The Top 10 Coffee Producing Countries

The top 10 coffee producers in 2016 is shown in the chart below. The chart comes from an interesting article on the booming coffee industry in Der Spiegel.

Coffee pickers in Guatemala earn about 5 Euros for picking a 50 kilogram (kg) bag.  Sometimes children also work to support a family. On an average they may pick 50 to 75 kgs per day. A large caramel macchiato.at a Starbucks(SBUX) in Europe costs about 5 Euros. No wonder the company is one of the most profitable firms in the world. The legal minimum daily wage for labor in Guatemala is 10 Euros.

Click to enlarge

Source: Custom Brewed Lifestyle – The Booming Coffee Industry and Those It’s Left Behind, Der Spiegel

The full article is an interesting read to understand the dynamics of the coffee industry.

Disclosure: No Positions

Tech Sector Dominates Emerging Equity Markets

Tech stocks have become a major sector in emerging markets. Up until now emerging markets have generally been known for commodities, consumer goods, manufacturing and financials. That is no longer the case as tech companies in emerging countries are growing faster, getting more innovative and in some cases beating their developed market peers.

In the developed world especially in the US, tech stocks have soared to astonishing levels this year. For equity investors in this sector, it feels like 1998-1999 all over again. Experts predict that this time it is different. Investors have been gobbling up shares of Alphabet, Amazon, Facebook, Netflix and Apple like there is no tomorrow. The year-to-date returns (including dividends) of these stocks are listed below:

  • Alphabet – 32%
  • Amazon – 52%
  • Apple – 50%
  • Facebook- 56%

Source: When a 10% Gain Makes You Feel Like a Loser, Jason Zweig, WSJ

In the emerging world, the dominance of tech sector has steadily increased for many years now as shown in the following chart:

As I mentioned above emerging market tech firms are more innovative than before as well as the number of patents filed has increased. The following chart shows the global patents registered by emerging vs. developed markets:

Source: Structural Growth Drivers Behind Emerging-Market Economies by Carlos Hardenberg, Franklin Templeton Investments

So which emerging tech companies are driving growth and are worth looking into?

Some of the major emerging tech titans trading on the US markets are listed below for further research:

  • Wipro Limited (WIT)
  • Infosys Ltd (INFY)
  • Alibaba Group Holding Ltd (BABA)
  • Baidu Inc (BIDU)
  • Taiwan Semiconductor Mfg. Co. Ltd. (TSM)

Many of the other tech firms like Hon Hai, Foxconn, Samsung, Mediatek, etc. do not trade on the US exchanges.

Related ETFs:

  • iShares MSCI Emerging Markets ETF (EEM)
  • Vanguard MSCI Emerging Markets ETF (VWO)

Earlier:

Disclosure: No Positions

Bloomberg BusinessWeek: 50 Companies To Watch in 2018

BusinessWeek magazine recently published a list of 50 companies to watch for next year. Selected from a list of 6,000 global stocks there are some interesting options in this list to consider for investment.

Some of the foreign stocks that appear in this list include:

  1. BASF SE (BASFY)
  2. Danone SA (DANOY)
  3. Eni SpA (E)
  4. Mercadolibre Inc(MELI)
  5. RWE AG (RWEOY)
  6. Telstra Corp Ltd (TLSYY)

Notable US stocks include:

  1. CSX Corp (CSX)
  2. DowDuPont Inc.(DWDP)
  3. Jacobs Engineering Group Inc(JEC)
  4. United Technologies Corporation (UTX)

Source: 50 Companies to Watch, Bloomberg BusinessWeek

Investors interesed in exploring the rest of the picks can review the complete list here.

Disclosure: Long CSX, RWEOY

End of the Line for National Bank of Greece ADR

National Bank of Greece has announced the termination of its ADR program. The bank’s ADR used to trade on the NYSE under the ticker NBG and crashed hard during the soverign debt crisis and implemented 3 reverse stock splits. Then when that did not work the bank started trading on the OTC market from Dec, 2015 under the ticker NBGGY.

Finally the bank decided to shut down its ADR program altogether and issued the following termination notice to holders yesterday:

NBG will today instruct the Depositary to terminate the Agreement and NBG expects that the Depositary will provide notice of termination to holders of ADRs shortly in accordance with the terms of the Agreement. NBG expects that the termination of the Agreement will become effective on or about March 15, 2018 (the “Termination Date”). Holders may surrender their ADRs to the Depositary for cancellation in exchange for the delivery of the underlying ordinary shares of NBG. NBG and the Depositary further intend to enter into an amendment to the Agreement, to become effective on the Termination Date, to shorten the period during which the Depositary may sell any shares underlying ADRs that have not been surrendered following the termination of the Agreement from one year to any time following such termination, as set out in a notice to owners of ADRs from the Depositary. Accordingly, at any time after the Termination Date, the Depositary may sell any shares underlying ADRs that have not been surrendered and may hold the uninvested net proceeds from of any such sale for the pro rata benefit of the holders of any such outstanding ADRs.

The termination notice can be found at the BNY Mellon Depository site here.

Today NBGGY closed at $0.258 a share and the bank had a market cap of $2.4 billion.

What can you do if you are holding NBGGY?

The best option is to sell out on the open market now and move on. On March 15th of next year the ADR program will terminate and trading of NBGGY will end. So better to sell asap and take the loss if you are in the red. I do not think exchanging to ordinary shares on the domestic market is worth it for this bank. Besides the depository may not offer this option.

Anyway after years of maintain the listing on the US markets National Bank of Greece has reached the end of the line RIP NBG!.

Disclosure: No Positions

 

Petroleum in Brazil: Infographic

Petróleo Brasileiro S.A.  or simply called as Petrobras(PBR) is the state-owned Brazilian oil company. Petrobras used to a high-flier with the ADR hitting over $70 a share in 2008. Since then it has been gone nowhere but down year after year. The massive corruption scandal that was uncovered and falling oil prices have led this former crown jewel of Brazil to such a low level that the ADR closed at $10.71 on Friday. The share reached single digits before a massive run. It will be years or even decades for PBR to reach the $70 level.

Anyway the infographic below shows the Petroluem industry in Brazil:

Click to enlarge

 

Source: Wilson Center

Disclosure: Long PBR