Which German Firms Have High Exposure to Russia?

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Germany has been reluctant in recent months to impose aggressive sanctions on Russia for its involvement in the Ukraine crisis. This is because unlike other developed countries including the U.S., Russia is an important trade partner for Germany. Many German companies have large investments in Russia and benefit from selling goods and services to Russia. In return, Russia is one of the major suppliers of oil and gas to Germany. So this mutual dependency is taken into account when German policy makers make their decisions.

From an article in The Local website:

Germany has been criticized for being reluctant to impose tough sanctions on Russia for its annexation of Crimea from Ukraine, as it is deemed an important trading partner.

But according to the German Foreign Office trade between the two countries declined by five per cent in 2013 to €76.5 billion – it was €80.5 billion in 2012.

German exports to Russia were worth €36.1 billion and German imports from Russia €40.4 billion.

That made Russia Germany’s eleventh biggest export market and seventh most important importer, according to Destatis.

Russia’s main exports to Germany were oil and natural gas, with around a third of German gas imports coming from the country.

Source: How important is Russia to Germany?, The Local, April 3, 2014

To answer this article title, the following German companies derive a significant amount of revenue from Russia. For example, Adidas has been in business during the days of the former Soviet Union and has over 1,000 stores today in Russia. It generated over 1.0 billion Euros $ in 2012 accounting for over 7% of total sales.

1.Company: adidas AG (ADDYY)
Current Dividend Yield: 2.80%
Sector:Textiles, Apparel & Luxury Goods

2.Company: Henkel AG & Co KGaA (HENKY)
Current Dividend Yield: 1.81%
Sector: Household Products

3.Company: BASF SE (BASFY)
Current Dividend Yield: 4.24%
Sector: Chemicals

4.Company: Siemens AG (SIEGY)
Current Dividend Yield: 3.54%
Sector:Industrial Conglomerates

5.Company: Volkswagen AG (VLKAY)
Current Dividend Yield: 2.78%
Sector: Auto Manufacturing

6.Company: Volkswagen AG (DDAIF)
Current Dividend Yield: 4.18%
Sector: Auto Manufacturing

7.Company: BMW AG (BAMXF)
Current Dividend Yield: 3.35%
Sector: Auto Manufacturing

8.Company: Beiersdorf AG (BDRFF)
Current Dividend Yield: 1.16%
Sector: Personal Care Products
Overview: Beiersdorf was founded in 1882 and had sales of over EUR 6.0 billion in 2012. The company’s stock is listed on the DAX since 2008. Its brand portfolio includes La Prairie,Nivea, Eucerin, Hansaplast, Labello, Florena, 8×4 and tesa.

Source: Corporate Germany Opposes Sanctions, The Wall Street Journal, May 2, 2014

Note: Dividend yields noted above are as of Oct 3, 2014. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions.

Disclosure: Long HENKY

A Quick Post on Brazil

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Brazilians are going to polls today. The current President Dilma Rousseff seems like will win again. From an investor’s point of view, Dilma has been a disaster when she was elected back in 2010 for the first term. If Dilma wins investors may have to brace themselves for another wild ride.

Here are a few interesting stats in terms of Brazilian equities:

  1. The benchmark Bovespa index is by nearly 15% in the past five years and year-to-date it is up by 8%.
  2. The iShares MSCI Brazil Capped ETF(EWZ) has lost 40% in the five years and is flat so flat so far this year.
  3. The state-owned oil company Petrobras (PBR) plunged 71% in 5 years.

Performance of iShares MSCI Brazil Capped ETF – 5 years:

Click to enlarge

EWG 5 Years

Source: Yahoo Finance

Year-to-date performance of Brazilian exchange-listed ADRs:

S.No.CompanyTickerYear-to-date change %Industry
1EmbraerERJ18.49%Aerospace & Defense
2BRF S.A.BRFS15.52%Food Producers
3Itau UnibancoITUB14.18%Banks
4Banco BradescoBBD13.09%Banks
5GolGOL9.63%Travel & Leisure
6Comp. Paranaense de Energia-COPEL ELP8.45%Electricity
7Banco Santander BrasilBSBR4.10%Banks
8Telefonica BrasilVIV1.98%Fixed Line Telecom.
9Petroleo Brasileiro-PetrobrasPBR1.38%Oil & Gas Producers
10Centrais Eletricas Brasileiras-EletrobrasEBRUNCHElectricity
11Banco Bradesco BBDO-0.43%Banks
12Companhia Energetica de Minas Gerais-CEMIGCIG-1.34%Electricity
13Companhia Brasileira de Distribuicao-CBDCBD-2.24%Food &Drug Retailers
14TIM ParticipacoesTSU-3.39%Mobile Telecom.
15CPFL EnergiaCPL-5.06%Electricity
16BrasilAgroLND-7.07%Real Estate Inv&Serv
17Fibria CeluloseFBR-7.79%Forestry & Paper
18AMBEV S.AABEV-10.75%Beverages
19UltraparUGP-14.63%Gas,H20&Multiutility
20BraskemBAK-24.37%Chemicals
21GafisaGFA-27.16%HouseGoods&HomeConst
22ValeVALE-27.74%Indust.Metals&Mining
23Companhia Energetica de Minas Gerais-CEMIGCIG-27.93%Electricity
24SABESPSBS-29.81%Gas,H20&Multiutility
25GerdauGGB-37.88%Indust.Metals&Mining
26Companhia Siderurgica Nacional-CSNSID-42.42%Indust.Metals&Mining
27OiOIBR-57.93%Fixed Line Telecom.

Source: BNY Mellon

The complete list of Brazilian ADRs trading on US exchanges and OTCs can be found here.

Disclosure: Long ITUB, BBD and PBR

Things To Do In North Wales

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One of the best tourist destinations to visit in the UK is North Wales. There are plenty of things to do and see in beautiful Wales including train rides through wonderful mountains, castles, parks, camping, etc. Here are some photos from a few of those tourist places:

1. Cabin stay in the woods near Tan-y-Bwlch train station:

Click to enlarge

2. Train ride from Tan-y-Bwlch to  Blaenau Ffestiniog and back:

For more info visit: Ffestiniog & Welsh Highland Railways

3.Visit to UNESCO-ranked Caernarfon Castle, in Gwynedd, North Wales

For more info visit: Caernarfon Castle

4. Explore the Awesome Beach Resort town of Llandudno

For more info visit: Llandudno Toursim Site

Comparing Financial Asset Class Types Held By U.S, Canadian and European Households

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In an earlier post we looked at the financial asset class types held by Latin American households. The following chart shows the various financial assets held by American and Canadian households:

Click to enlarge

Financial Asset Classes of US and Canada Households

The following chart shows the financial assets held by households in Developed Europe:

Financial Asset Classes of European Households

A few observations:

  • Americans hold more of their financial assets in stocks (at 55% in 2013) compared to Canadians.
  • Similarly Canadians hold more bank deposits then Americans.
  • An astonishing 64% of Greek households’ financial assets are in bank deposits while Swedish households have the lowest.
  • In countries such as Swizterland, Ireland, UK, The Netherlands and Denmark the majority of households’ financial assets are in insurance and pensions.

Source: Allianz Global Wealth Report 2014, Allianz

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Dividend Withholding Tax Rates By Country 2014

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*** UPDATE:  For the latest Dividend Withholding Tax Rates click Dividend Withholding Tax Rates By Country 2016

The withholding taxes for foreign stock dividends vary from country to country. For example, the UK withholding tax on dividends for US investors is 0% while Japan charges 20%.

The following table shows the withholding tax rates for 2014 for some of the countries. For the tax rates of all countries click on the image below to open a pdf document:

Click to enlarge and open a pdf document

Dividend Withholding Taxes By Country Page- 1

Source:  Deloitte

You can also download the pdf by clicking here.

*** UPDATE:  For the latest Dividend Withholding Tax Rates click Dividend Withholding Tax Rates By Country 2016