What is the DJ STOXX Grand Prix Index?

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Index providers continue to create many unique indices. One such index is the Dow Jones STOXX Grand Prix Index.

This index “tracks the performance of the major players in the Formula 1 industry. The index covers engine manufacturers, tire suppliers, oil and fuel suppliers participating in the Formula 1 as well as title sponsors. ”

The 15 constituents of this Index are:
1.Altria Group (MO)
US

2. AT&T; (T)
US

3. BMW
Germany

4.Bridgestone Corp
Japan

5.Daimler (DAI)
Germany

6. Exxon Mobil (XOM)
US

7.FIAT
Italy

8. ING Group (ING)
The Netherlands

9. Panasonic Corp (PC)
Japan

10. Petronas Gas Bhd
Malaysia

11.Renault
France

12. Royal Dutch Shell A(RDS.A)
UK

13. Total (TOT)
France

14. Toyota Motor (TM)
Japan

15. Vodafone Corp (VOD)
UK

Market Performance: NYSE vs. St.Petersburg Stock Exchange from 1865 to 1917

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The graph below shows the performance of New York and St.Petersburg Stock Exchange of Russia for the 50-year period from 1865 thru 1917:

spse.gif

Source: Capital-Flow-Analysis.com

“By 1910, stocks on the St. Petersburg Exchange had increased fourfold in value since 1865, compared to a mere doubling on the NYSE .”

Sometimes exogenous variables play an important role in determining the value of a security than any other measures. These variables are usually beyond investors’ control. So in addition to using many factors such as P/E ratio, Dividends,Book Value, etc. we must take into account the effect of exogenous variables on a security. In current times, these would include things like geo-political risks (war), weather (tsunami, drought),credit crisis, effects of globalization, etc.

Going back to our chart, the reason stocks on the St.Petersburg Exchange rose much higher than the ones on the NYSE due to the influence of Rasputin.

“The position of Rasputin in the power structure of the last Tsarist regime, was far more important to the long-term outlook of the St. Petersburg Stock Exchange than the price-earnings ratios of listed shares. ”

More fascinating stuff can be found here.

Agri-Food Stocks Offer Potential Investment Opportunities

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Food prices skyrocketed worldwide in 2007 and early 2008 leading to a crisis in many developing and under-developed countries. In 2008 and last year prices stumbled and the crisis faded away from headline news.

Last November BusinessWeek had an interesting report titled Land Rush in Africa. The article discussed in detail how Agri-business and global investors are scooping up fertile farmland in Africa. In the same month World Bank President Robert B. Zoellick warned that low food stocks and shortages could force food prices up again in 2010.At a panel discussion on food crisis three leaders warned that the food crisis may repeat again. One of the leader that shared this thought was Dr.Josette Sheeran of the United Nation World Food Progamme(WFP). She said that the cost of cereal had risen 17% and global food prices are 50% higher than just five years ago.

Some facts from the World Bank site on Food Crisis:

  • 1.1bn people were living on less than $1 a day
  • A 2 kg bag of rice now costs half the daily income of a poor family in Bangladesh
  • Between 130m and 155m people fell into poverty in the last 2 years due to high prices
  • Although lower than at their peak in 2008, major food grain prices are still above average
  • Although international prices have fallen, local prices in many countries have not

In the World Investment Report 2009, UNCTAD said over 900 million people worldwide are undernourished and 65 countries are in serious danger of food shortages. Globally Foreign Direct Investment (FDI) in the agriculture sector has increased sharply since 2005. many of the large companies are getting involved in the upstream and downstream of the value-chain.Large multi-national companies participate in agriculture production by contract farming. Some of the countries with heavy investment by foreign companies in farming include Vietnam, Kenya and Brazil.

The continued rise in oil prices, weather-related and man-made events can cause food prices to go higher this year. During the crisis in 2007 many Agri sector stocks had incredible runs.

The Top 25 Trans-National Food and Beverage Companies that are increasingly moving into other parts of the value-chain are:

  1. Nestlé SA (OTC: NSRGY)
  2. Inbev SA (BUD)
    Note: Budweiser merged with Inbev to form Anheuser-Busch InBev
  3. Kraft Foods Inc (KFT)
  4. Unilever (UN, UL)
  5. Coca-Cola Company (KO)
  6. SAB Miller (SAM)
  7. Diageo Plc (DEO)
  8. Pernod Ricard SA
  9. Cadbury PLC (CBY)
  10. Bunge Limited (BG)
  11. Heineken NV (OTC: HINKY)
  12. Pepsico Inc (PEP)
  13. Molson Coors Brewing Company (TAP)
  14. Kirin Holdings Company Limited
  15. Archer-Daniels-Midland Company (ADM)
  16. Associated British Foods PLC
  17. Carlsberg A/S
  18. HJ Heinz Company (HNZ)
  19. Danone (OTC: DANOY)
  20. Anheuser-Busch Companies Inc
  21. Wilmar International Ltd. (Singapore)
  22. Sara Lee Corp. (SLE)
  23. Constellation Brands Inc (STZ)
  24. Fraser & Neave Ltd. (Singapore)
  25. Danisco A/S

Source: UNCTAD

Note: These companies were selected based on 2007 foreign assets

Investors can use the above list as a starting point to do further research for selecting stocks.

2009 Performance Review: Foreign Bank Stocks

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The 2009 performance numbers of foreign bank stocks traded in the US markets are listed below in three sections.

a. Foreign Bank ADRs

[TABLE=270]

The best foreign bank ADR was Banco Macro of Argentina with a return of 175%. The worst performer was Llyods Bank of UK which lost 56%. Another British bank Royal Bank of  Scotland also was a poor performer with a loss of 38%. Brazilian banks Itau Unibanco and Banco Bradesco more than doubled last year.

b. Canadian Inter-Listed Banks

[TABLE=268]

Among the five Canadian banks, Bank of Montreal was the top performing stock with a return of 116%. Canada’s most profitable bank Royal Bank of Canada returned 86%. Overall all the Canadian bank stocks rebounded nicely in 2009.

c. Select Foreign Bank ADRs Traded on the OTC

[TABLE=269]

Commerzbank of Germany was the performing stock with a loss of 13%. Societe Generale of France beat BNP Paribas easily. All the three Australian banks – Westpac, National Australia Bank and Australia and New Zealand Banking Group – had great runs last year. Erste Bank received one of the most favorable bailouts from the Austrian government.DBS and United Overseas Bank of Singapore jumped over 50%.