8 Economic Charts of BRICs

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The equity markets markets of BRIC countries are not soaring this year.Brazil and India are down while China and Russia are up YTD compared to S&P’s fall of 1.90%. However the economies of BRICs continues to be strong and their growth is projected to outpace that of developed countries this year as well.

Deutsche Bank’s Research projects real GDP growth of 4.5%, 5.5%, 8.2% and 9% for Brazil, Russia, India and China respectively for 2011.The current weakness in BRIC equities offers an opportunity for investors looking to gain exposure to these countries. Some of the positive factors of the BRIC countries include strong Foreign Direct Investment (FDI) flows, low government debt, large balance-of-payments surpluses, lower labor costs, rising middle class, high foreign exchange reserves, etc.

The following eight charts offer some insight into the BRIC economies:

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Source: BRIC Capital Markets Monitor, February 2011, Deutsche Bank Research

Related ETFs:

WisdomTree India Earnings (EPI)
PowerShares India (PIN)
iShares S&P India Nifty 50 (INDY)
iShares MSCI Emerging Markets Indx (EEM)
EGShares Brazil Infrastructure ETF (BRXX)
iShares MSCI Brazil Index (EWZ)
Market Vectors Russia ETF (RSX)
iShares FTSE/Xinhua China 25 Index Fund (FXI)

Disclosure: No Positions

The Largest Hole in the World

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The largest hole in the world is a diamond mine in Mirny, Siberia – just below the Arctic Circle. According to Wikipedia, the mine is 525 meters (1,722 ft) deep (4th in the world) and has a diameter of 1,200 m (3,900 ft).

Photos:

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From the BBC:

The town was founded in 1955 when geologists came to exploit the area’s substantial mineral wealth. The town is strictly off limits to outsiders without a special permit and the authorities regard any foreigners with considerable suspicion. The Mir mine was the first and the largest diamond mine in the Soviet Union.Its surface operation lasted 44 years, finally closing in June 2001.

 For more info checkout:

http://en.wikipedia.org/wiki/Mir_mine

Google Images Link

 

Consumption, Investment Contribution to China’s GDP Growth

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Consumer spending accounts for over 70% of the U.S. economy.China on the other hand is not a consumer-driven economy. Despite the tremendous growth in recent years, consumer spending is relatively less in China. Much of the growth reported by China comes from investment spending rather than consumption spending.

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Source: The Wall Street Journal

The chart above shows that household’s contribution to China’s GDP has been shrinking since 2008. Consumer spending accounts for just 35% of the China’s GDP – about half the level of the U.S. Hence from an investment standpoint the takeaway is that investors must focus on companies that are involved in the infrastructure space instead of firms catering to consumer demands such as retailers, fast-food chains, etc. Some of the foreign firms helping China build its infrastructure include ABB (ABB), General Electric (GE), Siemens (SI), Areva (ARVCY), etc.

Disclosure: No positions

Australia’s Awesome Four Banks

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Australia’s four leading banks have reported strong earnings for the six months to March this year. With National Australia Bank’s reported profits of A$2.67 billion for half-year, the four banks’ combined total profits is a record $12 billion as shown in the graphic below:

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Source:News.com.au

In addition to rising profits, NAB and rivals have announced declining charges for bad debts and improving figures for late payments of mortgage payments.

After weathering the great financial crisis well, Australia’s banks are in stronger position to take advantage of the growth in emerging Asian economies due to their close proximity to those economies. The four banks are listed below together with their current dividend yields and stock prices:

1.Bank:National Australia Bank Ltd (OTC:NABZY)
Current Share Price: $28.42
Current Dividend Yield: 5.48%

2.Bank:Australia And New Zealand Banking Group Ltd (OTC:ANZBY)
Current Share Price: $24.69
Current Dividend Yield: 5.82%

3.Bank:Commonwealth Bank Of Australia (OTC:CMWAY)
Current Share Price: $56.23
Current Dividend Yield: 4.83%

4.Bank:Westpac Banking Corp (NYSE:WBK)
Current Share Price: $124.86
Current Dividend Yield: 5.68%

The chart below shows the 5-year performance comparison of the above banks against four large U.S. banks:

Click to enlarge

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Disclosure: No positions

20 Spanish Blue Chip Stocks To Consider

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The Spanish IBEX-35 index is up 10.3% as of May 2, 2011. Fears of debt crisis that plagued Spain last year have largely subsided. The financial system has stabilized and failing cajas (savings banks) have been closed or merged with stronger peers. With one of the largest economies in Europe and strong ties countries in Latin America, investors may want to add some Spanish equities at current levels.

In order to identify some of the blue chips stocks in Spain I referred to the STOXX Spain 20 Index. This index provides a blue-chip representation of the largest companies in Spain.The components of this index are listed below together with ADR tickers if available and current yields:

1.ABERTIS INFRAESTRUCTURAS
Sector:Industrial Goods & Services

2.ACS
Sector: Construction & Materials

3.AMADEUS IT HLDG (AMADF)
Sector: Industrial Goods & Services
Current Dividend Yield: N/A

4.BCO BILBAO VIZCAYA ARGENTARIA(BBVA)
Sector:  Banks
Current Dividend Yield: 6.68%

5.BCO POPULAR ESPANOL
Sector:  Banks
Current Dividend Yield:

6.BCO SABADELL
Sector:  Banks
Current Dividend Yield:

7.BCO SANTANDER (STD)
Sector:  Banks
Current Dividend Yield:10.26%

8.CRITERIA CAIXACORP
Sector:  Financial Services
Current Dividend Yield:

9.ENAGAS (ENGGY)
Sector: Utilities
Current Dividend Yield: 3.40%

10.ENDESA
Sector: Utilities
Current Dividend Yield:

11.FERROVIAL (FRRVY)
Sector:Construction & Materials
Current Dividend Yield: 1.10%

12.GAS NATURAL SDG (GASNY)
Sector:Utilities
Current Dividend Yield: 5.15%

13.GRIFOLS
Sector:Healthcare
Current Dividend Yield:

14.IBERDROLA (IBDRY)
Sector:Utilities
Current Dividend Yield: N/A

15.IBERDROLA RENOVABLES
Sector:Utilities
Current Dividend Yield:

16.INDITEX
Sector: Retail
Current Dividend Yield:

17.MAPFRE
Sector:Insurance
Current Dividend Yield:

18.RED ELECTRICA CORPORATION
Sector:Utilities
Current Dividend Yield:

19.REPSOL YPF (REPYY)
Sector:    Oil & Gas
Current Dividend Yield: 3.98%

20.TELEFONICA (TEF)
Sector: Telecom
Current Dividend Yield: 8.36%

Disclosure: Long BBVA, STD