GLOBAL STOCK INVESTOR HOTLINE UPDATE 9

After four strong weeks, many global markets sold off in the first half of this week. European markets, however, continue to perform strongly. The Swedish ETF (EWD) advanced 1.6% over the week and is now up 14.73% since our initial recommendation. Latin American cell phone giant America Movil (AMX) is up 8.32% and U.K.-based holding Tesco (TSCDY) is showing a solid 8.96% profit during the last six weeks.

Our positions in China and India continue to be the most volatile. China’s Home Inns & Hotels Management (HMIN) was up 7.5% for the past week, while Indian banking giant ICICI Bank (IBN) fell 11.1% during the same period.

Cognizant Technologies (CTSH) reported earnings this morning. Although its strong operational performance is reassuring, we are keeping Cognizant at a HOLD.

Otherwise, we are beginning to enter into a summer lull. Many stocks tend to tread water, until the early fall. All of our positions remain BUYS at current levels, except for Cognizant (CTSH) and Home Inns (HMIN), which we are keeping at a HOLD.

PORTFOLIO UPDATE

AMERICA MOVIL (AMX)

Recall that America Movil, our Latin American cell phone play, had been in talks to buy an indirect stake in Olimpia SpA, Telecom Italia’s holding firm. America Movil’s interest had been to gain control of additional mobile assets, primarily in Brazil. Sadly, America Movil lost out on this opportunity as selling shareholder Pirelli reached an agreement on Saturday to sell its ownership stake in Olimpia SpA to a group led by Spanish telecom giant Telefonica.

Although this is somewhat of a setback to billionaire Carlos Slim’s aspirations for America Movil, the superb long-term investment case for America Movil remains intact. The stock is up a solid 8.32% since our initial recommendation and remains a strong BUY.

COGNIZANT TECHNOLOGY (CTSH)

Cognizant, our New Jersey-based global IT and business process outsourcing service provider, announced its results today. Revenue for the first quarter increased to $460.3 million, up 61% compared with the first quarter of 2006. GAAP net income was $75.4 million, or $0.50 per diluted share, compared to $47.2 million, or $0.32 per diluted share, in the first quarter of 2006. On an adjusted basis, earnings rose to 54 cents a share. That performance handily beat analysts’ estimates of 48 cents a share. Cognizant also raised the guidance that it issued in February. Management now anticipates sales of at least $2.07 billion, with earnings per share of at least $2.13.

After a relatively weak quarter in terms of price performance, these assuring numbers should give the stock a boost over the next few weeks. Nevertheless, let’s keep Cognizant (CTSH) at a HOLD for now.

HOME INNS (HMIN)

Home Inns continues to live up to its billing as a highly volatile play. The stock shot up almost 10% in a single session last Thursday.

Home Inns and two investors raised $120 million through an American Depository Receipt sale, selling nearly 1.5 million ADS at $34.27 each on Tuesday. The order book for the offering was more than three times covered. That level of demand indicates that investor appetite for Home Inns’ stock remains strong. Because of the volatility of this stock — and the general concerns we have about the overheating China stock market — we continue to rate Home Inns a HOLD.

ICICI BANK (IBN)

ICICI Bank announced Q1 results over the weekend. Operationally, the results were fully in line with expectations. Net interest income increased 36%, while non-interest income rose 25%. And, profit before general provisions and tax jumped 40%.

ICICI’s bottom line took a hit due largely to government mandated loan-loss provisions. These provisions are not actual losses and could reverse if the bank’s defaults are less than what the Indian government is telling the banks to set aside.

In addition, ICICI announced that it plans to raise a whopping $4.9 billion by issuing stock in India and overseas this summer — the largest stock sale ever by an Indian company. ICICI’s CEO predicted that Indian corporations will invest an unprecedented $500 billion in infrastructure and manufacturing over the next three years, doubling the country’s existing industrial capacity. The new funds will help position ICICI to take part in this boom. The last time ICICI raised funds two years ago, the bank’s shares briefly underperformed, but then rebounded 80%.

Here’s the bottom line. ICICI is a volatile stock. It had rallied a whopping 27.3% since it bottomed on April 2nd, until its recent peak last Thursday. Despite the recent drop, I continue to be very bullish on this stock. As long as you can stomach occasional 20%+ corrections, this stock remains a BUY.

ISHARES MSCI SWEDEN INDEX (EWD)

Sweden is our lowest risk and, so far, best-performing recommendation, up almost 15%. Strong European markets and a strong currency mean that this Swedish investment remains a strong BUY.

TESCO (TSCDY)

Tesco remains one of our steadiest performers and it is up 8.96% since our recommendation. Tesco’s management continues to focus on squeezing out as much shareholder value as possible. Tesco now estimates that the value of its property is $56 billion versus a book value of $34 billion. As a result, it will accelerate the sale of these properties and return $6 billion to shareholders. Tesco remains a strong BUY.