Going Beyond The BRICs

Back in October, I highlighted EG Shares’ new emerging market option, the Beyond BRICs ETF (BBRC). BBRC is the first ETF for emerging markets that specifically excludes the “BRIC” countries of Brazil, Russia, China and India.  This strategy caught my attention because I’ve never been a big fan of the BRICs as an investment theme. The countries comprising the BRIC were chosen more for their ability to be combined into a marketable acronym than for any coherent investment rationale.

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Emerging Market Stocks Rise on Turkey Rally

Emerging-market stocks advanced, led by the biggest rally in Turkey’s benchmark index in more than three months, amid speculation political tension in the country may ease. The lira strengthened, while Russia’s ruble declined. 

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Quiet Bull Calls on Emerging Markets

For much of 2013, being bearish on emerging markets was the right call. Stocks in developing economies from the BRIC nations to the ASEAN group to CIVETS and nearly any other catchy acronym proved to be major disappointments as equities in the U.S., Japan and some other developed markets soared.  Weakening currencies, slumping commodities demand and current account and fiscal deficits prompted investors to pull $13.7 billion from emerging markets bond for the year through December 18, while $6.3 billion has left emerging market equity funds over the same period, CNBC reports, citing Jefferies data.

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Selling More Instant Noodles In Emerging Markets

A boy runs inside an exhibit made to look like a giant up-turned cup noodle pot at the opening of a cup noodle museum in Yokohama, suburban Tokyo, on Sept.17, 2011. After Japan’s traditional cuisine, “washoku,” was recognized by Unesco as an “intangible cultural heritage” earlier this month, some of the nation’s food makers announced plans to fill the bellies of the developing world with something perhaps more tangible.  Earlier this week, Toyo Suisan Kaisha Ltd. and Ajinomoto Co. said they would set up joint ventures in India and Nigeria, the world’s 5th and 12th biggest markets for instant noodles, respectively. 

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Blackberry, Foxconn Deal Aimed at Emerging Markets

BlackBerry announced Friday a third-quarter loss of $4.4 billion, a stunning freefall from the loss of $965 million suffered in the second quarter of this year. Revenue also tumbled, nestling in at $1.2 billion, down from $1.6 billion in the prior quarter.  BlackBerry managed to sell only 1.9 million smartphones last quarter, an ugly decline from the 3.7 million sold in the previous quarter. And talk about a vote of no confidence: The company said that "most of the units" that generated revenue were older BlackBerry 7 designs, not the newer BlackBerry 10 devices that had been front and center in its revival efforts.

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Emerging Market Stocks Could Escape 'Taper Tantrums'

Emerging market economies might be bracing themselves for the after-shock of the U.S. Federal Reserve's latest policy move, but there are individual stocks that could still take off, an asset manager told CNBC.  "Every time there is a big dislocation or big macro consensus trades - and that has been long developed markets, short emerging markets -- and flows are driving valuations, there are always specific stocks or specific opportunities you can take advantage of," Alper Ince, managing director of the Pacific Alternative Asset Management Company, told CNBC on Friday.

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Key Emerging Markets Events in 2014

Frontier Strategy Group put together a report listing five potential global events to watch among emerging markets for what it refers to as an “unpredictable” 2014.  The research, released Thursday, is geared toward executives for multinational corporations in emerging markets, but the picks offer a good glimpse of what emerging-market investors should look out for.  That’s particularly important following a rough year for emerging markets. The iShares MSCI Emerging Markets Exchange-Traded Fund EEM has lost 6.7% year to date after a 19% gain in 2012. 

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Mr. Bernanke's Emerging Market Curse

The MSCI Emerging Markets Index, the benchmark for investors interested in emerging markets, has been underperforming the S&P 500 for three years. I am sorry to say emerging markets seem destined to continue underperforming in 2014 in part due to the pending unwind of QE and its repercussions.  I stared at the relative chart of the iShares MSCI Emerging Markets Index fund EEM -0.42% almost with disbelief. On a relative basis, things are as bad for emerging-market investors as they were five years go near the infamous low in global markets in March 2009. EEM has rallied off that low, but the S&P 500 has rallied so much more that it is easy to see how investors interested in global markets can get disheartened.

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Can Companies Win By Investing in Emerging Markets?

Over the past year, there has been quite a bit of commentary about the lack of value in emerging markets. Criticisms that apply across industries -- from P&G to Facebook -- argue that companies that are banking their growth on their "next billion" consumers are entering a not-so-lucrative space.  Before the Twitter IPO last month, many argued that there was little value in 77% of the company's users living outside the United States.

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Nokia’s Still Strong in Emerging Markets

Nokia’s Lumia range is showing signs of promise across Europe and the US, but it is often thought that the Finnish firm is losing out on emerging market customers to cheap Android smartphones. A new survey from Jana suggests that this may not be the case, and posits the Nokia brand as (still) aspirational to many.Jana, which covers mobile rewards, marketing and research, regularly runs surveys among 2,500 selected phone owners in emerging markets in Asia. While that’s not a wide survey base, the quality of Jana’s reports is much respected.

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How to View Emerging Markets Now

This year marked a huge switch in how some investors viewed emerging markets. In the early days of 2013 there were large net inflows, in the range of $10 billion. Almost immediately (still in January) the flows started to slow down and by May money started pouring out of companies associated with emerging markets.  This happened for a variety of reasons but chief among those were investors’ fears that “easy money” being borrowed at little interest was drying up. 

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Train For Startup Life; Work In Emerging Markets

A startup CEO, who began her career working in countries like India, China and Mexico, claims exposure to emerging markets is good training for entrepreneurship. There are many skills you can only learning by doing. Reading books on skiing won’t help you all that much when you hit the slopes and no one ever learned to swim while staying dry. Is the same true of entrepreneurship? Is there any way to prepare for entrepreneurship besides jumping in and starting up?

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Invest Now In Emerging Markets for 2014

The growth is in emerging markets. However, for a variety of reasons, emerging markets have lagged this year.The chart comparing SPY with iShares MSCI Emerging Markets shows that emerging markets will have to move about 30.68% to catch up with the U. S. market.The chart again brings us to mean reversion which is commonly seen in the markets. In other words, markets that have been strong become relatively weaker and markets that have been weak become relatively stronger. It is important to note that all emerging markets are not the same. I will illustrate the point below. 

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How Do You Approach Emerging Markets?

One of the most surprising data points in Morningstar's monthly asset-flows data during the past few years has been investors' appetites for emerging-markets equity funds.Investors typically send new dollars to categories that have notched strong performance, not the ones that have underperformed. But emerging-markets equity funds have bucked that trend, garnering $43 billion in new flows during the past year even as the category's 4% average annualized return during the past three years lags nearly every other stock-fund category.

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Don't Make Emerging Markets Investing Blind Spot

For many U.S. investors, the thought of investing in companies from emerging markets may provoke a sense of unease. Names like China Mobile (CHL), Infosys (INFY), and OAO Gazprom (OGZD) aren't exactly household names here. Yet many U.S. investors already own emerging-markets companies like these through their mutual funds and exchange-traded funds without even realizing it.

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Emerging Markets Mirror Euro Zone Problems

There are problems with outsourcing your monetary policy.  The euro zone is the most obvious case in point. But emerging markets economies’ difficulties are surprisingly similar. Whereas euro-zone member states have handed their monetary levers to the European Central Bank, emerging market economies have handed a substantial degree of their domestic policy to the Federal Reserve. And that’s going to be a worry for them over the coming months as Fed tapertalk resurfaces.

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Don't Be Scared of Emerging Markets

If you looked back at many stories on investing in emerging markets over the past decade, you may have thought this category should not be a part of your total portfolio. Many retirees continue to think emerging markets are still too dangerous for investing. Yet what they are missing is just how many of these countries have now risen out of the emerging markets category and into what I call "growth countries."  Back in 2000, the BRIC nations, Brazil, Russia, India and China, represented only 3 percent of the world's gross domestic product. By 2012, they had advanced to represent over a fifth of the world's production. 

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IBM Pushes Smarter Infrastructure Into Emerging Markets

IBM continues to push its smarter infrastructure technology into growth markets, which the company has targeted as a rich opportunity for expansion.  IBM, which has extended its banking technology into emerging markets, recently opened its first research center in Africa; the 2,000-square-foot facility opened Nov. 8 in Nairobi, Kenya. IBM Research-Africa addresses key challenges of the African continent through commercially viable innovations that affect people's lives.

Emerging Market Shares Are Poised to Recover

Emerging markets account for more than 80% of the world’s population and half of the world’s economy, yet there are huge differences between these economies.  Fast-growing giants such as China and India will continue to devour resources for decades to come. Smaller economies such as Chile and several African and Middle Eastern nations provide these commodities. The tech-savvy markets of Korea and Taiwan supply the world, largely the rich parts, with Samsungs and bits for the iPhone.  However, the real story in emerging markets in the future will, in our view, not be commodities or selling cheap products to Westerners who can no longer afford them. 
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Greece Joins Emerging Markets Index

Wednesday marks Greece's return to a widely tracked emerging-markets stock index after a 12-year absence, but some fund managers aren't enthused.  Many investors who specialize in developing economies say they don't intend to invest in Greece's stock market the minute Greece officially becomes part of the MSCI Emerging Markets Index, to which about $1.4 trillion in portfolios are benchmarked. In June, MSCI said it would again label Greece as an emerging market. Greece had been deemed a developed market since May 2001, shortly after it adopted the euro.

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Emerging Markets Provide Growth Potential for Global Breweries

 Diageo could be considered a good stock for long-term shareholders. In the past ten years, including the global depression in 2008-2009, Diageo's share price increased from $50.50 per share to more than $129 per share; this marked an annualized gain of 9.83%. Diageo hasn't stopped there, and continues to seek growth initiatives to drive its operating performance in the future.

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Picking Emerging Market Winners

Thanks to the Federal Reserve, the heat will be on emerging-market economies in 2014.  The timing and pace of the Fed’s pullback from its easy-money program has been at the forefront of investors’ minds for months. When the central bank finally does ease off on its stimulus–possible beginning as early as March–it will throw emerging markets into disarray.

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Emerging Market Stocks Gain on Iran Nuclear Deal

Emerging market stocks rose for a second day as oil slid after Iran agreed to limit its nuclear program in exchange for some sanctions relief. India’s rupee and the Turkish lira led gain in developing-nation currencies.  South Korean builders including Samsung Engineering Co. (028050) rallied on expectations some of their construction projects in Iran will resume. The Borsa Istanbul National 100 Index increased to a three-week high, while the S&P BSE Sensex Index added 1.9 percent in Mumbai as lower oil helps cut import costs. 

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Can Emerging Markets Offer Inflation Protection?

As the world's main central banks try to battle the threat of stagnant growth and falling prices by implementing inflationary measures, one option for yield available to investors is emerging market bond plays. However, while some analysts point to the gains to be made in the trade, others warn that the market for emerging market inflation-linked bonds, often called "linkers," is too limited to be worth betting on.

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SABMiller Earnings Growth on Emerging Markets

SABMiller Plc, the world’s second-biggest brewer, reported first-half earnings that exceeded estimates on gains in Latin America and Africa, and said developing markets will continue to drive growth.  So-called organic earnings before interest, taxes and amortization rose 7 percent in the six months through September, the London-based company said today. The median estimate of nine analysts surveyed by Bloomberg was for a 6 percent increase.  Total Ebita gained 4 percent to $3.27 billion, beating the $3.2 billion median estimate. Growth was crimped by the weakness of currencies including the South African rand and Australian dollar.

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Diageo Targets New Rich in Emerging Markets

Diageo Plc, the world’s biggest distiller, said it plans to target a growing group of middle-class and wealthy consumers in emerging markets from India to Brazil even as growth in those economies slows.  The London-based maker of Smirnoff vodka and Johnnie Walker whisky has invested about 3 billion pounds ($4.84 billion) in the last three to four years to buy assets from China to Turkey to help boost its presence abroad, Ivan Menezes, chief executive officer, said today at a meeting with journalists after an investor conference.

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Gameplan for 2014: Buy Europe and Emerging Markets

I’ve got some good news for you and some bad news. We’ll get the bad news out of the way first. Using the ratio of total market cap to GDP, the U.S. equity markets are looking expensive again. This metric — which is one that Warren Buffett himself claims to use as a general gauge of market valuation — suggests that U.S. stocks are priced to return a measly 2.1% per year going forward. The good news, however, is that many of my favorite international markets are priced to generate fantastic returns going forward. Spain — which I wrote about last week — is priced to deliver returns of 11.4%. Singapore is priced to deliver returns of 16.7%.
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Reuters Summit: China to Lead Emerging Market Rebound

HSBC Global Asset Management expects emerging 

markets to play catch-up with stocks in the developed 

world with Chinese shares well positioned to lead the 

rebound, a top strategist at the $419 billion money 

manager said on Monday. Bill Maldonado, the chief 

investment officer in Asia-Pacific for HSBC Global, said 

China's reform agenda has further reinforced his 

confidence about investing in the country. He also favorscheap South Korean shares. 

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Emerging Markets to Lead the Next Decade

Standard Chartered Bank is forecasting average growth of 3.5 percent in global gross domestic product for the 2000-2030 period, well above the 3.0-per-cent rate in the prior 20 years, helped by an expected pick-up in global expansion over the rest of this decade.  The research expects China to lead the way on reform. This could enable its economy to deliver average growth of 7 percent between 2013 and 2020 and, with rebalancing of the structure of its economy already under way for more sustained growth, 5.3 percent for 2021 to 2030.

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Google Mototola Moto G Targets Emerging Markets

Google's Motorola Mobility has unveiled a new smart phone aimed at budget-minded consumers. The 8GB Moto G, which will be rolled out this week in Brazil and some parts of Europe – a wider launch is expected over the next couple months – is set to be offered unlocked for the equivalent of $179. (The 16GB model will sell for $199.) For that price, you'll get a colorful aesthetic inspired by the Moto X, a 4.5-inch HD display, a Qualcomm Snapdragon processor, and the Android 4.3 operating system. 

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GM to Back Emerging Market Thrust

General Motors Co., the Detroit-based car maker that counts China as its biggest market, will open a new headquarters in Singapore to oversee markets including Southeast Asia and India.  The offices will open in the second quarter of 2014 with Stefan Jacoby, an executive vice president, overseeing about 120 employees, the Detroit-based company said in an e-mailed statement. The operation, currently based in Shanghai, will also direct businesses in South Korea, the Middle East, Africa, Australia and New Zealand, according to the statement.

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Don’t Forget About Emerging Markets

With the S&P 500 up 25 percent year to date, emerging markets could provide the next move for investors, Gregg Fisher, president of Gerstein Fisher, said Monday.  "We've just come 9,000 since the bottom of the market in 2009, so I think investors can't help themselves but wonder what will the future be like after this run," he said.  On CNBC's "Halftime Report," Fisher said it's time to look outside the United States.

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Active Emerging Market Strategies Poised To Outperform

In a recent blog, we point out that while common large-cap, small-cap and global benchmarks ranked reasonably high in their respective Morningstar categories over the last three years, over a 15-year period the performance of the indices were unremarkable, and in some cases, poor.

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Emerging Markets Super Cycle Promises Growth

The emerging-markets juggernaut that propelled the globe out of the 2009 recession is taking a pause rather than running out of steam.  That’s the analysis of economists at Standard Chartered Plc, who have updated their 2010 theory that the world economy is in a “super cycle” of historically high economic growth which lasts a generation. It remains on track, they conclude in a Nov. 6 study.

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Return of Cash Sparks Emerging Market Rallies

Cash is returning to emerging markets, sparking big stock rallies and a surge in fundraising as calm in the U.S., combined with low interest rates, spurs global investors to try to juice up returns before the end of the year.

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Emerging Markets IPOs Creep Back in London

Emerging market companies are staging a return on the London Stock Exchange after a quiet year for flotations from developing countries so far.  Dubai-based property group Damac Real Estate Development announced an approximately $500 million initial public offering on the LSE’s main market yesterday, while Chinese e-commerce provider JQW announced a float on Aim, the junior listings venue. A person familiar with the JQW deal said the company would be worth about £140 million.

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Emerging Market Equity Funds Make a Comeback

Emerging market equity funds shone in October, reflecting the recent recovery in stocks from once-battered markets like India, Turkey and Brazil.  Diversified emerging-market stock funds saw total returns of 4.19% in October, according to Morningstar. The funds have been on a tear lately, outperforming U.S. equity mutual funds over the last three months with returns of 6.74%. Three-month returns on various categories of U.S. equity funds range from 2.42% to 6%, according to Morningstar.

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Test Your Emerging Markets IQ

As the world's most advanced economies continue to sputter, investors looking for a brighter picture continue to turn to emerging markets, which are growing faster. Investing in these countries can carry significant risks. Political turmoil, uncertain legal systems that may not favor foreign investors, and currency risk are all possible pitfalls.

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Time to Be Choosy in Emerging Markets

After two difficult years, emerging-market stock funds posted solid gains in the third quarter, raising hope that this once-highflying asset class may be ready to rebound. Yet many strategists and money managers caution investors not to get too excited.

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BIITS Replacing BRICs in Emerging Markets

Emerging markets risk shattering into BIITS.Investors in these markets are becoming more discerning about where they put their money, shying away from countries such as Brazil, India, Indonesia, Turkey and South Africa. Behind the discrimination is a new-found focus on current-account deficits and structural weaknesses exposed by the likelihood of less stimulus from the Federal Reserve and cooling demand in China, according to economists from HSBC Holdings Plc, JPMorgan Chase & Co. and International Strategy & Investment Group LLC.

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Should U.S. Be Treated Like An Emerging Market?

 

After a partial government shutdown, a near-miss on a potential debt default and a Chinese ratings agency downgrade, why doesn't the U.S. get treated like an emerging market?  Pundits have compared the U.S. with developing nations for years, citing issues ranging from crumbling infrastructure to healthcare to education, but in the wake of the 16-day government shutdown and near-default on the national debt, the comparison has moved away from the fringes. Chinese rating agency Dagong cut its rating on U.S. debt to parity with Brazil, with a negative outlook. 

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Emerging Markets Chart That Says 'Aggressively Buy'

Investors who were eventually won over by the merits of backing emerging markets will have been left disappointed by returns over the past year.  The promise has long been that poorer parts of the world, such as China and India, will rapidly catch up with the wealth of the West, and that investors here could profit from that transformation, albeit with a bumpy ride along the way. 

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Best Way To Invest In Emerging Markets

There are three ways to get exposure to emerging markets, according to Barron’s Shuli Ren:

Buy an emerging market index 
Buy a global materials indexBuy a basket of multinationals with heavy emerging markets exposure.

I’ve written about the first option recently, giving my recommendation on choosing the right emerging market ETF.  The most direct route I have found is via the EG Shares Emerging Market Consumer ETF (ECON). 

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Hyundai's Third-Quarter Profit Advances In China, Brazil

Hyundai Motor Co., South Korea’s largest carmaker, reported its first profit increase in four quarters after sales rose in China and demand for hatchbacks helped boost deliveries in Brazil.  Third-quarter net income climbed 5.6 percent to 2.14 trillion won ($2 billion) from a year earlier, the Seoul-based company said today. That compares with the 2.15 trillion won average of 25 analysts’ estimates compiled by Bloomberg.

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Okay To Like Emerging Markets Again?

Have emerging market assets finally embarked on a rally which can stick?   Quite a few analysts seem to think so, including those who have been cautious or outright bearish in the  past.  One of these is Societe Generale’s Benoit Anne.

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Yum to Invest $10B in Emerging Markets Push

Yum! Brands Inc. (YUM), the owner of the KFC and Taco Bell fast-food chains, and its partners will spend $10 billion over the next seven years adding restaurants in emerging markets to tap increasing demand for eating out.  The investments will help Yum increase its outlets in these countries to more than 20,000, Chief Executive Officer David Novak said in an interview yesterday. 

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Liquidity Flowing Back Into Emerging Markets

In an interview with ET Now, Joel Bloomer, Head of Equity and Credit Research, Asia Pacific, Morningstar, shares his views on global equity markets. Excerpts:  ET Now: Why are all equity markets moving up in a synchronized manner when growth concerns are still evident?

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South African Stocks Hit Record Peak

Emerging stocks hit five-month highs on Monday, boosted by expectations that China will keep up its strong growth performance and the Federal Reserve will maintain monetary stimulus this year.  South African stocks hit new record peaks after touching an all-time closing high on Friday as positive China data has boosted the outlook for mining and other companies sensitive to Asian demand.

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Debt Deal Done, Are Emerging Markets Set to Soar?

With the removal of a major market overhang following a deal to avoid a U.S. debt default, investors have begun to wonder: are emerging markets set to soar?  "We expect the news to sustain the re-pricing of risk assets that got underway in September," Tim Condon, head of research for Asia at ING, said. "We now think emerging market equity will outperform developed market equity in the current quarter."

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Nestle Sees Emerging Markets Lift Sales Growth

Nestle said an improvement in emerging market demand helped to lift sales growth in the third quarter, reassuring investors worried by recent negative news from European peers Danone and Unilever.  The world's biggest food group and its rivals have been grappling with sluggish consumer demand in austerity-hit Europe, where prices for Nestle's products continued to fall, and a slowdown in many emerging markets. But Nestle said on Thursday that it had seen a slight pick-up across all its markets, which helped to boost its share price by 2 percent in morning trade.

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