Petrobras, Potash Added to Goldman Hedge Fund List

Date: Friday, August 29, 2008
Author: Paulo Winterstein, Bloomberg.com

(Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Potash Corp. of Saskatchewan Inc., the world's largest producer of the crop nutrient, were added to Goldman Sachs Group Inc.'s list of the most popular stocks among hedge fund managers.

The addition of the companies to the so-called VIP list, which includes the 50 stocks that are the most common holdings in hedge fund portfolios, is a sign of ``strong interest in non- U.S. markets by U.S.-based hedge funds,'' strategist David Kostin wrote in note to clients.

The VIP has outperformed the Standard & Poor's 500 Index during the past 12 months, falling 6 percent as the S&P 500 lost 9.2 percent. It is the first time Petrobras, as the Brazil company is known, or Potash Corp. appeared in the index.

Petrobras' American depositary receipts rose to an all-time high in May, spurred by record oil prices and investor interest in the offshore Tupi oil field, which the company said in November may hold 8 billion barrels of crude.

Among hedge funds, Boston-based Wellington Management Company LLP owns the most U.S.-listed shares. Wellington had 21.9 million ADRs as of the end of June, Bloomberg data showed.

Billionaire investor George Soros bought an $811 million stake in the Rio de Janeiro-based company in the second quarter, making the oil company his investment fund's largest holding. Soros Fund Management LLC has the second-biggest stake in Petrobras among hedge funds, according to Bloomberg data.

Biggest Holder

Petrobras fell 20 percent so far this year in Sao Paulo, more than the 12 percent drop in Brazil's Bovespa index. The shares surged 78 percent in 2007, compared with a 44 percent gain in the Bovespa.

Speculation the government may keep some oil profits instead of channeling them through Petrobras may have hurt the shares, Mark Mobius, the executive chairman of Templeton Asset Management Ltd. in Singapore, said an Aug. 20 Bloomberg radio interview. Mobius oversees about $40 billion in emerging-market equities.

Tupi Field

In November, Petrobras announced the discovery of Tupi, a field with as much as 8 billion barrels of crude, making it the largest find in the Americas since 1976. Tupi is part of a new deepwater offshore region known as the pre-salt that may contain as much as 50 billion barrels, according to Peter Wells, oil analyst with the U.K.'s Neftex Petroleum Consultants Ltd.

Saskatoon, Canada-based Potash has gained 23 percent this year after tripling in value in 2007. Wellington and Soros also are the two largest holders of Potash.

To contact the reporter on this story: Paulo Winterstein in Sao Paulo at pwinterstein@bloomberg.net.