Earning Release

Acergy S.A. (NASDAQ:ACGY) reported a 6% y-o-y rise in revenues for 3Q 08, while margins exceeded our expectations due to a fall in costs. In spite of the financial crisis currently afflicting equity markets, we do not anticipate any significant decline in global exploration and production activity. Management also remains optimistic about achieving its revenue guidance, based on its strong order backlog, Therefore, given the sharp decline in the ADR price since our previous update report, we continue to see upside potential and maintain our BUY rating for the ADR. We now anticipate a significant positive currency impact on the Norwegian stock over our investment horizon. Therefore, we maintain our BUY rating.

News

ASM International N.V.’s (NASDAQ:ASMI) common stock price has declined significantly since our 2Q 08 update report, reflecting overall weakness in global stock markets. Although economic prospects are weak, which is expected to have a negative impact on the semiconductor industry, we believe that the common stock offers upside potential from the current level in anticipation of expected margin improvement in FY 2009 and a degree of stabilization in stock markets from the current level. As we do not expect a significant currency impact over the medium term, we maintain our current BUY rating for the NASDAQ stock based on our fundamental outlook.

Brasil Telecom S.A.’s (NYSE:BTM) preferred stock was rated a BUY in our update report dated 05 August 2008. Since then the stock has declined 23.3%, compounded by a significant single day decline of 8.1% yesterday. Although the global financial crisis will have a negative impact on the company, we believe that the recent decline in the preferred stock price significantly undervalues the company and therefore maintain our current rating for the stock. We do not expect a change in our current ADR rating as we expect a significant positive currency impact on the ADR over the medium term.

Brasil Telecom Participações S.A.’s (NYSE:BRP) preferred stock was rated a BUY in our update report dated 05 August 2008. Since then the stock has declined 24.4%, compounded by a significant single day decline of 6.8% yesterday. Although the global financial crisis will negatively impact the company, we believe that the recent decline in the preferred stock price significantly undervalues the company and therefore maintain our current BUY rating for the stock. We do not expect a change in our current ADR rating as we expect a significant positive currency impact on the ADR over the medium term.

Check Point Software Technologies Ltd.’s (NASDAQ:CHKP) common stock price has witnessed a significant decline since our 2Q 08 update report, dated 08 September 2008, led by the worsening state of equity markets worldwide on account of a challenging global economic environment and the US financial markets crisis. However, we believe that the recent decline in the current stock price provides an investment opportunity at current levels as the company’s fundamentals remain strong. We therefore maintain our current BUY rating for the Check Point NASDAQ common stock. As we continue to anticipate a positive currency impact on the European stock over the next 6-24 months, we do not anticipate any change in our current rating on the European stock.

Focus Media Holding Limited (NASDAQ:FMCN) ADR has experienced a significant decline since our last update report, reflecting weakness in the broader indices and prevailing economic uncertainty in the US. However, given the company’s strong presence in the Chinese out-of-home advertising industry and its leading multi-platform digital media network in China, we remain optimistic regarding the company’s growth prospects. In view of this we believe that the recent decline in the ADR price provides an attractive investment opportunity at current levels and therefore maintain our BUY rating on the FMCN ADR. As we continue to anticipate a significant positive currency impact on the European ADR over the long term, we maintain our BUY rating on the European ADR.

Kongzhong Corporation’s (NASDAQ:KONG) ADR price plummeted 14.17% in a single day to close at US$2.75, led by weakness in global bourses amidst investor concerns of a recession in the US economy and the ongoing financial markets crisis. Although at current levels, our target price does not support a HOLD rating, in light of the lack of visibility in the Chinese WVAS sector in the present difficult operating environment coupled with uncertainty in global markets, we retain our cautious outlook for the Kongzhong ADR. Therefore, we do not anticipate a change in our rating for the ADR. We reiterate our BUY rating for the ADR as we continue to anticipate a positive currency impact on the ADR in the medium to long-term

Lan Airlines S.A. (NYSE:LFL) ADR price has declined significantly since our previous update report, reflecting the ongoing global financial markets crisis, particularly in the US. However, given that the target price now supports a BUY rating and that our fundamental expectations remain broadly intact, we are upgrading the Lan ADR from a HOLD to a BUY. We expect a significant positive currency impact over the long term and based on our fundamental outlook, we do not anticipate a change in our current Chilean Stock rating.

The NDS Group Plc’s (NASDAQ:NNDS) common stock has experienced a significant decline in price since our last update report, reflecting weak market sentiments and prevailing economic uncertainty. However, we believe that the recent decline in the common stock price is temporary and thus provides an attractive investment opportunity at current levels. Therefore, we upgrade our rating for the common stock from a HOLD to a BUY. As we anticipate a significant positive currency impact on the European stock in the long term we maintain our current BUY rating for the stock.

New Oriental Education and Technology Group’s (NYSE:EDU) ADR has declined significantly since our previous update report on account of a potential slowdown in the Chinese economy led by the challenging global economic environment. However, we are optimistic regarding the long term growth prospects of the Education market in China. In addition, taking into account the company’s leading position in the online education market and long term growth prospects, we do not anticipate a change in our BUY rating for the ADR. As we continue to anticipate a positive currency impact over the next 6-24 months, we do not anticipate a change in our BUY rating for the European ADR.

Ultrapar Participacoes S.A.’s (NYSE:UGP) common stock price has declined significantly since our last update report, reflecting a widespread sell-off in equity markets and investor concerns regarding a possible slowdown in demand for hydrocarbons. However, we do not expect an extensive decline in global hydrocarbon consumption, and our fundamental outlook for the company has not significantly changed. Hence, we upgrade the common stock rating from a HOLD to a BUY given the current price level. Although we now anticipate a negative currency impact on the ADR over the medium term, given our fundamental outlook and the current price level, we maintain our BUY rating for the ADR.

Veolia Environnement S.A.’s (NYSE:VE) common stock price has declined significantly since our last update report, reflecting weakness in equity markets worldwide. However, we believe that Veolia is fundamentally strong and will benefit from increasing demand for environmental services and its increasing exposure to high growth markets in all of its segments. In view of this, we maintain our positive outlook for the common stock and believe that the current price levels provide an attractive investment opportunity. Although we continue to anticipate a negative currency impact on the ADR over the long term, we do not anticipate a change in our current ADR rating given current price levels and our positive fundamental outlook.

The Accenture Ltd. (NYSE:ACN) common stock has depreciated significantly since our 3Q 08 update report, including a sharp fall on 07 October 2008, reflecting weakness in equity indices and economic uncertainty. However, we believe that this decline has left the company significantly undervalued. We therefore upgrade the NYSE common stock from a HOLD to a BUY on fundamental grounds. We continue to anticipate a positive currency impact on the NYSE common stock over our investment horizon. Therefore, we maintain our BUY rating.

The Brookfield Properties Corporation (NYSE:BPO) common stock price has fallen significantly since our previous update report, reflecting investor concerns over weak US economic indicators and the state of financial markets. However, our long term outlook remains positive and we believe the company is now fundamentally undervalued. Therefore, we maintain our BUY rating. We continue to anticipate a positive currency impact on the Canadian stock over our investment horizon. Therefore, we maintain our BUY rating.

China Medical Technologies Inc. (NASDAQ:CMED) announced the acquisition of Molecular Diagnostic Technologies Ltd’s (MDT) HPV-DNA Biosensor Chip and SPR-based Analysis system on 07 October 2008. We expect this acquisition to further strengthen China Medical’s leading position in the high end Chinese In-Vitro Diagnostics (IVD) market and support its existing product pipeline, going forward. Consequently, our fundamental outlook for the company remains positive. Therefore, we reiterate China Medical’s ADR a BUY. Based on our fundamental outlook and anticipated positive currency impact on the European stock over our investment horizon, we reiterate the European stock a BUY.

The Deutsche Bank AG (NYSE:DB) common stock price has declined significantly since our previous update report, reflecting investor concerns that the bank may be forced to raise capital, compounding negative sentiments towards the financial sector. Considering DB’s exposure to the US mortgage market, we remain concerned about its near term prospects. We therefore expect to lower our estimates and target price when we next revalue the bank. Furthermore, although our long term outlook remains positive, in view of recent inorganic growth initiatives, the financial sector is particularly sensitive to the current wave of negative sentiment afflicting equity markets. Therefore, although our target price implies a BUY, we maintain our HOLD rating for the common stock. We continue to anticipate a significant negative currency impact on the NYSE stock. Therefore, we maintain our SELL rating.

The Domtar Corporation (NYSE:UFS) NYSE common stock price has declined significantly since our last update report, including a single-day fall of 10.5% on 07 October 2008. This fall reflects turbulence in financial markets, which is weakening investor sentiment. The stock has also come under downward pressure more broadly as a result of concerns over demand for newsprint and other paper grades, reflecting the slowdown in the US economy, as well as rising raw material costs. Considering these factors, we expect to lower our estimates and target price. Furthermore, we are concerned about the impact of current market sentiments on the stock price over the near term. Therefore, although our target price implies a BUY, we downgrade the NYSE common stock to a HOLD. We continue to anticipate a significant positive currency impact on the Canadian stock over our investment horizon. Therefore, we maintain our BUY rating for the Canadian stock.

Himax Technologies Inc.’s (NASDAQ:HIMX) ADR price has declined significantly since our supplement to the 2Q 08 update report, reflecting overall weakness in global stock markets. Although economic prospects are weak, we maintain a relatively positive outlook for the company based on its competitive position and anticipated margin improvement going forward. Subsequently, we maintain our current BUY rating for the Himax ADR. As we do not expect a significant currency impact over the medium term, we maintain our current BUY rating for the European stock based on our fundamental outlook.

The Invesco Ltd. (NYSE:IVZ) common stock price has declined significantly since our previous update report, reflecting the impact of economic conditions in the US and the global credit crunch. As we expect the company’s performance to be significantly adversely impacted by conditions in the near term, we maintain our HOLD rating, even though the target price supports a BUY rating at current levels. Although we continue to anticipate a positive currency impact in the medium term, as a result of current conditions we downgrade the European stock rating from a BUY to a HOLD.

Tata Motors Ltd. (NYSE:TTM) announced its plan to relocate its Nano manufacturing plant to Gujarat, India. We remain apprehensive in the short term due to the additional capex burden, delay in Nano launch and full production capabilities and loss due to relocation. Consequently, although the current common stock price no longer supports our HOLD rating, we reiterate the common stock a HOLD. Based on our fundamental outlook and our anticipation of a negative currency impact on the ADR, we reiterate the ADR a HOLD. We are likely to revert back to a 6-24 months horizon as we no longer anticipate a significant currency impact in the medium term.

New Valuations

Canadian Pacific Railway Ltd.’s (NYSE:CP) 3Q 08 carload volumes were below our estimate, due to a weakening North American economic environment and the impact of unforeseen problems in specific segments. We are lowering our estimates as a result of decreased carload volumes and an expectation that the current economic climate in North America is likely to deteriorate to a greater extent than previously forecast in light of the ongoing financial crisis. CPR’s common stock price has declined significantly, in line with general market conditions, and at current price levels we believe the stock continues to offer an attractive investment opportunity.

Allied Irish Banks PLC (NYSE:AIB) reported flat y-o-y growth in net profit for 1H 08. However, Net Interest Income (NII) increased strongly, driven primarily by growth in loans to customers. However, this was offset by lower other income, which declined as a result of trading losses in 1H 08. The bank’s operating expenses declined in 1H 08, signaling enhanced operating efficiency. However, provisions for impairment of loans and receivables increased during the period, reflecting slowing economic growth in Ireland, together with softening in the property sector and high interest rates. Looking forward, we expect credit off-take to slow down now that the Irish economy has moved into recession. Moreover, deteriorating economic conditions could lead to growth in Non-performing Loans (NPL). Overall, therefore, our fundamental outlook remains cautious.

Carnival corporation’s (NYSE:CCL) revenue increased 11.4% y-o-y in 3Q 08, primarily driven by higher passenger ticket prices, as a result of fuel supplement charges, and an increase in Average Lower Berth day (ALBD) However, Onboard and Other revenue per ALBD declined, primarily due to the weak economic environment.. Adjusted operating income3 declined 459 bps y-o-y to 30.3% reflecting the y- o- y increase in fuel prices. Going forward, we are confident of sustained revenue growth given the company’s aggressive expansion plans increasing its passenger capacity. However, we believe an expected slowdown in demand for cruise line travel during FY 2009, due to the ongoing global financial crisis, will limit revenue growth potential. Furthermore, we expect FY 2008 margins to decline y-o-y as a result of high fuel prices during the 9M 08 compared to FY 2007. However, an anticipated reduction in fuel prices in FY 2009 and FY 2010 is expected to improve margins.

An increase in Carnival Corporation’s (NYSE:CUK) revenue in 3Q 08 was driven by higher passenger ticket prices, as a result of fuel supplement charges, and an increase in Average Lower Berth day (ALBD), although Onboard and Other revenue per ALBD declined, primarily due to the weak economic environment. Adjusted operating margin1 declined 459 bps y-o-y to 30.3%, reflecting the y-o-y increase in fuel prices. Going forward, although we expect aggressive expansion plans to sustain revenues, we believe a slowdown in demand for cruise travel during 2009, due to weak global economic conditions, will limit revenue growth potential. While we expect FY 2008 margins to decline y-o-y as a result of fuel prices, an anticipated reduction in prices in FY 2009 and FY 2010 is expected to improve margins.

RenaissanceRe Holdings Ltd. (NYSE:RNR) has announced a preliminary loss estimate of US$275 mn from hurricanes Gustav and Ike. Estimated losses are significantly higher than our previous expectations. Consequently, we have increased our combined ratio estimate for 3Q 08. The company has also reported fixed income portfolio exposure to Lehman Brothers, as a result of which we have lowered our net investment income estimate for 3Q 08. Considering current weakness in financial markets we have also revised estimates downwards for FY 2009. However, we believe that, at current levels, the stock offers an attractive investment opportunity.

Research in Motion Ltd. (NASDAQ:RIMM) reported strong 2Q 09 results, broadly in line with our and market expectations as the company continued to register strong shipment growth of its handheld devices. Although the company delayed the launch of its much awaited BlackBerry Bold in the US during the quarter, the company is now well placed to launch several new product range along with BlackBerry Bold in 3Q 09 in the US, which will strengthen its leadership position in the smartphone industry assisting revenue growth, going forward. However, the company expects to incur high costs associated with its new products, which will severely impact earnings growth. In light of the company’s revised margin outlook, we have revised our margin estimates and thereby our target price downwards. However, the recent decline in the RIM NASDAQ common stock suggests an attractive investment opportunity at current price levels.

Our revenue estimates remain broadly unchanged for Sadia S.A.(NYSE:SDA) as we continue to expect strong revenue growth, primarily due to the company’s expansion plans, acquisitions and its continuous effort to strengthen its brand name in both the domestic and export markets. We have revised our margin estimates downwards based on our expectation of higher commodity costs, General & Administration expenses and interest expenses for the next coming years.

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