Citigroup (NYSE:C) said they see emerging markets soaring in 2011, saying shares should surge to record highs.
Geoffrey Dennis, Citigroup’s emerging markets strategist, wrote in a note, “The weak, but not recessionary, macro situation in developed countries is a ‘super-Goldilocks’ environment. The underlying conditions that have driven markets higher over the past few months remain in place and are likely to do so for several more quarters.”
Emerging market expert and investor Mark Mobius concurs. saying he sees little risk in the near future for the sector.
Dennis added that he believes the MSCI Emerging Markets Index will skyrocket over 30 percent sometime in 2011, which would boost it past its all-time high.
The quantitative easing, or inflating by the Federal Reserve by buying billions in government debt is cited as the reason behind this. It's interesting to note that many say the money will flow to where the highest yields are, which isn't the United States.
In the end, commodities will benefit from the ongoing collapse in the value of the U.S. dollar, but over time will have little benefit to the economic health of America, as the former quantitative easing package has already proven.
Some American companies doing business overseas will benefit, but it's unlikely to have much impact on America at all, other than further indebting its people.
Showing posts with label Emerging Markets. Show all posts
Showing posts with label Emerging Markets. Show all posts
Monday, November 8, 2010
Tuesday, October 19, 2010
Citigroup (NYSE:C) Building Up Commodity Unit in Europe, Asia
Citigroup Inc. (NYSE:C) said they're increasing the greatest number of commodity jobs for the company in Europe and Asia, as the North America market is considered the most "mature."
Stuart Staley, global commodity head for Citigroup said, “It’s been a leaner year than the past two years across the sector. We’re adding disproportionately to Asia and Europe whereas the U.S. business is the most mature part.”
Growing demand for energy in Asia has caused Citigroup and a number of its competitors to focus on shoring up its commodity units in Asia especially, as the growing middle class now has the disposable income to acquire more energy, generating more demand for natural gas, oil and coal.
Staley said Citigroup has hired close to 30 people in the commodity unit this year, as investors focus more on physical refined products and crude oil. A growing number of investors want to participate in physical transactions instead of commodity futures, he said.
Revenue generated from commodity transactions for Citigroup will be lower than in previous years, Staley concluded.
Stuart Staley, global commodity head for Citigroup said, “It’s been a leaner year than the past two years across the sector. We’re adding disproportionately to Asia and Europe whereas the U.S. business is the most mature part.”
Growing demand for energy in Asia has caused Citigroup and a number of its competitors to focus on shoring up its commodity units in Asia especially, as the growing middle class now has the disposable income to acquire more energy, generating more demand for natural gas, oil and coal.
Staley said Citigroup has hired close to 30 people in the commodity unit this year, as investors focus more on physical refined products and crude oil. A growing number of investors want to participate in physical transactions instead of commodity futures, he said.
Revenue generated from commodity transactions for Citigroup will be lower than in previous years, Staley concluded.
Friday, October 8, 2010
Alcoa's (NYSE:AA) Performance Going Forward
While some celebrated the fact that Alcoa (NYSE:AA) analysts' profit estimates in the third quarter, they were still down 21 percent from previous results.
So even though aluminum prices helped their performance some, higher costs still cut into margins, generating lower results than they could have had. And that was with sales rising 15 percent to $5.3 billion.
Where does all this leave the company as it relates to the future?
They've already cut expenses to the bone, and while they may be able to whittle away a little more, there isn't much more it would to do affect the bottom line.
That means management has pretty much positioned themselves the best they can, other than possibly expanding through acquisition.
But that has its weaknesses as well, as the industry via its smelters can easily ramp up production and increase global aluminum inventory quickly, making acquisitions less desirable than other miners, such as in the gold mining industry.
One positive thing Alcoa and other commodity producing companies have going for them is the misguided policies of central banks around the world, who are committed to inflating (call it quantitative easing if it makes you feel better), which will drive down the value of the dollar, making it cheaper for overseas customers to buy aluminum in the case of Alcoa.
Lower prices alone can't be counted on though, as continued weaknesses in the global economy, especially in the West, could quickly skew the supply and demand picture, and little could be done if that ends up going down.
Since aluminum demand is for the most part coming from the emerging markets, that may not be as big of a factor, although it could still slow things down for a time, and stunt the rally they're experiencing now.
In other words, Alcoa is going to remain volatile and unpredictable, as there are too many factors happening at the same time to know which one will predominate and affect their markets.
One that can be counted on is weakening U.S. dollar and possible increased sales from overseas markets. If other things continue on as they are, that could be good news as long as the global economy and emerging markets remain fairly healthy.
That can't be measured by the West, as if they're not still in a recession, they're just on the other side of it, with the likelihood of dropping down into another one.
Alcoa's near and mid-term future is tied into emerging market growth. How they go will be how Alcoa goes, along with the secondary factors mentioned beyond supply and demand.
So even though aluminum prices helped their performance some, higher costs still cut into margins, generating lower results than they could have had. And that was with sales rising 15 percent to $5.3 billion.
Where does all this leave the company as it relates to the future?
They've already cut expenses to the bone, and while they may be able to whittle away a little more, there isn't much more it would to do affect the bottom line.
That means management has pretty much positioned themselves the best they can, other than possibly expanding through acquisition.
But that has its weaknesses as well, as the industry via its smelters can easily ramp up production and increase global aluminum inventory quickly, making acquisitions less desirable than other miners, such as in the gold mining industry.
One positive thing Alcoa and other commodity producing companies have going for them is the misguided policies of central banks around the world, who are committed to inflating (call it quantitative easing if it makes you feel better), which will drive down the value of the dollar, making it cheaper for overseas customers to buy aluminum in the case of Alcoa.
Lower prices alone can't be counted on though, as continued weaknesses in the global economy, especially in the West, could quickly skew the supply and demand picture, and little could be done if that ends up going down.
Since aluminum demand is for the most part coming from the emerging markets, that may not be as big of a factor, although it could still slow things down for a time, and stunt the rally they're experiencing now.
In other words, Alcoa is going to remain volatile and unpredictable, as there are too many factors happening at the same time to know which one will predominate and affect their markets.
One that can be counted on is weakening U.S. dollar and possible increased sales from overseas markets. If other things continue on as they are, that could be good news as long as the global economy and emerging markets remain fairly healthy.
That can't be measured by the West, as if they're not still in a recession, they're just on the other side of it, with the likelihood of dropping down into another one.
Alcoa's near and mid-term future is tied into emerging market growth. How they go will be how Alcoa goes, along with the secondary factors mentioned beyond supply and demand.
Tuesday, July 6, 2010
JP Morgan (NYSE:JPM): Lower Commodity Prices in Third Quarter
Lower commodity prices in the third quarter should generate tremendous investment opportunities in emerging markets, according to JP Morgan (NYSE:JPM).
Emerging market stocks should go lower in the third quarter, which should result in an “extraordinary buying opportunity,” the giant financial institution stated.
“For now markets are going lower driven by a sharp correction in commodities,” said Adrian Mowat Mowat, JPMorgan’s chief Asian and emerging-markets strategist, in the report. “The third quarter of 2010 should provide an exceptional buying opportunity.”
While JPMorgan said in the report investors should "wait" at this time before putting their money in shares of emerging market companies, they added investors are probably “too pessimistic” concerning overall global growth.
Emerging market stocks should go lower in the third quarter, which should result in an “extraordinary buying opportunity,” the giant financial institution stated.
“For now markets are going lower driven by a sharp correction in commodities,” said Adrian Mowat Mowat, JPMorgan’s chief Asian and emerging-markets strategist, in the report. “The third quarter of 2010 should provide an exceptional buying opportunity.”
While JPMorgan said in the report investors should "wait" at this time before putting their money in shares of emerging market companies, they added investors are probably “too pessimistic” concerning overall global growth.
Monday, April 26, 2010
Caterpillar (NYSE:CAT) Revenue Down, Earnings Up
Caterpillar (NYSE:CAT) gave the Dow a boost today as its earnings exceeded expectations for the last quarter.
Earnings in the first quarter was 36 cents a share in contrast to the same quarter last year when they had a loss of 19 cents a share. Revenue for the quarter plunged by 11 percent though.
As usual, China was largely the impetus behind increased sales in some of the sectors of the company, particularly mining and construction equipment, including excavators and bulldozers.
Sales to mature countries remain weak as expected.
In probably the most important news for the company, Caterpillar did give positive guidance going forward, and that is what is more important than the numbers, as everything looks good after the disaster last year.
Earnings in the first quarter was 36 cents a share in contrast to the same quarter last year when they had a loss of 19 cents a share. Revenue for the quarter plunged by 11 percent though.
As usual, China was largely the impetus behind increased sales in some of the sectors of the company, particularly mining and construction equipment, including excavators and bulldozers.
Sales to mature countries remain weak as expected.
In probably the most important news for the company, Caterpillar did give positive guidance going forward, and that is what is more important than the numbers, as everything looks good after the disaster last year.
Wednesday, April 7, 2010
BofA (NYSE:BAC): Columbia Peso Run Over
Columbia Peso being cooled off
Bank of America (NYSE:BAC) says the strong run of the Columbian peso is over, as central bank head Jose Dario Uribe begins to battle its strength in order to increase exports and improve the nation's economy.
The method to be used will be an increased acquisition of U.S. dollars.
Estimates are the peso will plunge by about 9 percent against the dollar by the end of 2010; by far the largest fall of any major currency the world, according to a number of analysts.
Of all emerging market countries, the Columbian peso has risen the most, gaining 6.4 percent against the dollar in the first quarter alone.
With about $8 billion being estimated to be added to foreign capital entering the country in 2010, the approximate $20 million a day spent to acquire dollars isn't considered a large enough move by many of those in business.
So far since the new policy has been instituted, the peso has dropped 1 percent in value.
Bank of America (NYSE:BAC) says the strong run of the Columbian peso is over, as central bank head Jose Dario Uribe begins to battle its strength in order to increase exports and improve the nation's economy.
The method to be used will be an increased acquisition of U.S. dollars.
Estimates are the peso will plunge by about 9 percent against the dollar by the end of 2010; by far the largest fall of any major currency the world, according to a number of analysts.
Of all emerging market countries, the Columbian peso has risen the most, gaining 6.4 percent against the dollar in the first quarter alone.
With about $8 billion being estimated to be added to foreign capital entering the country in 2010, the approximate $20 million a day spent to acquire dollars isn't considered a large enough move by many of those in business.
So far since the new policy has been instituted, the peso has dropped 1 percent in value.
Tuesday, March 16, 2010
MarK Mobius: China Growth is Sustainable
Mark Mobius on China Growth
Mark Mobius was talking at the Reuters Mining and Steel Summit on the future growth of China and whether he believed it was sustainable or not. The emerging market expert said while China will continue at high growth levels and it will be sustainable, it won't be able to continue at double-digit growth levels, but will probably continue on some time in higher single-digit growth.
This ensures raw material demand will continue to be high based on China alone, according to Mobius, and I would add it shows the long-term demand cycle we're in when taking into account all emerging nations, and to a lesser degree, developing nations as well, who will benefit from selling commodities.
Contrary to the idea China will be tightening up, Mobius looks at them continuing to to pursue raw materials no matter what they do with their currency. Taking into account Chinese concerns over economic conditions in the United States and the rest of the West, and you can see they know exports are going to take a long time to rebound, making their internal needs and domestic projects as important as ever. This doesn't mean there won't be decent exports, just that they'll take time to build up to pre-recession levels.
Some of the larger and safer emerging market investments Mobius mentioned as good plays were Compania de Minas Buenaventura SA (NYSE:BVN), Vale (NYSE:VALE) and PetroChina Company Limited (NYSE:PTR).
Mark Mobius on China Growth
Mark Mobius was talking at the Reuters Mining and Steel Summit on the future growth of China and whether he believed it was sustainable or not. The emerging market expert said while China will continue at high growth levels and it will be sustainable, it won't be able to continue at double-digit growth levels, but will probably continue on some time in higher single-digit growth.
This ensures raw material demand will continue to be high based on China alone, according to Mobius, and I would add it shows the long-term demand cycle we're in when taking into account all emerging nations, and to a lesser degree, developing nations as well, who will benefit from selling commodities.
Contrary to the idea China will be tightening up, Mobius looks at them continuing to to pursue raw materials no matter what they do with their currency. Taking into account Chinese concerns over economic conditions in the United States and the rest of the West, and you can see they know exports are going to take a long time to rebound, making their internal needs and domestic projects as important as ever. This doesn't mean there won't be decent exports, just that they'll take time to build up to pre-recession levels.
Some of the larger and safer emerging market investments Mobius mentioned as good plays were Compania de Minas Buenaventura SA (NYSE:BVN), Vale (NYSE:VALE) and PetroChina Company Limited (NYSE:PTR).
Mark Mobius on China Growth
Monday, March 8, 2010
Coals Future Looks Great
The future of coal
Even though it has become politically correct to malign coal, and media loves to cover its so-called "clean" energy alternatives, which are anything but real alternatives, coal will continue to be a major force in generating electricity for decades to come.
The thing to understand with coal, is even if it's not as important in western countries, in general it's going to be a ongoing force around the world for emerging and developing nations for a long time, as they hunger for sources of energy that are affordable and minimally meet their needs.
So don't believe the majority of what you read in the media about the demise of coal. It's not even close to going away or becoming irrelevant, and it is well worth the time to check out the numerous companies still having a major presence with coal, as demand will only increase and not decrease, no matter what the mainstream media tries to convince you of.
The future of coal
Even though it has become politically correct to malign coal, and media loves to cover its so-called "clean" energy alternatives, which are anything but real alternatives, coal will continue to be a major force in generating electricity for decades to come.
The thing to understand with coal, is even if it's not as important in western countries, in general it's going to be a ongoing force around the world for emerging and developing nations for a long time, as they hunger for sources of energy that are affordable and minimally meet their needs.
So don't believe the majority of what you read in the media about the demise of coal. It's not even close to going away or becoming irrelevant, and it is well worth the time to check out the numerous companies still having a major presence with coal, as demand will only increase and not decrease, no matter what the mainstream media tries to convince you of.
The future of coal
Thursday, March 4, 2010
Marc Faber: Buy Gold Forever
Marc Faber on Dollar and Gold
In an interview on CNBC today, Marc Faber told interviewers that he recommends investors to buy gold on a monthly basis forever.
Part of Faber's reasoning is the ongoing printing of U.S. dollars which will continue to weaken the currency going forward.
Faber also recommends for investors to look toward emerging market stocks rather than shares in U.S. companies.
For the U.S. dollar, Faber says it won't necessarily go down like it may have under normal circumstances, because foreign government are also printing money, essentially competing with the dollar on the downward spiral in value of their currencies, making it harder to predict than in the past.
Marc Faber on Dollar and Gold
In an interview on CNBC today, Marc Faber told interviewers that he recommends investors to buy gold on a monthly basis forever.
Part of Faber's reasoning is the ongoing printing of U.S. dollars which will continue to weaken the currency going forward.
Faber also recommends for investors to look toward emerging market stocks rather than shares in U.S. companies.
For the U.S. dollar, Faber says it won't necessarily go down like it may have under normal circumstances, because foreign government are also printing money, essentially competing with the dollar on the downward spiral in value of their currencies, making it harder to predict than in the past.
Marc Faber on Dollar and Gold
Wednesday, March 3, 2010
Mark Mobius Likes Commodity Countries
Mark Mobius - Commodities in Emerging Markets
Emerging market guru Mark Mobius likes two things about investing in the BRIC countries, and that is consumers and commodities.
The head of Templeton Asset Management said he continues to look for strong performances from countries with strong natural resources and infrastructure and consistency in place to extract and distribute them.
With growing middle classes in BRIC nations, Mobius also likes industries prepared to service them like retail, banking and disposal product firms.
Anyone investing in BRIC economies need to have a longer term outlook to be successful says Mobius, as they are volatile and move up and down quite a bit.
Market timers and other need not apply here or you could get slaughtered from the short term fluctuations of the markets.
Mark Mobius - Commodities in Emerging Markets
Emerging market guru Mark Mobius likes two things about investing in the BRIC countries, and that is consumers and commodities.
The head of Templeton Asset Management said he continues to look for strong performances from countries with strong natural resources and infrastructure and consistency in place to extract and distribute them.
With growing middle classes in BRIC nations, Mobius also likes industries prepared to service them like retail, banking and disposal product firms.
Anyone investing in BRIC economies need to have a longer term outlook to be successful says Mobius, as they are volatile and move up and down quite a bit.
Market timers and other need not apply here or you could get slaughtered from the short term fluctuations of the markets.
Mark Mobius - Commodities in Emerging Markets
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