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Archive for November, 2015

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Posted On 09  Nov  2015  

Currency as an asset class and as a risk in investing

09/11/2015 It is not only in an internationally diversified investment portfolio that investors encounter currency as a source of returns as well as risk. Currency risks are part and parcel of most investments into stock, bonds, commodities or deposit markets. Here are examples of how currency returns are intrinsic in investment products: FTSE 100, DAX, SMI, CAC, S&P 500, Nikkei, HSI These indexes contains mining, consumer, energy, banks and insurance companies. Most derive very significant parts of their incomes from foreign assets and foreign earnings. One only has to think of BHP, Rio, HSBC, Unilever, Nestle, Roche, AstraZeneca, UBS, WPP, BMW, BP etc. to know that either the commodities they deal with are sourced from outside of the countries in which the shares are listed or the revenues come from a diverse set of countries, as does their cost of operations. Many large companies have more than one listing. BHP,

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Posted On 02  Nov  2015  

Why we are on the cusp of recovery for Brazil stocks?

02/11/2015 By the time an emerging market economy such as Brazil enters a recession a lot of damage is already priced in. This is because emerging markets are expected to grow between 4-8 per cent per annum and the journey to negative growth is a prolonged and painful affair. After the doc com sell off in 2002, the IBOV started its rapid up move from a level below 15,000 to reach 70,000 by May 2008. The financial crisis of 2008 resulted in the market correcting back to less than 32,000 for it to then rally in 2009 back to the old peaks. At the market peaks the Brazilian Real (BRL) was worth ca. 0.60 to the USD. The BRL peaks in July 2011 at 0.65 and since then has declined to the current level of 0.26. In the meantime the stock market has fallen to ca. 46,000. That is a