, a good deal of which remains under explored. Global gold mining companies are likely to invest as much as 4.5 billion U.S. dollars over the next ten years in Colombia attracted by rich unexplored regions and soaring prices of the commodity.

The Colombian Stock Exchange: The Colombian stock exchange or the Bolsa de Valores de Colombia, also known as Bolsa de Valores (BVC), is the principal stock exchange of Colombia. It was created on July 3, 2001 by the union of three extant stock exchanges in Colombia: Bogota Stock Exchange (Bolsa de Bogota), Medellín Stock Exchange (Bolsa de Medellin)and Cali's Western Stock Exchange (Bolsa de Occidente). The company maintains offices in Bogotá, Medellín and Cali.

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Investing In Turkish Economic Delight

For a number of years, Istanbul has been given the cold shoulder with respect to it joining the elite European Union club and there were feelers that Turkey was believed to be too economically backward to qualify for membership. A visit to Turkey today can clearly suggest that the old argument no longer holds good as modern day Turkey is a fast-rising economic power, with a core of internationally competitive companies turning the youthful nation into an entrepreneurial hub, tapping cash-rich export markets in Russia and the Middle East while attracting billions of investment dollars in return. So complete has been Turkey's transformation that about 10 years ago, Turkey which had a budget deficit of 16% of gross domestic product and inflation of 72% is now fulfilling European Union’s fiscal guidelines of a 60% ceiling on government debt, at 49% of GDP, and could well get its annual budget deficit below the 3% benchmark next year.

The Republic of Turkey borders the Mediterranean Sea and its strategic location between Europe and the Middle East brings potential economic benefits. Turkey has a unique economy and a potentially attractive risk and return profile. Turkey, situated at the crossroads where two continents meet, is an ideal center for investors looking for a location at the heart of Euro-Asia. With its dynamic and growing economy, huge market, competitive and skilled labor force, Turkey offers numerous opportunities to international investors.

  • With a population of 73 million with an average age of just 27.7 years, Turkey has a very young population and an increasing consumer purchasing power; Turkey offers a huge and dynamic domestic market to investors. Moreover Turkey's economy has witnessed a growth of an average of nearly 6% between 2002 and 2008.
  • Unlike other emerging markets in Europe, Turkey survived the financial downturn without relying on an emergency bailout package from external lenders. The country now is expected to grow 3.5% to 4% this year.
  • Turkey is located at the gateway of the Middle East, Caspian petroleum and Central Asian natural gas to the west, which are regarded as the future energy reserves of the world.
  • In an encouraging sign, Standard & Poor's raised its long-term foreign currency and local currency sovereign credit ratings to BB and BB+, respectively in February this year.
  • IMF projections for the period 2008-2013 suggest that Turkey would maintain the title of the world’s 17th largest economy until 2013 with gross domestic product reaching $968.2 billion in 2013
  • The Istanbul Stock Exchange’s ISE-100 Index; hit all-time in-session record high at 60,410.11 points earlier this week. The record-breaking performance was attributed to the positive atmosphere in the global markets, positive expectations on European bank stress tests, the possibility of an increase in Turkey’s sovereign credit rating and most of all, foreign investor interest in the bourse.
ETFs Investing In Turkey

1: iShares MSCI Turkey Investable Market Index Fund (TUR) : One of the best ways for U.S. investors to make a play on Turkey is through the iShares MSCI Turkey Investable Market Index Fund (TUR). The fund tracks the MSCI Turkey Investable Market Index, which measures the performance of the Turkish equity market. TUR is heavily focused on financials, which make up 52% of total assets. Additionally, the fund makes large allocations towards the industrial materials (13.6%) and telecommunication (10.4%) sectors.
TUR Top Ten Holdings
1. Turkiye Garanti Bankasi (GARAN): 14.50%
2. Akbank T.A.S. (AKBNK): 9.53%
3. Turkiye Is Bankasi C Share (ISCTR): 8.09%
4. Turkcell Iletisim Hizmetleri AS (TCELL): 6.60%
5. Haci Omer Sabanci Holding A.S. (SAHOL): 4.07%
6. Anadolu Efes Brewery ve Malt Sanayi A.S. (AEFES): 3.91%
7. Yapi Ve Kredi Bankasi (YKBNK): 3.90%
8. Turkiye Halk Bankasi A.S. (HALKB): 3.83%
9. Bim Birlesik Magazalar A.S. (BIMAS): 3.81%
10. Tupras-Turkiye Petrol Rafineleri A.S. (TUPRS): 3.77%

TUR Sector Breakdown
Financials 53.15%
Industrial Materials 13.63%
Telecom 9.47%
Consumer Goods 7.13%
Consumer Services 4.58%
Energy 3.99%
Business Services 3.14%
Media 1.25%
Utilities 1.22%
Hardware 1.02%
Health Care 0.62%

Expense Ratio: 0.63%

TUR Performance
52 Week Return: 43.28%
YTD Return: 13.62%
1 Week Return: 4.61%
2 Week Return: 7.29%
4 Week Return: 10.64%
13 Week Return: -1.95%
26 Week Return: 8.43%
2: SPDR S&P Emerging Europe ETF (GUR): The S&P European Emerging BMI Capped Index is a market capitalization weighted index that defines and measures the investable universe of publicly traded companies domiciled in emerging European markets. The fund has 16.49% holdings in Turkey.

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Tracing Investment Opportunities In Egypt

When we speak of Egypt, the first thing that comes to mind is the images of the Great Pyramid at Giza, the Nile Delta and the ancient Egyptian civilization. Far from being a civilization located on both sides of the river Nile, the modern day Egypt is the most populated country in the Middle East and the third most populous on the African continent. Despite technically considered part of geo-economic area called Middle East Egypt lies in the continent of Africa and its per capita GDP is below the global average, trailing behind other emerging markets such as Brazil, South Africa, China, but ahead of India. Egypt’s economy is much more diversified than many in the region. Oil and gas make up only about 15% of the country’s GDP, compared to as much as 50% for many oil rich states. In addition to a strong financial sector, tourism, agriculture and industrials account for significant portions of GDP.

Investors wanting to invest in the growing Egyptian economy can do so via the Van Eck Global launched the Market Vectors Egypt Index ETF which is the first US traded Egypt ETF. The fund launched on 18th February 2010, invests in 28 companies that derive at least 50 percent of their revenues from Egyptian operations. The fund comes with a price tag of 0.94 percent. EGPT is the latest off-the-beaten-path country ETF from the fast-growing Van Eck, which recently launched ETFs tied to Poland, Indonesia and Vietnam as well. EGPT follows the Market Vectors Egypt Index, providing exposure to publicly traded companies that are domiciled and primarily listed on an exchange in Egypt or that generate at least 50% of their revenues in Egypt. The Egypt ETF has a heavy weight in the financials (42%) and industrial materials (31%) sectors, a common occurrence among large cap-focused emerging markets ETFs

EGPT: Sector Breakdown

Financials 42%
Telecommunications 17%
Industrials 16%
Materials 14%
Energy 4%
Consumer Discretionary 3%
Consumer Staples 2%

EGPT: Top Ten Holdings

Commercial International Bank 8.48%
Orascom Construction 8.44%
Orascom Telecom Holding 6.81%
EFG-Hermes Holding 6.60%
Mobinil-Egyptian Mobile Serv 5.88%
Egyptian Kuwaiti Holding 5.77%
TMG Holding 5.39%
Elswedy Cables Holding 5.13%
Al Ezz Steel Rebars 5.02%
Telecom Egypt 4.59%

Egyptian Stock Market

The EGX 30 is the main index of the Egyptian exchange. The EGX 30 is comprised of the 30 largest stocks traded on the exchange, and is quoted in U.S. dollars. A total of 179 stocks were listed on the Egyptian exchange in early 2010 and another 27 were trading over-the-counter. Regarding market capitalization, Egypt is the second biggest African market after South Africa. Many stocks are very liquid and can be traded easily and with low transaction cost. Foreign participation is still quite low, as it is in most other African markets.

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