On The Performance of Foreign Foreign Bank Stocks Year-to-Date

Posted by on

Most of the exchange-listed foreign banks trading on the US exchanges are down so far this year in line with the overall market conditions in the equity markets. As expected, European banks are in the deep red while emerging market banks especially in Latin America have performed very well. European lender Credit Suisse(CS) is the worst performer with a loss of nearly 47%. Brazilian banks are some of the top performers with Itau Unibanco(ITUB) gaining over 35% year-to-date. In general, Brazilian equities are on the upswing with investors expecting major changes after the general elections in October this year. The last time the equity market had a great bull run was when Lula was President.

The following table shows the year-to-date returns of foreign bank stocks:

S.No.Bank NameTickerEnding Price on Sept 2, 2022Year-to-Date Change(%)Country
1Itau UnibancoITUB$5.0735.20%Brazil
2Banco de ChileBCH$20.1328.13%Chile
3Itau CorpbancaITCB$3.5823.45%Chile
4ICICI BankIBN$21.8410.36%India
5Banco BradescoBBD$3.687.60%Brazil
6Banco Santander BrasilBSBR$5.767.26%Brazil
7Banco MacroBMA$14.916.35%Argentina
8Banco BradescoBBDO$3.003.45%Brazil
9Banco Santander ChileBSAC$16.742.76%Chile
10HSBCHSBC$30.591.46%United Kingdom
11Banco BBVA Argentina S.A.BBAR$3.15UNCHArgentina
12HDFC BankHDB$61.98-4.75%India
13Mitsubishi UFJ FinancialMUFG$5.08-6.96%Japan
14Grupo Financiero GaliciaGGAL$8.54-10.01%Argentina
15Bancolombia - PrefCIB$28.23-10.64%Colombia
16Mizuho FinancialMFG$2.27-10.98%Japan
17Sumitomo Mitsui FinancialSMFG$6.02-11.34%Japan
18Shinhan FinancialSHG$25.61-17.15%Korea
19Woori Financial Group Inc.WF$25.12-21.82%Korea
20Lloyds Banking GroupLYG$1.96-23.14%United Kingdom
21KB Financial GroupKB$35.21-23.72%Korea
22Banco Bilbao Vizcaya ArgentariaBBVA$4.40-25.04%Spain
23Barclays BankBCS$7.72-25.41%United Kingdom
24Banco SantanderSAN$2.35-28.57%Spain
25Deutsche BankDB$8.27-33.84%Germany
26Credit SuisseCS$5.12-46.89%Switzerland
27NatWestNWG$5.78-13.34%United Kingdom

Note: The returns noted above are excluding dividends

Source: BNY Mellon

Investors can avoid European banks since they face major headwinds both due to internal issues and external issues such as the Ukraine war for example. Emerging market banks offer better opportunities than European banks. For instance, Colombian or Chilean or Indian banks have better growth potential than British banks which are mired in problems ranging from the most recent Brexit drama and potential recession in the country.

Disclosure: Long BCH, CIB, ITUB, BBD, BBVA, SAN and LYG

Amtrak vs. U.S. Freight Railroads: Infographic

Posted by on

Amtrak is the only passenger major railroad operator in the U.S. Unlike railroads in other developed countries, Amtrak is chronically a mess and most people have never traveled in its trains except the other in the east and west coasts and some long distance routes. While US freight railroads are the most efficient and most profitable in the world, the story with Amtrak is not the same. While Amtrak’s potential is huge it is mostly useless for long distance travel since it does own much of the tracks. With that said, below is a neat infographic showing some of the differences between Amtrak and US freight railroads:

Click to enlarge

Source: FreightWaves

Russian ADRs: Automatic Conversions Update

Posted by on

BNY Mellon, the depository for many Russian DR programs has posted an update on the automatic conversion of Russian ADRs and GDRs to the ordinary shares trading on the local market. This update provides answers to some of the questions that owners of Russian ADRs may have. The automatic conversion starts from 8/31/22 to 9/6/22 and includes major ADRs like the oil giant Gazprom.

Below is an excerpt from the notice:

NOTICE TO HOLDERS OF AMERICAN AND GLOBAL DEPOSITARY SHARES REPRESENTING DEPOSITED SHARES OF RUSSIAN-INCORPORATED ISSUERS (“Russian DR Programs”)

Further to our notices of July 14, 2022 and August 1, 2022, BNY Mellon has been advised by its Russian custodian that Automatic Depositary receipt (“DR”) conversions for certain Russian DR Programs could begin as early as August 30, 2022.

The table in Annex I of this notice lists Russian DR Programs in-scope for Automatic DR conversions and the anticipated date that Automatic DR conversions may occur for each Russian DR Program.

Should BNY Mellon receive notification from its Russian custodian that shares underlying a specific Russian DR Program will be automatically removed from BNY Mellon’s account with its Russian custodian, BNY Mellon will immediately close the relevant Russian DR Program books for cancellation of DRs in accordance with the applicable Deposit Agreement and will not be able to process any corporate actions with respect to that Program (including voting) until a complete reconciliation of its books and records against DRs outstanding may be achieved.

Note that BNY Mellon cannot guarantee that such reconciliation will be possible, and, to the extent such reconciliation is not possible, the relevant Russian DR Program books will not be reopened.

As a reminder, under the mandatory provisions of the DR Delisting Law, BNY Mellon as Depositary will be disintermediated from DR cancellations using the Automatic DR Conversion procedures (described in detail in our notice of July 14, 2022).

Source: BNY Mellon

For more details please review the full notice at the above link.

The National Debt Mountain in Perspective: Infographic

Posted by on

The Gross Federal Debt of the United States crossed $30.0 Trillion in February of this year. This mountain of debt is bound to grow as additional freebies are handed out by the Federal government including the recent student loan forgiveness program. For an average American anything more than a million is all numbers with lots of zeros. So billions and trillions simply mean some big number that nobody needs to worry about. The thinking goes whether the debt is $30 Trillion or $300 Trillion who cares.

The following infographic from the Peter G. Peterson Foundation puts the nation debt in perspective and how it impacts us all:

Click to enlarge

Source: Peter G. Peterson Foundation