Dr. Hema Divakar conversation with NRInews24x7
So far in 2010, most European stock markets fell as traders grew increasingly wary about the health of the euro area and the future of the common currency Besides lower stock market outlook some countries like Spain and Portugal have been hurt by the decline of the euro; because these countries are among the largest importers in the world, the euro drop makes goods more expensive to buy While the crisis has tempered most investors growth forecasts of European GDP, the euro decline could be good news for them to export intensive economies like Germany and could help many European companies to quickly develop overseas operations, despite the weakness of the domestic market which is exactly the scenario that played around iconic German automaker BMW, one of the 15 largest automotive manufacturers in the world and third in Germany the company a boost to its strong 2010 guidance Tuesday, a move that sent shares in the about 8 end trade in Frankfurt.
The company currently expects that sales will increase about 10 on the year while the operating margin increased by more than 5 This is largely due to the weakness of the euro; the decline in value was cited by Barclays as the main reason to triple profit estimate for BMW; Analysts estimate that every 1 percent of the value of the euro would increase earnings per 0 02 cents.
The company also cited a rebound in sales in the US and Europe, as well as robust sales of BMW China recently announced that it plans to export an additional 10,000 vehicles 3 Series at its plant in Munich China, even though the cars will be subject to 25 taxes on imports of Chinese demand for luxury cars is so high that BMW cars of domestic production can not keep up, forcing the company to send more cars in the emerging market growing rapidly, despite the steep fee However, some analysts see more sales in China as a catalyst for the continued appreciation of stock prices BMW there are not that strong sales in China, it is also delivering new models and the impact of cost reduction measures, said John Buckland analyst at MF global UK Ltd also see five ETFs for Euro tumbling.
What remains to be seen is whether these trends can be easily replicated by other large industrial exporters in Germany, a development that could give the German stock market a shot in the arm of BMW bright outlook helped propel the ETF main followed the country, iShares MSCI Germany Index EWG, by more than 2 7 into trading by midday in New York, although BMW is less than 3 in total assets EWG the holdings of the fund include industrial giant Siemens July 10 8 3 and 7 as BASF in terms of sectors, the fund is weighted more heavily towards industrial materials, which represents almost a quarter of total assets, and financial services 18 February and consumer goods companies fund 17 January like most tracking funds economies of Europe, EWG posted a loss so far in 2010, sinking nearly 10 also ensure the ire ETF plays to the end of the recession in Europe.
While BMW is a relatively small car company, it is the largest luxury car maker in the world, and as such, it helps to define the trend of luxury good producers for investors who seek a way to focus on the luxury segment of the market, as opposed to a particular country, the luxury World index ETF ROB Claymore Robb Report presents a compelling choice in terms of individual stocks, BMW receives the higher allocation to 4 9 with second place going to fellow German automaker Daimler August 4 the fund holds 32 companies in total and is strongly focused on consumer goods 45 and services to consumers 36 companies in Germany is the third largest country allocation, with France and the United States took the first two places ROB was up over 2 June today and produced a gain of almost 50 over the last 52 weeks groins read also beyond XLY Three Pure Play Consumer Discretionary ETF.
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BMW Drives Germany ETF (EWG) database soaring ETF, Germany database.