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New Index Puts Focus On Hispanic Growth Investment Bank Tracks Nation's 10-Largest Latino-Related Firms… Samuel A. Ramirez & Company, Inc. Launches Hispanic Index

New Index Puts Focus On Hispanic Growth Investment Bank Tracks Nation's 10-Largest Latino-Related Firms

By DIANNE SOLIS (Staff Writer)

December 23, 2003
Copyright © 2003
The Dallas Morning News. All rights reserved.

Looking for a Wall Street play off the Hispanic demographic tsunami?

Take a peek at the Ramirez & Co. Hispanic Index that made its debut this month - the creation of New York investment bank Samuel A. Ramirez & Co.

It tracks the 10 largest Hispanic companies in the United States and Puerto Rico, based on market value and trading volume.

The bellwether stock of this weighted index is Los Angeles-based Univision Communications Inc., which acquired Hispanic Broadcasting Corp. of Dallas earlier this year and is expected to close the year with about $1.4 billion in annual revenue.

The index's purpose is to track the stocks as an asset class, against other indices, such as the Standard & Poor's 500. All of the publicly traded companies are either headed by Hispanics or aimed at the nearly 40 million person-strong U.S. Hispanic market.

The performance?

If one had invested in a fund made up of companies in the Hispanic stock index on Aug. 1, 2000, that investment would have returned 125 percent, says Jay C. Garcia, research director for Ramirez.

If one had invested in a fund calibrated to the Standard & Poor's 500 on Aug. 1, 2000, that investment would have lost about 24 percent.

And that date was well after the market began to dive in March 2000.

"It was not trivial; it was not marginal," says Mr. Garcia of the performance. "I am a true believer in that the only thing that will happen is that the market grows."

Upward trajectory

Comparing a 10-stock index to a 500-stock index is, of course, a bit like comparing a cherry to a watermelon. And portfolio diversification is considered a must. But demographers project only an upward trajectory for Latinos.

By the year 2050, fully a quarter of the U.S. population is expected to be Hispanic, up from 14 percent.

And as a consumer bloc, it already wields about $653 billion in purchasing power, according to the Selig Center for Economic Research at the University of Georgia. That's a sum larger than the gross national product of Mexico, a country of 100 million.

Thus, Ramirez treats it as an "emerging market." And because it resides within the United States, it's one without the vagaries of currency devaluations, rigged political elections or oligopolies with questionable accounting practices.

Or as Mr. Garcia notes in his research report, "The domestic Hispanic emerging market lacks the political, regulatory and currency risk inherent in other emerging markets."

The downside?

There are the lagging educational rates, the report notes. More than two in five Hispanics age 25 years and older have not graduated from high school.

"But U.S.-born Hispanics have higher levels of education than their immigrant parents. This generational change will significantly affect the educational profile of the Hispanic population," the report says.

Financial basket

The next product?

The 32-year-old investment banking house hopes to offer a financial basket of the companies in the Hispanic index to investors. The investment house, founded by Puerto Rican Samuel A. Ramirez, offers services that range from portfolio management for individuals to municipal bond underwriting.

In addition to Univision, the index includes fellow Spanish-language broadcasters Entravision Communications Corp. of Santa Monica, Calif., and Spanish Broadcasting System Inc. of Coconut Grove, Fla.

Other firms include Molina Healthcare Inc. of Long Beach, Calif., and the telecommunications firm MasTec Inc. of Coral Gables, Fla.

Five Puerto Rican-based financial companies round out the rest of the index: Popular Inc., with the second-largest market capitalization; Doral Financial CP; W Holding Co.; R&G Financial Corp.; and First BanCorp.

Samuel A. Ramirez & Company, Inc. Launches Hispanic Index RCHI(TM) One Of The First Indices To Track Hispanic Market; Up 125% Since August 2000

December 16, 2003
Copyright © 2003
PR Newswire Association LLC. All rights reserved.

NEW YORK, Dec. 16 /PRNewswire/ -- Investment bank Samuel A. Ramirez & Company, Inc. (Ramirez & Co.) has launched the Ramirez & Co. Hispanic Index(TM) (RCHI(TM)), one of the first Hispanic indices in the United States.

RCHI is an equal-dollar weighted index the firm has developed as a benchmark to track the Hispanic market. RCHI includes the 10 largest and most liquid publicly-traded Hispanic companies in the United States and Puerto Rico, based on market cap and average trading volume. According to Ramirez & Co. Managing Director Jay C. Garcia, RCHI defines Hispanic companies as those with more than 51 percent Hispanic ownership and/or customers. Ramirez plans to expand its coverage to include 19 Hispanic publicly-traded companies.

With a combined market cap of $38.1 billion, RCHI has increased 125 percent since August 1, 2000. By comparison, the Russell 2000 rose 8.6 percent during the same period, while the Dow Jones Industrial Average and the S&P 500 declined 7.3 percent and 26.4 percent, respectively.

"We believe that the Hispanic market represents a unique asset class that warrants dedicated coverage," Garcia said. "Investors can see growth rates comparable to emerging markets while benefiting from the stable operating and regulatory environment of the United States."

For the first time, Hispanics represent the largest minority group in the United States with 37.4 million people comprising 13.3 percent of the U.S. population. Hispanics' purchasing power grew to a record $530 billion in 2002 and is forecast to eclipse the $1 trillion level by 2010, according to Global Insight, Inc.

Ramirez & Co. initiated RCHI as part of its research division's effort to expand coverage to the firm's institutional investor base, which also includes the Latin American region. The company has joint venture relationships with top-tier local affiliates throughout Latin America. Ramirez and its affiliates provide an integrated approach to high-quality research and execution. Its joint team of 35 analysts conducts macro economic, industry sector and individual company research, presently covering approximately 190 stocks.

"With our established relationships throughout the region and the marketplace, we are building one of the most extensive Latin American research platforms on Wall Street," said Samuel A. Ramirez, CEO and founder of Ramirez & Co.

The Ramirez & Co. Hispanic Index is composed of the following companies in order of market capitalization:

-- Univision (UVN)

-- Banco Popular (BPOP)

-- Doral Financial (DRL)

-- W Holding (WHI)

-- First Bancorp (FBP)

-- Entravision (EVC)

-- R&G Financial (RGF)

-- Molina Healthcare (MOH)

-- MasTec (MTZ)

-- Spanish Broadcasting (SBSA)

For a comprehensive report on RCHI's methodology, the economic and fundamental outlook for the Hispanic market asset class and snapshots of the 10 RCHI companies, contact Jay C. Garcia at 212-248-3894.

About Samuel A. Ramirez & Company, Inc.

Samuel A. Ramirez & Company, Inc. ("Ramirez & Co.") is a full service securities firm serving the investment needs of individuals, business owners, institutional investors and government agencies. Founded in 1971, Ramirez offers professional services focusing on wealth management, underwriting, investment banking, institutional brokerage, research and asset management. Ramirez provides retail and institutional trading expertise in tax-free municipal bonds, equities, government bonds, corporate bonds and alternative investments. Ramirez & Co. currently ranks as the tenth-largest managing underwriter of municipal bonds in the U.S. The firm's main office is located in New York with branch offices in Chicago, Houston, Los Angeles, Miami, Oakland, San Antonio, and San Juan, Puerto Rico.

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