Emerging-Market ADRs: Winners and Losers

NEW YORK ( Karvy Global) -- Last week, Brazil's Bovespa gained 1.3%, while India's Nifty and China's Shanghai Composite Index fell 1.8% and 2.6%, respectively. Meanwhile, the Dow Jones and S&P 500 rose 1% and 1.7%, respectively.

China: Winners and Losers

China Shenghuo Pharmaceutical ( KUN) topped the gainers' list last week, rising 62%.

Fuwei Films ( FFHL) and New Dragon Asia ( NWD) followed, adding 34% and 23.5%, respectively.

SINA ( SINA) gained 16.1% on speculation that Baidu ( BIDU) and Alibaba.com may invest $100 million in its microblogging Web site Weibo.

Meanwhile, LDK Solar ( LDK) jumped 16% after the company raised its fourth-quarter guidance, pegging sales between $870 and $910 million, almost 21% higher than the top end of its earlier estimate. In addition, LDK raised its shipments guidance for wafers and modules and its in-house polysilicon and cell production.

eFuture Information Technology ( EFUT) and China GrenTech ( GRRF) notched up gains of 14.6% and 13.3%, respectively. Sinovac Biotech ( SVA) and AgFeed ( FEED) added 11.4% and 11.1%, respectively.

A-Power Energy Generation Systems ( APWR) increased 10.5%, after securing a few construction projects in China. The company recently signed a $43 million engineering, procurement, and construction (EPC) contract with China Resources Land (Shenyang) to develop the Oak Bay real estate project. The company has also signed a $13.6 million construction project with Yingkou Tesco Real Estate for a shopping mall project in North China.

China Architectural Engineering ( CAEID) was the major loser, plunging 75% during the past week. Telestone Technologies ( TSTC) was down 20.2%, weighed down by the legal allegations it has been facing during the past couple of weeks. SORL Auto Parts ( SORL) lost 9.6% after Zacks Investment Research downgraded the stock's rating to neutral from outperform.

China Shen Zhou Mining & Resources ( SHZ) and Home Inns & Hotels Management ( HMIN) plummeted 9.3% and 7.2%, respectively. However, China Shen acquired 55% of Xinyi Fluorite for $9.85 million last week, aiming to expand its fluorite resources for producing value-added fluorite chemicals. Home Inns announced plans to launch 260 to 280 new hotels in 2011 and is seeking to move into China's midscale hotel segment with three to four hotels under the Yitel brand.

India: Winners and Losers

Technology stock Rediff.com ( REDF) topped the advancers' list, gaining 45.8% last week. Sify Technologies ( SIFY) followed, accumulating 24.7%. The company is scheduled to report its third-quarter financial results on Friday before the market opens.

WNS Holdings ( WNS) edged up 5.3%. On Jan. 10, the company announced that it has completed its scheduled term loan repayment of $20 million on its existing $94 million term loan facility, conforming to the payment terms.

Syntel ( SYNT) rose 3.4% past week after analysts at Wells Fargo upgraded the stock's rating to outperform from market perform. Deutsche Bank also upgraded the stock to "buy" from "hold" with a 15% upside potential, based on expected strong fourth-quarter results.

iGATE ( IGTE) emerged a major loser, down 15.2% after Zacks Investment Research downgraded the stock to neutral from outperform. In addition, ratings agency ICRA placed the issuer rating of IrAA on iGATE on rating watch with negative implications. The ratings agency said that besides potential integration challenges with Patni Computers ( PTI), the eventual funding mix of debt and equity is also a critical aspect for the company.

Infosys ( INFY) lost 6.6% after the company's chief financial officer said that although currency fluctuations can be managed up to a certain extent, extreme volatility in world currencies is likely to affect the company adversely. Patni Computers shed 3.8% past week.

Wipro Technologies ( WIT) dipped 2.2% last week. The company is due to publish its results for the quarter ended Dec. 31 on Friday.

Lastly, HDFC Bank ( HDB) declined 2.1%. Last week, reports were rife that India's central bank is likely to raise key interest rates by 25 to 50 basis points, after reviewing the country's monetary policy in January. The chairman of HDFC Bank expressed concern that higher interest rates would affect retail and housing loans.

Brazil: Winners and Losers

Embraer ( ERJ) topped the advancers' list, up 12.4%, after Goldman Sachs added the stock to its conviction buy list and projected a 30% upside potential to the price target of $39. Last week, the company confirmed the sale of 10 Embraer 190 jets to China-based CDB Leasing.

TIM Participacoes ( TSU) followed, gaining 10.3%. During the week, analysts at BTIG Research initiated coverage on TIM with a buy rating and a $45 price target.

Companhia Paranaense de Energia - COPEL ( ELP), a telecom service provider, added 7.3%.

Meanwhile, Companhia Energetica Minas Gerais (CEMIG) ( CIG) and Tele Norte Leets Partricipacoes ( TNE) gained 4.7% and 4.6%, respectively.

Brasil Telecom ( BTM) increased 4.5% last week.

TAM ( TAM) edged up 4.1%. Analysts at Zacks Investment Research upgraded the airline company to outperform from neutral, based on the total synergies of $400 million expected from the Lan Airlines ( LFL)-TAM merger. Of the total amount, $133 million is expected to be realized during the first year of transaction close and the remaining over the next two years. The deal is likely to close in mid-2011.

Among the major losers, Companhia de Bebidas das Americas - AmBev ( ABV) lost the most, 7%, after Goldman Sachs downgraded the stock to neutral from buy. In addition, last week a survey by 100 Brazilian economists raised Brazil's 2011 inflation forecast for the fifth consecutive week to 5.34%, up from the earlier 5.32%.

Braskem ( BAK) followed, declining 4.3%. However, Fitch affirmed Braskem's Issuer Default Ratings at BB+ with a positive outlook. The company is seeking to invest $179 million in a new plant producing butadiene, boosting the company's total production by almost 30% by 2013.

Among others, Net Servicos de Comunicacao (Net Servicos) ( NETC) shed 2.6%.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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