Archive for the ‘adr’ Category

Wind of change comes to Chile

president bacheletLatin American nations are leading their Western counterparts with respect to diversity in renewable energy. Now GDF Suez has opened its 38 MW wind farm facility at Monte Redondo in Chile.

Work on the wind farm began at the start of this year, with more than $100 million being invested, as GDF Suez commits to it’s green credentials in it’s South American operations. According to estimates, Monte Redondo will prevent the emission of 54,000 tones of CO2 per year, whilst providing energy for up to 60,000 homes.

“GDF SUEZ strongly believes in Chile and in the development opportunities it offers. The Group holds broad and multiple areas of expertise in this country and intends to further reinforce them.” said Gerard Mestrallet at the inauguration

Monte Redondo will also assist in providing long term stability in energy prices, as GDF Suez has already entered into a 14 year supply contract for 100 GWh/year, beginning in January 2010. Chile has historically been dependant upon gas imports from Argentina, which have been the subject of much contention, as Argentina seeks to secure it’s own domestic energy requirements & supply has fluctuated from agreed measures.

Chilean President Bachelet said that clean energy investments have grown sharply from a mere 2 MW in 2006 to 250 MW in 2010 & it would seem that this may be only the beginning of a love affair with wind power. By the end of the 2009, a further five new wind parks will begin operating in Chile, increasing the country’s wind energy production by a factor of 10.

These new projects are slated to produce 180 MW of wind energy, dwarfing the existing 20 MW currently produced by Chile’s two existing projects. According to the National Energy Commission, other new wind turbine projects which are currently under review or in planning will soon generate 1,500 MW for the country’s Central Power Grid. To put this into perspective, the country’s largest proposed hydro-electric project, Ralco, will provide 690 MW at full capacity.

It is encouraging to see real commitment from what people in the West term “developing” markets, Chile & Brazil are world leaders in the advancement of renewable energy & also in implementation of green policies down to grass roots level. Perhaps those of us in our ivory towers in Europe & the Us should pay a little more attention to what is being implemented in the southern hemisphere.

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Brazil confirms hydrocarbon strategy

Santos basinMuch has been made of Brazil’s offshore hydrocarbon deposits particularly in the Tupi oil & gas reserves which have been touted by state owned energy firm Petrobras as containing up to 5-8 billion barrels of recoverable oil.

Tupi,which is located in the pre-salt region, is estimated to contain between 5 billion & 8 billion barrels of light crude, & is the world’s biggest new field since a 12-billion-barrel find in Kazakhstan in 2000. The pre-salt region covers an offshore area 800 kilometers long and 200 kilometers wide between the states of Espirito Santo and Santa Catarina, is estimated to contain up to 80 billion barrels of light crude under a thick layer of salt far beneath the ocean floor.

As discussed in a previous article, Petrobras (NYSE: PBR)  & partners including Repsol and BG Group discovered vast deposits of oil under more than 4,000 meters of water, rock and salt in 2006. These deposits are at previously untapped depths and will be costly to extract. It is thought that other reserves may be nearby in other as yet unexplored blocks.

To capitalise, Brazil’s regulatory agency the ANP has announced that it will be excluding Tupi from a new round of block concessions scheduled for spring 2010, as Brazil looks to protect it’s strategic reserves & is currently changing the concession framework for blocks in the area. According to proposed legislation, which is being heavily pushed by President Lula, Petrobras will operate all blocks in pre-salt areas with a minimum 30% stake. Output would belong to the federal government under a production sharing model & participating IOCs will receive a fixed share of the revenues.

This is a canny move & possibly a very good gambit to make, as IOCs are now on the backfoot with new capacity for exploitation becoming scarce. More tellingly, companies such as Royal Dutch Shell, Total, Chevron & Exxon Mobile have come under increasing pressure in countries such as Nigeria & Angola in recent months, especially from Chinese state firms.

Last month, CNOOC, made a bid to acquire concessions in 23 prime blocks in Nigeria, which could see the Chinese state-controlled oil giant securing more than 20% of Nigerian hydrocarbon assets. There has been some speculation that Nigeria may be using the Chinese approach as a heavy hammer to extract more favorable terms on concessions that are due for re-newal, however, it underlines the fact that oil majors must look for more stable environments in which to do business.

ANP Director Nelson Narciso has expressed confidence that oil majors will still be interested in new pre-salt areas despite market uncertainty over the new terms because of both economic & political stability.

“As long as the production sharing agreements are preceded by a fair competition, there is no reason for not being happy with Brazil,” he said. “I expect that if everything goes well, by the end of next year we’ll be in a position to start the bidding for the new pre-salt round”

Lula has a knack of getting his way, as he is seen as being instrumental in pulling Brazil out of the global recession via his socialist policies, which have been very popular with Brazil’s citizens. Our view is that the IOCs will be forced to accept these terms on the pre-salt fields, whilst picking up other concessions in more mature blocks as a sap. We have been bullish on Petrobras for a good while & we see no rason to change that view on the basis of this news.

 

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Nokia launches first handset on China Mobile 3G standard

nokia logoHere at Emerging Voice, we have been following the the whole Nokia / China Mobile / 3G story for a good while, you can pick up on some of those previous posts here : Nokia in China

Today, Nokia has finally launched it’s first TD-SCDMA compliant handsets the Nokia 6788, which was built from the ground up for China Mobile.


Nokia (NYSE: NOK) today announced the Nokia 6788, its first device for TD-SCDMA – China’s domestic 3G standard, at an event in Beijing. The Nokia 6788 is the result of close collaboration between Nokia and the world’s largest mobile phone operator, China Mobile.

Speaking at the event, said Olli-Pekka Kallasvuo, CEO of Nokia: “Nokia sees TD-SCDMA as being central to the successful evolution of 3G in China, and so is fully committed to this 3G standard. With a wide range of integrated China Mobile applications, the Nokia 6788 marks a new level of collaboration with China Mobile and offers enriched experiences to China’s 3G users. Nokia plans to introduce more TD-SCDMA phones in the near future, further boosting the development of this 3G standard in China.”

“We are excited to see the launch of Nokia 6788,” said Mr. Lu Xiangdong, Vice President of China Mobile Communications Corporation. “With extensive experience in the China market, Nokia will provide Chinese consumers with TD-SCDMA solutions that are perfectly catered to their needs. Such cooperation between the world’s largest operator and the world’s leading mobile phone manufacturer will provide an important boost to the development of TD-SCDMA in China.”

The Nokia 6788 is specifically designed for China Mobile’s (NYSE: CHL) network and offers rich data services. It is an all-in-one device that provides its users with faster Internet speeds and download times. Featuring a 5-megapixel (2592 x1944) camera with a dual-LED flash, a 2.8″ QVGA display, and the hugely-successful Symbian S60 platform, the Nokia 6788 allows people to instantly share the things that matter to them most.

& here’s some pics

Nokia 6788

we apologise for the Engadget style of this post, but it’s been a long time coming !!

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Positive figures from Redecard will push Brazilian retail bank shares

redecardAs we have discussed in previous articles, Brazil’s retail banking sector has been enjoying a buoyant 2009 so far. This would seem set to continue as payment card processor Redecard posts an 18% jump in financial volumes.

This should be seen as a positive for Itaú Unibanco (NYSE: ITUB), which controls Redecard, as net income for the third quarter rose to BR$333M ($195M), with financial transactions across the payment platform registering BR$ 24.7Bn ($14.52Bn) & more interestingly, the debit card side rising in step by 17% to BR$12.2Bn ($7.13Bn).

Although there is general negativity on global credit card companies, particularly in Western economies, Brazil’s nascent credit sector has benefitted from a wave of bank consolidation over the last 18 months, the strength of the real versus the US dollar & one of the strongest economies to exit the finiancial crisis. Earlier this year, Visa affiliate VisaNet was the star IPO on the BOVESPA, with the launch being hugely oversubscribed by both retail & institutional investors, raising a record of $4.5Bn.

“We think the results were solid and highlight the strength of the credit and debit card markets,” reported Deutsche Bank which keeps a buy rating on Redecard. “While regulation remains a key risk, we think that it is already priced in.”

For Redecard, it is also very much a case of being seen as a Brazilian brand, which seems to be helping it’s positioning against VisaNet, which although no longer owned by Visa, retains the association. Redecard has the benefit of being able to position itself as a multi-brand entity & is more popular with Brazilian retail customers, especially in the growing debit card sector, whilst VisaNet is to some extent still regarded as a premium brand.

So, short term one-up for ITUB & we expect to see shares taking a ride higher over the next few days. VisaNet reports later this week (October 28th), so it will be interesting to see if Bradesco will be able to catch the same sentiment wave.

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Strong VAS revenues offset by weak dollar for Millicom

millicomEmerging Markets focussed telecom operator Millicom International (Nasdaq:MICC) has  posted a 12% decrease in net profits of US$143mn in the third quarter of 2009 compared to US$161mn in the same quarter a year ago, the company said in a statement.

Overall revenues were up 7% to US$856mn compared to US$800mn a year ago. However, top line figures have been heavilyimpacted by the dollar exchange rate across all of it’s markets, resulting in a 9% negative translation impact, the company said.

EBITDA has  increased 13% to US$392mn year-on-year, while  margin was 45.8%, up 2.6% compared to Q3 as a result of cost control initiatives and strong growth in higher margin Value Added Services (VAS) revenues. In Central America, Millicom’s Tigo brand returned a margin of 55.2% and in South America the margin increased to 40.7%.

Speaking during a conference call with investors, Millicom‘s CEO Mikael Grahne said the company had seen a lower level of customer intake in Central America, reflecting high voice penetration and an increasing focus on higher value customers and Value Added Services.

For the group, VAS revenue was up an encouraging 46% in the quarter in local currency terms and represented 19% of recurring mobile revenues. Demand for 3G services remains high in Latin America, especially for datacard customers. Paraguay represented the best market overall for VAS, where it brought in 30% of mobile revenues. Grahne said that in the long term, the company is aiming to have VAS represent an average of 25% of revenues across all markets.

In Central America, Honduras grew its customer base 11% year-on-year despite the entry of a third operator Digicel in late 2008. Guatemala grew its customer base by 19% and El Salvador 10%. Net additions were lower in Central America resulting from a combination of high penetration, weaker economic conditions and an increased focus on high quality customers, the company said.

In South America, total customers increased by 17% year on year, with Bolivia surging 47%. In Colombia, the increase was 9% and in Paraguay 12%. Constant currency ARPU in South America was up 2%, while in Central America it fell 5%. This was mainly a result of lower ARPU in Honduras, which was negatively affected by a new regulatory tax on international inbound traffic and continued promotional activity by competitors.

Grahne said that capex for 2010 would be US$700mn, US$50mn of which is held over from 2009. Though not giving a break down, Grahne said that capex in Central and South America would increase in 2010 as the company steps up investment in 3G capacity and coverage.

Millicom’s internet and TV assets that it purchased last year, Amnet and Navega, saw a sequential decline in EBITDA margins to 43% from 45% of revenues in Q2, which Grahne attributed to restructuring changes since the acquisition, but forecast that the margin would rise over time. Millicom also expects capex for Amnet to be lower in the medium term as the company focuses on increasing customer penetration with its existing footprint, rather than extending coverage.

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Baidu clinches mobile search for China Unicom

baidu9Baidu, Inc., the leading Chinese language Internet search provider, today announced it has entered into a strategic partnership with China Unicom (Hong Kong) Limited to provide wireless search for China Unicom’s 3G mobile subscribers.

Under the agreement, Baidu’s wireless search service will be embedded in China Unicom’s 3G mobile phone modules. China Unicom’s mobile subscribers will be able to use preinstalled applications to access Baidu products including web search, Baidu Knows, Baidu Post Bar, image search, news search, MP3 search and other useful services. Baidu (Nasdaq:BIDU)will also provide search functions within China Unicom’s wireless Internet sites to service the carrier’s users.

”We are very excited to join hands with China Unicom (NYSE:CHU) today following our partnership agreement with China Telecom (NYSE:CHA) in May,” said Xuyang Ren, Baidu’s Vice President of Marketing and Business Development. ”As the leader in Chinese language search, we hope that Baidu’s cooperation with major telecom providers in China will accelerate the development of 3G services and allow us to provide the rapidly growing population of mobile search users better access to information.”

This can be seen as a major coup for Baidu, as it has once again managed to pip it’s major competitor Google at the post. For China Unicom this is also a boon, with the upcoming launch of Apple‘s iPhone on their 3G network.

Original editorial : MyStockVoice.com

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Bullish future for Chalco

chalcoA number of new reports coming out of China & other industry & economic factors point to the Aluminum Corporation of China Limited (CHALCO) entering into a new growth phase, which has me looking at the ADR from a fairly bullish stance.

Chalco (NYSE:ACH), which is by far the largest domestic producer of finished aluminium & holds a national monopoly on alumina. It runs a national network of 34 subsidiary operations & has a 26.6% stake in Yunnan Copper, the second largest copper producer in China.

Abroad, Chalco has been very active on the acquisition front, in 2007, it acquired development rights in the Aurukun project in Australia, which will be coming online in 2011, which is slated to provide 6.4 mtpa of bauxite & 2.1 mtpa of refined alumina. 2008 saw it acquiring the Peru Copper Company for a snip at $860 million & along with it the development rights for Toromocho which is estimated to hold more than 15 billion tonnes of high grade ore.

Not all has been complete plain sailing, however,  as the company bought into 12% of Australia’s Rio Tinto last year in partnership with Alcoa. But failed this year to acquire a further 18% for a chunky $20Bn after a shareholder revolt & Australian fears that Chinese companies were getting their hands on mineral assets at knock down prices.

To cap off the supply side, as we reported yesterday, it looks as though China has managed to secure access to vast bauxite resources in Guinea, the majority of which will go to supply Chalco refining & smelting operations.

Looking at the Chinese economy as a whole & at one or two of the sectors in more detail, I can see a building demand for aluminium starting in the short term.

China National News has reported trade figures for September that show a marked slowdown in exports, down only by 15.2% from September 2008. Considering that overall, Chinese exports have been on a decrease of around 31% for the year, this is a strong signal that Chinese manufacturing is back on the rise.

Figures released by the China Association of Automobile Manufacturers today, show that the auto sector is still enjoying sustained growth, with more than 1.3 million units being sold in February, as 78% increase on a year ago. So far 9.66 million units have been sold in China in 2009, a jump of 34% on the same period in 2008. With this continued growth in the sector, aluminium demand will also continue to grow in line.

In aviation, China has made some great advances in the last 10 years, moving from maintenance & repair, to engine manufacture & now construction of airliners. We have seen Airbus centre it’s Asian operations for A320 assembly in Tianjin, alongside Eurocopter, whilst Beijing is investing over 10 billion yuan in an “aviation city” that will support aircraft manufacturers. Domestic useage of commercial aircraft has seen astonishing growth this  year, with a 43% rise in passenger air traffic being registered. Now China is looking to build it’s own flagship airline brand to take on incumbents Boeing & Airbus. State-owned Aviation Industry Corp. of China, (Avic) which is producing the ARJ21, recently predicted the country will need 3,796 new passenger planes by 2028 to keep up with domestic demand for air travel, adding to its present fleet of 1,191.

Need I say more ?

Courtesy of Peter Medved at MyStockVoice

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