Bloomberg BusinessWeek: The 50 Most Innovative Companies 2010

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The 50 Most Innovative Companies in the world for 2010 has been published by Bloomberg BusinessWeek in the latest issue. This year’s list is dominated by companies from Europe and Asia. Showing the rise of Asian emerging markets, for the first time  15 of the Top 50 are Asian and Greater China has as many companies in the list as Japan. The majority of the Top 50 are based outside of the U.S.

From the report:

“If Asia ever did figure out how to design cutting-edge products comparable to those dreamed up in the West, however, the one-two punch of high-value research and development and low-cost manufacturing would make it almost unbeatable in the battle for global economic supremacy.

The battle is on. In the 2010 Bloomberg BusinessWeek annual rankings of Most Innovative Companies, 15 of the Top 50 are Asian—up from just five in 2006. In fact, for the first time since the rankings began in 2005, the majority of corporations in the Top 25 are based outside the U.S. Asia’s newfound confidence is turning up everywhere you look, from wind turbines to high-speed bullet trains, just two of the technologies China is trying to export to the U.S. “We are the most advanced in many fields,” Zheng Jian, director of high-speed rail at China’s railway ministry, told The New York Times in April. “And we are willing to share with the U.S.” The U.S., of course, still has its innovators. Apple (AAPL) remains No. 1, followed by perennial first runner-up Google (GOOG). But just ahead of General Electric (GE) in seventh and eighth places are newcomers LG Electronics of South Korea and BYD, with Korea’s Hyundai Motor claiming a spot at 22.

The extended Top 50 list is dominated by companies from Europe, Asia, and, in another first, South America (Petrobrás (PBR) of Brazil at No. 41). China’s rise is biggest. A year ago its only representative was PC-maker Lenovo Group (LNVGY), at 46. This year Greater China is tied with Asia’s postwar powerhouse, Japan, thanks to showings by BYD, Haier Electronics (27), Lenovo (29), China Mobile (CHL) (44), and Taiwan-based HTC (47). The age of Asian innovation has begun.” (emphasis added)

The Top 25 Most Innovative Companies in the World:

  1. Apple (AAPL)
  2. Google (GOOG)
  3. Microsoft (MSFT)
  4. IBM (IBM)
  5. Toyota Motor (TM)
  6. Amazon.com (AMZN)
  7. LG Electronics
  8. BYD
  9. General Electric (GE)
  10. Sony (SNE)
  11. Samsung Electronics
  12. Intel (INTC)
  13. Ford Motor (F)
  14. Research In Motion (RIMM)
  15. Volkswagen (OTC: VLKAY)
  16. Hewlett-Packard (HPQ)
  17. Tata Group
  18. BMW
  19. Coca-Cola (KO)
  20. Nintendo (OTC: NTDOY)
  21. Wal-Mart Stores (WMT)
  22. Hyundai Motor
  23. Nokia (NOK)
  24. Virgin Group
  25. Procter & Gamble (PG)

The complete list can be found here.
Is America losing its edge in research and innovation?. Only time will tell.

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The World’s Five Biggest Alcohol Companies by Market Cap

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The “Numbers” column in the latest edition of Bloomberg BusinessWeek discusses the impact of recession on the alcohol business.

Sales of alcholic beverages are proving to be recession-proof. Sales of expensive wines,beers and spirits have been flat to down compared to one year earlier. However sales of beer in the cheapest category have been up a solid 7.3%. Sales of imported beers fell by 3.8%. Cheaper brands which usually tend to have the biggest market shares have shown solid growth in the recession.

The world’s five biggest alcohol companies by market cap are listed below:

1. Anheuser-Busch Inbev (BUD)
Belgium
Market cap as of March 29: $81 billion
Top Brands: Budweiser, the Busch and Michelob families,Natural Light,Ice, etc.

2. Companhia de Bebidas das Américas (AMBEV) (ABV)
Brazil
Market cap as of March 29: $57 billion

3. Diageo plc (DEO)
U.K.
Market cap as of March 29: $42 billion
Top Brands: Jamaican lager Red Stripe, Ireland’s Kilkenny red ales and Senator Keg in Africa, etc.

4. Heineken (OTC: HINKY)
The Netherlands
Market cap as of March 29: $25 billion
Top Brands: Heineken and Amstel

5. Pernod-Ricard (OTC: PDRDY)
France
Market cap as of March 29: $22 billion
Top Brands: ABSOLUT VODKA, Jacob’s Creek, Havana Club, Martell, etc.

Ten Reasons to Invest in Germany

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brandenburg-gate.jpgGermany is the economic locomotive of Europe. The country has a population of about 82 million people and a world-class  infrastructure. Germany is centrally located offering convenient access to over 500 million of the EU consumers.

Germany has been in the news recently often due to the debt crisis in Greece.Today Germany has agreed to an EU-led bailout of Greece. The EU may give a loan of 20-25 billion Euros to Greece at below market rates of about 5%.

While Germany used to be a super-power militarily in the past, the Germany of today is an economic superpower with leadership positions in many industries. As an export-driven economy, exports fell heavily during the credit crisis. However they are picking up with the global recovery. In February exports were up 9.6% relative to same months of 2009. According to the IMF, the German economy is expected to grow 1.1% this year.

The following are some the 10 reasons to invest in Germany:

1. Germany is Europe’s largest economy and is the second largest exporter in the world after China. Germany accounts for about 20% of Europe’s GDP.

2. The Germany economy is heavily oriented towards manufacturing  and exports.
This is reflected in the main stock market where the weightings are 15% in consumer goods, 17% in industrials, 18% in basic materials, and 14% in utilities (15.7%). In the machinery and equipment sector, there are about 6000 companies. Contrary to popular belief, it is not the industrial giants such as Siemens,Bayer,BASF that employ the most people in Germany. The thousands of small and medium-sized companies (SMEs) employ the majority of workers.

3. German companies lead the world in many industries such as automobile, mechanical engineering, electrical engineering and chemicals. For example, the world’s largest chemical company BASF is based in Germany. In the automotive sector, some of the top quality cars in the world are made by BMW and Mercedes Benz. Germany is also the largest automotive market in Europe by production and sales.Germany is the world’s largest producer and exporter of chemicals. About 75% of total chemical manufactured are exported. Due to the extremely good infrastructure and the establishment of many Chemical Parks which offer “plug-and-plug” features for companies, Germany is the preferred destination for foreign direct investment in the chemical industry.

Germany-Industries

Germany-Trade

4. From 1949 to date, Germany has enjoyed one of the lowest inflation rates in the world.

5. Germany’s stock market dates back to 1695 and is the 7th largest in the world in size. Its domestic bond market is the 5th largest in the world.

6. In the last 110 years the real value of German equities, with dividends reinvested, grew by a factor of 25.2. However during World War II stocks fell by 88% in real terms.

7. German companies are also among the leading players in some new industries such as the renewable energy and the nano-technology. Many of Europe’s Top 100 Clean-Tech companies are located in Germany. Due to government incentives, the clean energy industry is growing rapidly.

8. Among European countries, Germany tops in research and innovation. Due to billions of Euros spent on R&D by both the private and public sectors, German companies excel in the registration of patents. For example, German companies register 28% of the world’s mechanical engineering patents and statistically, Germany has 277 international patents per one million inhabitants, the highest in the world.

9. The Government deficit ratio for 2009 amounted to just 3.3%. This ratio is the difference between a government’s revenue and expenditure.

10. The labor unions, corporate owners and the government follow prudent financial policies. In most companies, the workers have representation in the boards and this makes sure that workers interests are protected in management decisions. Back in February about 2 million public sector workers (thru their union Verdi) agreed to a pay raise of just 1.2% this year as opposed to  5.00% that was demanded earlier. The country largest Union IG Metall earlier agreed to wage freezes this year in order to protect jobs. These two examples how all the stakeholders involved acted reasonably when many countries in the European Union face budget issues.

Sources: Credit Suisse Global Investment Returns Yearbook 2010, Germany Trade and Invest, DeStatis.de, FT.comOne of the simplest ways to invest in German equities is via the ishares MSCI Germany Index Fund (EWG). It has 803M in net assets and financials make up only about 20% of the portfolio. Another way is to pick some of the  ADRs German traded in the US markets such as Siemens (SI), BASF (OTC: BASFY), Bayer AG (OTC: BAYRY), Deutsche Bank (DB), etc. The full list of German ADRs traded in the U.S. organized exchanges can be found here.