12 Components of the STOXX Global Grand Prix Index

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The Formula One is the world’s most prestigious race car championship in the world. Wikipedia notes the following about Formula One:

Formula One, also known as Formula 1 or F1 and referred to officially as the FIA Formula One World Championship,[2] is the highest class of single seater auto racing sanctioned by the Fédération Internationale de l’Automobile (FIA). The “formula” in the name refers to a set of rules with which all participants’ cars must comply.[3] The F1 season consists of a series of races, known as Grands Prix (translated to English as “Big Prizes”[4]), held on purpose-built circuits and public roads. The results of each race are combined to determine two annual World Championships, one for the drivers and one for the constructors, with racing drivers, constructor teams, track officials, organizers, and circuits required to be holders of valid Super Licences, the highest class of racing licence issued by the FIA.[5]

Formula One cars are considered to be the fastest circuit-racing cars in the world, owing to very high cornering speeds achieved through the generation of large amounts of aerodynamic downforce. Formula One cars race at high speeds – up to 360 km/h (220 mph) – with engines the performance of which is limited to a maximum of 18,000 revolutions per minute (rpms). The cars are capable of lateral acceleration in excess of 5 g in corners. The performance of the cars is very dependent on electronics – although traction control and other driving aids have been banned since 2008 – and on aerodynamics, suspension and tyres. The formula has had much evolution and change through the history of the sport. Europe, where all the Formula One racing teams are based, is the sport’s traditional basis and where about half of each year’s races occur. However, the sport’s scope has expanded significantly during recent years and an increasing number of Grands Prix are held on other continents.

Formula One had a total global television audience of 527 million people during the course of the 2010 FIA Formula One World Championship.[6] The Formula One Group is the legal holder of the commercial rights.[7] With annual spending totalling billions of US dollars, Formula One’s economic effect is significant, and its financial and political battles are widely reported. Its high profile and popularity make it a merchandising environment, which results in great investments from sponsors and budgets in the hundreds of millions for the constructors.

The STOXX Global Grand Prix Index tracks the performance of the major players in the Formula 1 industry. The index covers auto engine manufacturers, tire suppliers, oil and fuel suppliers in the Formula 1 as well as title sponsors.

The twelve components of the STOXX Global Grand Prix Index are listed below:

1.Altria Group Inc.(MO)
Personal & Household Goods
Country: USA

2.AT&T Inc.(T)
Telecommunications
Country: USA

3.DAIMLER
Automobiles & Parts
Country: Germany

4.Exxon Mobil Corp.(XOM)
Oil & Gas
Country: USA

5.FIAT    (FIATY)
Automobiles & Parts
Country: Italy

6.Petronas Gas BHD
Oil & Gas
Country: Malaysia

7.PIRELLI & Co.
Automobiles & Parts
Country: Italy

8.RENAULT
Automobiles & Parts
Country: France

9.ROYAL DUTCH SHELL A (RDS.A)
Oil & Gas
Country: UK

10.TOTAL (TOT)
Oil & Gas
Country: France

11.VODAFONE (VOD)
Telecommunications
Country: UK

12.WILLIAMS GRAND PRIX
Travel & Leisure
Country: UK

Disclosure: No positions

European Chemical Stocks Reach Record Highs

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Many European chemical companies are projected to report strong earnings for the last quarter. Ahead of the earnings, the Euro Stoxx Chemicals Index has reach reached an all-time high as shown in the graphic below:

best-chemicals-european.jpg

Source: Stoxx

Some of the reasons for this include the solid recovery in the industry since 2009, optimism on profits and more M&A in the industry. Further consolidation in the industry is likely this year.Earlier this month Belgium’s Solvay (SVYZY) agreed to buy Rhodia of France to expand its footprint in the fast-growing emerging markets. On April 21st Akzo Nobel(AKZOY) announced a 58% rise in first-quarter profits and said it will raise prices and cut expenses to mitigate the increasing cost of raw materials.

Though many of these chemical stocks have reached their 52-week highs recently, there is still potential for further growth. Some of the large European chemical firms are listed below for further analysis and consideration:

1.Arkema SA (OTC:ARKAY)
Current Price: $101.10
Country: France

2.Air Liquide SA (OTC:AIQUY)
Current Price: $ 28.48
Country: France

3.Linde (OTC:LNEGY)
Current Price: $ 17.40
Country: Germany

4.Bayer AG (OTC:BAYRY)
Current Price: $ 82.35
Country: Germany

5.Yara International (OTC:YARIY)
Current Price: $ 53.08
Country: Norway

6.K+S AG (OTC:KPLUY)
Current Price: $ 39.75
Country: Germany

7.Syngenta (SYT)
Current Price: $ 71.02
Country: Switzerland

Note: Prices noted above are as of April 21, 2011

Disclosure: No positions

Withholding Taxes for Foreign Stock Dividend Payments

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Earlier this year I wrote a post on withholding taxes for foreign stock dividends based on data from Dow Jones Indexes. In this post, I have listed below the withholding taxes of 62 countries (including the U.S.) according to data published by STOXX Ltd:

[TABLE=926]

Source: STOXX

USA charges 30% tax on stock dividend payments to foreigners on all dividends paid by domestic corporations.

U.S. Currency in Circulation Crosses $1 Trillion

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The total U.S. currency and coin outstanding at the end of December 2010 crossed over $1 Trillion or $1,165,184,270,423 to be exact according to the Treasury Bulletin March 2011, U.S. Department of the Treasury. When the amounts held by the Treasury and the Federal Reserve Banks are deducted, the total amount in circulation stood at $982,716,270,064. Out of this, coins in circulation totaled $40,696,461,630.

The latest edition of Bloomberg BusinessWeek notes that the currency and coin in circulation has crossed the $1 Trillion figure.

US-Cash-in-Circulation

U.S. currency in circulation has been increasing steadily for many years now. For example, at the end of December 2007 currency in circulation totaled about $829 billion with the vast majority of it held outside the U.S. (Source: Federal Reserve Bank of New York).

On a per capita basis, the totals of currency and coins in circulation in mid-1955 was just $183. At the end of last year this amount has shot up to $3,157. As the Fed continues to print more money for a multitude of reasons the value of the dollar falls inevitably and investors’  demand for gold and other assets increases.