Knowledge is Power: Armata, Dead Money, Profits Edition

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Armata

Armata-2

Armata Tank

Photos Courtesy: RT and EnglishRussia

Chile Dividend Withholding Tax Rate Update

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Chile Flag White

The Dividend Withholding Tax Rate imposed by Chile on non-residents used to be 35% until recently. However it has now been reduced to just 20.13%.  So the revised rate from 35% to 20% is very for foreign investors investing in Chilean equities. This tax reform also makes Chile attractive in the eyes of international investors especially those looking for income stocks.

Investors looking to gain exposure to Chilean stocks can consider the iShares MSCI Chile Capped ETF (ECH). Currently it has an asset of about $283 million and an expense ratio of 0.62%. The number of holdings in the fund is 36.

For those interested in individual companies, currently 12 firms from Chile trade on the US exchanges as ADRs. Three Chilean banks trading on the NYSE include Banco de Chile(BCH), Banco Santander Chile(BSAC) and CorpBanca (BCA). These currently have dividend yields of  4.69%,  5.34% and 4.48% respectively. Other stocks that investors can consider are Compania Cervecerias Unidas(CCU), Embotelladora Andina – A (AKO.A), Embotelladora Andina – B (AKO.B) and Vina Concha y Toro(VCO) in the beverage sector.

Disclosure: Long BCH, BCA and BSAC

Source: ADR.com

Infographic: Egg Facts

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Interesting facts about eggs in this infographic from UN’s FAO:

One large egg (50gr) provides the daily requirements* of 27% selenium, 25% vitamin B12, 23% choline, 15% riboflavin, 13% protein, 11% phosphorus, 9% vitamin D.

* Based on approximate averages for adult male/female from 5 databases (Australia, Canada, China, EU, USA

Click to enlarge

FAO-Infographic-EGG-facts_EN

 

Source: FAO

Allah Does Not Set The Price Of Oil

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Saudi Arabia’s Oil Minister Ali al-Naimi made the following statement recently:

No one can set the price of oil — it’s up to Allah 

in an interview with CNBC. It is not clear if he said this as a joke or he was really serious. Regardless we all know that Allah does not set oil prices. In fact, Jesus, Lord Shiva, Buddha or any other God that people worship do not set the price oil. It is humans that determine the price of oil on a daily if not on a minute by minute basis.

Unlike other markets, price of oil is not based on supply and demand alone. For instance, the OPEC cartel carefully manages production levels among the member nations. There are a gazillion factors that affect the price of oil. For example, here are 10 factors that can impact oil prices:

  1. Demand increase in China
  2. Oil pipeline attack in Nigeria
  3. Russia increasing production
  4. Political crisis in Venezuela
  5. Escalation of Iran tensions
  6. Decline in Strategic Petroleum Reserves(SPR) storage
  7. Weather conditions in the U.S.
  8. Saudi conflict with Yemen
  9. New oil well discovery
  10. Death of a Saudi King

As shown above, anyone can come up with a list of reasons why the price of oil goes up or down.

The following chart shows the change in oil prices due to various geopolitical and economic events:

Click to enlarge

Oil Price Changes Chart

Source: What drives crude oil prices?, EIA

Here is a price chart from 1861 thru 2010:

Crude Oil Prices 1861-2010

Data Source: Source: BP Statistical Review of World Energy, June 2011

Source: The driver of oil prices, Asia Times

Related ETF:

  • United States Oil ETF (USO)

Disclosure: No Positions

Comparing the Forward P/E Ratio of China and India

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Chinese equities have outperformed India and other emerging market so far this year.The Shanghai Composite is up by about 33% year-to-date while Sensex is basically flat in dollar terms. Yesterday the Sensex fell 2.64% in the local market.

Based on the forward P/E ratio Indian stocks are expensive as they are trading above the 10-year average compared to Chinese stocks.

Click to enlarge

China vs India PE Ratio

Note: The data used in the above is as of March 23rd.

Source: Investment Strategy – Margin of Safety, March 2015, Societe Generale

Currently 12 Indian firms trade on the US exchanges as ADRs. China has 107 stocks trading on the US exchanges and many more on the OTC markets.

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