david.fm

In my latest CNBC interview I discussed about the recent second summit of BRIC countries held in Brazil. The meeting was shortened due to the earthquake situation that required Chinese President Hu Jintao to return to China.

In my discussion with Luisa and Chloe I pointed out that while BRIC countries share many traits, are yet very different and have their own agenda. Chinese exports to Latin America increased considerably and exceeded these of Brazil in some leading markets. In Mexico, since 1998, Brasil exports increased three folds while Chinese exports, in the same period, increased twenty times. More notably Russia and Brasil benefit from the raise in commodities prices while China and India have a very different position. India and China have very different agendas and while synergies and cooperations will be part of the political agenda, they remain very distinct and different markets.

For this reason I don't entirely adhere to the characterization to threat BRIC as a single block. To investors these markets should be treated as they are: different economies with substantial differences.

Among the future opportunities I think there are opportunities in the infamously named PIIGS countries especially banks. As I pointed out in my interview several of the smaller banks have no toxic asset to deal with and are still available at good valuations. Also in the Swiss front the surprise earnings of UBS and increase of several other Swiss banks is very promising. The current environment, where banks can borrow at slightly above 0% from their central banks and lend at a good premium, is very favorable for banks.

Many regional banks in Italy, Portugal and even Greece present interesting valuation for these investors with a long term view and a good knowledge of specific banks. As an alternative a broad ETF on European banks is a good way to play this strategy.