Update AmBev (ABV)
On March 4 AmBev (ABV) reported fourth quarter earnings before interest, taxes, depreciation, and amortization grew by 9.1% from the fourth quarter of 2008. Total net sales increased by 13.9% from the year-earlier period on an 11.6% increase in volume in Brazil.
Brazil becomes a big player in the profitless global economic recovery
Want to know why this is going to be a profitless recovery? And not just in the United States either.
Then look at the IPO (initial public offering) planned by OSX Estaleiros, a start-up ship building company. The March 19 offering aims to raise $5.6 billion. (For more on the profitless global recovery see my post http://jubakpicks.com/2010/01/19/get-your-portfolio-ready-for-the-profitless-global-economic-recovery/ )
For ship building?
This is an industry with global overcapacity. Shipyards in Korea, Japan, China, and Germany have all been forced out of business. How can this company possibly hope to float such a huge offering? Why would investors even think of putting money into such a company?
Update Itau Unibanco (ITUB)
On February 9 Itau Unibanco (ITUB) reported a 72% jump in fourth quarter net income from the fourth quarter of 2008. Just as important in banking these days, credit quality improved. The percentage of loans more than 90 days behind in payment fell to 5.6% as of the end of December from 5.9% at the end of the third quarter. That was the first improvement in the delinquency ratio since the third quarter of 2008.
The company managed to grow its loan portfolio in the quarter by 4% from the end of the third quarter and still increased its Tier One capital ratio to 13.7%.
Itau Unibanco remains the most profitable bank in Brazil with a return on average equity of 22.6% in the quarter. That was up from 20.1% in the third quarter and above the 18.2% return on average equity at top competitor Banco Bradesco (BBD).
How to build a global portfolio: What countries do you want to own?
If you were building a global stock portfolio for the long run—let’s say 2020 and beyond—how would you weight the world’s stock markets?
Personally, over that time period I’d pick India over China, Poland over India, and Brazil over them all. And I’d give U.S. stocks a bigger piece of the pie than they’d earn if you looked just at near term numbers.
Traders jumping on the Brazilan currency bandwagon
Guess there’s no such thing as a little volatility when it comes to the Brazilian real.
In December traders were calling the real the world’s most overvalued currency.
Now the consensus prediction, according to a Bloomberg survey of 19 currency analysts, is that the real will climb by as much as 6% against the dollar by March 31. Yep. Not the end of 2010. But the end of March.
That big a swing in a currency over so short a period of time would seem unlikely except that options traders are reversing short positions against the Brazilian currency at the fastest pace in 10 months, according to Goldman Sachs.
On Monday, February 1 Goldman said that the real’s slump was over. The currency had dropped almost 8% against the U.S. dollar in January and fell 3.7% in the last week of the month alone.
