Testing – Changed Web Url to addr with no wp folder in it
And All Permalinks now has no wp in it.
Permalink for this post: (Has no “wp” in it)
https://topforeignstocks.com/2011/07/05/test-post-test…w-correct-path/
Equity Performance Comparison: Developed vs. Emerging Countries
Equity markets of emerging and developed countries perform differently due to obvious reasons. During the credit crisis, the theory that emerging markets are decoupled from developed markets was proven wrong when equities worldwide plunged in a synchronized fashion. In fact, emerging equities fell higher than developed equities. However over a 5-year period, some of the emerging markets are well ahead of developed markets.
The chart below the performance 5-year comparison of select developed and emerging countries using the MSCI country indices:
Source: MSCI
Brazil, China and India are have much performed better than the developed countries of Australia, China dn Germany. The MSCI index 5-year returns for these countries are noted below:
- Brazil = 14.98%
- India = 11.84%
- China = 13.89%
- Canada = 5.30%
- Australia = 5.32%
- Germany = 2.76%
It is interesting to note that Canada and Australia have almost similar returns. Both the countries have natural resource-based economies with Canada dependent heavily on the U.S. and Australia feeding China’s voracious appetite for iron ore, coal, etc. As commodities boomed in the past few years the economies of Canada and Australia benefited considerably. Despite having a strong export-based economy Germany has lagged in performance in the past 5 years.
Another takeaway from this chart is that investors need to diversify their holdings across many asset classes and markets. Though emerging markets are lagging this year they may indeed outperform developed markets in the long-term such as a five or ten year time horizon.
Related ETFs:
iShares MSCI Emerging Markets Indx (EEM)
iShares MSCI Brazil Index (EWZ)
iShares FTSE/Xinhua China 25 Index Fund (FXI)
iShares MSCI Germany Index Fund (EWG)
iShares MSCI Canada Index Fund (EWC)
iShares MSCI Australia Index Fund (EWA)
PowerShares India Fund (PIN)
iShares S&P India Nifty 50 (INDY)
Disclosure: No Positions
Top Chemical Companies in Latin America
The top chemical companies in Latin America based on sales in 2009 are listed below:
1. Braskem (BAK)
2. ALPEK
3. PEMEX
4. Quotter
5. Mexichem
6. SQM (SQM)
7. Fosterill
8. Oxiteno
9. Petrobras Argentina (PZE)
Brazil-based Braskem is a petrochemical firm with 29 plants in Brazil and the U.S. Last year the company had total revenues of about $18.0 billion. Sociedad Quimica y Minera de Chile SA (SQM) is a Chile-based producer of specialty plant nutrients and chemicals whose products are sold in more than 100 countries. Petrobras Argentina’s is an integrated oil company with operations in the petrochemicals sector as well.
In the Economic Cycle, Where are We Now?
I came across this interesting graphic on economic cycle at the FT Alphaville blog:
Click to enlarge
Source: Hugh Hendry, Eclectica Asset Management, UK
Some of the items mentioned here such as creditor countries tightening monetary policies have not occurred yet. In addition it is highly unlikely that the U.S. will reject globalization anytime soon.
Performance: One Small Bank vs. Four Super-Banks
The banking sector has been one of the worst performing sectors due to the recent financial crisis. Many small U.S. banks have been shutdown and many more are on the verge of extinction. However there are a few winning small banks. One such bank is Prosperity Bancshares Inc.(PRSP) based in Houston, Texas.
Prosperity’s performance vs. the four large super banks in the past 10 years is shown below:
Click to enlarge
Citibank(C), Bank of America(BAC) and JPMorgan Chase (JPM) all have a negative return with Citibank faring the worst. The variance in returns between Prosperity Bancshares and the large banks is surprising since large banks were supposed to be better due to their massive size and scope of operations.
Disclosure: No positions