Monday, October 25, 2010

Chinese Costs Forcing Yum's Q4 Margin Drop

Like it or hate it but you cannot ignore China in almost all sectors of international business and trade. For its sheer size of its vast population, China continues to be the prime mover of a lot of segments. Even as China offers a good incentive for investors and organizations to tap the Asian markets, there are a lot of headwinds associated with China, which have been on the rise in the recent past. Testimony to the fact is the growth of Yum Brands Inc. (YUM), the owner of KFC, Pizza Hut and Taco Bell which is expecting another year of at least 10% earnings growth but its facing a severe headache from higher commodity costs that could seriously dent profit margins in China which is Yum's primary growth market contributing almost one-third of the company's profits.
Although the preliminary guidance for fiscal 2011 earnings growth puts Yum's 2011 guidance at a baseline of $2.73 a share, after the company on Tuesday raised guidance for the current year to $2.48 a share, Yum expects $15 million of higher labor costs in the fourth quarter in China and $40 million for the full year. Yum has seen year-to-date China commodity deflation of $35 million but is now expecting a commodity inflation of about $15 million in the fourth quarter.

The rising stiff competition from other quick-service restaurant operators, cost escalation as well as wage inflation in China, and macroeconomic factors influencing consumer spending patterns have emerged as the most immediate concerns for Yum in its China business. Yum is now trying to offset some of the higher costs by raising prices, a prospect that may be more palatable to Chinese consumers with higher wages but that would mean ignoring the majority of China's vast population base that have been contributing to almost one-third of the company's profits.

Visit http://www.worldmarketpulse.com for the full article

Friday, October 1, 2010

Family Dollar Underscores Improving Retail Landscape

image It's been a good week of sorts for the retail industry after Wal-Mart (WMT) become the first major retail giant to jump in the African market with a $4 billion bid for South African wholesaler Massmart.

And now Family Dollar Stores (FDO) has forecast profits for the current fiscal year that are bound to beat the estimates of even the most skeptical of analysts. The forecast not only sent the shares up 1.6%, but also paved the way for the company to announce plans to open 300 new stores during fiscal 2011, up 50% from fiscal 2010. With retail giant Wall Mart looking at overseas destinations to churn out profits in a sluggish US economy, Family Dollar Stores, which prices most of its goods under $10, has attracted consumers struggling in a weak economy.

The company also posted a fourth-quarter profit that beat analysts' estimates and said it had authorized a new $750 million share repurchase plan while it's expecting to reap sales benefit of longer store hours, and an overhaul to give more room to fast-moving items like food introduced earlier in the year.

Retail analysts across the board have been impressed by the recent work-ethic of the company and are of the opinion that Family Dollar can continue to be dollar store of choice, given the significant opportunities the company has to narrow its productivity gap compared to rival Dollar General (DG).

Impressive Figures: Family Dollar forecast fiscal 2011 earnings of $2.95 to $3.15 a share on a same-store sales increase of 5% to 7%. Analysts on average forecast $2.96 a share. Net income in the June-August quarter was $74 million, or $0.56 a share, beating the analysts average level of $0.51 a share, compared with $60.1 million, or $0.43 a share, a year ago.


Read the complete article HERE or visit http://worldmarketpulse.com

Huge Indian Demand to Drive Global Coal Export Boom

image India, Asia's third largest economy is bracing itself for a huge import of coal in order to fulfill apart of its ever increasing energy requirements as the country plans to add a capacity of 100,000 MW of power during 2012-17. India faces peak hour power shortage of nearly 14 % as of today and sector firms have lined up to raise funds as they expand generation and transmission capacity to satisfy a rapidly urbanizing population and rising industrialization.

India's government has meanwhile promised to modernize its ports to accommodate larger vessels and make transporting iron ore and coal to roads and railways more efficient. Coal powers 75 percent of India's electricity, but local output lags swelling demand. Imports are expected to grow to 100 million MT in 2011/12 from 80 million MT now.

Coal is a complex natural resource that is primarily used to fuel power or cement plants, two commodities that are expected to see increases in demand as global populations increase and per-capita income in developing nations increase.

In fact last month, India's Adani Enterprises agreed to invest $1.65 billion in an Indonesian coal port and railway project, and acquired stake in Australian miner Linc Energy's Galilee project for $2.7 billion.

Increased demand for coal is already being seen in China, which accounts for nearly half of global coal demand and being used for power generation and metallurgical coal to produce steel. Now with an increase in demand in neighboring India, the two Asian neighbors can consume a lot of coal put together to fulfill their economic dreams of industrialization and growth.

Meanwhile Coal India, the world's largest coal producer, plans to launch a public offer of its shares next month, the biggest ever in the country. The company made a net profit of 98.294 billion rupees ($2.17 billion) in 2009/10 ended in March on revenues of 525.922 billion rupees.

In 2010/11, India's coal demand is seen at 656.31 million MT, while indigenous availability is estimated at 572.37 million MT.


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U.S. Yuan Bill: From Currency War To Trade War

image Just days after the reports of possible currency wars between nations have been in the limelight, after the drop in the US Dollar's value was attributed to the Federal Reserve’s willingness to continue quantitative easing, Beijing's Foreign Ministry has warned that the upcoming House of Representatives bill to penalize China for not letting the Yuan rise faster could seriously affect bilateral ties between the two giant nations.

The comments come after The U.S. House of Representatives began debate on legislation to put pressure on China to let its currency rise faster, fanning the flames of a long-running dispute over trade and jobs. The measure is most likely to be discussed in the U.S. congressional election on Nov. 2, with voters worried about their jobs and a sluggish economy. The Bill if passed would open the door to extra duties on Chinese goods entering the United States, some of which are already subject to special levies.

China's Foreign Ministry spokeswoman Jiang Yu has suggested that the US Congress should avoid steps that could harm relations between the two nations with Beijing being strongly opposed to the bill. Currency and economic experts don’t expect China to take things lying down and might be forced to retaliate if the bill is indeed signed into a law by President Obama. China Meanwhile has adopted a wait and watch approach as of now, but the if the statements coming out from Chinese sources are a barometer of the Chinese mindset, then we might be just sitting at the transition of currency wars into an ego and Trade war.

Obama and Chinese Premier Wen Jiabao had earlier discussed the issue about China's currency and huge trade surplus on the sidelines of the U.N. General Assembly last week.

Read the full article HERE or visit http://worldmarketpulse.com

Will Change of Guard at BP Actually Change Anything?

In an apparent attempt to restore BP PLC's reputation in the wake of the Gulf of Mexico oil spill, the company’s new incoming Chief Executive Robert Dudley has announced big changes in the company's management with an eye on improving safety standards. Although the change is a positive news coming from the Oil major in a number of months after the hard times, still experts feel that announcing changes is one thing but to actually carry out and implement the safety procedures and other changes sucessfully is a difficult and lengthy process and it remains to be seen how successful the changes might be in the long run.


BP's incoming Chief Executive Bob Dudley has not only ousted the oil group's exploration and production chief following the Gulf of Mexico oil spill but has also appointed a new safety guru, Mark Bly, who would ensure safe practices across the organization. October 1 marks the start of BP's Year Zero, a fresh start following the capping of the Macondo well in the Gulf of Mexico. The revolution begins in exploration and production. The engine room of the UK oil major's profits is being broken into three and Andy Ingles, the director in charge, is leaving. His number two, Doug Suttles, seems likely to follow.

Although the management claims that Bly's role will be stronger than previous safety chiefs as he will have representatives in each business unit that will have the authority to intervene if they feel practices are not meeting BP's safety standards, skeptics feel that having a so called internal police force with its "expert staff" poking their noses into every operating might lead to ego clashes and conflicts in the future, things that are least required at this stage.

The critics have a point as well because the company had made long standing promises earlier as well to improve safety after the blast at its Texas City refinery in 2005, which killed 15 people and injured 170 but nothing had really improved at ground zero leading to the horrific oil spill in the Gulf of Mexico.
BP has already lost more than a third of its stock-market value since April 20, when one of its gulf wells blew out, destroying the Deepwater Horizon drilling rig, killing 11 men and triggering the worst offshore oil spill in U.S. history. BP finally killed the well earlier this month.


Read the full article HERE or visit http://worldmarketpulse.com

China Investment Guide-II: The Real Face of The Chinese Realty Bubble

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As the world fights deep recession, which is getting murkier by the day, much of the world’s global capital has been flocking to China in recent years in anticipation that China's growth can act as a protective shield. Although this investment route has worked well in the past year but now it seems like a perfect case of putting the cart before the horse as China's inflated equity and real estate growth built largely on government-led economic stimulus measures and soaring asset prices, which lead to low interest rates and massive fiscal deficits, have run out of steam and its quite evident that the Chinese bubble is already on its way to bust bringing an abrupt end to the boom.

A growing number of economists and market analysis have expressed deep concern that the busting of the Chinese Realty bubble has the potential to rattle the world economy that is still struggling to recover from the global meltdown. Chinese economic crisis, which could have been shrugged off a few years ago, is now a considerably more serious event in a world in which Beijing runs the second-largest economy.

Soaring real estate prices in China's coastal cities, with prices rising as much as 50% a year, have lifted some rents to unprecedented levels. The biggest risk to China’s economy is the desire of the Chinese government to maintain past economic growth rates by maximizing investments in property.

  • According to a recent Bloomberg report China’s home prices will start declining from this month as the government maintains its lending curbs and increases the supply of public housing, forcing property developers to cut prices to boost sales.
  • Statistics from Goldman Sachs showed that over the past six years, housing price hikes have outpaced income rises by 30 percentage points in Shanghai and 80 percentage points in Beijing. In Beijing, the housing price of per square meter is as much as a resident's seven months' salary on average.
  • The average price-to-income ratio in Beijing has reached 27:1, five times the world average, according to data from the Bureau of Statistics of the Beijing Municipality.
  • Economists have expressed concern that when the China Real estate bubble pops, countries with economies heavily dependent on exporting commodities to China, like Australia and Brazil are likely to go down with the China ship.
  • Official government statistics, which are considered to be unreliable, show house prices in Shanghai are rising at 11% a year but agents and local people say the reality is more like 50%. According to the investment bank Goldman Sachs, in recent years housing prices in Beijing have risen 80 percent faster than wages.

Imminent Realty Price Correction: A recent Bloomberg report has quoted Beijing-based analysts at BNP Paribas as saying that China’s home prices will start declining from this month as the government maintains its lending curbs and increases the supply of public housing, forcing property developers to cut prices to boost sales. China’s property developers, the worst-performing group on the benchmark Shanghai Composite Index this year, will “continue to be affected” as the government maintains its curbs on the industry, the BNP analysts said. With the correction of the Chinese Real estate prices as projected by BNP Paribas, there are bound to be deep economic repercussions in China. Private housing investment accounted for around 15% of total investment volume in urban areas in 2008 and about 13% in 2009 while output in the home construction industry constitutes around 6% of China's GDP, employs around 14% of all workers in urban areas, and consumes around 40% of all steel and lumber produced in China. Hence the slowdown in China's housing production or a significant house price decline on the household sector is going to have a very direct impact on the China's economic growth.


Read the Complete article HERE or visit http://worldmarketpulse.com

Research in Motion: A Case of Too Little, Too Late?

President Barak Obama's statement that he was "bored" of his blackberry handset with only a handful of people authorized to email the super-encrypted device, Research in Motion (RIMM) knew that it constantly needs to be innovative if it needs to be a top ranker in the mobile telecommunication business. With the growing competition from Google’s (GOOG) Android based phones and Apple’s (AAPL) iPhone, Research In Motion introduced its version of the Tablet PC named ‘the PlayBook’ at its annual developers’ conference yesterday.

The BlackBerry PlayBook with its 7-inch display touch screen is smaller than its rival Apple's iPad and aimed at business and corporate users, which have been RIM’s core customers for its e-mail and messaging phones.

Although the announcement of the new device was well timed which came close to the news of Apple i-4 phone's euphoric sales in China, the world's largest communication device market, the one thing that the company would have least expected is the negative stock trends after the announcement instead of any substantial buying interest.

Research In Motion shares fell 3.4 percent, as concern over the late release date of the BlackBerry PlayBook tablet computer prompted investors to claw back some of the stock's recent gains. Although the decline in the RIMM's stock was not entirely unexpected given its strong rise in the run-up to the release, the company has already given the lead to its rival Apple as its next generation iPad will be in he markets by the time Blackberry Playbook rolls out its version 1.0.

While most analysts and communication device gurus have lauded the PlayBook's sleekness and compact size, the projected release date of early 2011 makes it difficult to penetrate the consumer market that Apple dominates and looking to consolidate.

The one thing Playbook may have going for it is a focus on enterprise functionality such as the opening of BBM as a social platform and a BlackBerry Advertising service giving developers the tools to build applications that take advantage of the social aspects of the popular BBM service. However competing with an innovative company like Apple and giving them a head start in the market is not considered as the best of strategies.



Read the complete article HERE or visit http://worldmarketpulse.com

Demystifying China's Iron Ore Price Negotiations

image After being labeled as a savior and a threat to the world’s steel industry, China is slowly pulling back on its steel production after restarting a war of world's over setting up the prices for China's biggest import commodity. The China Iron and Steel Industry Association (CISA) has suggested that iron ore prices should be linked to steel prices instead of iron ore indexes while top global Iron Ore majors including Rio Tinto Group (RTP), BHP Billiton Ltd.(BHP) and Brazil's Vale SA (VALE) ended a 40-year custom of setting annual prices in favor of quarterly agreements.

Difference Over Iron Ore Pricing

The Chinese Steel Industry Association argues that the current iron ore pricing system that is based on price indexes reflects only a small portion of the iron-ore trade that passes through the spot markets, and therefore should not be the determinant of sea borne iron-ore prices while Iron Ore majors including Rio Tinto Group, BHP Billiton Ltd. and Brazil's Vale SA, which account for three-quarters of global iron ore trade, ended a 40-year custom of setting annual prices in favor of quarterly agreements as they bet on rising prices.

Even as the war of words continue to mount, Jose Carlos Martins, head of ferrous business for Vale SA, told an industry conference that iron ore pricing indexes including spot and benchmark iron ore prices were also converging acknowledging that Asian steel mills still prefer a quarterly pricing system.

Tensions peaked last year when CISA failed to clinch an annual pricing deal and a Shanghai court jailed four Rio Tinto employees, including Australian citizen Stern Hu, for stealing commercial secrets and taking bribes. Their arrest at the height of fraught term iron ore price negotiations in 2009 strained ties between Australia and China, and shocked the Chinese steel industry.

Meanwhile as the price wars begin to develop into a serious difference of opinion, China, the largest buyer of iron ore, is considering recycling the scrap metals to reduce steel makers' import dependence. Iron ore sold by BHP and Rio will post their first price decline as a result in three quarters as automakers and builders in China cut orders for steel.

China, the biggest buyer of the raw material used in making steel, expects to lift iron ore production by about a quarter to more than 1,1-billion tons this year and cut imports as it tries to rely less on the global miners. CISA however says that while domestic steel prices will remain volatile in the near term, demand should pick up in the fourth quarter because of the growing Chinese economy.


Read the complete article HERE and visit http://worldmarketpulse.com

Why M&A For Metal Majors Is A Bad Idea

Mergers and Acquisitions have been the prime driving force of the markets in the recent week across a majority of segments. Such has been the force of M&A's that world stocks hit their highest level in nearly five months on Monday while oil prices rose as growing corporate merger activity and last week's upbeat U.S. economic data encouraged investors to buy risky assets. Thomson Reuters recent data shows that global mergers and acquisition activity announced so far this year totaled $1.678 trillion, surpassing volumes in the first nine months of 2009.

While there is no doubt that Mergers and Acquisitions can work in favor in the long term if the prospect of incoming organization has some synergy with the buying organization happen when companies have surplus cash in hand but problems happen when companies start to buying things loosely associated with their business as witnessed in the early 1970’s to 80's when oil companies had so much cash they didn’t know what to do with it.

Similar story is seen to be replicating in the Metals sector with the recent takeover bids by BHP Billiton and Vedanta showing a bounty of cash from high metals prices is slowly enticing miners to chase pricey takeovers and build unwieldy conglomerates. When mining groups seek acquisitions in new sectors like fertilizer in the name of diversification they can easily destroy value by paying full prices when synergies are lacking, analysts warn.


BHP, the world's top mining group, surprised many investors last month when it unveiled a $39-billion hostile bid the largest takeover offer so far this year for the world's biggest fertilizer maker, Canada's Potash Corporation. Critics of the BHP-Potash deal say it is unlikely to add value since there are no synergies and BHP has scant experience in the sector but BHP continues to be bullish on the crossover Merger and argues it has expertise in large capital projects and the takeover will further diversify the group.


Read the complete article HERE or visit http://worldmarketpulse.com

Analyzing Walmart's Head Start In The African Race

Ending all speculations of a possible acquisition in Africa, Wal-Mart Stores Inc's has become the first major retail giant to jump in the African market with a $4 billion acquisition for South African wholesaler Massmart. The move comes just a couple of months after World Market Pulse research report highlighted in its research report the beginning of growth period for the African continent

The move by the US retail giant one the hand highlights the company’s futuristic approach by betting on growth in the African continent but also suggest emerging patterns of moving away from the sluggish US markets for better international ventures.

There is no doubt that some African nations offer a tremendous growth opportunity for the investors especially for those looking at emerging economies outside the bric nations. Of course there are people who are skeptical of the kind of growth African nations can achieve but like South Africa showed with the successful completion of the Fifa World Cup Football 2010, the continent is ready to attain its lost glory.

Massmart, South Africa's third-largest listed store group by value owns chains such as Game and Makro and has been among the most aggressive South African outlets in expanding into the rest of sub-Saharan Africa, operating in 14 countries. Walmart offered 148 rand per share for Massmart, valuing it at 28.9 billion rand ($4.1 billion) or a premium of nearly 10 percent over the share price at Thursday's close of 134.75 rand. While it might take some time for the acquisition to make statistical sense most analysts are of the opinion that the retail giant with more than $10 billion in cash on the books at the end of July is well within economic business sense to go ahead on the African safari. Moreover its not the first time that the company has focused more on the international front as Wal-Mart's international sales rose about 11 % last year as the company started focusing on expansion outside the United States with international revenues accounting for about a quarter of the company's overall sales. Highlighting the company's international plans, the company has added more than 60% of its new international retail space in the first quarter of this year alone.


South African Growth Overview:

As much as the South African Reserve Bank lowers interest rates, consumer spending remains unchanging. Rather than being a consumer-driven economy South Africa thrives on a product-based economy. Materials production is at its highest. South Africa’s ports help transport the majority of the world’s oil. Apart from currency ETFs, the South African stock exchange operator JSE Ltd hopes to list a platinum exchange traded fund (ETF) on the bourse this year as it looks to capitalize on increasing investor appetite for commodity-based products. JSE was also looking at launching an Africa ETF in South Africa, which would trade blue chip firms from other big economies on the continent, particularly Egypt, Kenya and Nigeria.


Read the full article HERE or visit http://worldmarketpulse.com

Currency Wars And The Fall Of The US Dollar

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Gone are the days when the currency of a country was regarded as a barometer of a country's economic conditions. As the global economies, business and market trends change momentum towards the east, the relationship between a country's economy and its currency is getting much more complicated as governments across the globe are assuming a bigger role in propping up the financial system and encouraging economic growth.

Just as the US government released its employment data released last week, the U.S. durable goods orders data and poor the dollar index fell below the key support level of 80 points, fell over seven month low 79.255. The move came after the Federal Reserve said it would restart the quantitative easing monetary policy. Surprisingly just a week after the National Bureau of Economic Research’s Business Cycle Dating Committee finally announced that the recession officially began in December 2007 and the economic downturn ended and the recovery officially began in June 2009, the US Dollar has been virtually in the red zones to its lowest level since February as stronger-than-expected data in Europe and a drop in US durable goods orders hurt demand for the greenback. The dollar also fell to its lowest in more than a week against the yen.

Although most experts agree that the drop in the dollar was mainly due to the Federal Reserve’s willingness to continue quantitative easing. An excess supply of dollars obviously leads to a fall in its value. Some traders attribute the dollar’s fall to the increase in risk appetite. This analysis does not ring true as the price of gold is making new highs, which actually signals risk aversion.

US Vs China

Although its not just the yen but the Yuan as the depreciation of the Yuan compared to the Dollar has caused a growing tension between The U.S and China in recent weeks. The U.S is blaming the cheap Yuan for its economic issues and even financial sanctions against China have been on the cards. If these two giant economies are starting to threaten each other, the impact on the ever-slowing recovery could be enormous.

Meanwhile China's vice commerce minister has described the U.S. House of Representatives Ways and Means Committee approved bill that would let the United States apply duties on goods from countries with undervalued currencies as being "redundant". The Yuan rose against the dollar on Monday even though the central bank lowered its mid-point after nine days of stronger fixings in the face of growing U.S. pressure on Beijing to let the currency rise faster.

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Friday, September 24, 2010

How Asian Airlines Lead The Global Airline Recovery: An Insight

image Asia has definitely taken the lead in the road to recovery as far as the Aviation industry is concerned with Asian airlines leading the way to a stronger recovery than their global peers amid rising passenger and cargo volumes helped by the economic slowdowns in Europe and the United States. Global aviation industry's umbrella body IATA in its latest industry outlook has projected a global profit of $8.9 billion in 2010 for the Airline industry as a whole with airlines in the Asia-Pacific region leading the race with maximum profits to the tune of a $5.2 billion this year compared with $3.5 billion in North America, $one billion in Latin America, $400 million in the Middle East and $100 million in Africa.

In March, the Montreal-based organization, which represents 230 airlines and 93 per cent of passenger air traffic, predicted a 2010 loss of $2.8 billion U.S. for its members but in June, it revised that upwards to a modest profit of $2.5 billion U.S.

"Asia-Pacific carriers continue to benefit from strong regional growth," the IATA said, adding that the Asian economy, excluding Japan, is expected to grow by 7% this year, with China outpacing that with a forecasted 9.9% expansion.

One of the major factors contributing to the rise of the Asian airline industry is the fact that consumer spending in the North America and Europe has been falling in the recent past and is not expected to pick-up any time soon, joblessness was high and consumer confidence has also been on a regular decline.

The strong improvement in Asian airline profits has been based on strong market growth and yield gains. The 23.5 per cent improvement in high volume intra-Asia premium traffic, due to a surge in business travel, was another of the driving factors, the IATA said while renewed buoyancy in air freight markets was also important for airlines in this region, where cargo can represent up to 40 per cent of revenues.

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Tuesday, September 21, 2010

The Rise And Rise Of The Indian Markets


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There is no doubt that India as a preferred investment destination is gaining more and more acceptance with each passing day. India is now seeing inflows from all corners of the globe, be it global macro funds, hedge funds or exchange-traded funds. India's rise has not made investors across the globe happy but has also been acknowledged by the 'Global Governance 2025' jointly issued by the National Intelligence Council (NIC) of the US and the European Union's Institute for Security Studies (EUISS) ranking India as the third most powerful country in the world after the US and China and the fourth most powerful bloc after the US, China and the European Union.

Of course there are other important factors like climate change, ethnic and regional conflicts, new technology, and the managing of natural resources in order to rate a country's resurgence but none is as important as the economic might. And talking of economic might, Indian markets have been on a high for a long time although a little subdued in 2008 owing to the global economic crisis but have been picking up steam since then and now almost on cruise control as Indian shares gained today to close at their highest level in 32 months amid huge inflow of funds from foreign institutional investors (FIIs) pushing the benchmark Nifty above 6,000 level, for first time since January 17, 2008. Even the Sensex joined the party by hitting 20,000 levels. The manner in which the Sensex has gone from 8,000 to 20,000 must has taken even the most optimistic of the lot by surprise but even the country's the finance minister Mr Pranab Mukherjee expressed happiness over the Sensex crossing the 20,000 level.


The BSE Sensex has risen close to six per cent over the last two weeks and reached a 34-month high of 19,600 during this time, and foreign institutional inflows too have been strong. FIIs have invested Rs 7,862 crore in the net in equities during the last week.

Continue Reading the complete article HERE or visit http://worldmarketpulse.com

Friday, September 17, 2010

World Market Pulse Daily - Market Indicators Friday Sept. 17, 2010

I: Market senti-meter representing 27 top markets of the world after close of Asian Markets




II: World Markets At A Glance


Asia-Pacific


Market sentimeter based on 10 key Asian markets

Index Close Change %Change

AORD – Australia 4685.10 35.10 0.75Up
NZ50 - New ZeaLand 3212.26 16.62 0.52Up
BSE - Bombay SENSEX India 19594.75 177.26 0.90Up
CNXN - S&P CNX NIFTY INDIA 5884.95 56.25 0.97Up

HKX - Hong Kong 30 index 1017.67
HSCEI - Hang Seng china enterprise 12171.19 169.78 1.41Up
HSI - Hang Seng 21970.86 279.41 1.27Up
JKSE-Jakarta Composite Index 3384.65 43.02 1.39Up
KOSPI - South Korea 1,827.35 15.50 0.85Up

NIKK - Nikkei Japan average index 9626.09 116.59 1.21Up
SETI - Thailand SETI index Thailand
SSEC - Shanghai Composite Index 2,598.69 -3.78 -0.15Down
STI - Singapore Strait times Index 3,076.37 9.26 0.30Up
TA100 - TelAviv 100 Israel 1087.75 -3.09 0.28Down
THDOW - Dow Jones Thailand 173.17 0.74 0.43Up
TWII - Taiwan Weighted 8,158.33 58.58 0.72Up



Europe-Russia



Market sentimeter based on 8 key European markets
Index Current Change %Change
(Prices At 2:00 PM CET)

AEX - Amsterdam Netherlands 336.27 1.64 0.49Up
ATX - ATX vienna index Austria 2525.77 15.34 0.61Up
CAC - France 3751.12 14.82 0.40Up
CH30 - SWISS CH30 Switzerland 6454.34 30.18 0.47Up
DAX – Germany 6290.09 40.44 0.65Up
EUR - EUROPE 100
XU100 - Istanbul Turkey TURKEY
FTSE - FTSE Uk 5584.39 44.25 0.80Up
IBEX - Bolsa Madrid IBEX 35 Spain
RTSI -Russian Trading System 1474.31 9.90 0.68Up
RTS index Russia

North & Latin America :


Market sentimeter based on NYSE, S&P500 & Nasdaq



Index Close Change %Change

BVSP - Brazil Bovespa 67662.997 -443.853 -0.65%Down
MERV - Argentina Mercado Valores
Index Argentina 2447.07
MXX -Mexico Bolsa IPC Index 33,046.69 11.31 0.03% Down
CDNX – Canada 1,650.34
Canada - S&P/Tsx Composite Index 12173.35 28.51 0.23% Up

DJX - Dow Jones 100 105.95
NDX - 100 Nasdaq 100 1948.11
INDU - Dow Jones Industrial Average 10594.83 22.1 0.21 UP
SPX - S&P 500 large cap index
JRS - JRS Nuveen Real estate fund 10.10
WLSH - WILSHIRE 5000 full cap index


Major Indices Close Change % Chg

NYSE Composite 7,169.48 -10.31 -0.14%
Nasdaq Compos. 2,303.25 +1.93 +0.08%
Dow Industrial 10,594.83 +22.10 +0.21%
AMEX Composite 1,987.14 -3.24 -0.16%
S&P 500 1,124.66 -0.41 -0.04%


III: World Market Indicators:


Dow Jones World Stock Index, SMA > 20-period 50-period

Market Breadth Close Change % Chg

VIX Volatility Index 21.72 -0.38 -1.72%
CPC Put/Call Ratio 0.82 -0.11 -11.83%
NYAD NYSE A-D Line -460.00 -637.00 -359.89%
NYSI NYSE McClellan Chart 670.79 +22.39 +3.45%
NYHL NYSE Highs-Lows 126.00 -1.00 -0.79%
NAAD Nasdaq A-D Line -648.00 -1,040.00 -265.31%
NASI Nasdaq McClellan Chart -179.65 +32.50 +15.32%
NAHL Nasdaq Highs-Lows 37.00 -13.00 -26.00%


Market Momentum:

Market advancing and declines issues


NYSE NASDAQ AMEX OTCBB

Advancing Issues 1,247 966 558 406
Declining Issues 1,827 1,792 1,006 683
Unchanged Issues 135 132 83 274


IV: Market Day To Come In Ny Exchanges:

Top Events Of The Day:

Time (ET) Report Period Consensus Previous
Forecast


8:30 am Consumer price index Aug. 0.3% 0.3%
8:30 am Core CPI Aug. 0.1% 0.1%
10 am Consumer sentiment Sept. 70.0 68.9
12 noon Household borrowing 2Q N/A -2.4%

This Week Earning Calendar

Monday, September 20

Before The Open Actual Consensus Yr Ago Yr/Yr Rev
Discover Financial Services DFS 0.33 1.07
Lennar LEN 0.05 -0.97


V: Latest Upgrades Or Downgrades By Top Analysts

+ Upgrades

Company Ticker Brokerage Firm Ratings Change Price Target

Ford Motor F Barclays Capital Equal Weight » Overweight 15 » 16
IDEX Corp IEX Robert W. Baird Neutral » Outperform 35 » 41
Medicis MRX Jefferies Hold » Buy 29 » 41
OpenTable OPEN Merriman Neutral » Buy
Regal-Beloit RBC Robert W. Baird Neutral » Outperform 78

- Downgrades

Company Ticker Brokerage Firm Ratings Change Price Target

Actuant ATU KeyBanc Capital Mkts Buy » Hold
Borg Warner BWA Barclays Capital Overweight » Equal Weight 53 » 50
Lear LEA Barclays Capital Overweight » Equal Weight 93 » 85
Sappi Limited SPP BMO Capital Outperform » Market Perform 5.75 » 5.50
Savient Pharma SVNT Oppenheimer Outperform » Perform



Future Projections For Today

Sector Out-performers:
1. Coal +2.31% 2. Education +1.25% 3. Gold +1.16%

Sector Under-performers:
1. Home builders -2.78% 2. Hospitals -1.85% 3. Disk Drives -1.50%

Top performers of today with potential for more bullishness in next day or two:

GNI , OPEN, SVNT, SINA , PLUS, CTL , MNRO, HMY, ABV, HDB

World markets are reaching an overbought state on very short term and the current bullish momentum may reverse in next 2 trading days.


Future,Earnings, Momentum,Indicators , Asian , European , North American,NYSE, Nasdaq, Dow Industrial, AMEX,SPY, QQQQ, IWM, EWZ, EWJ, FXI, EEM, GNI, OPEN, SVNT,SINA, PLUS, CTL, MNRO, HMY, ABV, HDB

Tuesday, September 14, 2010

China Investment Guide-I: The Rise And Coming Fall Of The Red Dragon

image There is no denying the fact the China has risen metaphorically like no other nation has in the recent past. The Chinese growth model has not only attained enormous success for the citizens and investors worldwide but has also been an envious state for many other developing countries that have literally failed to do anything with their moribund economies where as the Asian giant successfully managed to bring about a change in common mans life. China’s GDP has multiplied while exports have risen exponentially, so much so that the country has been labeled the factory of the world. But Change is the only thing that is constant in this world and same is true for the Chinese growth cycle. Whatever comes up goes down just as night gives way to day and the life gives way to death. The problem is that just about everyone wants to go to heaven but no one quite wants to die, just as everyone is talking about the China growth story but not many are actually able to understand the haze of uncertainty surrounding the Chinese economy and its growth story.
  • Even though China has attained enormous highs, yet the growth of 200 to 300% of past 2 decades has reached at a critical point where the growth has attained a peak and the only way forward is an eminent decline.
  • China's harsh reality is that after decades of double digit GDP growth, average household incomes still trail miles behind many emerging economies.
  • Not only is China marching towards the greatest bubble in history of mankind, the massive misallocation of wealth is also accelerating at an alarming speed. One doesn’t need to be an economic genius to understand the fact that the wealth gap epitomized by the Chinese economy and Real estate segment is dividing the Chinese society’s social fabric.

China's Society Divide And Rising Black Money:

A recent Credit Suisse-sponsored study by a top economic think-tank has revealed that China's richest citizens may hold as much as 9.3 trillion yuan ($1.4 trillion) of hidden assets. The report has confirmed fears that nearly two thirds of all the unreported income goes into the pockets of the richest 10 %, widening China's wealth gap alarmingly.

Another very important element of the Chinese growth story is the government-sponsored abuse of the country’s human resource, the largest in the world. China is the manufacturing base of the world with cost effective products but not many people seem to understand that China has cheap labor mainly because the government literally robs most of their hard earned money by printing trillions and trillions of Yuan that were used to finance infrastructure project and to maintain cheap labor through a cheap currency. Not only are the Chinese workforces fighting with their lives, majority of Chinese peasants are hand to mouth farm labor who have no other alternative but to work at any cost to survive or to sustain their families in rural areas. What’s more shocking is that the migrant workers are forced to commit suicides in order to get a raise, but with the growing high misallocation of wealth, a petty wage increase is unlikely to solve the problem.

China Manufacturing Sector:


There is no debate the Chinese factories have mastered the art of producing cheap goods but with most global markets being saturated; Chinese factory owners are offering their products below cost price just to sustain the factories. As the world markets are getting bit tired due to high unsold inventory, reducing desire to consume non-essential items and high import bills. All the above factors are collectively reaching a breaking point soon that would definitely deflate the China bubble.

Analysts feel that the popping of the Chinese bubble is expected to have a global impact across major sectors of world trade. The great Chinese buying boom of raw materials and storing them has created big market bubbles in shipping, freight, raw material markets. If the factories are not able to sell their products, all the buying revolution is destined to slow down and thus prices of raw materials come to more realistic levels with global repercussions.


Environmental Damages: The Chinese industrial base is causing distress to urban landscape with heavy pollution, smog and extremely foul air with industrial residuals entering into water base, air and general environment causing extreme strain on Chinese Eco system. The average concentration of particulates in city air during 2008, for example, was six times the ideal standard recommended by the World Health Organization . The Chinese economy may be witnessed a definite boom but at what costs? Perhaps, the Chinese economy revolution has done more harm to the environment in the last 15 years what Europe possibly did in 150 years or USA in the last 75 years.

  • China's coal consumption jumped more than 7.6% last year, boosted in large part by increased demand for energy from smokestack industries.
  • Sixteen of the 20 worst cities in the world for air pollution are in China; acid rain falls on 30% of the country; and more than a quarter of the land is subject to desertification, an area that increases by 2,000 sq km every year.
  • The World Bank estimates that environmental degradation already shaves China's annual GDP growth by about 7% due to lost productivity from sick workers and wasted resources.

Chinese Stock Markets: As the world fought the global financial crisis, China was busy boosting government spending on infrastructure and social welfare projects, engineering a lending boom and re-pegged its currency to the U.S. dollar to support exports in response to the fallout of the global financial crisis. The measures might be effective in the short term with China's economic growth likely to exceed 9 percent in 2010, but have surely aggravated the imbalances that are at the heart of China's development story. The Shanghai composite index has been the worst performer in Asia this year. China's growth model is based on government-led investment and foreign enterprise-led export. As exports grew in the past, the government channeled income into investment to support more export growth. Now that the global economy is weak and China's exports are not coming back to earlier attained highs, there is not much income growth to support investment growth.


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Saturday, August 28, 2010

Exploring Investment Opportunities In Peru

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As the world fights hard to control global economic downturn and volatile markets more and more investors are now seriously considering investment options in emerging economies that can offer a much better return to their investments both in the short as well as the long term. Since most investors have already been looking at emerging economies for a long time, the most talked about emerging economies like BRIC nations have also been over invested and overheated. With the global population of the planet increasing by the day, it makes much more investment sense to look at nations with Commodity based economies rather than just investing in emerging economies as a fad.

Arguably one of the most important commodity based economies after Chile is the Latin American nation of Peru. Peru's government can definitely take a leaf out of Chile's book by offering more incentives by opening up and showcasing a cleaner and an investment friendly environment. If Peru can manage its policies accordingly, there is a potential for a lot of global investment in this Andean nation.

Peru is a country that features practically all of the planet's climates, with remarkable natural, mining, and power resources. According to FAO figures, Peru, the third largest country in South America has 7.6 million hectares with immediate agricultural potential, but less than 3.6 million are actually used. This paves the way for a good Agriculture based commodity segment as an investment opportunity.

The country’s top exports apart from Agriculture products include copper, gold, zinc and crude oil. Furthermore, the country’s Ministry of Energy and Mines estimates that only a 10% of the overall national territory with mining potential has been explored so far.

Peru is a member of the Asia Pacific Economic Cooperation (APEC), which facilitates the mechanism development of the economic-trade cooperation with other 20 powerful economies. Peru is, likewise, is one of the 5 country members of the Andean Community of Nations, which has more than 120 million inhabitants and an overall GDP of around US$ 300.00 billion.

  • Peru ranks fifth worldwide in gold production (first in Latin America), second in copper, and is among the top 5 producers of lead and zinc.
  • Peru has also signed agreements for the promotion and protection of investments (BIT) with 29 countries of Europe, Asia and Latin America
  • Around 8 million hectares are suitable for agricultural farming, 18 million hectares for pasture and 49 million hectares for sustainable forest activities (besides 54 million hectares of protection lands).
  • Peru is the leading exporter of asparagus and paprika in the world, the leading producer of fishmeal, oil, Alpaca and Vicuña fibers and is also the leading producer of silver worldwide.
Investing In Peru:

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Hang Seng BeES ETF: India's First International ETF

The fixation of investing in Chinese markets with as low as Rs.10,000 combined with the growing popularity of Exchange Traded Funds (ETFs) marked the launch of the Hang Seng Benchmark Exchange Traded Scheme (NSE Symbol-HNGSNGBEES) in February this year. The fund is the brainchild of Benchmark Asset Management Company India Pvt. Ltd, which carved a niche for itself in the Indian Mutual Fund Industry by successfully launching first ETF in Asia (not only India) Nifty BeEs. The company is also credited with launching the Gold ETF first time in India.

The Benchmark's open-ended ETF tracks Hong Kong's Hang Seng index, one of the oldest and among the most popular indices on the Hong Kong stock exchange. The index currently comprises 42 stocks and can have a maximum of 50 stocks. The ETF, which is also investing in mutual funds, or ETFs that track the Hang Seng Index themselves, is the first international ETF to have emerged out of India.

The daily net asset value (NAV) of a single unit of the fund is arrived at, by calculating the daily Hang Seng index close multiplied by the currency rate of Hong Kong dollar-Indian rupee and divided by 100.


Management Of The Hang Seng BeES ETF


Name of Company: Benchmark Asset Management Co Pvt. Ltd.
Phone: 91-22-66512727
Website: benchmarkfunds.com
Address: 405,Raheja Chambers,
Mumbai 400 021
India

Inception Date: 15/03/2010
Fund Advisor(s): Benchmark Asset Management Co Pvt. Ltd.
Fund Manager: Vishal Jain
Manager Start Date: 15/02/2010
Fund Manager: Payal Kaipunjal
Manager Start Date: 15/02/2010


Top 5 Holdings Sector %


HSBC Holdings PLC Financial Services 13.70
China Mobile Ltd. Telecommunications 8.87
China Construction Bank Financial Services 7.08
Industrial And Commercial Bank O... Financial Services 6.23
China Life Insurance Company, Ltd. Financial Services 5.11




The Hang Seng Stock Exchange:

Hang Seng Stock Exchange is one of the largest exchanges in the world. Hang Seng Index Charts, Hang Seng Futures, Hang Seng Historical Data are now determined and tracked on a real-time basis by Indian investors.



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Thursday, August 19, 2010

Japan: The World's Cheapest Developed Market

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Japan in recent years has been unfashionable and largely ignored by investors. Home to the world's third largest economy as well as global brands like Sony and Toyota, Japan, has been an economic non-starter for more than a decade. Japan has been the most disappointing major stock market in the world over the past 20 years, with the Nikkei 225 at barely a quarter of its 1989 peak but with the arrival of a new political era last year, foreign ownership in Japanese stocks has edged higher slowly. The Japanese Stock markets might have had a 20 year old bear cycle but so far the country has managed to survive and with a limited downsize, it would not be unfair to say that Japan has put its worst behind and is ready to slowly crawl its way back. The economic revival of sorts will definitely not happen overnight or in a couple of years, but the Japanese economy surely has the potential to kick start a positive movement offering money creating opportunities for the global investors.

Data released by the Tokyo Stock Exchange shows that foreign ownership of Japanese shares rose to 26% for the year that ended in March, up from 23.5% a year earlier.

Adding to Japan's growth revival opportunity is the neighboring red dragon of china, which recently surpassed Japan as the second largest economy of the world. There is, of course, a danger that the Chinese will muscle in on areas where Japan is currently dominant but experts believe the benefits of having such powerful neighbors ultimately might well outweigh the costs and would play favorably in Japan's favor.

The Japanese economy managed a 4.9% annualized growth for 1st quarter of 2010, marking 4 consecutive quarters of positive growth.


Japanese stocks are universally cheap. The average stock trades for about 1.4 times its book value that is roughly a 40% discount to the average U.S. or emerging market stock. With an extremely limited downsize, Japanese stocks offer the perfect low risk, high return opportunity.

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Is Alternative Energy An Alternative Investment Option?

image One of the major issues facing our society today is global warming and the accompanying fear of slowly squandering the limited natural resources available on our planet. We all know that oil is a limited resource. But we also know that if we don’t find alternative sources of energy, the world as we know today it will no longer exist. That’s why alternative energy exchange traded funds (ETFs) are so tantalizing to think about. There is so much discussion about the older energy sources such as coal, oil and natural gas that have been moving our economy for decades. Climate change discussions as well as rising commodity prices have helped bring alternative or renewable energy discussions to the front table.

The problem of course is that these new energy sources are often much more expensive and while that may change in the future, it is not clear how much time it will take. Another important factor when it comes to energy is government regulation. Other sectors are relatively free of government interference as long as they obey the basic laws. Governments have put their money where their policy is by granting huge financial incentives to alternative energy companies but with financial support comes regulations. Energy including Alternative energy is seen as something with national security implications and is keenly under the radar of most governments. Since there's no way to know how the governments would react in the future, it adds a good deal of risk to any alternative energy investment.


As an investment perspective, recently, with the drastic drop in oil prices, alternative energy funds have suffered. It should not come as a surprise that coal related stocks and ETFs have continued to be on of the best performing sectors this year. Considering that alternative energy is yet to produce sensible economics, oil and coal continue to be cheaper to use than alternative energy. Another basic disadvantage that holds true for most of the alternative energies is that their supplies are mostly dependent on nature and thus are not constant.


Hydrogen- The cheapest way to produce hydrogen for fuel cells is by using natural gas, a non-renewable resource that creates greenhouse gases when burned. Hydrogen can also be made from water, but this is expensive and widespread adoption of this practice could threaten

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Investing In South Korea: The Hidden Asian Gem

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We have all witnessed the enormous coverage given to China’s meteoric rise and the country has been attracting more investors than any other region in Asia as a result but for investors not willing to walk the monkey see monkey do china way, South Korea deserves equal attention than China if not more, offering under-rated values and long-term economic stability. While the US economy was bleeding last year South Korea adopted numerous economic reforms in early 2009, amid the global financial crisis; including greater openness to foreign investment and imports and has witnessed a remarkable change in its fortunes compared to last year. South Korea’s central bank has painted a bright optimistic future for the country as well anticipating exports to grow by 11.9%, private spending to jump by 4%, capital investment to soar by 13.4% and inflation to be a mere 2.6% for the year.

  • International Monetary Fund increased its 2010 growth forecast for South Korea to 5.75 percent from 4.5 percent as a result of the recovery in global trade and a successful Korean government led stimulus
  • South Korea has a strong economic partnership with China, which has strengthened enormously over the last decade. China now accounts for about 25 percent of South Korea’s exports, up from 14.6 percent in 2002. Korean companies are big now suppliers of equipment and materials needed for China's economic extravaganza.
  • South Korea’s annual per capita income of about $20,000 is at market prices only $5,000 behind that of Japan and it is catching up fast.
  • South Korea is the world's most wired nation - 95% of homes have broadband, compared with 58% in Germany. The country is also home to one-fifth of global lithium battery production



Investing Options in South Korea

South Korean Companies Listed On NYSE As ADRs


Samsung (SSNLF.PK): Samsung, which recently overtook Hewlett-Packard to become the biggest electronics company by sales in the world, is this year on track to make more money than the top 15 Japanese electronics companies combined.

Hyundai (HYMLF.PK) : the world's fastest-growing auto-manufacturer, it has increased US market share from 3.7 per cent to 4.4 per cent in just 12 months.

LG (LGERF.PK): LG Electronics Inc.

Korea Electric Power Corp. (KEP): generates, and sells, electricity throughout South Korea.

KT Corp. (KTC): provides telephone, and broadband Internet services.

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Friday, August 13, 2010

Security Concerns A Roadblock To RIM's Future?


Research in Motion (NASDAQ:RIMM), which operates the popular Blackberry Messenger service, has been in the news recently for all the wrong reasons. Firstly the American President Barak Obama revealed that he was 'bored' of his blackberry handset with only a handful of people authorized to email the super-encrypted device and the company has ever since faced mounting pressure to open its secured data network for scrutiny by the governments of Saudi Arabia and the United Arab Emirates. RIM competes with Apple (NASDAQ:AAPL), Motorola (NYSE:MOT) and Nokia (NYSE:NOK) in the mobile phone market. Several other countries, including India, Algeria and Lebanon, have recently pushed for access to Blackberry data for law enforcement purposes.

If RIM denies their requests, its Blackberry Messenger service and/or smart phones could be banned from these countries. On the other hand, some Blackberry users might lose confidence in the service if they feel that their data is no longer confidential.



Why Business Users Prefer Blackberry

Despite the introduction of competing smart phone solutions, RIM's Blackberry remains prevalent amongst large business customers due to its track record of security and reliability. Heavy usage amongst business users helps RIM to 'condition' users to the Blackberry device making a switch less likely. RIMM's net profit margins of 16.5% are significantly higher than other mobile phone manufacturers of 5%, mainly because of RIMM's higher margin is its Service revenue segment but If numerous governments were to ban Blackberry Messenger services, RIM is likely to loose its USP which is its competitive advantage, prompting subscribers to buy other smart phones. Research in Motion (RIMM) has been getting brutally punished by Wall Street. Its stock is down 30% in the past 6 months from $75 to $56 per share.


RIM Market Trends:

Blackberry Mobile Phone Market Share increased from 0.4% in 2005 to 2.7% in 2009.

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Nickel: The Rise Of The Silver White Metal


Nickel has been one of the biggest sufferers in the global commodity price meltdown, but this high luster silver-white metal has been making a steady comeback fuelled by investment demand this year mainly driven by massive Chinese imports, and the stainless steel market recovery worldwide. As the global stainless steel production is slowly rebounded towards its highest levels and since stainless steel mills account for over two-thirds of nickel demand, its no surprise that Nickel prices have witnessed a spike in the recent times. As nickel’s chief application is as a constituent of a major building material, nickel use mirrors economic growth.

  • Nickel has jumped about 45% since the start of 2010, while copper and aluminum have risen merely 5%. And since its low point in late 2008, the commodity’s price has more than tripled to $27,500 a ton thanks to strong demand from the stainless steel industry along with supply disruptions.
  • Some 80% of nickel is use to produce steel products - with stainless steel being particularly important. Stainless steels are used in the building industry, automobiles, food & beverages and water industries
  • Nickel is taking off because there has been a huge rise in the demand for everything from home appliances to hybrid cars especially in rapidly emerging markets like China and India.
  • LME nickel stocks are currently sitting at around 116,034 MT, equivalent to around seven weeks of world consumption.
  • Nickel is a primary component in stainless steel and stainless steel is in all kinds of everyday things we use including home appliances and cell phones.

Nickel Global Demand:


Usage of nickel has increased over time and is correlated with economic development. In the past decade world nickel demand increased from 1.009 million MT in 1998 to 1.278 million MT in 2008, a growth rate of 2.4 % per year. However, the upward trend has had peaks and valleys. sia is now the largest regional market for nickel representing 54 % of total world demand. China alone now accounts for 25 % of world nickel demand compared with 4 % ten years earlier.


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A Market On Tires: Global Tire Industry Outlook


The automobile industry is one of the dominating sectors because many economic activities rely on and are linked to automobile production. If you include suppliers, car services, garages or retailers, a total of about 5 million employees depend on the success of the automobile industry. With changing technologies, production concepts, strategies and products, the automobile industry is often an initiator of innovations in other related industries as well.

As the world tries to come out of economic recession, the first sector to witness positive movement has been the Automobile sector and since its linked to related sectors like tire industry, plastics industry and metal processing, all the sub sectors are slowly witnessing a silent revival. As more and more people look at buying automobiles slowly, the tire industry is also set to attain a positive movement from the pits, where it has been for most of last year. The recession had people reducing spending across the board, which meant that they had been putting of those new tires on hold until things start to look a little better on the economic front. Now as the economy is moving out of the red slowly, tire sales are witnessing a welcome revival even better than the Automobile companies and a lot of second hand car owners have also been investing in the new set of tires instead of buying a new automobile altogether.

Tire shipments in 2010 are projected to increase by approximately 3 % or approximately 7 million units to 267 million units, according to the Rubber Manufacturers Association. Total shipments experienced an 8 % drop in 2009 to 259.7 million units. The increase in tire shipments reflects the onset of the economic rebound, an increase in vehicle miles traveled and a slight up tick in auto sales. As a result, this rebound is projected to extend into 2011, reaching approximately 275 million units as the economic recovery gathers momentum.


  • Tire companies were first in the early on 20th century, and grown in partnership together with the automobile business. In the present day, above 1 billion tyres are created annually, in over 400 tire factories, with the three top tire makers commanding a 60% total marketplace share.
  • The US tire manufacturing industry alone consists of about 100 companies with combined annual revenue of about $15 billion. The industry is highly concentrated and the top four companies generate more than 75 % of revenue. Major companies include Goodyear, Bridgestone, Michelin, and Cooper.
  • Tire manufacturing has become extremely technical and forward-thinking as manufacturers look to push the boundaries of what can be achieved through new technologies. Whether it’s improvements in fuel economy, handling performance or safety, technological developments in the tire world are making a big difference
  • As the world fights strong economic recession, people are more prone to buy and use older cars rather than buying new ones. No matter if the vehicle is old or new, the need for tire remains a constant and with number of second hand vehicle sales increasing and as compared to new vehicles, the worldwide consumption of tires is estimated to be more than automobiles.
  • With developing nations churning the growth engines of the world, commercial vehicles (vans, utility and light trucks) are much in demand in both developed and developing nations; such vehicles require both more and larger tires than passenger cars.

Correlation Of Tires And Rubber: In the history and the application of various materials, few have made as large an impact globally as natural and synthetic rubber. The source of the material stretches from plantations in Malaysia and Indonesia to factories on all continents. The making of rubber into tires and nontire goods involves a series of sophisticated manufacturing processes. The finished products are then distributed through thousands of warehouses and dealers in large cities and small villages, practically in every country.

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An unbiased review of world markets. Review of current market scene, news, events and forecasting for the days to come.
Our focus is on prominent emerging markets, major world markets and national financial centers of big industrialized nations.

There are many markets that have their own personality and they do not necessarily follow the United States Financial markets. We can post news, views and analysis and forecasts for specific market areas to enhance value for your portfolios. If you are based outside the country of interest, you could participate in the world markets by investing in Exchange traded funds about we would be discussing and providing ample information.

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