The World’s Best Developed Market Banks 2010

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Last month the Global Finance magazine announced the awards for the best banks in the developed world for this year. The winners were selected in 25 countries excluding Ireland and Iceland.

From the magazine report:

“All selections were made by the editors of Global Finance, after extensive consultations with bankers, corporate financial executives and analysts throughout the world. In selecting these top banks, we considered factors that range from the quantitative objective to the informed subjective. Banks were invited to submit entries supporting their selection. Amid nominally objective criteria were growth in assets, profitability, geographic reach, strategic relationships, new business development and innovation in products. Subjective criteria included the opinions of equity analysts, credit rating analysts, banking consultants and others involved in the industry.”

The World’s Best Developed Market Banks for 2010 are:

The-Best-Developed-Market-Banks-2010

Source: Global Finance

Among the banks in the U.S., one of the four supers JP Morgan Chase (JPM) was ranked the best bank. After last year’s low in March Chase has rebounded well and closed at $42.81 yesterday.Royal Bank of Canada(RY), the winner from Canada has a 3.45% dividend yield now.The bank is a consistent long-term performer.

Some of the notable top ranked banks in Europe were ING(ING) of Belgium, Danske Bank (OTC: DNSKY) of Denmark, BNP Paribas(OTC: BNPQY) of France and Deutsche Bank(DB) of Germany. Santander(STD) of Spain was the winner in both Spain and the UK.

Santander rebranded the British banking brands Abbey National, Alliance & Leicester and Bradford & Bingley under the Santander name this year.Santander has about 1,300 branches in the UK. While its competitor Societe Generale(OTC: SCGLY) is still suffering from losses, BNP Paribas survived the credit crisis and remains strong. Its fourth quarter earnings more than doubled but the bank raised its dividend  by 50%.

DBS Group Holdings (OTC: DBSDY) of Singapore currently pays a 3.99% dividend.

10 Leading Swiss Companies

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The Dow Jones Switzerland Titans 30 Index tracks the performance of 30 leading stocks in traded in Switzerland. The stocks in this index are selected based on float-adjusted market capitalization and average trading volume.

The Top 10 components in the Dow Jones Switzerland Titans 30 Index are:

1. Company: Novartis AG (NVS)
Sector: Health Care
Current Dividend Yield: 3.66%

2. Company: Nestle S.A. (OTC: NSRGY)
Sector: Consumer Goods
Current Dividend Yield: 2.45%

3. Company: Roche Holding AG (OTC: RHHBY)
Sector: Health Care
Current Dividend Yield: 3.24%

4. Company: ABB Ltd (ABB)
Sector: Industrials
Current Dividend Yield: 2.10%

5. Company: Credit Suisse Group (CS)
Sector: Financials
Current Dividend Yield: 0.20%

6. Company: UBS AG (UBS)
Sector: Financials
Current Dividend Yield: N/A

7. Company: Zurich Financial Services AG (OTC: ZFSVY)
Sector: Financials
Current Dividend Yield: 3.99%

8. Company: Syngenta AG (SYT)
Sector: Basic Materials
Current Dividend Yield: 1.95%

9. Company: Compagnie Financiere Richemont S.A.
Sector: Consumer Goods
Current Dividend Yield: N/A

10. Company: Holcim Ltd (OTC: HCLMY)
Sector: Industrials
Current Dividend Yield: N/A

Nestle(ABB) is the world’s largest food company with a strong presence in many emerging markets. Nestle is also the owner of some of the most popular brands in the world like Nescafe, Nesquik, Milo, etc. For 2009, the company earned $9.58B. Last month Nestle announced plans to increase its dividend by 14.3% and buy back shares worth 10 billion Swiss francs this year.ABB (ABB) is a global provider of power and automation equipments and services to utilities and other industrial customers. It is a major player in countries like India, China, Brazil, etc where there is a strong buildup in infrastructure. In the fourth quarter of 2009, revenues fell to $8.76B but profit more than doubled to $540M.

Will Singapore Stocks Shine This Year?

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The city state of Singapore was not affected severely during the financial crisis and is now well positioned to benefit from a rebound in the global economy. The seasonally adjusted unemployment rate for December 2009 was just 2.1%. As a major hub for international trade and commerce, for January this year total trade was up 33.2% and the industrial production was also up significantly. Tourist arrivals increased about 18% in January compared to the same month last year (Source: Statistics Singapore).

Singapore-Casino

Resorts World Sentosa Casino, Singapore (Courtesy: Malaysia Finance)

The government of Singapore is famous for its forward-thinking and enacting policies that are growth-oriented. One of its visions was to transform Singapore into an entertainment mecca in Asia and attract visitors from the around the world especially from the fast-growing markets of China, India, etc. As part of this initiative, the country allowed the building of its first casino a few years ago. Resorts World Sentosa is an integrated complex that includes a casino, an Universal Studios theme park, hotels, shopping plazas, etc. The casino opened its doors on Feb 14th, the first day of the Chinese Year of the Tiger. Another casino resort named Marina Bay Sands and built by Las Vegas Sands is  slated to be opened soon in the downtown business district. Once both the casinos are fully operational,  they are projected to earn $2.1B in revenues this year according to CLSA Asia-Pacific markets. Most of the visitors are expected to be from overseas mainly from China as the casinos will charge a S$100 entrance fee for each 24 hours for Singaporeans.

In order to prevent over-growth of population and to protect local wages Singapore announced proposals last week to curtail immigration. Overall Singapore is in a relatively better shape compared to other developed countries. The opening of casinos and the theme park should provide additional growth to the local economy.

The iShares MCSI Singapore Index Fund (EWS) tracks the performance of the Singapore equity market.There are 30 holdings in the portfolio and the fund has total assets of about $1.5B. Two of the leading Singapore banks are United Overseas Bank (OTC: UOVEY) and DBS Group Holdings (OTC: DBSDY). Both the banks are well capitalized and have a large presence in other Asian countries as well. To answer my title question, Singapore stocks should perform well if the global economic recovery continues.

Investment Opportunities in PIIGS

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For the past few months the Greek debt crisis has been the focus of investors worldwide as the major European countries try to figure out a solution to solve the crisis. Due to politics and the integration of many countries under the common currency, the crisis does not appear to end very soon. In addition to Greece, Portugal, Ireland, Italy and Spain (collectively dubbed as PIIGS by traders) are also suffering from high deficits.

Despite the current chaos  in the European Union, some good investment choices can be found in these countries. An article in the latest edition of Bloomberg BusinessWeek lists a few stocks from PIIGS that are liked by fund managers.

The stocks listed in the article are noted below:

1. Portugal

Energias de Portgual (OTC: EDPFY)  is an electric and natural gas utility with strong presence in Spain, Portugal, France and Belgium. Its alternative energy subsidiary EDP Renovaveis has wind energy projects in the early stages in Illinois, Indiana and Ohio. The current dividend yield is 5.15%.

Portugal Telecom (PT)  offers telecom services  in Portugal, Brazil and a few countries in Africa. PT pays a dividend of 7.10%.

2. Ireland

The holding company DCC which has interests in food, energy and health care. DCC is not traded on the US markets.

3. Italy

Ansaldo Sts Spa (OTC: ASDOF)  is a builder of railways and subways. The company earns more than 50% of its revenues from outside of Italy and has a strong backlog of orders.

4. Greece

National Bank of Greece (NBG)  does not pay regular dividends. The stock has fallen heavily in recent months and closed at $3.95 today.The bank’s deposits exceeds loans.

5. Spain

The telecom giant Telefonica(TEF)  gets a significant portion of its revenues from Latin America. Telefonica’s current yield is 6.34%.

Banco Santander (STD) also gets more than 50% of its profits from outside the Euro zone. The stock pays a 5.26% dividend. Santander has large exposure in North and South America. In the US, it bought the Sovereign Bank during the credit crisis in 2008.

In another article titled The Pain in Spain falls Mainly on the Cajas, author Mark Scott notes that the main reason the Spanish banking giants Banco Santander (STD) and BBVA (BBV) remain strong despite the troubled economy is that bad real estate loans have hit mostly the the non-profit lending institutions known as Cajas. Hence investors need not totally avoid Santander and BBVA.

Australian Stocks with the Highest Dividend Yields

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The Australian Financial Review Smart Investor published the list of stocks with the highest dividend yields among the largest companies on the Australian Stock Exchange.

From the article titled Downunder Dogs:

“Flea-bitten may be a bit harsh for some of these stocks but they are nevertheless this month’s Downunder Dogs – the stocks with the highest dividend yields among the largest 50 companies on the Australian Stock Exchange.

So what qualifies them as dogs? If you make the rather simplistic assumption that dividend levels remain more or less stable, then the dividend yield should rise as the share price falls. So by buying companies with high dividend yields you are buying shares that are out of favour – hence, “dogs”. And why would you want to buy a dog? The theory – based on the US stock-picking system known as the Dogs of the Dow – is that this year’s dogs often turn out to be next year’s prize pooches. Do you own these puppies?”

Australia-Top-Dividend-Stocks

Source: Australian Financial Review