Company Description

Costco Wholesale Corporation operates an international chain of membership warehouses, mainly under the "Costco Wholesale" name. The company currently operates 562 warehouses, including 409 in the United States and Puerto Rico, 77 in Canada, 21 in the United Kingdom, 7 in Korea, 6 in Taiwan, 9 in Japan, 32 in Mexico and 1 in Australia. Costco also operates Costco Online at www.costco.com and at www.costco.ca in Canada. The company plans to open an additional five new warehouses (including the relocation of one warehouse to a larger and better-located facility), prior to the end of calendar 2009.

Recent Events

In recent news, it was reported that Costco will stop carrying Coke products due to a dispute over prices as the retail giant is trying to win over customers with low prices, while Coca-Cola Co. (KO) is working hard to maintain profits amid a recessionary environment.

Solid Sales

Costco recently posted October net sales of $5.68 billion, a 7% increase over last year's $5.30 billion. Comparable sales spiked 5% year-over-year.

Competitive Income

In early October, the company declared a quarterly dividend of 18 cents per share, which was paid out on November 6. The dividend translates into an industry-leading yield of 1.2%.

Bullish Forecasts

Analysts polled by Zacks are upbeat on earnings. For the fiscal year ending August 2010, the Zacks Consensus Estimate of $2.87 per share was increased from $2.71 over the past 60 days. For the following year, Zacks analysts are calling for $3.22 per share, up from the 2 months-ago level of $3.00.

Zacks Investment Research

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Chicago, IL – October 19, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Qualcomm Inc. (QCOM), MetroPCS Communications Inc. (PCS), NTT DoCoMo (DCM), Nokia Corp. (NOK) and Motorola Inc. (MOT).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Friday’s AnalystBlog:

Qualcomm Wins M-Banking Deal

Qualcomm Inc. (QCOM) recently entered into an agreement with MetroPCS Communications Inc. (PCS), through which the latter will offer mobile banking services to its customers using Qualcomm’s mobile banking applications. Qualcomm provides mobile banking solutions through its subsidiary Firethorn Holding LLC. MetroPCS subscribers will now be able to freely download Firethorn’s mobile banking solutions from the Metro store.

Firethorn’s mobile banking platform will provide a complete picture of an individual’s personal finances on his/her mobile handset. Subscribers of MetroPCS will be able to view their bank and credit card balances and history, make transfers between their accounts, and pay their bills securely from their mobile phones using a single PIN. Furthermore, customers can also check rewards information and review targeted, timely offers from their financial institutions using Firethorn’s mobile commerce capabilities.

The acquisition of Firethorn has diversified Qualcomm into a new wireless market segment - mobile banking solutions. Mobile financial service has high growth potential. Various industry researches estimate that currently there are approximately 4 billion mobile phone users throughout the world but only around 1.6 billion individual bank accounts. This indicates that a large population of mobile phone users does not have access to basic financial services.

Firethorn’s mobile banking platform is targeting to narrow this gap combining wireless handsets and secured financial services. Citi-Card entered into an agreement with Firethorn for its real-time secured access gateway to be used by card members for account information retrieval using their wireless handsets. Four of the top ten banks in the U.S. are now Firethorn customers.

According to our assessment, Qualcomm’s entry into mobile financial service is a welcome move as this market is getting crowded gradually. NTT DoCoMo (DCM) has decided to launch an innovative on-line money transfer service in Japan. The company will extend this service globally later. Nokia Corp. (NOK) has established a business tie-up with Obopay, a global leader for developing mobile payment solutions, to launch an innovative wireless financial service called “Nokia Money". Motorola Inc. (MOT) has also developed a new mobile phone SIM card called “I-SIM NFC Lite" card that can be used for mobile money transfer. The company is currently testing the m-wallet card in Taiwan and plans to launch it in China in the near future.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Contact:
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Chicago, IL – October 14, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: American International Group (AIG), Morgan Stanley (MS), Elan Corporation (ELN), Biogen Idec (BIIB) and Johnson & Johnson (JNJ).

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Here are highlights from Tuesday’s Analyst Blog:

AIG to Sell Taiwan Life Unit

American International Group (AIG) said on Monday that it has decided to sell its stake of almost 98% in Taiwan life insurance unit Nan Shan Life Insurance Co. for about $2.2 billion to a group led by Hong Kong-based investment company Primus Financial Holdings.

The Primus consortium, which includes Hong Kong-listed China Strategic Holdings, will take over Nan Shan Life, Taiwan's largest life insurer by book value. Primus and China Strategic will seek loans from Taiwanese banks to finance the deal.

China Strategic owns an 80% stake in the consortium, while Primus holds the remaining 20%. Following the close of the transaction, Primus consortium will maintain the existing compensation and benefits package for Nan Shan's 4,000 employees for at least two years.

Pending regulatory approval, Blackstone Advisory Partners and Morgan Stanley (MS) acted as AIG’s financial advisers for this deal.

Subpoena for Elan

Elan Corporation (ELN) recently received a subpoena from the US Securities and Exchange Commission (SEC) regarding the company’s disclosure of two brain disorder cases (in July 2008), often fatal, tied to the use of its drug Tysabri for the treatment of multiple sclerosis.

Elan has a marketing agreement with Biogen Idec (BIIB) for Tysabri. In addition, the subpoena asked for detailed information regarding clinical trial data on bapineuzumab, a drug for the treatment of Alzheimer's disease. Recently, Johnson & Johnson (JNJ) paid $885 million for an 18.4% stake in Elan in addition to $500 million for a majority stake in the company’s Alzheimer's disease pipeline.

As a reminder, in July last year, both Elan and Biogen announced the occurrence of two cases of brain infection, progressive multifocal leukoencephalopathy (PML), in patients taking the drug. Meanwhile, 11 such cases have been reported by the companies through July 2009. Since then, the companies stopped informing public about the infection. The drug was withdrawn from US markets in 2005 due to the PML concern but was reintroduced after one year with a strict warning regarding the occurrence of PML.

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About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5517

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=5518.

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Follow us on Twitter: http://twitter.com/zacksresearch

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Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

• UBS (NYSE:UBS) initiated coverage of VF Corp (NYSE:VFC) with a "buy" rating

• Pier 1 Imports (NYSE:PIR) reported a 9.9% gain in September same-store-sales, versus last year's 11.7% decline. The company expects inventory levels will peak at the end of the quarter at about $350 million

• According to the WSJ, Macau may draft rules within the next two months to impose age and table limits on casinos there

• AIG International (NYSE:AIG) agreed to sell its Taiwan life insurance unit to a Hong Kong investment group for $2.15 billion

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This gives the smaller gear makers like PureWave Networks and Airspan Networks a chance to enter the WiMAX market.

Alcatel-Lucent (ALU) has scaled back its WiMAX R&D expenditures and now concentrates only on fixed WiMAX infrastructure deployment, rather than the complex mobile deployment. Nokia-Siemens Network, a joint venture of Nokia Corp. (NOK) and Siemens AG (SI), has taken a strategic decision to shift its focus to other next-generation wireless technologies, such as LTE and HSPA+, and decided to outsource the WiMAX technology from Alvarion Ltd. (ALVR). Fujitsu Ltd. has entirely stopped the development of WiMAX radio technology. Motorola (MOT) is also moving towards the LTE platform.

We believe WiMAX still enjoys commendable growth potential, especially within emerging markets. The technology provides a low-cost, open network system with an all-IP mobile Internet solution that enables efficient and scalable networks for voice, data, and video transmission. The government of India has decided to allocate spectrum for the WiMAX network together with 3G technologies.

Chunghwa Telecom (CHT) of Taiwan, P.T. Telekomunikasi (TLK) of Indonesia, Aria SPA of Italy and Mobitel Nigeria have decided to implement WiMAX broadband solutions. Millicom International Cellular (MICC), a leading telecom service provider in Central America and Africa, is also exploring an option to implement the WiMAX network as a niche alternative to cable and DSL networking.

In the U.S., WiMAX still generates enthusiasm among telecom service providers. Clearwire Corp. (CLWR) is on the verge of a nationwide WiMAX deployment. The U.S. government stimulus plan for Rural Broadband expansion has also encouraged several regional telecom operators to implement WiMAX. For example, Open Range Communications Inc. has decided to implement WiMAX network spanning 17 states, 546 rural communities, which may reach a population of 6 million.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Chinese Equity Funds list.

3 Excellent Picks

Dreyfus Greater China A (DPCAX) was incepted in May 1998 and seeks long-term capital appreciation. It may include invest in common stocks, preferred stocks and convertible securities, including those purchased in initial public offerings. It is non-diversified.

The fund primarily invests in stocks of companies that are principally traded in China, Honk Kong or Taiwan, derive at least 50% of their revenues from Greater China, or have at least 50% of their assets in Greater China.

Sino-Ocean Land Holdings Ltd., Zhuzhou CSR Times Electric Co. Ltd. and Bengang Steel Plates Co. Ltd. are among the fund’s top holdings.

AIM China A (AACFX) was incepted in March 2006 and seeks long-term growth of capital. It invests in China securities, including securities of companies in the U.S. and other countries with substantial exposure to China.

The fund does not expect to invest more than a quarter of its assets in debt securities. It may invest in initial public offerings of securities and hold a portion of assets in cash or cash equivalents, including shares of affiliated money market funds. Shareholders have to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank (“Strong Buy") fund.

Some of the fund’s key holdings include PetroChina (PTR - Analyst Report), CNOOC Ltd. (CEO - Analyst Report) and China Life Insurance (LFC - Analyst Report)

ProFunds UltraChina Inv (UGPIX) seeks to provide daily investment results, before fees and expenses, that correspond to the performance of the Bank of New York Mellon China Select ADR Index.

The fund may use leveraged investment techniques and/or sampling techniques in seeking its investment objective. It is non-diversified.

This Zacks#1 Rank (“Strong Buy") fund distributes dividends annually. Its key holdings include China Mobile Ltd. (CHL - Analyst Report), China Life Insurance Co. Ltd. (LFC - Analyst Report) and PetroChina Co. Ltd. (PTR - Analyst Report).

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

Results revealed that serum phosphorous was well-controlled under the drug’s effect. The mid-stage trial involved 29 patients in Taiwan who were followed for a year. Prior studies of the drug did not exceed 28 days.

The study also indicated that Zerenex could maintain phosphorus content at a normal level when used over an extended period of time. Additionally, signs of potential iron overload in the blood were not displayed. Zerenex is expected to enter a late-stage study at the end of the year.

As per data from the US Renal Data System, America has nearly 485,000 ESRD patients. This is projected to rise to about 785,000 by 2020. The majority of ESRD patients require dialysis.

The US market for phosphate binders to treat hyperphosphatemia in ESRD patients exceeded $600 million in 2008. It has registered an approximate growth of 25% per annum over the last five years.

The growing dialysis care market has hemodialysis as the most preferred method of treatment in this segment. The other mode of treatment peritoneal dialysis finds favor with a much lesser number of dialysis patients.

The acquisition of Renal Care Group by Fresenius Medical Care (FMS) and acquisition of Gambro by DaVita (DVA) has changed the competitive landscape of the dialysis industry. The two companies now dominate the dialysis services sector.

The positive news regarding Zerenex comes close on the heels of Keryx’s candidate KRX-0401 being granted orphan-drug status by the US Food and Drug Administration for the treatment of multiple myeloma. KRX-0401 is in-licensed by Keryx from Aeterna Zentaris Inc. (AEZS) in the U.S., Canada and Mexico.

The news about the positive long-term data from Zerenex had a positive impact on Keryx’s share price, sending it to a new 52-week high of $3.33 on Wednesday morning. It however ended the day at $2.69 on Nasdaq.

The company formed a joint venture with Singapore Telecommunications Ltd. to build ST-2 telecommunications satellite network. Mitsubishi Electric Corp. and Integral Systems Inc. (ISYS) will install satellite ground system for the ST-2 program.

Chunghwa signed a memorandum of understanding with China Telecom Corp. Ltd. (CHA) to set up a joint venture to develop information and communications technologies in China.

As part of its next-generation network implementation program, the company is deploying Cisco System Inc.’s (CSCO) optical network solution to expand coverage from 6 to 12 cities in different countries of Asia, Europe and the U.S. Successful deployment of an all IP-based converged network will generate considerable international revenue (currently just 4% of total sales) as many Taiwanese firms have regional branches in several foreign countries.

Chunghwa has also entered into a joint venture with Viettel Corp to provide Internet Data Center services in Vietnam.

So-net Entertainment Corp of Japan formed an operational venture with Chunghwa to expand its Internet services. The company will acquire 30% stake of So-net for total consideration of Japanese Yen 170 million.

Chunghwa, China Unicom Ltd. (CHU) and Japan’s KDDI Corp. have decided to jointly build an undersea cable network called APCN3 for a total consideration of $ 500 million.

Along with these initiatives, Chunghwa has taken lot of other measures to improve sales. The company has started selling Apple Inc.’s (AAPL) 3G iPhone in Taiwan and entered an agreement with Warner Music Taiwan to pursue opportunities in the digital music market.

Going forward, we expect fierce competition as Chinese giant China Mobile Ltd. (CHL) has acquired a 12% stake in Chunghwa’s prime rival Far EasTone Telecommunications. In view of these competitive pressures, we believe geographical expansion and product innovation initiatives were crucial steps taken by Chunghwa’s management.

Air Products, which supplies oxygen and other gases to industrial and medical sectors, is also building two new air separation units for Shadeed Iron & Steel's production plant in the Sohar Industrial Port of Oman with Saudi firm Abdullah Hashim Group.

Eyes Emerging Market

India is an emerging photovoltaic (PV) market with strong support from the government. Earlier this month, Air Product’s joint venture in India, INOX Air Products Ltd., signed two new contracts with leading manufacturers for the company's SunSource Solutions gases and materials to support the growing Indian PV market.

INOX Air Products has signed a long-term gas supply deal to provide bulk and specialty gases to HHV Solar Technologies Pvt. Ltd and Jupiter Solar Power Ltd. Last year, it won more than 20 new contracts in Asia from both crystalline and thin-film PV markets. The company has also signed gas supply contracts with leading PV manufacturers including Best Solar and CHINT Solar in China, Green Energy Technology in Taiwan and Gadir Solar in Spain.

Separately, Air Products said that its consolidated sales in the current quarter-to-date fell 26% from the same period last year. The company blamed declining demand in most end markets, unfavorable currency and price weakness for the drop in July and August sales. Sales in the Tonnage Gases segment were down 43%, driven by pricing pressure while sales in the electronics and performance materials segment was down 28% due to lower industry utilization and capital spending. Merchant gases sales slipped 17% on weak volumes and unfavorable currency impact.

The company is scheduled to release its fourth quarter results before the market opens on Oct. 21. We maintain our Neutral recommendation on the stock.

Based in Phoenix, Arizona, Avnet is one of the world’s largest distributors of electronic components and computer products. MosChip provides high performance multimedia and connectivity solutions for consumer, industrial and computing applications.

According to the deal, Avnet’s Electronics Marketing unit will distribute MosChip products throughout Asia. The distribution agreement spans Australia, China, India, Korea, Hong Kong, New Zealand, Taiwan and Southeast Asia. MosChip products include Network Appliance Processors and co-processors, audio / video processors, USB and PCI / PCI Express connectivity semiconductors.

Last month, Avnet reported weak fourth-quarter results as its top line remained challenged by adverse business conditions amid the global economic slowdown. The company’s organic growth continues to be lackluster and it continues to expand only through acquisitions.

Although both bookings and billings increased during the period and backlog was up for the first time in several quarters, rival Arrow Electronics (ARW) maintained that the weakness in top line is yet to bottom out and visibility still remains limited. In particular, business conditions in Europe remain challenging.

Management stated that growth in Asia continues to offset sales decline in other regions. Business in Asia is associated with lower selling prices and lower costs. While this might help margins in the short term, it would not be sustainable until Avnet sees some strength in the high-margin Americas and EMEA regions.

While the advisory committee voted 12-1 in favor of the efficacy of the vaccine, its safety profile got 11-1 in support from the panel. While the FDA is not bound by the advisory committee’s recommendation, it generally follows the suggestion.

Cervarix was found to be highly effective and was well tolerated in the prevention of cervical pre-cancers and cervical cancer related to human papillomavirus (HPV) types 16 and 18, in girls and young women. Types 16 and 18 are the two most common virus types known to cause cervical cancer.

The vaccine is currently approved in nearly 100 countries around the world, including the 27 member states of the European Union, Australia, Brazil, South Korea, Mexico and Taiwan. Glaxo is seeking approval in more than 20 additional countries including the U.S. and Japan.

Approval in the U.S. would open up a very large market for the product, which recorded £125 million in global sales in 2008. Once approved, Glaxo will compete directly with Merck’s (MRK) Gardasil. Although Merck beat Glaxo to the market, we believe Cervarix comparatively offers a broader base, has more potent protection and could achieve peak sales of approximately £1.5 billion.

Glaxo has presented very encouraging data against genotypes that account for 70% of cervical cancer cases and management believes that Cervarix may offer protection against several other genotypes that could increase this figure to 80% of cervical cancer cases.

The American Cancer Society estimates that about 11,000 women will be diagnosed with cervical cancer and 4,000 women will die from the disease in 2009 in the U.S. Globally, more than 500,000 more women are expected to be diagnosed with cervical cancer and 280,000 women to die from it every year.

A response from the US FDA on Cervarix should be out shortly. We believe that US approval of Cervarix will significantly boost Glaxo’s vaccine segment revenue, which came in at £2.5 billion in 2008.

The Trade Deficit increased to $32 billion in July, expected to increase to $27.3 billion, following $27.5 billion in June (revised from $27 billion), and $26 billion in May.  July exports increased by $2.7 billion to $127.6 billion, offset by the increase in imports by $7.2 billion to $159.6 billion.  The increase in exports was a result of increased export goods by $2.7 billion - automotive vehicles, parts, and engines; capital goods; industrial supplies and materials; consumer goods; and other goods – and increased export services by $0.1 billion - other transportation (which includes freight and port services) and small increases in several other categories of services exports.  Imports increased by $7.0 billion – reflecting increases in imports of automotive vehicles, parts, and engines; consumer goods; industrial supplies and materials; capital goods; and other goods - and import services increased by $0.2 billion – increasing in categories of other transportation and travel.

The Commerce Department provided the July figures of the trade balance of the U.S. relative to selected trading partners, in billions of dollars, with surpluses in Hong Kong ($1.3), Australia ($0.7), Singapore ($0.7), and Egypt ($0.2).  Deficits were recorded, in billions of dollars, with China ($20.4), the European Union ($8.0), OPEC ($6.9), Japan ($3.9), Mexico ($2.9), Venezuela ($2.3), Canada ($2.2), Nigeria ($1.7), Korea ($1.0), and Taiwan ($0.7).

Upcoming Releases
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Investors can find such funds by checking out the entire list of the Zacks #1 Rank Chinese Equity Funds list.

3 Excellent Picks

Dreyfus Greater China A (DPCAX) was incepted in May 1998 and seeks long-term capital appreciation. It may include invest in common stocks, preferred stocks and convertible securities, including those purchased in initial public offerings. It is non-diversified.

The fund primarily invests in stocks of companies that are principally traded in China, Honk Kong or Taiwan, derive at least 50% of their revenues from Greater China, or have at least 50% of their assets in Greater China.

Sino-Ocean Land Holdings Ltd., Zhuzhou CSR Times Electric Co. Ltd. and Bengang Steel Plates Co. Ltd. are among the fund’s top holdings.

AIM China A (AACFX) was incepted in March 2006 and seeks long-term growth of capital. It invests in China securities, including securities of companies in the U.S. and other countries with substantial exposure to China.

The fund does not expect to invest more than a quarter of its assets in debt securities. It may invest in initial public offerings of securities and hold a portion of assets in cash or cash equivalents, including shares of affiliated money market funds. Shareholders have to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank (“Strong Buy") fund.

Some of the fund’s key holdings include PetroChina (PTR), CNOOC Ltd. (CEO) and China Life Insurance (LFC)

ProFunds UltraChina Inv (UGPIX) seeks to provide daily investment results, before fees and expenses, that correspond to the performance of the Bank of New York Mellon China Select ADR Index.

The fund may use leveraged investment techniques and/or sampling techniques in seeking its investment objective. It is non-diversified.

This Zacks#1 Rank (“Strong Buy") fund distributes dividends annually. Its key holdings include China Mobile Ltd. (CHL), China Life Insurance Co. Ltd. (LFC) and PetroChina Co. Ltd. (PTR).

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

“Nokia Money" is a 24-hour service that will enable any mobile phone user to transfer money from his bank account to another account dialing the latter’s mobile phone number. This can be done either through SMS or a call. Nokia is likely to launch this service commercially from early 2010 in select European markets.

The major innovation of this service is that it will be available across various wireless networks from any mobile phone and not necessarily a Nokia handset. This user friendly, fully secured digital financial service can be used for remitting money, pay bills for goods and services, utility bills or top-up prepaid connections. Rural consumers, who do not have access to online services, will particularly benefit from this service.

Mobile financial service has high growth potential. Industry researches estimate that currently there are approximately 4 billion mobile phone users in the world but out of these, only 1.6 billion have individual bank accounts. This indicates that a large population of mobile phone users does not have access to basic financial services.

“Nokia Money" aims to narrow this gap by combining wireless handsets and secured financial services. The company has established an alliance with Obopay, a global leader for developing mobile payment solutions, to commercialize this service. We consider Nokia’s entry into mobile financial service at this stage as a right move as the market is gradually getting crowded.

NTT DoCoMo (DCM) plans to launch an innovative online money transfer service in Japan, where it is the largest wireless service provider. Customers of DoCoMo’s i-mode mobile internet service using the 3G FOMA network will be able to remit up to 20,000 Yen per transaction subject to a monthly limit of 200,000 Yen.

Motorola Inc. (MOT) has also developed a new mobile phone SIM (Subscriber Identity Module) card called “I-SIM NFC Lite" card that can be used for mobile money transfer. The company is currently testing this m-wallet card in Taiwan and plans to launch it in the world’s largest mobile subscriber market of China in the near future.

Chicago, IL – August 25, 2009 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: China Mobile (CHL), Microsoft (MSFT), Chunghwa Telecom (CHT), Apple Inc. (AAPL) and China Unicom (CHU).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=5513

Here are highlights from Monday’s Analyst Blog:

China Mobile Goes for “Ophones"

China Mobile (CHL) has reportedly entered into a strategic agreement with Taiwan-based High Tech Computer Corp (commonly known as HTC) today to jointly develop 3G smartphones in China. The joint-venture will design and develop handset models (called "Ophones") based on China Mobile’s home-grown TD-SCDMA 3G technology. The agreement also covers the development of TD-LTE, a 4G mobile broadband technology based network.

HTC, the world’s largest maker of handsets based on Microsoft’s (MSFT) Windows Mobile platform, will develop and supply at least seven 3G handset models by 2010 (including one in 2009). On the other hand, China Mobile will invest RMB47 million ($6.9 million) in the joint-venture and will provide customer service and support. This strategic collaboration will significantly help China Mobile to promote its TD-SCDMA technology in the nascent domestic 3G wireless market.

China Mobile is also exploring opportunities for technology collaboration with other Taiwanese companies such as Chunghwa Telecom (CHT) and MediaTek Inc. Moreover, the company aims to acquire a 12% stake in Far EasTone Telecommunications, Taiwan's third-largest mobile-phone operator by revenue, for approximately $529 million. This strategic investment will open up an opportunity for network and technology synergies as Far EasTone also plans to develop 3G TD-SCDMA based network.

In addition to the expansion of its 3G TD-SCDMA network, China Mobile is increasingly focusing on developing 3G smartphones to counter competition from Apple Inc.’s (AAPL) iPhones. The company’s closest competitor, China Unicom (CHU), is currently negotiating with Apple to bring iPhones to China, potentially in 2009. China Mobile hopes its relatively low-priced smartphones will drive demand for 3G services in China and boost associated subscriber growth.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=5515.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

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Qualcomm continues to lead mobile video market with the deployment of MediaFLO networks (that offers FLO TV services). In June, the mobile TV industry received a boost when the US government decided to switch to digital TV from analog transmission.

The immediate beneficiary of this was Qualcomm’s FLO TV network, which has already spent $500 million to buy spectrum that has been released. The company will now have the opportunity to broadcast its transmission in 100 major US markets serving more than 250 million potential customers. According to industry researches, market size for mobile TV may reach $10 billion by 2013 from $1.5 billion in 2008.

Advertisement in the mobile TV network is gaining huge market traction for the corporate world. Since each mobile device is connected to a specific viewer, the scope for audience-specific advertisement is enormous in this industry. Rentrak’s TV Essentials media management system will provide relevant viewership information on FLO TV network to several advertisers and content developers.

FLO-TV has been offered by the two largest telecom operators in the U.S., AT&T (T) and Verizon Wireless (VZ). The company has bought select licenses in the FCC auctions for 700-Mhz spectrum. Qualcomm has also started a trial run of FLO TV in Taiwan in collaboration with Taiwan Television Enterprise Ltd. and China Network Systems. Successful delivery may result in further business opportunities in the vast Asian market.

To bolster its position, Qualcomm has entered multi-year licensing agreements with large media content/broadcaster companies to provide TV programs through the FLO TV mobile entertainment platform. CBS, CBS College Sports, CBS News, CNBC, Comedy Central, ESPN, ESPN News, ESPN 2, FOX, FOX News, FOX Sports, MSNBC, MTV, NBC, NBC 2Go, NBC News, NBC Sports and Nickelodeon are the channels which have joined hands with FLO TV.

Since the bursting of the tech bubble in the late 1990s, semiconductor companies have improved inventory management, streamlined operations and transferred manufacturing to cheaper locations. This enabled a stronger focus on research, helping differentiation and consequently profit margins.

Although companies like Intel (INTC), STMicroelectronics (STM), Texas Instruments (TXN) and National Semiconductor (NSM) continue to operate their own facilities, many smaller players, such as Intersil Corp. (ISIL) and Semtech Corp. (SMTC) decided to take the outsourcing route.

This was a boon for Asian manufacturers, especially Taiwan Semiconductor Manufacturing Co. (TSM) and United Microelectronics (UMC), which were the first to capitalize on the opportunity. Chartered Semiconductor (CHRT) and Semiconductor Manufacturing International (SMI) joined later, but continued to benefit from the trend.

Taiwanese companies have thrived over the past decade by using the cash generated to increase investment and research. The result was improved technology and cost competitiveness.

However, with demand from China and other emerging markets mounting, the trend appears to be reversing now. Consequently, the need to produce even cheaper semiconductors in large volumes is on the rise. Further, demand in mature markets is centered on innovation, which increases manufacturing complexities. The cost of advanced tools that could facilitate all this is currently a strain for most manufacturers.

Taiwan has been worst affected since it was already competing over price. With the recession shrinking demand, Taiwanese semiconductor makers have surplus capacity and too much inventory at hand. Although the government has stepped in to help, no clear plan is evident as of now. We strongly believe that this environment will result in increased consolidation in semiconductor manufacturing and R&D collaboration among companies.

Investors can find such funds by checking out the entire list of the Zacks #1 Rank Chinese Equity Funds list.

3 Excellent Choices

Dreyfus Greater China A (DPCAX) was incepted in May 1998 and seeks long-term capital appreciation. It may include invest in common stocks, preferred stocks and convertible securities, including those purchased in initial public offerings. It is non-diversified.

The fund primarily invests in stocks of companies that are principally traded in China, Honk Kong or Taiwan, derive at least 50% of their revenues from Greater China, or have at least 50% of their assets in Greater China.

Sino-Ocean Land Holdings Ltd., Zhuzhou CSR Times Electric Co. Ltd. and Bengang Steel Plates Co. Ltd. are among the fund?s top holdings.

AIM China A (AACFX) was incepted in March 2006 and seeks long-term growth of capital. It invests in China securities, including securities of companies in the U.S. and other countries with substantial exposure to China.

The fund does not expect to invest more than a quarter of its assets in debt securities. It may invest in initial public offerings of securities and hold a portion of assets in cash or cash equivalents, including shares of affiliated money market funds. Unit holders have to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank (?Strong Buy?) fund.

Some of the fund?s key holdings include PetroChina (PTR), CNOOC Ltd. (CEO) and China Life Insurance (LFC)

ProFunds UltraChina Inv (UGPIX) seeks to provide daily investment results, before fees and expenses, that correspond to the performance of the Bank of New York Mellon China Select ADR Index.

The fund may use leveraged investment techniques and/or sampling techniques in seeking its investment objective. It is non-diversified.

This Zacks#1 Rank ("Strong Buy") fund distributes dividends annually. Its key holdings include China Mobile Ltd. (CHL), China Life Insurance Co. Ltd. (LFC) and PetroChina Co. Ltd. (PTR).

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our new mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

The third emerging markets sector exchange-traded funds launched on Wednesday, this time adding top stocks from a composite index of 10 sectors spanning 15 countries.

The name of the new ETF is a mouthful – the Emerging Global Shares Dow Jones Emerging Markets Titans Composite Index Fund (NYSE Arca: EEG).  Its sponsor is Emerging Global Advisors, which is responsible for coming to market in May with the first sector-focused emerging markets ETFs so far.

Those are: the Emerging Global Shares Dow Jones Emerging Markets Energy Fund (NYSE Arca: EEO); and the Emerging Global Shares Dow Jones Emerging Markets Metals & Mining Titans Index Fund (NYSE Arca: EMT).  You can read more about those ETFs here.

EEG is designed to track the Dow Jones Emerging Markets Titans Composite Index. That benchmark includes the 100 top names by market capitalization sizes in major sectors across the developing marketplace. The sector weightings are modified in that no one name can have more than a 10% exposure in the fund.

The ETF will charge an annual expense ratio of 0.75%.

EEG differs in both its geographical complexion as well as its sector exposures in several subtle, yet possibly significant ways, from broader-based emerging markets ETFs.  For example, take the iShares MSCI Emerging Markets Index (NYSE: EEM). It has roughly the same in financials (23.89%) as EEG’s benchmark had at the end of the second quarter (22.35%).

But financials are the second-biggest sector in EEG, whereas it’s No. 1 in EEM. Oil and gas was the Dow Jones index’s largest sector weighting at slightly more than 29% (again, through June).  EEM has less than 16% in energy right now.

“Since we don’t include Taiwan, Korea and Israel – we don’t consider them emerging markets – our fund will have a little bit more exposure to the BRICs. That means we’ll have less in areas like telecom and a little more in resource-related sectors,” said Richard Kang, EGA’s research director.

Kang and the firm’s chief executive, Bob Holderith, discussed in detail how a composite sector emerging markets ETF might work – along with the company’s other plans to launch 10-plus related sector ETFs – in this Q&A story which ran at IndexUniverse.com in June.)

Entering the third quarter, the underlying benchmark for EEG had the following country makeup:

• China Offshore: 20.43%

• Brazil: 20.29%

• India : 18.15%

• Russia: 14.24%

• Mexico: 10.07%

• South Africa: 8.30%

• Chile: 2.74%

• Malaysia: 1.85%

• Indonesia: 1.53%

• Kuwait: 1.04%

The fund’s sector weightings of its underlying benchmark showed the following breakdown:

• Oil & Gas: 29.02%

• Financials: 22.35%

• Basic Materials: 11.36%

• Telecommunications: 10.70%

• Industrials: 5.55%

• Consumer Goods: 5.20%

• Technology: 4.93%

• Consumer Services: 4.80%

• Utilities: 4.25%

• Health Care: 1.84%

The potash cartel comprises Canpotex – a partnership between Potash Corp. of Saskatchewan (POT), Agrium Inc. (AGU) and Mosaic Co. (MOS) – besides three Russian and one German producer. Together, they account for 75% of the global potash capacity.

The price of potash – an essential crop nutrient – remained obstinately higher on top of falling demand. The fertilizer cartel had deliberately curtailed production to keep pricing unaffected. About 40% of the global potash production capacity has been idled since the second half of 2008.

Canpotex has succeeded in maintaining its price level recently by signing contracts with customers in Japan, Korea, and Taiwan covering shipments for the second quarter of 2009. The new contract is priced at about $700 per ton.

However, fears had spread that the cartel may no longer be able to sustain its price control given the current market conditions. Farmers were keen to know how the cartel resolves its pricing negotiations with the largest overseas potash buyers such as China and India.

The Russian producer settled with India at a price of $460 a ton, much lower than $625 a ton last year. Speculation is rife that the contract price may fall further, cutting a deep wound in the bargaining strength of potash superpower.
 
We continue to recommend POT and AGU as Hold.

However, CIT Group Inc. (NYSE:CIT) plunged 11.8% after the commercial finance lender said its failure would put prospects of 760 manufacturing clients in jeopardy and precipitate a crisis for about 300,000 retailers.  American International Inc. (NYSE:AIG) rallied 24% and was the leading gainer among S&P 500 stocks after media reports said Primus Financial Holdings Ltd. is looking to make a $2 billion bid for the firm’s Taiwan life insurance unit. 

Stock futures pared gains this morning, despite better-than-expected results from Goldman Sachs (NYSE:GS), as a government report said wholesale prices rose more than estimated in June.

Market breadth was positive. On the New York Stock Exchange, advancing shares beat declining issues five to one on volume of 1.19 billion shares. The market’s measure of volatility, the CBOE Vix, tumbled 9.3% to 26.31.  Crude prices sank to an eight-week low, off $0.20 to $59.69.

All ten S&P500 industry groups recorded gains, led by a 5.9% rise in financial stocks.  Financials rose, following Whitney’s "buy" rating on Goldman Sachs (NYSE:GS), that was issued a day before the firm reports its first-quarter earnings.  Goldman Sachs (NYSE:GS) is expected to beat consensus estimates of earnings of $3.48 per share, helped by its lucrative bond trading operations.  Bank of America (NYSE:BAC) jumped 9.3%, following Whitney’s comments.  General Electric (NYSE:GE) surged 6.3% ahead of its earnings release on Friday, after Goldman Sachs (NYSE:GS) said the company is likely to beat Street projections.  JP Morgan (NYSE:JPM), expected to report on Thursday, jumped 7.3% on expectations of better-than-projected earnings.

Yesterday's Treasury Budget statement for June of a slightly less-than-expected, but still onerous $94.3 billion deficit, sent the year-to-date cumulative deficit to a record $1.08 trillion. Treasury Secretary Geithner, however, countered suggestions of additional programs, noting, "...we're just beginning to come to the point when you're going to see the largest effective boost to the employment-intensive parts of the stimulus coming on stream," as he stated, "...we're starting to see a better basis for recovery."

Company earnings reports slated for release today include: Altera Corp (NASDAQ:ALTR), Goldman Sachs (NYSE:GS), Intel (NASDAQ:INTC), Johnson & Johnson (NYSE:JNJ) and Yum! Brands (NYSE:YUM).

Chunghwa’s second-quarter revenue was also below our expectations of NT$49 billion. This was primarily due to lower phone calls and utilization of internet data services by consumers as a result of the general economic downturn together with lower call tariffs imposed by the Taiwanese Government.

However, the company’s net earning was above our estimates of NT$10.9 billion. This is despite the fact that Chunghwa has undertaken significant expenses to upgrade its wireless network to support high-speed voice and data communications.

Taiwanese telecom market is quickly approaching maturity and has become extremely competitive following telecom regulatory changes. Chunghwa competes in a tough environment with two other major service providers - Taiwan Mobile Co. and Far EasTone Telecommunications Co. Ltd.

The market size is comparably smaller than other regional country markets, with approximately 23 million potential customers. Therefore, advanced technology deployment is critical for Chunghwa’s operations to retain a leading edge. We expect fierce competition going forward as Chinese giant China Mobile (CHL) has purchased a 12% stake in Far EasTone Telecommunications.

Chunghwa collaborated with Nokia (NOK) to expand its 3G wireless networks of WCDMA and HSDPA. The 3G services are expected to facilitate the company’s continued leadership by offering a wider array of advanced features and higher speeds. Ongoing network transformation initiatives to a single, IP-based converged network will be completed by 2013.

The company is building large-scale fiber-to-the-home (FTTH) and fiber-to-the-building (FTTB) access infrastructure and is aiming to provide both of these facilities to 75% of Taiwan’s population by 2011. Chunghwa will also launch Apple’s (AAPL) latest iPhone 3GS in August 2009. We reaffirm Buy rating for Chunghwa Telecom.