The Global Finance magazine has named the winners for the best emerging market banks in Asia for 2010. These banks were selected based on the following criteria:
The best bank in Asia was HSBC (HBC). The winning banks by country for this year are listed below:
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Property investors could get burnt again
German Shipping Faces Wave of Financing Problems
Red-hot housing market to cool off
Health-Care Cost Lies Make Us Sing the Blues
Bright outlook for Australia – RBA
The Dollar and the Deficits: How Washington Can Prevent the Next Crisis
Britain Resists Austerity to Cure Budget Woes
Post-Apocalyptic zombie finance
Source: De Speigel
Two of the largest countries in terms of population are in Asia. Despite the phenomenal growth in the total mobile phone subscriptions in India and China in the past few years, the cell phone to population penetration rate remains low in these two countries. Emerging markets in general offer the greatest potential for mobile phone companies. However because of the population Asia-Pacific has better opportunities for growth. It is interesting to note that the Asia Pacific had 46% of the global total subscriptions last year.
The following Telecom ADRs offer some options to invest in the mobile phone market of Asia Pacific:
1. Company: Hutchison Telecommunications International (HTX)
Hong Kong
Dividend Yield: No Dividends paid
2. PT Indosat (IIT)
Indonesia
Dividend Yield: 2.65%
3. NTT Docomo (NTT)
Japan
Dividend Yield: 3.69%
4. Partner Communications Co (PTNR)
Israel
Dividend Yield: 9.40%
5. China Mobile (CHL)
China
Dividend Yield: 3.55%
6. SKM Telecom (SKM)
South Korea
Dividend Yield: No Dividends paid
7. Vodafone Group (VOD)
UK
Dividend Yield:3.80%
8. Philippine Long Distance Telephone (PHI)
Philippines
Dividend Yield:5.91%
9. China Unicom Ltd (CHU)
China
Dividend Yield:2.45%
10. Hurray! (HRAY)
China
Dividend Yield:No Dividends paid
11. KongZhong (KONG)
China
Dividend Yield:No Dividends paid
In The Intelligent Investor section of the Journal yesterday Jason Zweig had an interesting article on the performance of stocks with the word “China” added to their names. Similar to the dot com mania days, some companies are adding “China” to their names to get a big boost in their stock prices. Investors blindsided by the China growth story are sending these stocks to astronomical levels without any fundamentals to back them up.
From the article:
“I asked Wei Wang, a finance professor at Queen’s School of Business in Kingston, Ontario, to study the returns of the 82 companies that have adopted new names containing the word “China” since late 2006. The list includes 18 last year and four so far in 2010.
Prof. Wang looked at returns from 20 trading days before the announcement through 20 days after. He found that the average stock that added “China” to its name outperformed the overall market by 31 percentage points over that period. The results held up over shorter and longer periods and after Prof. Wang removed the most extreme cases.
Golden Green Enterprises Ltd., a steel producer, became China Gerui Advanced Materials Group Ltd. on Dec. 14. Over the 40 days surrounding the switch, the shares went from $5.01 to $6.88 on the Nasdaq Global Market, a 37% gain even as U.S. and Chinese stocks were generally flat.”
Jason also notes that between 2004 and 2007 when crude oil prices soared companies that added the words “Oil” or “Petroleum” to their names got an 8% boost tho their stock prices.Later that mania faded.
“The bottom line: In the long run, cute names don’t make money; only good businesses do.”
Taking advantage of the craze for all things China, many Chinese companies have listed their ADRs in the U.S. markets in recent years. However many of their stock prices are still struggling under $10. For example, the IPO of China Real Estate Information ADR (CRIC) sold at $12 a piece in October last year. Since then the stock has fallen under the $10 mark and closed at $9.38 last Friday.
The following is a list of Chinese stocks trading under $10 as of March 19, 2010:
Some investors are avoiding Europe due to the Greek crisis. There are many European companies that are truly multinational firms with strong presence in emerging markets. Hence despite the current crisis one can be highly selective and pick quality stocks European stocks that offer not only stable growth but also high dividends.
Yesterday’s Wall Street Journal article Is It Safe to Buy Europe? discusses about investment options in Europe. From the article:
“The most successful investors, of course, spot opportunity where others see only danger—and possess the courage to rush in as everyone else flees. Most famously, in March 2009, with the Standard & Poor’s 500-stock index plunging through 800 toward a devilish 666, a few hardy souls placed buy orders among the stampede of sells—and were rewarded with the short-term rally of a lifetime. Miniversions of that historic turnaround play out frequently in markets around the world.
Investors with a contrarian bent are starting to tot up reasons to consider Europe now. Among them: Greece’s travails and the region’s overall economic sluggishness mean interest rates should remain low for an extended period of time. That could augur well for riskier investments such as European stocks, whose valuations seem favorable compared with other parts of the world. French and German companies, on average, trade at about 17 times their earnings per share, while U.K. companies fetch about 14 times earnings. That is much less than the 22.5 and 19 found in the U.S. and China, respectively.”
European blue chip companies generally have higher dividend yields than U.S. companies. For example, the current yield of the S&P 500 is just 1.87%. But the MSCI’s European Index has a dividend yield of 3.40%.
Morgan Stanley has identified a list of 33 European high and secure dividend paying stocks. These top dividend stocks are shown below:
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Italian utility A2A is engaged in the production and distribution of electricity. It also markets natural gas and is involved in the trash collection business. It has a P/E of 12 and prospective dividend yield of 7.4% on the shares traded local exchange. The company generates plenty of cash to cover dividend payments. Spanish telecom giant Telefonica (TEF) generates the majority of the earnings from Latin America and the British-based Vodafone (VOD) has significant presence in many developing countries.
Among the utilities listed, Germany-based RWE AG (OTC: RWEOY) has a forecast P/EÂ of 9.2 for this year and is a consistent dividend payer. The world’s largest chemical company BASF (OTC: BASFY) is also an industry leader and continues to expand into new markets.
Other stocks noted above in the drugs, insurance, retail and tobacco sector are also excellent choices for investing in European companies.
