New Valuations

Novartis AG (NYSE:NVS) new products are expected to ramp up Pharmaceutical business revenues, going forward. New products such as Lucentis, Exforge and others contributed 16% of revenues in 3Q 09 compared to 9% in 3Q 08. Moreover, positive clinical trial results for Tasigna indicate higher possibility of launching the product to treat patients who have been newly diagnosed with a form of chronic myeloid leukemia in early 2010. We believe the successful launch of Tasigna as a first line treatment early next year will recover some of the expected revenue loss from the launch of Gleevec generics in 2012. Currently, Gleevac, which caters to the oncology market, is expected to continue achieving double digit growth, benefiting from its leadership position in treating chronic myeloid leukemia (CML) and gastrointestinal stromal tumors (GIST), as well as post-surgery therapy for GIST in Europe. We maintain our positive outlook for Novartis’ developmental pipeline and expect the US Food and Drug Administration (FDA) to approve FTY720; a treatment for Multiple Sclerosis in FY 2010 and believe the company's strong product pipeline will benefit revenue growth in the long term. Moreover, recent approval of Onbrez Breezehaler (QAB149); a treatment for Chronic Obstructive Pulmonary Disease (COPD) in Europe will benefit the Pharmaceutical business going forward. We also maintain our positive outlook for the company’s expanding presence in emerging markets and Japan and expect this to be the thrust behind high growth rates over the long term. Moreover, compatible acquisitions such as EBEWE Pharma by Sandoz have strengthened the company's oncology portfolio and enhanced the scope of the generics business in future. We continue to expect expansion in margins due to further cost savings in FY 2009 and FY 2010 as a result of Project Forward, a cost cutting restructuring project by Novartis. However, net margin is expected to be under pressure due to increased interest payment commitments in lieu of debt raised to aid the Alcon acquisition in FY 2009. Considering our favourable top-line and bottom-line expectations over the medium term, we maintain our positive outlook for the ADR.

Ford Motor Company (NYSE:F)We expect Ford to continue to improve its top-line, aided by gradual recovery in industry volumes, attributable to improvement in global economic conditions, improving market share in core markets, North America and Europe, and improved average realizations aided by new products. Solid growth in demand for cars in emerging markets, India and China, also augurs well for Ford's top-line growth. While scrapping incentive schemes boosted industry volumes, particularly in the US and Europe, during 3Q 09, we expect auto industry volumes to taper off at closure of the schemes over the rest of FY 2009. We believe that FY 2010 auto industry volumes will be suppressed by the absence of these incentive schemes. Hence, we expect only a marginal recovery in FY 2010 followed by relatively higher sales in FY 2011. We expect significant improvement in Ford's operating cash flows supported by improved top-line and operating efficiency. We believe that improving cash from operations coupled with Ford's efforts to reduce its high debt levels will lead to significant improvement in its balance sheet going forward. Hence, our outlook for the company remains positive.

In 3Q 09 América Móvil S.A. de C.V. (NYSE:AMX) continued to report robust growth in revenues, driven by higher-than-expected ARPU performance. Although, the subscriber-base growth is expected to decline until the end of FY 2009, we continue to anticipate strong performance in Brazil and TracFone (US) to drive subscriber-base growth, going forward. Moreover, despite lowering our subscriber-base growth estimates, we expect moderate revenue performance from Mexico, going forward, reflecting robust ARPU performance in 3Q 09 due to increased focus of AMX Management on high ARPU postpaid subscribers’ net additions. Furthermore, the focus of Management on 3G data services and its infrastructure continued to pay rich dividends for the company and data revenues achieved growth of approximately 50% y-o-y in 3Q 09. We continue to anticipate robust data growth for the next couple of years amid expanding 3G coverage and lower Internet penetration in the areas of operation. In addition, as we now anticipate a faster than earlier anticipated recovery in Latin and Caribbean economies from 1H 10, we have increased our revenue estimates for FY 2010.

Genpact's (NYSE:G)3Q 09 results were in line with street estimates and the company reiterated its FY 2009 revenue guidance compared to a downward revision in 2Q 09, reflecting a stabilized business environment. Although on the face of it economic conditions are improving, companies across sectors are still adopting a cautious approach in terms of spending until stability sets into operations. We therefore expect customers to continue to rationalize budgets as part of wider cost cutting measures, which will mitigate revenue growth for IT-BPO services over the near term. We see the IT-BPO sector making a definite turnaround towards the latter half of FY 2010, with the full impact to be felt in FY 2011. Specific to Genpact, the FY 2009 guidance of between 6% – 9% y-o-y growth is expected to be led by non-GE client revenues driven by the company's focused efforts to retain client relationships. GE revenues are expected to decline in FY 2009 to low-single digits and remain subdued in the near-term owing to the impact on GE's business from global economic conditions. However, the company expects to expand its relationship with GE and grow revenues from it in the medium-to-long term. In the case of Global clients, Genpact's pipeline and deal conversions have strengthened with YTD client wins totaling 48, including 19 in 3Q 09 and 38% growth in the number of deals in the company's pipeline since 1Q 09, which offers a stable outlook for FY 2010. On the operating performance front, the company expects to effectively manage costs in order to boost margin and earnings expansion and has guided for higher adjusted operating income margin. Overall we expect business conditions for Indian offshore BPO service providers to improve gradually in FY 2010 as companies seek to explore low cost opportunities to reduce operational costs as they move out of the economic downturn. Hence at current levels we view the Genpact NYSE common stock as a decent investment opportunity.

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