As the markets "melt up" into the Christmas and New Year holidays, corporate news flow overseas is providing a steady (if muted) drumbeat for the traders still watching their global screens
BRAZIL: Sabesp (SBS) is not necessarily sexy, but this Brazilian utility just announced a spectacular dividend of $0.98 per share this year, giving it a 12% payout on cash flow and a hefty dividend yield of 4%.
If you are looking for a big thematic play in emerging markets infrastructure and the ever-growing reality that water treatment is becoming a strategic industry, SBS makes sense. Plus, the stock is cheap relative to its own 5-year average P/E of 25 times earnings -- right now, SBS is trading at 6.8 times current year earnings or 7.4 times next year's forecasts.
INDIA: Infosys (INFY) is one of the giants of the Indian economy and the ADR-traded market in particular, but the company rarely issues much tradable news and, let's face it, IT services make a lot of traders' eyes glaze over.
But that said, the company is actually exposed the much sexier smartphone story as its corporate clients around the world expand their tech budgets in order to re-develop their software for the mobile world.
And as a plus, while the United States remains INFY's core market, the company has started redeploying its Shanghai staff away from international projects to meet Chinese business computing needs. This market represents at least a $50 billion opportunity -- an enormous win for INFY if it moves in before its competitors.
RUSSIA: Gazprom (OGZPY.PK) is back in the news this week for making a lot of rumbling about expanding beyond its Russian stronghold into Eastern Europe and even as far as India. The giant gas company is always worth watching as a proxy for the Moscow market and Russian economy at large. However, this week OGZPY raised eyebrows for buying half of Bulgaria's South Stream gas pipeline and indicating that it may pick up a Polish refinery for dessert.
But the biggest news is that OGZPY is talking to Oil India to buy two blocks of energy leases and maybe co-run at least two other projects in Indian territory. Given India's fragile supply of oil and gas -- and the country's recent upswing in demand -- sewing up as much of this market as possible may make OGZPY a strategic winner in the energy endgame.
ETFs in the Spotlight
Although Colombian stocks have had a great year, EPI has retreated along with other high-flying single-country funds.
This is natural and was actually inevitable once word of these funds' spectacular YTD performance got out. In the long term, Colombian companies -- especially the oil majors and miners -- are still poised for substantial success. But for now, these funds may have gotten a little frothy.
CYB: If a stronger yuan is now inevitable, why is this yuan-based fund not doing better? The answer, as always, is that while investors are piling into yuan in the hope that a rate hike from Beijing will put the Chinese currency on a more equal footing compared to other global currencies, CYB and its peers do not actually hold yuan. Instead, they hold dollar-denominated money market instruments laddered to reflect historical yuan performance. But now, Treasury paper is retreating, and that is holding all currency ETFs back compared to their underlying benchmarks. Might be easier to simply hold yuan at this point.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.