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The BRIC Cheer: Stimulus Coming To India (EPI, PIN, IFN, IIF, INFY, TTM, IBN, SLT)

Administrator — Wed, 18 Jan 2012 16:22:37 +0000

India could finally be starting to turn itself around. Now that the nation is no longer so ultra-concerned about inflation tearing apart its population, the country is aiming for some stimulus measures. The FT has reported that the nation is launching a $35 billion public sector investment program. The aim is to boost infrastructure spending as well as to purchase energy even from foreign firms. Of the $35 billion, some $7 billion was earmarked for energy in coal, natural gas, and oil.

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

Filed under: ADR, Economy, Emerging Markets, ETF, Infrastructure, International Markets, Mutual Funds Tagged: EPI, IBN, IFN, IIF, INFY, PIN, SLT, TTM

Special Report: Chart Deaths of BRIC & Emerging Markets (EEM, VWO, EWZ, BRF, ECH, CH, RSX, TRF, CEE, EPI, PIN, IFN, IIF, FXI, GXC, TAO, HAO, CHN, TDF)

Administrator — Mon, 03 Oct 2011 22:46:14 +0000

The old saying goes, “When the U.S. sneezes, the rest of the world catches a cold.” But what about when Europe gets the flu and when China and India drink the tap water from Latin America? There have been many books about the Post-American economies and about the rest of the world catching up to America’s fiscal dominance. It turns out that our leverage isn’t so bad when you consider some of the other great nations. The recession in America is still only an unofficial and debated recession, but the recession in Europe and the equivalent of a recession is heading back to the developing nations.

All you have to do is look at the exchange-traded funds and closed-end which track the emerging markets and the BRIC nations (and those surrounding the BRICs). Ugly is not quite the right description and we will explain more after showing just how bad the carnage is. Greece is no emerging market, but it is on the path to default faster than emerging markets used to default.

The ETFs for the broad emerging markets is not a good signal for their equity markets. The revolutions of early 2011 did not help, nor did the food inflation, but the economic slowing is taking a hit here left and right. iShares MSCI Emerging Markets Index (NYSE: EEM) closed down 2.1% at $34.36 and the 52-week trading range is $34.29 to $50.43 (52-week low was Monday). Vanguard Emerging Markets Stock ETF (NYSE: VWO) closed down 1.75% at $35.20 and the 52-week trading range is $35.13 to $50.92 (52-week low was Monday).

We have included the most active ETF chart on each from Stockcharts.com at the end of this report. The data on the BRICs is almost shocking…

BRAZIL

Brazil may have energy independence and the Olympics headed its way, but the implosion there has been massive. The BOVESPA lost 2.9% of its value on Monday and let’s just say that its high-flyers are now grounded due to more than just weather. It seems that minerals and forestry are not going to generate cash, just like it missed out on royalties from the term “Brazilian” in personal grooming.

iShares MSCI Brazil Index (NYSE: EWZ) closed down 2.1% at $50.89 and the 52-week trading range is $50.71 to $81.77 (52-week low was Monday). Market Vectors Brazil Small-Cap ETF (NYSE: BRF) closed down 3.15% at $37.96 and the 52-week trading range is $37.73 to $63.78 (52-week low was Monday). iShares MSCI Chile Investable Market Index (NYSE: ECH) closed down 3.8% at $51.16 and the 52-week trading range is $50.92 to $80.38 (52-week low was Monday). Aberdeen Chile Fund, Inc. (NYSE: CH) closed down 4.9% at $13.45 and the 52-week trading range is $13.37 to $26.56 (52-week low was Monday).

Filed under: ADR, Brokerage Firms, Charts, China, Commodities, Corporate Governance, Currency, Defensive Stocks, Economy, Editor's Picks, Emerging Markets, ETF, Exchange News, Index, International Markets, Most Actives, Mutual Funds, Personal Finance, Trading Alert, Value Investing Tagged: BRF, CEE, CH, CHN, ECH, EEM, EPI, EWZ, FXI, GXC, HAO, IFN, IIF, PIN, RSX, TAO, TDF, TRF, VWO

Powerful Banking Group Rejects Global Reform Plan

247wallst — Sat, 24 Apr 2010 21:24:16 +0000

A number of the finance ministers and central bank managers in Europe support creating a bank tax to handle financial firm bailouts in the future. A related levy has been discussed by some members of Congress to build a $50 billion fund to take care of the cost of bank “wind downs” in the US. Most of these plans have been supported by an analysis of the problem by the IMF

The head of the The Institute of International Finance, an association which represents the world’s largest banks expressed strong objections to the taxes in a letter to the government representatives at the G20 Conference.

The IIF used an already widely discussed argument that any mechanism to fund the bail out of banks creates a “moral hazard.” Banks will take on excessive risks if their managements know that a rescue fund exists. In a letter from IIF Managing Director Charles Dallara to the Governors and Ministers of the Group of 20, he wrote that shareholders and bond holders should bear the costs of bank failures. He said that a bank tax would subvert the reasons for tax systems which are not to create funds for unanticipated catastrophes. He added say that taxes created by a number of nations would almost certainly vary by country. This would mean that rewards and penalties would be established that would not apply evenly to financial firms. The disparity, in turn, would make risk incentives and penalties which are not uniform.

The IIF letter went on the express the group’s opposition to a taxes that would cut bank profits and actually discourage bank lending a period when the global economy is dependent on high levels of liquidity to fuel the recovery.

The IIF reaction is predictable. The world’s largest banks want to avoid as much regulation as possible and do not want the system to do anything that will undermine their earnings and ability to improve their balance sheets.

The disarray among the G-20 nations to create a bank tax that operates across borders and in most developed nations favors the IIF. The plans that the Congress is debating have some aspects that are not in common with proposals within the European union.

Politics and not economic analysis will turn out the be the IIF’s greatest ally

Douglas A. McIntyre

Filed under: General, International Markets Tagged: G20, IIF

India Election Winners By ETF & Shares (PIN, EPI, IIF, IFN, INP, INFY, IBN, REDF, SAY, SLT, TTM, WIT)

247wallst — Mon, 18 May 2009 13:19:05 +0000

It is rare that you see an election have this large of an impact, but the Indian stock market surged on the new election results. The Congress Party won a decisive victory in India and this sent Indian stocks up 17% on average. The move was so large that the Bombay Stock Exchange had to close after already seeing one halt. This had a huge impact on stocks, which you can see reflected in the share prices in the high pre-market indications of the major ETF’s, closed-end funds, and active ADR’s listed below.

ETF’s and closed end fund gainers representing India are as follows:

PowerShares India (NYSE: PIN) up 15% at $17.00 at 9:07
WisdomTree India Earnings (NYSE: EPI) up 23% at $17.20 at 9:07
Morgan Stanley India Investment Fund, Inc. (NYSE: IIF) up 17% at $18.85 at 9:07
India Fund, Inc. (NYSE: IFN) up 20% at $25.93 at 9:07
iPath MSCI India Index ETN (NYSE: INP) up 23% at $48.75 at 9:08

The key Indian ADR shares are as follows:

Infosys Technologies Ltd. (NASDAQ: INFY) up 13% at $36.35 at 9:09
ICICI Bank (NYSE: IBN) up 31% at $23.39 at 9:09
Rediff.com India Ltd. (NASDAQ: REDF) up 32% at $3.30 at 9:09
Satyam Computer Services (NYSE: SAY) up 13% at $2.05 at 9:09
Sterlite Industries (NYSE: SLT) up 19% at $10.98 at 9:10
Tata Motors (NYSE: TTM) up 13% at $8.59 at 9:10
Wipro Ltd. (NYSE: WIT) up 9% at $11.65 at 9:10

This election is expected to allow the government to have a greater degree of flexibility to boost economic reform and growth. The prior communist parties had not been favorable for issues such as insurance, privatizations, and pensions.

JON C. OGG

Posted in ADR, Emerging Markets, ETF, Index, Mutual Funds, Politics, Trading Alert Tagged: EPI, IBN, IFN, IIF, INFY, INP, PIN, REDF, SAY SLT, TTM, WIT

India ETF’s & Funds Hold Up After Terror Attacks in Mumbai (PIN, EPI, IIF, IFN, INP)

247wallst — Wed, 26 Nov 2008 15:26:37 +0000

Fresh terrorist attacks targeted against foreigners in Mumbai, India have failed to thwart a market rally today. Reports have foreigners being taken hostage at premiere hotels frequented by the wealthy and by business travelers. Some 60 deaths have been reported. Interestingly enough, this has also failed to take the wind out of the Indian ETF’s and Indian ADR’s which are actively traded in the US. ETF and fund price moves are as follows:

PowerShares India (NYSE: PIN) up 4.5% at $11.31
WisdomTree India Earnings (NYSE: EPI) up 4.1% at $10.37
Morgan Stanley India Investment Fund, Inc. (NYSE: IIF) up 1.4% at $12.39
India Fund, Inc. (NYSE: IFN) up 4.1% at $17.47
iPath MSCI India Index ETN (NYSE: INP) up 4% at $28.72

We also added in an after-report list to the ADR’s and active stocks we track that trade in the U.S. to show a broad interest as well.

Jon C. Ogg
November 26, 2008

Posted in Emerging Markets, ETF Tagged: EPI, IFN, IIF, INP, PIN

New ETF To Track India (WSDT, IIF, IFN, INP, EPI)

247wallst — Thu, 24 Jan 2008 13:55:22 +0000

WisdomTree Investments (WSDT-OTC) made a fairly significant announcement yesterday for those who trade ETF’s. The ETF manager is going to launch an ETF in the latter part of February that tracks the Indian stock market, one of the larger emerging markets that is not exactly the easiest for Americans and non-Indians to invest in.

This will have the proposed tick of "EPI" on the NYSE. What is most interesting is that it is said to be an "earnings weighted ETF" and it will offer pure exposure to local Indian securities rather than just the US-listed ADR securities. This will also be more of an open-ended fund so that its assets will actually fluctuate more in-line with the underlying securities as opposed to swinging at wider premiums or discounts to the net asset values that closed-end funds and some ETF’s encounter.

EPI will select from a broad universe of approximately 150 profitable companies included in the WisdomTree India Earnings Index on the annual index screening date. EPI will be listed on the NYSE Arca. You can access the full release here.

The current major ETF that traders use is the iPath MSCI India Index ETN (NYSE: INP) or traders go to the closed end fund called the India Fund, Inc. (NYSE: IFN) or the Morgan Stanley India Investment Fund, Inc. (NYSE: IIF).

This may offer investors a chance to invest in a broader basket of Indian shares without the added volatility that can be caused from the premium and discount to net asset values. Now we just have to wait about 5 or 6 weeks to see how well it works and how active the trading is.

Jon C. Ogg
January 24, 2008

Financial Market Reactions On Bhutto Assassination (INP, IFN, IIF, MINDX, IBN, TTM)

247wallst — Thu, 27 Dec 2007 12:08:50 +0000

It is unfortunate to have to analyze tragic international or domestic terrorism news from a financial angle on horrible news such as the murder of a foreign leader or a challenger for that leadership ahead of an election. Pakistan opposition leader Benazir Bhutto was assassinated Thursday in a suicide attack at a campaign rally that also killed killed more 20 others (reports still vary). The news of her death was reported after the Pakistan markets were closed.

Investors are looking to see how far down the Karachi Stock Exchange will drop and one of the best proxies as to see how this will affect the Pakistani stocks is to look at the closest markets. India is the closest and most tied (good and bad) to Pakistan, and the worries that this could create additional instability in the region has the ETF and the Indian funds that trade in the U.S. down considerably:

The major ETF that tracks India is the iPath MSCI India Index ETN (NYSE: INP), and it is trading down some 5% at $96.10 today. Its 52-week trading range is $46.13 to $110.09.
There are two closed-end funds that track the performance of Indian stocks. India Fund, Inc. (NYSE: IFN) is also down some 5.1% at $59.40 today, and its 52-week trading range is $35.51 to $71.54. The second is less actively traded, but the Morgan Stanley India Investment Fund, Inc. (NYSE: IIF) is down some 6% at $50.75, and its 52-week trading range is $38.29 to $66.56.
One open-ended mutual fund that we will not know how that trades really until tomorrow after we have a chance to see how those trade is the Matthews India Fund (MINDX). These only trade at N.A.V. at the end of each day and these traded at $24.29 yesterday. This fund started out 2007 at $15.62, so it is also up considerably.
A couple of the more liquid stocks that trade as ADR’s in the U.S. are ICICI Bank Ltd. (NYSE: IBN) and Tata Motors Ltd. (NYSE: TTM), and both are down close to 5% today.

This is potentially a very large political and geopolitical event that could end up with much greater repercussions than a mere 3%or 5% move. The hardest part of interpreting these price reactions is that Wall Street is staffed with a skeleton crew this week and part of next week. These are the go to stock and fund names to track the financial market reactions to the situation.

Jon C. Ogg
December 27, 2007