Earning Release

AngloGold Ashanti Limited (NYSE:AU) reported an increase in revenues y-o-y, driven by higher average gold price realization. Although underlying bottom-line benefited from a decline in the cost of sales as a percentage of revenues, the company reported a significant net loss, largely reflecting its hedging activities. We maintain the ADR rating a SELL at current levels. We will reassess our ADR rating in our next update report. We continue to anticipate a negative currency impact on the South African stock (1 ADR = 1 South African share) over the coming 6-12 months. Therefore, we maintain our SELL rating. We will reassess our South African stock rating in our next update report.

Patni Computer Systems Limited (NYSE:PTI) reported its second consecutive sequential revenue growth performance in 3Q 09, pointing towards a stabilized demand environment, much like its peers in the Indian IT services industry. Although y-o-y revenues continue to be lower, the rate of decline is slowing, as can be seen from the company's 4Q 09 top-line guidance. Whilst higher utilization and cost reduction measures resulted in improved y-o-y adjusted operating profitability, sequential performance disappointed. New client additions remained mute and witnessed a reduction on both a sequential as well as y-o-y basis, as did employee additions. 4Q 09 guidance suggests flattish to marginal q-o-q revenue growth. Although we believe the worst is over for the Indian IT services sector, particularly on the demand front, we are moderating our rating for the Patni ADR given the significant run-up in the stock price since our previous update report as we believe the market has already factored in expectations of a rebound in the sector. We will reassess our estimates and target price for Patni's ADR in the following weeks. We had rated the Patni Indian stock a SELL on anticipation of a negative currency impact over the next 6-12 months. However, given the significant run-up in stock price since our previous rating and considering our fundamental rating, we rate the Indian stock a HOLD until we reassess our rating and target price in the coming weeks.

News

Coca-Cola FEMSA, S.A.B. de C.V.'s (NYSE:KOF) common stock has appreciated significantly since our previous update, closing at MXN71.26. The increase primarily reflected positive investor sentiment relating to the possible synergistic benefits arising from the merger with Fomento Económico Mexicano, S.A.B. de C.V.'s (FEMSA) underperforming beer business. In light of proposed synergy benefits and as KOF's results were broadly above our estimates, we expect to revise our estimates and target price upwards. As a result, although the target price does not support a HOLD rating we reiterate the common stock a HOLD and will reassess our target price and rating in our 3Q 09 update report. As we expect significant positive currency impact on the ADR over our 6-24 month investment horizon and since the target price supports a BUY we maintain our BUY rating for the ADR (1 ADR = 10 common shares). We will reassess our target price and rating in our 3Q 09 update report.

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