Will Emerging Market Telecoms See Double-Digit Growth in 2010?

Posted by on

The telecom sector in the emerging markets has experienced high growth rates in the past few years. The introduction of cell phone services in many of these countries has contributed to the growth of this industry. Due to cut-throat competition, monthly subscription charges have dropped dramatically and are now cheaper than in developed countries.

Mobile service providers in emerging markets are now targeting the vastly untapped rural market where the potential for expansion is huge. Providers are also offering value-added services such as music, sports news, etc. to create additional revenue streams and in the process differentiate themselves from their rivals. Recently there was an article on Bloomberg BusinessWeek where a service provider in India is offering famous Bollywood tunes on cell phones for a small fee. Rural folks who do not have access to radio or tv, use this service to listen to their favorite songs.

From IMF’s Finance & Development magazine, September 2009 edition:

“Just a decade ago, there were still some countries with no mobile service at all. Since then, wireless telephone coverage has enveloped the globe. Mobile phone subscriptions have skyrocketed from 1 billion in 2002 to an estimated 4.1 billion by the end of 2008, covering more than half of the world’s population. The fastest growth rates have been in low-income countries. In Africa mobile phone penetration has soared from just 1 in 50 people at the turn of the century to 28 percent.

The World Bank (2009b) says this growth has been driven primarily by new wireless technologies and liberalization of telecommunications markets, which enabled faster and less costly network rollout. The total number of mobile phones in the world surpassed the number of fixed-line telephones in 2002; and mobile phones now represent the world’s largest distribution platform.”

The table below lists the Mobile Telecom ADR stocks with their current yields and 2009 performance:

[TABLE=277]

China’s KongZhong(KONG) was the best performer in 2009 with a return of 269%. Mexico’s America Movil(AMX) and TelMex(TII) returned over 50%. Philippine Long Distance Telephone(PHI), Deutsche Telekom(DT) and Partner Communications(PTNR) of Israel pay dividends above 5%.

In 2010, emerging markets will have higher growth in the number of subscribers. However carriers may have to aggressively market value-added services in order to generate higher revenue.

2009 Performance Review and The Complete List of Mining ADRs

Posted by on

Mining stocks are extremely volatile. However they can return handsome gains if the commodity prices rise. In recent years due to high demand from many developing countries commodity prices like iron ore, copper, gold, etc. have soared.

Copper prices rose by almost 140% last year. The rise is attributed to “Unprecedented levels of Chinese imports, new investor cash, improving economic data and a weaker dollar”. Similarly gold gained around 25% in 2009 and closed at $1,096.20 an ounce.

The 2009 gains of other precious metals gains:

Platinum = 58.7%

Palladium = 220%

Silver = 49.1%

Overall in 2009, commodities recorded the best year since 1973. It must be noted that while most of the mining stocks listed below had impressive gains last year, they fell hard during the global credit crisis in 2008 .For example, Vale was down 61% in 2008.

The Complete List of Mining ADRs with their 2008 performance is listed below:

[TABLE=276]

Note: Canadian stocks are not included here as they trade as inter-listed stocks in the U.S.

Quicktake: BRF Brasil Foods

Posted by on

BRF Brasil Foods(BRFS) is a Brazil-based food company engaged in the “production and sale of poultry, pork, beef cuts, milk, dairy products, and processed food products.” The company markets its poultry products under the brand name Chester and is also the largest meat processor in the world. The company used to be called Perdigao. After its merger with Sadia it changed the name to BRF Brasil Foods.

BRFS dividend payout policy is to pay at least 25% of net income as dividends. From the 52-week low of $21.51 the stock has more than doubled to close at $52.37 in 2009. Average annual revenue growth in the past 5 years is about 25%.

For more information please visit BRF Brasil Foods Investor Relations site here.