Belgium LT IDR downgraded to ‘AA’ from ‘AA+’; Negative Outlook; ST IDR  affirmed at ‘F1+’: iShares MSCI Belgium Index Fund (NYSE: EWK) is still up 0.4% at $11.33; 52-week range $10.23 to $15.65.

Ireland LT IDR affirmed at ‘BBB+’; Negative Outlook; ST IDR affirmed at ‘F2′:  Bank of Ireland (NYSE: IRE) down 1.6% at $6.15; 52-week range of $3.99 to $27.00 (adjusted for reverse split). MSCI Ireland Capped Investable (NYSE: EIRL) is down 1.5% at $20.17; 52-week range is $16.78 to $23.80. The Irish Investment Fund, Inc. (NYSE: IRL) is still up almost 1% at $7.22 and its 52-week range is $6.49 to $8.77.

Italy LT IDR downgraded to ‘A-’ from ‘A+’; Negative Outlook; ST IDR downgraded to ‘F2′ from ‘F1′: iShares MSCI Italy Index Fund (NYSE: EWI) is down 0.8% at $12.92; 52-week range is $10.88 to $20.15. Telecom Italia S.P.A. (NYSE: TI) is flat at $10.33 an dthe 52-week range is $9.74 to $16.04.

Spain LT IDR downgraded ‘A’ from ‘AA-’; Negative Outlook; ST IDR downgraded to ‘F1′ from ‘F1+’: iShares MSCI Spain Index Fund (NYSE: EWP) is still up 0.4% at $31.44 against a 52-week range of $28.53 to $45.99. Banco Santander, S.A. (NYSE: STD) is still up 0.7% at $8.16 against a 52-week range of $6.77 to $12.72.

Two more downgrades were issued:

• Cyprus LT IDR downgraded to ‘BBB-’ from ‘BBB’; Negative Outlook; ST IDR affirmed at ‘F3′
• Slovenia LT IDR downgraded to ‘A’ from ‘AA-’; Negative Outlook; ST IDR downgraded to ‘F1′ from ‘F1+’

Should this have really been a surprise?  If so, these would be performing far worse.

JON C. OGG

As we noted this morning, “The company said that fourth quarter pre-tax operating profit was $1.1 billion, or 20 cents per share, a decrease of $189 million from fourth quarter 2010. Ford has posted a pre-tax operating profit for 10 consecutive quarters. Revenue for the period was $34.6 billion up $2.1 from the year before’s quarter.”

Asia seems like a spot where Ford should not be weak on the surface, but again that was explained a in recent weeks (when CNBC accidentally called for a loss at Ford rather than a loss in operations in much of Asia due to the ongoing Thai flood issues). 

Our question is simple.  Can the dividend save Ford?  Ford was originally expected to reinstate its dividend at some point this year or even in 2013.  Unlike General Motors Co. (NYSE: GM), Ford is not under government restriction and it does not owe any bailout funds back to Uncle Sam.

New investors entering today will get a dividend yield of 1.5% now that shares are down 3.5% at $12.30.  Shares are still up handily in 2012 after closing at $10.76 on December 30.

The next boost is the coming replacement cycle here in the United States.  Maybe this is not as large of a growth market as Asia and Latin America, but the drastic age of the U.S. car fleet owned by Joe Public is the oldest it has been in our lives.  People can keep pouring a few hundred dollars here and a few hundred dollars there every few months to keep a clunker from clunking out, but eventually it is just cheaper to buy a new a car.

As long as the economy doesn’t fall apart rapidly, Ford’s dividend, the recovery after the Thai flooding, and the U.S. replacement cycle should all help Ford shareholders.

JON C. OGG

As far as how this is impacting closed-end funds and ETFs, the moves are below and the 52-week ranges have been offered so that investors can see just how much pain has been there in the last year:

WisdomTree India Earnings (NYSE: EPI) is up 0.9% at $17.93 and the 52-week trading range is $15.44 to $25.58. 

PowerShares India (NYSE: PIN) is up 0.8% at $18.30 and the 52-week range is $15.96 to $24.59.

India Fund, Inc. (NYSE: IFN) is up 0.4% at $21.46 and the 52-week trading range is $18.61 to $33.99. 

Morgan Stanley India Investment Fund, Inc. (NYSE: IIF) is up 0.7% at $15.75 and the 52-week trading range is $13.59 to $24.57.

These are no ETFs nor closed-end funds but there are some key ARDs to watch:

Infosys Limited (NASDAQ: INFY) was recently butchered on its earnings and revenue warnings and shares are only up marginally at $52.00 versus a 52-week range of $46.12 to $74.52.

Tata Motors Ltd. (NYSE: TTM) is up 2.2% at $21.18 versus a 52-week range of $14.33 to $29.06.

ICICI Bank Limited (NYSE: IBN) is up only 0.25% at $30.95 against a 52-week range of $24.14 to $51.50.

Sterlite Industries (India) Limited (NYSE: SLT), which operates as a non-ferrous metals and mining company, is up 1% at $8.67 versus a 52-week range of $6.64 to $16.60.

$35 billion might not sound like much when you consider the U.S.-sized stimulus packages and when you consider that India has almost 1.2 billion people versus about 310 million in the U.S.  The 2010 GDP on a purchasing power parity was put at about $4.06 trillion and that comes to only about $3,500 in GDP per capita.

$35 billion matters, even if it is going to take more to jumpstart the economy after months and months of tightening and restive monetary measures as the nation fought inflation at the expense of growth.

JON C. OGG

Germany cannot defy the gravity that has pulled much of the EU region close to recession, and some parts of it to negative GDP growth. Demand in the U.S. and China for high-end manufactured goods, pharmaceuticals and software may be relatively good. But Germany’s GDP is $3 trillion. That is not far behind Japan, and nearly 50% more than Brazil, France and the UK, taken individually. An economy of Germany’s size can hardly thrive without some robust demand from nations within its region, coupled with a U.S. economy that is in a recovery, albeit a weak one.

The U.S. faces a problem similar to Germany’s. The EU, which in total has a GDP of $15 trillion, has to continue to have reasonable consumer demand, as well as corporate demand for U.S.-originated goods and services. Germany will help drive some portion of this. But most other European economies will not. Neither will Japan. That leaves China, which may not do as well as it has economically. The People’s Republic will post a drop-off in consumer activity expansion as a slowdown in its factory production undermines growth in its new middle class.

China’s massive manufacturing sector should be able to rely on the U.S. and German markets, along with Brazil, India, South Korea, Mexico, and Canada. That will not to make up for slack demand from large economies, which include the UK, France, Japan, Italy and Spain. It is simply too much to ask of emerging market nations and the balance of North America outside the U.S.

Based on comments from economists and the press, the U.S., Germany and China should have relatively good years as measured by GDP. If so, the improvement will have to draw largely from trade activity among them. That by itself cannot drive a good year among the three. They are not decoupled enough from the balance of the world’s economy.

Douglas A. McIntyre

The nation has an estimated 29.2 million people and 2010 Gross Domestic Product was listed as $275.7 billion on a purchasing parity calculation.  Moody’s currently has a “Baa3″ rating, the lowest of all investment-grade ratings, but it has a “Positive” outlook.  S&P rates Peru as “BBB” as invest-ment grade but slightly better than the lowest investment-grade by rival ratings agency Moody’s, and it has been that way since August of 2011.

While trade deals and ratings agencies do not immediately impact many investors’ decisions, this is another positive for iShares MSCI All Peru Capped Index (NYSE: EPU) and its ADR members in weighting: Credicorp Ltd. (NYSE: BAP) in financial services; Compania Mina Buenaventura, S.A. (NYSE: BVN) in precious metals; and Southern Copper Corporation (NYSE: SCCO), based in Phoenix, Arizona, with a $24 billion value for its mining, exploring, smelting, and refining copper ores in Peru, Mexico, and Chile.

Read Also: Nations Expected to See Their Ratings Raised in 2012

What is interesting is that Russia was also on the list of companies which may face ratings upgrades in 2012 and that was before the official entrance into the World Trade Organization.  Peru is often overlooked by U.S. investors, but the ETF above and the three stocks there tend to make investing in the mountainous nation much easier than many international investors might think.

Peru’s most recent growth was called up at 5.1% GDP, which was higher than most nations and was actually considered a disappointment due to a weaker manufacturing climate which was boosted by private consumption and public spending.  There is some economic stimulus in place and some investors may consider Peru’s stock market cheap.  The iShares MSCI All Peru Capped Index (NYSE: EPU) was down more than 30% in 2011 as of late-September and early-October but shares have rebounded from about $34 to over $38 since then.

The latest news is that Peru will begin deeper discussions with Russia over a free trade pact in 2012.  A Peruvian trade minister was quoted noting that Russia offers many export possibilities for Peru and the government data showed bilateral Peru-Russia trade being worth some $214 million (in converted dollar terms) in 2010. 

Will this overtake the free trade pacts in place with the United States or with China?  Unlikely.  Still, this is yet one more tailwind that could help steer Peru forward and deeper into investment grade by the ratings agencies along with expected trade pacts coming from Japan and the European Union in 2012.

And as far as the stocks noted, here is the discount that these are trading at to 2011 highs:

• Credicorp Ltd. (NYSE: BAP) in financial services is down around $107 after peaking at about $121 in 2011;
• Compania Mina Buenaventura, S.A. (NYSE: BVN) in precious metals is down at about $39 and its high in the last twelve months was just over $49.50;
• Southern Copper Corporation (NYSE: SCCO) in metals and mining trades around $30.50 versus a high of just over $50.00 in the last twelve months.

Your email address

subscribe

terms and conditions

JON C. OGG

24/7 Wall St. has focused on the ratings with a “positive” outlook from Standard & Poor’s, Moody’s and/or Fitch with a bias towards nations that investors can easily invest in via ADR shares, closed-end funds, and exchange-traded funds (ETFs). The featured nations that may be upgraded in 2012 are Brazil, Chile, China (with Hong Kong), Indonesia, Peru, Russia, South Korea, and Turkey.

Read: Nations Set For Credit Ratings Beyond Upgrades, Beyond The Euro Crisis

There is another slew of countries for which S&P has a “positive” outlook stance: Azerbaijan, Bolivia, Ecuador, Honduras, Latvia, Panama, and Sri Lanka. Unfortunately, these nations are almost impossible for Americans to invest in due to their size, the small number of public companies, and a lack of ETFs or mutual funds covering them.

The 24/7 Wall St. list is presented alphabetically and features relevant ratings. Also included are economic details and important developments to consider. Lastly, we have provided a list of the key closed-end funds, ETFs, and ADRs specific to each nation. Population estimates and purchasing power parity GDP for 2010 were taken from the CIA World Factbook.

iShares MSCI South Korea Index (NYSE: EWY) tracks the performance of publicly traded securities in the South Korean markets inside the MSCI South Korea Index and its shares are down 3.75% at $49.80 against a 52-week range of $40.65 to $69.99.

There are also two more fund vehicles via and ETF called The Korea Fund Inc. (NYSE: KF), down 2.4% at $39.54, and the closed-end fund called the Korea Equity Fund Inc. (NYSE: KEF) which is down 2,2% at $8.78.  Both generally have very light trading volume.  A much smaller and often illiquid play is the IQ South Korea Small Cap ETF (NYSE: SKOR) and its shares are down 5% at $25.59 against a 52-week range of $22.90 to $35.68.

There are three active and large ADRs from South Korea that we track which have NYSE share listings: POSCO (NYSE: PKX), the Korean steel giant, is down 2.9% at $81.47 and the 52-week range is $70.47 to $118.00; Korea Electric Power Corp. (NYSE: KEP) is down 2.3% at $11.28 and its 52-week range is $8.22 to $15.25; and finally SK Telecom Co. Ltd. (NYSE: SKM) is down 2.25% at $13.82 against a 52-week range of $13.35 to $20.29.

Trying to make any bold prediction about what leadership will rise and what policies will come ahead would be like asking a gunslinger to lead a charity fundraiser for children.  Of the defense sector, Alliant Techsystems Inc. (NYSE: ATK) is a top ammunition maker and its shares are up 1% at $55.99 and rocket-maker and missile-maker Raytheon Co. (NYSE: RTN) is up 1.2% at $46.07.  Any coincidence?

JON C. OGG

Tuesday is going to be another interesting day for the Market Vectors Egypt Index ETF (NYSE: EGPT) ETF that is meant to track Egypt.  Shares hit a new low on Monday of $10.27 and shares closed down at $10.34.  Now the markets are getting a sneak peek that the stock exchange in Egypt has suspended trading after a 4.5% broad market drop. 

24/7 Wall St. would note that while this is technically an ETF, this acts and feels like a closed-end fund more than an ETF.  Parliamentary elections are now than a week away in Egypt, supposedly.  With all of the problems in Europe and with things not going smoothly in the local regime reporting in the U.S., it is a wonder that Egypt even managed to make the headlines.

JON C. OGG

While investment demand was the key driver to increased gold demand during the past quarter, it is central bank gold buying and selling that is going to be a key factor for demand ahead. The council projected that central bank demand is expected to continue as creditworthiness woes of western governments has come front and center. In fact, the council also cited many new central bank entrants have emerged as they move to diversify reserves. Further, the council sees this increased central bank activity trend continuing into 2012.

24/7 Wall St. reviewed the top 13 nations that hold the lion’s share of the world’s gold reserves, according to the World Gold Council’s International Financial Statistics. Of course, many nations will have new gold reserve data in 2012. And some of the data remained unchanged from prior months. Our aim here is to show which nations probably are increasing or lowering their gold reserves into 2012 and why.

The European credit crisis and emerging market weakness are what is likely behind central banks’ demand. Total gold demand rose 6% in the third quarter from a year earlier to 1,053.9 tonnes. This equates to roughly $57.7 billion — an all-time high in value terms. Investment was the large driver for increased gold demand, while jewelry demand was soft.

These are The 13 Countries That own The World’s Gold.

The question is one which most Americans might care less about unless the are trying to decide if Coca-Cola or Pepsi will win the most financially in India from now to 2020.  For people living in India, this may be a very pertinent question.  The big consideration is that Pepsi’s Chairman and CEO Indra Nooyi is, after all, an Indian-born American.

This story has garnered rather little news for two brands which are very different but which are fighting for more and more market share in the great opportunity in emerging markets.  Consider this: United States is listed as having 312.6 million as its resident population as of today; India is listed in the CIA World Factbook as having nearly 1.9 billion as of July 2011.  Only China is larger at 1.336 billion residents projected in its population according to the CIA World Factbook.

Nooyi has been making decisions to expand internationally and she has led Pepsi’s global strategy for more than ten years.  She was also featured in CNBC’s ‘Pepsi’s Indra Nooyi: Rule-Breaker’ series noting, “Pepsi in India is the generic word for cola and it outsells Coke by a three to two margin. India and other emerging markets provide opportunities for higher market shares and are critical to PepsiCo’s growth.”

Many regions say I would like a Coke, when they simply mean a cola.  In the Midwest of the U.S. it is “I’ll have a pop.”  $2 billion might sound like a large effort, but frankly it is not. If Coca-Cola can bridge part of that gap then it could be a huge pay off for what was a small investment.

Pepsi and Coke are very different because of Pepsi’s play in snacks and beverages versus mostly just the belief that Coke is a beverage player.  Pepsi’s 2010 sales were $57.8 billion and its market cap is $98 billion, while Coca-Cola’s 2010 sales were $35.1 billion and its market cap is $154 billion.  Pepsico also has a higher dividend rate at nearly 3.3% versus 2.8% from Coca-Cola.

Our big question remains… Will India stay loyal to Pepsi and Indra Nooyi?

JON C. OGG