A Review of the Performance of Brazilian Exchange-listed ADRs Year-To-Date

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The Brazilian equity market has been very volatile in the past few weeks due to the upcoming general elections in October. Brazil used to be the top destination for emerging market investors up until a few years ago. Equity investors enjoyed spectacular returns when the Brazilian market as hot. For example, from 2001 to 2010 the 10-year annualized return for Brazil was 21.6%. Though Brazil plunged over 56% during the peak of the global financial crisis in 2008, the following year it soared by 128%. From 2003 to 2007, Brazilian stocks yielded double digit percentage returns. However as the global commodity market cooled in the past few years and government policies became anti-investor friendly, global investors fled Brazilian equities.

The Bovespa is up by 10.5% so far this year as investors bet on a change in political reforms and policies. Though most Brazilian ADRs fell on Friday, year-to-date some of the ADRs are in the positive territory as shown in the chart below:

Click to enlarge

Brazilian ADRs Return YTD

Data Source: BNY Mellon

Miners and some utilities such as Sabesp (SBS) are down year-to-date while banks such as Itau (ITUB), Banco Bradesco (BBD) are up by over 20%. Though Petrobras (PBR) is up this year, it still has a long way to go to reach the highs reached in the recent past. It would be interesting to how the equity market reacts once the elections are over and a new administration takes power.

Disclosure: Long PBR, BBD, ITUB

The Top 50 Global Pharma Companies 2014

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The Pharmaceutical Executive magazine publishes its annual ranking of the Top 50 Pharma Companies Worldwide based on sales in the previous year. This year’s list was released back in June.

The Top 50 Global Pharma Companies are listed in the tables below:

Click to enlarge

Top 50 Pharma Cos 2014 - Page 1

Top 50 Pharma Cos 2014 - Page 2

Top 50 Pharma Cos 2014 - Page 3


 Top 50 Pharma Cos 2014 - Page 4 Top 50 Pharma Cos 2014 - Page 5

Source: Pharmaceutical Executive

Here are a few observations:

  • Swiss drug giant Novartis(NVS) replaced last year’s topper Pfizer (PFE).  Novartis beats Pfizer in R&D expenditure as well.
  • The top 10 firms are either from the U.S. or developed Europe.
  • It is not surprising to see Israeli generic drug maker Teva(TEVA) on the 12th place since generics are becoming more popular among cost-conscious consumers.
  • Denmark-based Novo Nordisk(NVO) is the world leading drug and equipment maker for diabetes. Hence the company has strong growth potential in emerging countries such as China where diabetes is becoming more prevalent as people’s food habits change.

For the 2013 ranking of the Top 50 Pharma firms click here.

Also checkout:

Disclosure: No Positions

Chart: Brazil’s Bovespa Index

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The Brazilian equity market as measured by Bovespa is up 13.0% this year due to elections.However in the past 5 years Brazil has been a laggard with the Bovespa actually down by over 4% as shown below:

Click to enlarge

Bovespa 5 years

Source: Yahoo Finance

From 1993 the index has soared by an astonishing 241,389% according to Yahoo data. It remains to be seen if Brazilian stocks can pick up their mojo  after the elections.

Related ETF:

  • iShares MSCI Brazil Index (EWZ)

Disclosure: No Positions

Comparing the Performance of Germany and France ETFs

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The iShares MSCI Germany Index Fund(EWG) is down over 8% year-to-date while iShares MSCI France Index Fund (EWQ) is down just over 3%. The German ETF is down since German stocks has been more negatively impacted due to the Ukraine crisis. Germany has more exposure to Russia than France.

Here is a quick comparsion of the two ETFs:

a) iShares MSCI Germany Index Fund (EWG):
Net Assets = $4.8 Billion
Number of Holdings = 55
Distribution Yield = 4.24%

b) iShares MSCI France Index Fund (EWQ):
Net Assets = $2.6 Billion
Number of Holdings = 74
Distribution Yield = 4.40%

However over the long-term the German ETF handily beat the French ETF. For example, over 5 years the German ETF was up by over 40%. But the French ETF was up by only 14%. Similarly over the 10 year period,  Germany shot up by 82% while France went up just 33%. So long-term investors may want to ignore short-term performance of German equities.

The 10-year performance of the two ETFs are shown below:

Click to enlarge

EWG vs EWQ

Source: Google Finance

Disclosure:No Positions

The Top 100 Non-Financial TNCs from Developing and Transition Economies Ranked by Foreign Assets

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** New – For the latest version of this list go here: The World’s Top 100 Non-Financial TNCs Ranked by Foreign Assets 2015

The Top 100 Non-Financial TNCs from Developing and Transition Economies Ranked by Foreign Assets are listed in the below based on 2013 data:

S.no.CorporationHome economyIndustry cForeign Assets ( in millions of US$)Total Assets ( in millions of US$)
1Hutchison Whampoa LimitedHong Kong, ChinaDiversified85 721103 715
2CITIC GroupChinaDiversified78 602565 884
3Hon Hai Precision IndustriesTaiwan Province of ChinaElectrical & electronic equipment65 47170 448
4Petronas - Petroliam Nasional BhdMalaysiaPetroleum expl./ref./distr.49 072163 275
5Vale SABrazilMining & quarrying45 721131 478
6China Ocean Shipping (Group) CompanyChinaTransport and storage43 45256 126
7China National Offshore Oil CorpChinaPetroleum expl./ref./distr.34 276129 834
8América Móvil SAB de CVMexicoTelecommunications32 00875 697
9Lukoil OAORussian FederationPetroleum and natural gas31 17498 961
10Cemex S.A.B. de C.V.MexicoNon-metalic mineral products30 73036 808
11Petróleos de Venezuela SAVenezuela, Bolivarian Republic ofPetroleum expl./ref./distr.27 462218 424
12Samsung Electronics Co., Ltd.Korea, Republic ofElectrical & electronic equipment26 077169 702
13Singapore Telecommunications LtdSingaporeTelecommunications25 76832 242
14Hyundai Motor CompanyKorea, Republic ofMotor vehicles25 443113 906
15Jardine Matheson Holdings LtdHong Kong, ChinaDiversified24 28463 460
16Sabic - Saudi Basic Industries Corp.Saudi ArabiaPetroleum expl./ref./distr.23 54090 089
17Gazprom JSCRussian FederationPetroleum and natural gas23 425396 454
18Wilmar International LimitedSingaporeFood, beverages and tobacco23 08841 920
19China Resources Power Holdings Company LtdHong Kong, ChinaEnergy22 93822 938
20Tata Motors LtdIndiaAutomobile21 57531 281
21Ooredoo QSCQatarTelecommunications20 30426 104
22Formosa Plastics GroupTaiwan Province of ChinaChemicals19 994101 998
23New World Development LtdHong Kong, ChinaDiversified19 85736 918
24China National Petroleum CorporationChinaPetroleum expl./ref./distr.19 284541 083
25CapitaLand LtdSingaporeConstruction and real estate18 92630 885
26Abu Dhabi National Energy Co PJSCUnited Arab EmiratesUtilities (Electricity, gas and water)18 19833 377
27Noble Group LtdHong Kong, ChinaWholesale trade17 74819 700
28Genting BhdMalaysiaOther consumer services17 71921 940
29Petroleo Brasileiro SABrazilPetroleum expl./ref./distr.16 927331 078
30Gerdau SABrazilMetal and metal products15 68426 072
31MTN Group LtdSouth AfricaTelecommunications15 26321 409
32Bharti Airtel LimitedIndiaTelecommunications15 15330 783
33Tata Steel LtdIndiaMetal and metal products14 99427 027
34CLP Holdings LtdHong Kong, ChinaUtilities (Electricity, gas and water)14 85529 513
35Sinochem GroupChinaPetroleum expl./ref./distr.14 70445 488
36Quanta Computer IncTaiwan Province of ChinaElectrical & electronic equipment14 49419 479
37POSCOKorea, Republic ofMetal and metal products13 99774 289
38China Resources Enterprises LtdHong Kong, ChinaFood and beverages13 42616 448
39Golden Agri-Resources LtdSingaporeFood13 28613 286
40First Pacific Company LtdHong Kong, ChinaElectrical & electronic equipment13 25613 880
41YTL Corporation BhdMalaysiaUtilities (Electricity, gas and water)13 01016 154
42Sun Hung Kai Properties LtdHong Kong, ChinaOther services12 61560 277
43Steinhoff International Holdings LtdSouth AfricaOther consumer goods12 45316 090
44Lenovo Group LtdChinaElectrical & electronic equipment11 96216 882
45Fomento Economico Mexicano SABMexicoFood, beverages and tobacco11 91922 752
46Shangri-La Asia LtdHong Kong, ChinaOther consumer services11 49611 920
47Hindalco Industries LtdIndiaDiversified11 32522 186
48Li & Fung LtdHong Kong, ChinaWholesale trade11 25412 015
49Gold Fields LtdSouth AfricaMetal and metal products10 93111 200
50Oil and Natural Gas Corp LtdIndiaPetroleum expl./ref./distr.10 93046 630
51SonatrachAlgeriaPetroleum and natural gas10 358103 584
52Etisalat - Emirates Telecom Corp.United Arab EmiratesTelecommunications9 83421 821
53Sasol LimitedSouth AfricaChemicals9 48624 638
54San Miguel CorpPhilippinesFood, beverages and tobacco9 43725 298
55ZainKuwaitTelecommunications9 41210 438
56Flextronics International LtdSingaporeElectrical & electronic equipment9 39510 592
57The Hong Kong & China Gas Company LimiteHong Kong, ChinaElectricity, gas and water9 24312 776
58Swire Pacific LtdHong Kong, ChinaBusiness services8 99641 567
59JBS SABrazilFood, beverages and tobacco8 80424 307
60Ternium SAArgentinaMetal and metal products8 41210 867
61China Mobile LimitedChinaTelecommunications8 349166 972
62Pou Chen CorpTaiwan Province of ChinaOther consumer goods7 8808 410
63Naspers LtdSouth AfricaOther consumer services7 7698 811
64Tata Consultancy ServicesIndiaOther services7 2479 616
65Wistron CorpTaiwan Province of ChinaOther equipments goods7 2249 389
66Grupo Bimbo SAB de CVMexicoFood, beverages and tobacco7 20910 491
67Orascom Construction Industries SAEEgyptConstruction7 14611 271
68China Electronics Corporation (CEC)ChinaElectronics7 78429 047
69DP World LimitedUnited Arab EmiratesTransport and storage6 87716 434
70Compal Electronics IncTaiwan Province of ChinaOther consumer goods6 79510 658
71Doosan CorpKorea, Republic ofConstruction6 65929 527
72Sime Darby BhdMalaysiaDiversified6 62815 068
73Turkcell Iletisim Hizmetleri ASTurkeyTelecommunications6 46110 428
74LG Electronics Inc.Korea, Republic ofElectrical & electronic equipment6 14829 482
75Olam International LtdSingaporeElectrical & electronic equipment6 03910 875
76Severstal Group HoldingsRussian FederationMetal and metal products5 95415 707
77Cofco Ltd.ChinaFood, beverages and tobacco5 95241 264
78Power Assets Holdings LimitedHong Kong, ChinaElectricity, gas and water5 75313 114
79Embraer - Empresa Bras De Aeronautica SABrazilAircraft5 7079 465
80Keppel Corp LtdSingaporeDiversified5 65223 842
81Galaxy Entertainment Group LtdHong Kong, ChinaOther consumer services5 6195 727
82Inventec Co LtdTaiwan Province of ChinaElectrical & electronic equipment5 4836 169
83Medi-Clinic Corp LtdSouth AfricaOther consumer services5 3436 154
84Mechel OAORussian FederationMetal and metal products5 18617 695
85Sinopec - China Petrochemical CorporationChinaPetroleum expl./ref./distr.5 030201 027
86Fraser and Neave LtdSingaporeFood, beverages and tobacco4 99511 975
87Shenzhen International Holdings LimitedHong Kong, ChinaConstruction4 9495 468
88Advanced Semiconductor Engineering IncTaiwan Province of ChinaElectrical & electronic equipment4 8968 494
89China Minmetals CorpChinaMetal and metal products4 88539 225
90Guangdong Investment LtdHong Kong, ChinaUtilities (Electricity, gas and water)4 5584 820
91City Developments LtdSingaporeOther consumer services4 55512 757
92Road King Infrastructure LtdHong Kong, ChinaTransport and storage4 3284 809
93Cheng Shin Rubber Industry CoTaiwan Province of ChinaChemicals4 3015 206
94Acer IncTaiwan Province of ChinaElectrical & electronic equipment4 2487 810
95Hynix Semiconductor IncKorea, Republic ofElectrical & electronic equipment4 01117 478
96Suzlon Energy LtdIndiaDiversified3 9905 337
97Netcare LtdSouth AfricaOther consumer services3 8925 325
98Sappi LtdSouth AfricaWood and paper products3 8666 168
99Enka Insaat ve Sanayi ASTurkeyConstruction and real estate3 8048 209
100China Railway Construction Corporation LtdChinaConstruction3 76176 282

Source: UNCTAD

Chinese firms located in mainland China and Hong Kong dominate this list.Many oil and utility firms are in this ranking since they have usually have major overseas operations.Lukoil OAO (LUKOY) of Russia, Sinopec – China Petrochemical Corporation (SNP) of China have big presence in other countries as well. South Africa’s MTN Group Ltd is a major player in the telecom space in many African countries.As these firms represent large multinationals from each of the country listed investors can consider these companies when exploring options for investments in emerging and frontier markets.

Download: The Top 100 Non-Financial TNCs from Developing and Transition Economies Ranked by Foreign Assets Full List (in Excel format).

Disclosure: Long PBR