Jan 082013

Any investor familiar with emerging markets will be aware that often find partly-owned subsidiaries and affiliates of major multinationals with their own listing on the local stock exchanges. For example, Unilever has listed divisions in India, Indonesia and Pakistan, while Wal-Mart owns Wal-Mex (Mexico) and Massmart (South Africa)

The reasons why these subsidiaries are publicly traded varies, although it sometimes reflects local rules that at some point prohibited foreign companies from being the sole owner of a local company. Where these rules have changed, the local listings can often look like an anachronism today, especially given that many of them are lightly traded.

So one might expect the shareholders in the stocks to jump at the parent multinational’s offer to buy them out at a premium. Which makes it interesting to see what’s going on with GlaxoSmithKline’s bid to increase its stake in its Indian affiliate, GlaxoSmithKline Consumer Healthcare. Continue reading »

Aug 122012

Long-term historical data on price/earning ratios, price/book ratios and dividend yields for stockmarket indices is extremely valuable in looking at long-term returns – but it can be very difficult to obtain. While price data is available for many major markets stretching back decades or more, valuation data typically hasn’t been recorded so carefully.

The figures that are available have usually been reconstructed from old earnings reports and are proprietary data sets that are expensive to access. For those who are willing to pay, Global Financial Data is probably the most comprehensive source for very long-term financial data of all kinds.

For those who can’t justify the cost of paid-for data, there are a few freely downloadable data series for some of the major indices around the world, although they are often hard to find and there is no consistency about which markets are available. The following links will take you to the ones I’ve found that are still updated  – if you’re aware of any others, please let me know in the comments below or by email. Continue reading »

Feb 262012

Following India’s decision to open its equity markets a little further to foreigners – and recent proposals to do the same for bonds – Chinese reformers are apparently pushing to loosen the even-tougher controls on foreign investment in their country.

As the FT reports, a new report from the central bank advocates a medium-to-long-term plan for removing restrictions, culminating in a largely convertible renminbi: Continue reading »

Jan 212012

Earlier this month, India announced details of its new system to allow foreign individual investors to invest directly in the local market – somewhat to my surprise, since when this proposal emerged in November, I though there was a big question mark over whether they would ever be implemented.

So what do the details look like? While the investors will be known as qualified foreign investors (QFIs), the restrictions to be qualified look less tough than we light had expected. Essentially it seems that they will need to be residents of a country that comply with standards on money laundering and are members of the Financial Action Task Force.

However, it was always too much to hope that such a bureaucratic government would allow unhindered access for foreigners to its markets. At first glance, the system is rather cumbersome and is unlikely to see a flood of foreigners into Indian shares. Continue reading »

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Nov 192011

Reuters is reporting that the Indian government is considering relaxing restrictions on foreign individuals investing in Indian shares, in an attempt to attract more foreign capital. If this goes ahead – and that’s a big ‘if’ – it could be a very exciting development.

Very few countries actively bar foreign individuals from investing in their stock markets, although some make it difficult. Oddly enough, it’s the BRICs – the four emerging markets that foreign investors talk about the most – that are the hardest. And India is arguably the most frustrating of all. Continue reading »