Jun 4, 2010

Foreign Money Managers finding bargains in emerging market: Compares PE of sectoral stocks of Developed Mkt and Emerging Mkts

    A recent Bloomberg report cited money managers finding bargains giving PE comparison amongst sectoral picks or developed markets vs. emerging markets. It mentions TAT MOTORS as cheaper compared to Germany’s Volkswagen. It remains to be seen if this thing become a trend and weather foreign money managers make it a part of analysis too and weather domestic investor cheer this. At least, we find this significant to put before you.
Below is the excerpts from the article followed by link
June 4 (Bloomberg) -- The biggest drop in emerging-market stocks since October 2008 is giving money managers the chance to find bargains in world-class companies from Sao Paulo to Moscow that are leading their peers in profit growth.
Itau Unibanco Holding SA, Latin America’s largest bank by market value, trades at a 75 percent discount to Wells Fargo & Co. as analysts say the Brazilian lender will increase profit three times faster. Tata Motors Ltd.’s price-to-earnings ratio is 23 percent less than Volkswagen AG’s even though profits at the Mumbai-based maker of the world’s cheapest car are rising twice as fast. OAO Rosneft, Russia’s largest oil producer, is valued at the lowest on record versus Canada’s EnCana Corp.

Renewable Energy (Hydro, Wind, Solar Power) Companies Day's is yet to come

Hydro Power and Wind Power Companies shares are likely to underperform and discourage investors for short to medium term. They will become hot sectors after few years when the prices of traditional sources of energy such as crude oil, natural gas, coal etc skyrocket due to increasing demand and declining supply and production. Also the ROE Return on Energy would decline i.e. more than one dollar would be required to produce 1 dollar worth of crude or coal. At those times the wind power, hydropower, and solar power companies would start attracting investments (in fact they already have). Invention of newer and advanced technology would enable and support use of power generated from solar systems.

MTNL- More Pain than Party

State owned Mtnl operated fixed line mobile service in delhi and Mumbai.
This state owned company is facing the brunt of typical characteristic of wage hikes in govt companies irrespective of performance of employees and profitability.
It incurred a net loss of Rs 894.95 crore for the third quarter ended December 31, 2009.
The company’s total income decreased to Rs 919.44 crore for the quarter under review from Rs 1124.82 crore during dec 2008 to dec 2009.
While recently mtnl has reported losses of Rs.1,573 crore during the fourth quarter ended March 31, 2010 against a net loss of Rs 73 crore during the corresponding quarter of the previous year.
According to the company this loss is due to arrangements of retirement pays, revised pay,arrears etc employee costs.
The increase is primarily due to wage revision of employees amounting to estimated arrears of Rs 740 crore and Rs 1,754 crore account of actuarial valuation for retirement benefits and for change in benefit of full pension for 20 completed years of service instead of the existing 33 years of completed service.
Posted on Friday, June 04, 2010 | Categories: ,