Earning Release

América Móvil S.A. de C.V.'s (NYSE:AMX) 3Q 09 results reported strong y-o-y revenue growth, above our estimate, aided by healthy wireless subscriber additions, primarily in Brazil, Chile and the US. Services revenues experienced strong growth, supported by healthy performance from the Data business while Equipment revenues registered flattish growth in 3Q 09. Despite strong top-line performance, margins were in line with our estimates due to higher-than-expected cost of sales. As 3Q 09 results were broadly in line with our estimates we are likely to maintain our estimates and target price. Thus, in light of these factors and considering current price levels we maintain our HOLD rating for the common stock. As we continue to expect a significant positive currency impact on the ADR over the next 6-24 months and given the current target price we maintain our BUY rating on the ADR. We will reassess our target price and rating in coming weeks.

Wipro Ltd.'s (NYSE:WIT) 2Q 10 revenues beat market expectations by a healthy margin, and surpassed the performances of rival companies Infosys Technologies and Tata Consultancy Services. Compared to the decline in revenues witnessed in 1Q 10, the company witnessed a robust uptick in 2Q 10 revenues, a testament to improved fundamentals in the Indian Information Technology (IT) sector. Higher price realizations played a key factor in the quarter's revenue growth. Operating performance and earnings also outperformed estimates by a healthy margin, led by operational efficiencies in the form of improved utilization, favourable revenue mix and cost savings. IT Services revenue guidance in USD terms for 3Q 10 is upbeat and indicates growth in the range of 2.5% to 4.5% q-o-q. We believe the uncertainty and volatility that prevailed in the operating environment over the last year, has past and expect growth in the IT sector to move back firmly on an upward trajectory. While the appreciating Indian rupee poses some concerns, we believe long term prospects for Wipro as an offshore Indian IT services vendor remain strong, with global demand picking up steam. We had reiterated the Wipro common stock a HOLD in our 1Q 10 update report dated 27 July 2009 with a cautiously optimistic outlook for sector performance. Considering Wipro's higher-than-expected results at every level, we expect to revisit our projections for the company and will reassess our rating and target price in our update report in the following weeks. As we continue to anticipate a significant positive currency impact on the ADR in the medium term, we reiterate the Wipro ADR a BUY. We will reassess the target price and rating for the ADR in the following weeks.

News

Aluminum Corporation of China (NYSE:ACH) announced its 3Q 09 results on 27 October 2009. While revenues experienced a moderate decline due to lower realized prices on aluminum sales, falling input costs and company’s cost saving efforts improved earnings during the quarter. As the results are broadly in line with our expectations, our fundamental outlook for the company remains unchanged. However, considering the increase in common stock price since our last update we downgrade the stock from a HOLD to SELL. We will reassess our rating in our next update report. The Hong Kong dollar is currently pegged to the US dollar. Therefore, no currency impact is expected on the ADR over the coming 6-12 months. In line with our fundamental outlook, we downgrade the ADR rating (1 ADR = 25 common share) from a HOLD to a SELL. We will reassess our rating in our next update report.

Yanzhou Coal Mining Company Ltd. (NYSE:YZC) reported a steep decline in its top-line and bottom-line in 3Q 09, given a significant decline in realized coal prices during the quarter. Going forward, we expect revenues to rebound in 2010 due to recovery in coal prices and improvement in the company's production capacity through inorganic growth. Therefore, at current prices, we believe the stock is fairly valued and reiterate our HOLD rating for the common stock. The Hong Kong dollar is pegged to the US dollar. Therefore, we assume no currency impact on the ADR over our investment horizon. We maintain our HOLD rating in line with our fundamental outlook.

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