The 10 Leading Oil Importing Countries

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The U.S. topped the list of oil importing countries based on 2011 data as shown in the graphic below:

Click to enlarge

Top-Oil-Importing-Countries

Source: Should the U.S. Expand Offshore Oil Drilling?, The Wall Street Journal, April 12, 2013

Here are some interesting facts from the EIA site:

  • The U.S. was a net importer in 2011 and imported 45% of petroleum products consumed.
  • U.S. dependence on foreign oil has been on the decline since 2005.
  • The U.S. is the largest petroleum consumer and consumed 18.8 million barrels per day (MMbd) in 2011.
  • Canada, not any Middle Eastern country, is the top supplier of crude oil.
  • The following chart shows U.S. production, consumption and imports:

US-oil-Chart

Source: How dependent are we on foreign oil?, EIA

An earlier article on the major players supplying the world oil market can be found here.

The 15 Largest Swiss Companies By Revenue 2012

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The largest Swiss firms by revenues that are in the Fortune Global 500 list in 2012 are listed below 

Country RankCompanyGlobal RankCityRevenues($ millions)
1Glencore International14Baar186,152
2Nestle71Vevey94,405
3Novartis157Basel59,375
4Zurich Insurance Group178Zurich52,983
5Roche Group192Basel49,714
6Credit Suisse Group204Zurich48,227
7UBS215Zurich45,978
8ABB273Zurich37,990
9Alliance Boots274Zug37,977
10Xstrata325Zug33,877
11Coop Group364Basel30,022
12Adecco Group387Glattbrugg28,567
13Swiss Re394Zurich28,083
14Migros Group396Zurich28,015
15Holcim474Jona23,378

Source: Fortune Global 500, Fortune

Five of the above companies trading on the US markets are shown below with their current dividend yields:

1.Company: Nestle SA (NSRGY)
Current Dividend Yield: 3.12%

2.Company: ABB Ltd (ABB)
Current Dividend Yield: 3.19%

3.Company: Novartis AG (NVS)
Current Dividend Yield: 3.32%

4.Company: Credit Suisse Group AG (CS)
Current Dividend Yield: 2.

5.Company: Roche Holding AG (RHHBY)
Current Dividend Yield: 2.98%

Related ETFs:

iShares MSCI Switzerland Capped Index (EWL)

Disclosure:  Long ABB

Despite Ongoing Turmoil European Markets Offer Attractive Investment Opportunities

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For many years now Europe has been hit by one crisis after another.First came the fiscal crisis in Greece and then Portugal followed suit. Greece has been bailed out multiple times so far and is still struggling to recover. In general, the economies of the PIIGS countries have suffered greatly since the global financial crisis of 2008-2009. More recently the tiny island state of Cyprus triggered a new crisis and was bailed out. Up until the crisis, hardly any investor paid attention to, let alone worry about this island causing a global economic collapse.

However despite the seemingly never-ending crises, European stocks have climbed higher in the past few years. The following shows the performance of the MSCI Euope index since September 2009. This index is a measure of the developed economies of Europe including the UK.

Click to enlarge

Eurozone-Crisis-Chart

Source: European stocks rally despite the crisis, Fidelity Investments

Here is a excerpt from an article on European stocks by Michelle Gibley, Director of International Research, Schwab Center for Financial Research:

Europe’s economy is in recession, austerity is biting, politicians have repeatedly resisted measures to unite, and the Italian election is inconclusive—are there any reasons to invest in the eurozone? Actually, we think there are.

In spite of their many challenges, eurozone countries have begun to institute crucial reforms, their credit markets are thawing, and the Organisation for Economic Co-operation and Development (OECD) leading indicator and purchasing manager indexes suggest the eurozone economy has improved from the low hit in the fall. Corporate earnings and valuations remain relatively low, making it easier for companies to surpass investor expectations, and making stocks appear comparatively cheap. And in light of easing global uncertainty, we see fewer risks of a global slowdown harming the eurozone’s nascent improvement.

All of these factors contribute to our positive view on eurozone equities as a whole. Among individual countries, we prefer the stock markets in Germany and France. Select individual stocks of companies that are in cyclical sectors or have high foreign exposure or strong brands may also be worth a look.

Source: European Stock Outlook Upbeat Despite Challenges, Charles Schwab

As I have mentioned in previous posts one way to profit from the growth in emerging and other developed markets is to invest in European firms that have high exposure to overseas markets. Traditionally many European companies have maintained strong presence in foreign countries due to colonial ties. For example, many of the UK’s FTSE 100 firms generate a high portion of their revenues from emerging markets.

The YTD performance of select European equity indices are noted below:

CAC-40: 0.30%
FTSE 100: 6.6%
DAX: -2.0%
IBEX 35: -3.1%

The S&P 500 has outperformed the major European indices and is up 9.0% YTD.

Ten European stocks to consider are listed below with their current dividend yields:

1.Company: Nestle SA (NSRGY)
Current Dividend Yield: 3.11%
Sector: Food Products
Country: Switzerland

2.Company: Unilever PLC (UL)
Current Dividend Yield: 2.95%
Sector: Food Products
Country: UK

3.Company: Vodafone Group PLC (VOD)
Current Dividend Yield: 5.07%
Sector: Telecom
Country: UK

4.Company: BASF SE (BASFY)
Current Dividend Yield: 3.84%
Sector: Chemicals
Country: Germany

5.Company: Banco Santander SA (SAN)
Current Dividend Yield: 8.83%
Sector: Banking
Country: Spain

6.Company: Total SA (TOT)
Current Dividend Yield: 5.43%
Sector: Oil, Gas & Consumable Fuels
Country:

7.Company: HSBC Holdings PLC (HBC)
Current Dividend Yield: 4.33%
Sector: Banking
Country: UK

8.Company: Heineken NV (HEINY)
Current Dividend Yield: 1.31%
Sector: Beverages
Country: The Netherlands

9.Company: ABB Ltd (ABB)
Current Dividend Yield: 3.35%
Sector: Electrical Equipment
Country: Switzerland

10.Company: British American Tobacco PLC(BTI)
Current Dividend Yield: 3.87%
Sector: Tobacco
Country: UK

Note: Dividend yields noted are as of April 19, 2013. Data is known to be accurate from sources used.Please use your own due diligence before making any investment decisions

Disclosure: Long ABB, SAN

Two Reasons Why Investors Are Attracted To Gold

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Gold futures closed at $1,406.50 an ounce in New York yesterday. Recently gold prices plunged by over $200 in just two days before recovering slightly. Over the past 10 years, gold soared from about $330.00 an ounce to a record high of $1900.00 in 2011.

Click to enlarge

Gold-10-Year-Chart

Source: Kitco

From 2002 thru early March this year, gold was one of the best performing asset classes climbing nearly 500% according to a report by CIBC World Markets.

But why did Gold prices rise to astonishing levels in the past decade? The authors of the CIBC report noted two reasons for investors’ attraction towards the yellow metal:

1. Concerns about inflation and

2. Currency depreciation

Fears about soaring inflation globally has been unfounded. CPI Inflation has declined in the US and other developed countries as shown in the chart below. Though inflation has been rising in the emerging markets especially the BRIC countries, at the end of last year it was below where it stood in 2011.

Global-Inflation

Source: Why Gold’s Lustre Will Fade, CIBC World Markets

Another popular myth is that Central banks, particularly the Federal Reserve is printing money recklessly which would cause inflation further. However money growth has not increased tremendously. Though the money growth has increased since 2000, as measured by the Divisia M4 Index, it is still below the pre-crisis level as shown in the following chart :

US-Money-Growth

On the fear of depreciation of the US dollar the authors wrote that most the dollar decline has already occurred. From the report:

Investors might not fear inflation, but instead hold gold as an alternative to the dollar for fear that the greenback will weaken sharply against other currencies. That wasn’t just fear, but was reality for the US dollar from 2002 to 2008, a period in which the greenback experienced a steady slide against most other majors.

But that slide was as much about where the dollar started, an overvalued level relative to trade fundamentals, one that generated an unsustainable trade and current account deficit. While the dollar might still be overvalued against some trade counterparties, including the Chinese yuan, the devaluation now behind us looks to have addressed much of the imbalance with other majors.

True, the US still sports an annual current account deficit of some $480 bn or 3% of GDP. But the bulk of that is now the trade deficit in petroleum products (Chart 4, left). The petroleum balance is now making progress as US crude production and dampened gasoline demand growth cut into import requirements (Chart 4, right). Add it all up, and trade fundamentals suggest that most of the broad dollar decline is behind us.

Chart-4

In summary, investors pushed gold prices far too high due to unfounded fears and hence gold may not be the safe heaven that investors are looking for anymore. Gold prices will stabilize at some level and prices reaching $2,000 an ounce that was suggested at its peak in 2011 seems unlikely now.

Related ETFs:

SPDR Gold Trust ETF (GLD)

Disclosure: No Positions