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Bayterek, Astana, Kazakhstan
National Bank of Greece (NBG) implemented a reverse split on its ADR in the ratio of 1:5 effective November 25, 2011.
From the announcement released by BNY Mellon:
National Bank of Greece has announced a change in the current ratio on its existing ADR program. The current ratio will change from five (5) ADSs representing one (1) Ordinary Share (5:1) to one (1) ADS representing one (1) Ordinary Share (1:1).
To effect the ratio change, a reverse split on the National Bank of Greece DRs on a basis of one (1) new ADS for every five (5) old ADSs will occur.
From a peak of over $14 in November 2007, NBG closed at $0.43 on Friday. From Monday the stock will start trading at the reverse adjusted price.
Though National Bank of Greece is the oldest and largest among Greek banks, it is better to avoid investing in the stock now. Greece has been bailed out twice in recent years and fundamental economic changes have to occur before the country becomes a desirable investment destination. The country is the poorest in Europe and despite being the birthplace of modern democracy, Greece suffers from many social ills such as corruption at all levels, tax evasion, high public sector employment, lowest retirement age, etc.
National Bank of Greece follows Bank of Ireland (IRE) which implemented a reverse split on its ADR last month. More European banks may effect reverse splits as their shares are currently languishing in the single digits and may fall below the $1 mark if the crisis worsens further.
Disclosure: No Positions
The wireless telecom industry in Latin America is projected to have exponential growth over the next few years due to rising incomes and more population entering the middle class category. Cell phones have become a necessity of life worldwide and hence they will be one of the first few items that the middle class aspires to own in addition to others such as a TV, car, household appliances, etc.
From an article on the growth of Telecom industry in Latin America:
The research has been done, the opinions formed, and the consensus is unanimous: Latin America’s telecommunications sector is set for huge growth over the next few years. Driven by increasing end-user affluence, the region’s analysts expect to see a jump in smartphone ownership, rising broadband penetration rates and an increase in mobile services as costs come down and network capacities expand to embrace next generation communications.
Having the right infrastructures in place will be key. Brazil and Chile’s future is highly dependent on audacious and substantial investments into its infrastructure,” says Cristiano Zaroni, Research Director for Frost & Sullivan’s Latin America practice in a research note. As the financial status of its working age citizens continues to improve, demand for infrastructure-intensive services is expected to increase in importance. Internet and telecommunication will become more commonplace, encouraging more investment from international service suppliers and the build-up of larger and more advanced networks.
Five Latin American Telecom ADRs currently paying more than 5% dividends:
1.Company: Telefonica Brasil SA (VIV)
Current Dividend Yield: 14.13%
Country: Brazil
2.Company: Telefonos de Mexico SAB de CV (TMX)
Current Dividend Yield: 5.89%
Country: Mexico
3.Company: Telecom Argentina Sociedad Anonima (TEO)
Current Dividend Yield: 9.20%
Country: Argentina
4.Company: Telefonos de Mexico SAB de CV (TFONY)
Current Dividend Yield: 5.94%
Country: Mexico
5.Company: Brasil Telecom SA (BTM)
Current Dividend Yield: 11.93%
Country: Brazil
Note: Dividend yields noted are as of Nov 25, 2011
Disclosure: No Positions
India is the second largest populous country with a population of over 1.1 billion. The economy grew at a robust pace up until recently after the India opened up its economy and implemented economic reforms. In 2010, the GDP was estimated to be $4.06 Trillion based on Purchasing Power Parity (PPP). The growing economy has led to higher trade with other countries as India competes with China to become a leading manufacturing base.
The following chart shows the Top Trade Partners of India:
Click to enlarge
Source: Pakistan to Boost Trade With India ,The Wall Street Journal
Due to high imports of oil and natural gas from the Middle East, UAE and Saudi Arabia appear in this list. Despite strong trade relationship with the U.S. due to off-shoring of IT work and call center businesses, the U.S. ranks as the third as the third trade partner. It is interesting to note that China is a major partner of India. The Indian scenario is similar to Brazil where growth in trade is higher between Brazil and China than with Brazil and the U.S.
Related ETFs;
WisdomTree India Earnings (EPI)
PowerShares India (PIN)
iShares S&P India Nifty 50 (INDY)
EGShares India Infrastructure ETF (INXX)
Disclosure: No Positions
European equity markets have fallen heavily this year due to the ongoing debt crisis there. While most investors are avoiding European stocks some are wondering if the current opportunities are too good to pass up.
Yesterday strategists at HSBC published a research report stating that investors have a rare opportunity to invest in high-yielding European stocks. They identified the following 43 stocks that are likely to outperform the current market even if they cut dividends:
Source: CityWire UK
From the CityWire article:
‘The classic dilemma for investors is to decide whether these high yields represent a value opportunity or whether it is a sign of distress,’ they wrote. ‘It turns out that there is an element of truth in both views.’
Citing an analysis of 430 stocks in the MSCI Europe index in the period since 1994 to date, they said 77% of the companies cut their dividends at some point in the two years after their yields broke above the 8% level.
But the strategists added that they also found that the majority of the stocks had still beaten the market, even though they had cut their payouts to investors.
Utilities Enel (ENLAY) and RWE(RWEOY) have dividend yields of 6.76% and 13.51% currently based on their ADR prices. Telecom companies such as France Telecom(FTE) and Telefonica(TEF) are also excellent choices at current levels.
Disclosure: Long RWE, STD and VE