BRIC Investors Lose Out as Statists Forgo Earnings

Investors in the biggest state-controlled companies are being punished with the lowest valuations in six years by emerging-market leaders putting public services ahead of shareholder profits as economies slow.

Brazil’s Petroleo Brasileiro SA posted a 52 percent drop in fourth-quarter earnings on Feb. 9 after government-imposed price caps led to losses on fuel sales. Russia’s OAO Gazprom said last month that tax increases will cut 2012 profit by $2 billion, while Coal India Ltd. was ordered to sign supply agreements with the nation’s power companies. China’s banks trade near record lows versus net assets on concern local governments may default.