In the Year of the Metal Rabbit What Do You Invest In?

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According to the Chinese Zodiac,  2011 is the Year of the Golden Rabbit, which began on February 3rd.  Last month published the 17th annual CLSA Feng Shui Index report with a tongue-in-cheek look at what 2011 holds for equities, commodities, property, celebrities, and the zodiac signs in the year ahead.

From the report:

The 2010 Year of the Golden Tiger CLSA FSI predicted the performance of the Hang Seng Index (“HSI”) so precisely that even we were a little surprised. Although past performance is no guarantee of future returns, we are confident that the HSI will provide great opportunities for investors to buy and sell their way to profit over the months ahead.

For the market, February 2011 should see a slow start to the year, with the Rabbit reluctant to emerge from its hole for fear the tiger still lingers. March calls for patience as opposing forces test investors’ metal. As the Rabbit finds his feet, wealth will come from the West in April and prove a great month for those with stamina.

May begins with one of the year’s four most auspicious dates (14 May), but we expect a tumble in June, providing a great buying opportunity for the savvy. Investors may want to rethink their summer-vacation plans: we see markets rising sharply over July and August. Money will flow.

With Fall comes a fall: the CLSA FSI predicts a sharp decline in September – but not for long. October marks a sustained market rally with money flowing abundantly through to the end of November. However, investors should remain focused as markets decline during December. Come January 2012, the Bunny bounces back to close the year on a high.

Sector-focused investors should pay attention to the five elements: Metal is hot, water is bubbly, fire is on fire, wood would if it could and earth is soiled. So where to invest? It will be a great year for Financials, Gaming, Gold, Resources and Transport. While gold didn’t break US$2,000 per ounce as we predicted in 2010, we are confident the Rabbit will provide the carrot this year. It will be a good year for Oil and Gas, Technology, Telecoms, Internet and Utilities, but an unexciting time for the earth-related Property sector.

So investors putting faith in this theory may want to avoid the property sector and invest in gold, financials, resources,etc. Financials are already on a solid footing this year with many bank stocks performing well and dividend increases.

Happy Days are Hare Again: As the index rises rabbitly hopportunities abound:

Year-of-the-Rabitt-2011

Click on image to enlarge

Some related ETFs:

SPDR Gold Trust ETF (GLD)
United States Natural Gas Fund (UNG)
United States Oil Fund (USO)
KBW Regional Banking ETF (KRE)
PowerShares Dynamic Banking Portfolio (PJB)
iShares Dow Jones U.S. Broker-Dealers Index Fund (IAI)

British Companies To Raise Dividend Payouts in 2011

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British companies are projected to increase dividend payouts by 10% this year according to a report by Capita Registrars Dividend Monitor. Captia Registrars expects overall dividend yield to be 4.4% in 2011.

While most investors focus on stock prices, dividends are an important part of total return. Quoting the Barclays Equity Gilt Study, the monitor report notes that a £100 invested at the end of World War II would have been worth £5,721 at the end of 2008 in nominal terms. But if dividends were invested the same £100 would be worth £92,460. This example shows the tremendous power of dividend reinvesting over many years.

The report added that 61% (or £34.4 billion) of all dividends paid out in 2010 came from just 15 companies. Hence investors looking to add some high-quality British dividend stocks may start with the following stocks:

1.Royal Dutch Shell plc (RDS.B)
Sector: Oil
Current Dividend Yield: 4.58%

2.Vodafone (VOD)
Sector: Telecom
Current Dividend Yield: 3.17%

3. HSBC Holdings (HBC)
Sector: banking
Current Dividend Yield: 2.82%

4. GlaxoSmithkline (GSK)
Sector: Major Drugs
Current Dividend Yield: 5.49%

5. Astra Zeneca (AZN)
Sector: Major Drugs
Current Dividend Yield: 7.76%

6. British American Tobacco(BTI)
Sector: Tobacco
Current Dividend Yield: 2.76%

7. BP plc (BP)
Sector: Oil
Current Dividend Yield: 3.56%

8. BHP Billiton(BBL)
Sector: Metal Mining
Current Dividend Yield: 2.22%

9. Tesco (TSCDY)
Sector: Retail Grocery
Current Dividend Yield: 2.02%

10.National Grid plc (NGG)
Sector: Electric Utility
Current Dividend Yield: 4.57%

11. Standard Chartered Banking(SCBFF)
Sector: Banking
Current Dividend Yield: 2.49%

12. Diageo (DEO)
Sector: Beverages (Alcoholic)
Current Dividend Yield: 3.78%

13. Unilever (UL)
Sector: Food Processing
Current Dividend Yield: 3.89%

14. Imperial Tobacco (ITYBY)
Sector: Tobacco
Current Dividend Yield: 6.30%

15. Reckitt Benckiser Group (RBGPY)
Sector: Household products
Current Dividend Yield: 2.78%

Disclosure: No Positions

Note: The dividend amounts and projected yield noted in the monitor report are based on stocks trading on the local market while the yields shown above are for the ADRs.

Top 15 North America-Focused Exploration & Production Companies

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Crude oil prices continue to march higher due to geo-political risks and other factors. On the New York Mercantile Exchange March crude rose 0.1% to settle at $90.86 a barrel. Across the U.S. consumers are already feeling the impact of rising oil prices with pump prices well above $3.00 a gallon.With the economy slowly recovering, gasoline demand may increase.

In the production of crude oil and natural gas, North America was considered to be in terminal decline for many years.However that has changed with surprising production growth coming from onshore North American wells. The global oil consultancy firm PFC Energy celebrated this revival by publishing a new list of top Exploration and Production (E&P) companies. These North America-focused E&P firms derived at least 80% of their 2010 production from North America.

The table below lists the top 15 North America-focused E&P firms:

[TABLE=877]

Source: PFC Energy

Encana and Penn West are based in Canada. The share prices of majority of the companies above rose by double digit percentages last year.  Instead of focusing their attention on the integrated global oil majors such as BP plc (BP) or ExxonMobil(XOM), investors looking to profit from growth in North American production may want to consider some of these E&P companies.

Knowledge is Power: Corporate Taxes, Newton, German Recovery Edition

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Big companies should pay as little tax as they can get away with

The Paradox of Corporate Taxes

500,000 Britons have never worked

US vs UK: Two countries, divided by a deficit

2011: The year for aluminum, molybdenum, zinc and potash

Will risk on, risk off continue into 2011?

‘Germany Is Admired for How Quickly It Emerged from the Crisis’

Crash landing

Newton moves markets too

Economy: Well functioning housing markets are key for stability and growth

thailand.jpg

Floating Market, Thailand

 

New ADR Listings: Interxion, Adecoagro and BCD Semiconductor

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Last week three new foreign companies were listed on the U.S. organized exchanges. The following is a brief overview of them:

1. InterXion Holding N.V. (INXN) is an Amsterdam, The Netherlands-based provider of colocation data center services. InterZion serves over 1,100 customers through 28 data centres in 11 European countries. The company offered about 20 million shares at $13.00 per share. Shares closed at $13.80 on the first day of trading.

In 2009, total revenue was $171.7 million €. Revenues have grown over 23% year-over-year since 2006. InterXion was founded in 1998 and is backed by major investors including Credit Suisse First Boston, Goldman Sachs and Morgan Stanley Dean Witter. More information about InterXion is available at their investor relations site here.

2. Adecoagro S.A is an agricultural company in South America involved in the production of many agricultural products, including corn, rice, wheat, soybean and sugar among others, as well as ethanol and milk.Founded in 2002, the company owns over 270,000 hectares with operations in Argentina, Brazil and Uruguay. Ethanol is the main source of fuel for transportation in Brazil and the demand for rice, sugar and beef is growing in other emerging countries. Adecoagro is in a sweet spot to capitalize on this demand since the land it owns is highly fertile and hence yields will be high relative to yields in developing countries such as China, India, etc. Hence this company is worth monitoring for potential investment in the future.

Adecoagro priced about 28.5 million shares at $11.00 per share and trades under the ticker AGRO. On debut, shares jumped about 10% and ended the day at $12.00 even. For further research please visit their corporate site here.

3. BCD Semiconductor Manufacturing Ltd. (BCDS) is a Shanghai,China-based designer and manufacturer of analog integrated-circuit semiconductors for Asian makers of consumer electronics, ranging from computers to mobile-phone chargers. BCD began operations in 2002. BCD’s website has more detailed information on their products.

BCD offered 6 million shares in the $10.50 to $12.50 range. The stock closed flat on the NASDAQ market at $10.50.