News

AXA S.A.'s (NYSE:AXA) common stock achieved our target price on 29 June 2009, reflecting the impact of general recent improvement in financial markets and renewed optimism that the recent recovery will limit investment losses for AXA. While we believe that the company's well diversified and relatively lowrisk business model, supported by a prudent acquisition policy, will benefit the company in the long term and take a positive view of the company's fundamentals, we believe the recent upside in the AXA common stock has been exhausted and we see limited potential upside from current price levels. Hence, we downgrade the common stock from a BUY to a HOLD. We now anticipate a positive currency impact on the ADR reflecting our revised expectation that the US dollar will depreciate relative to Euro over our investment horizon. Although the target price does not support a BUY rating at current levels, given that our anticipation of a positive currency impact will lead us to significantly increase our target price, we upgrade the ADR from a HOLD to a BUY.

On 29 June 2009, Semiconductor Manufacturing International Corporation (NYSE:SMI) revised upwards its sales guidance for 2Q 09, reflecting strong growth in customer orders due to robust demand from the Chinese market. The company's revised guidance is higher than our previous expectations, and we plan to revise our estimates and target price in line with Management's current guidance. With the increase in revenue guidance for the current quarter and growth in demand from the Chinese market, we upgrade the ADR from a SELL to a HOLD although the stock does not support a HOLD at current price levels. Based on our fundamental outlook we upgrade the Hong Kong stock from a SELL to a HOLD although the stock does not support a HOLD at current price levels. The Hong Kong dollar is pegged to the US dollar; therefore, we assume a neutral currency impact.

The Portugal Telecom, SGPS, S.A. (NYSE:PT) common stock hit our target price on 29 June 2009, reflecting positive investor reaction to healthy fundamentals outlined in our most recent update report. However, we now feel that the stock's medium term upside potential has been exhausted. Therefore, we moderate the common stock from a BUY to a HOLD. We will reassess our 6-12 month fundamental rating in our next update report. We no longer expect to revert to a 6-24 month investment horizon to value the company in our next update report, as we now anticipate a significant positive currency impact on the ADR over the next 6- 12 months. However, as we believe that the company's fundamental upside potential has been exhausted, we moderate the ADR from a BUY to a HOLD.

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