Emerging Markets ETFs Hauling In Cash

Rebounding equities throughout the developing world are spurring investors to rush into the exchange traded funds that hold those stocks. Investors are also paying up for the privilege.  The Vanguard Emerging Markets ETF, the largest emerging markets ETF by assets, now trades at a 0.2% premium to the value of its underlying holdings good for the ETF’s widest gap in two years, report Boris Korby and Edith Waringa Kamau for Bloomberg.

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Mark Mobius Says Buy Russia and Nigeria

Mark Mobius is a superbull. In fact, he’s confident that the global markets are facing a five-year bull environment, as massive liquidity injections from central banks will start to do the trick.  And then things will start to happen: Emerging markets will outperform. Nigeria will attract lots of attention. Even Zimbabwe is looking like an interesting investing opportunity.  “The U.S. outperformed emerging markets last year, [and] now emerging markets are coming back and outperforming,” Mobius, executive chairman of Templeton Emerging Markets Group, said in an interview with MarketWatch on the sidelines of this year’s FundForum International in Monaco.

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The Cloud in Emerging Markets

Cloud computing is rapidly transforming business processes both domestically and in international emerging markets. Information technology is projected to be based more than 50 percent in the cloud within the next few years and it may be an ideal environment for many developing markets. This shift will allow emerging international markets to move past costly technology barriers and drastically increase productivity and growth. 




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How Baron Emerging Markets Is Winning

Emerging-markets stocks have been mostly submerging the past year or so. But Baron Emerging Markets fund has managed to stay afloat and deliver a respectable return. The fund has also excelled against the competition, beating 96% of diversified emerging-markets funds over the past 12 months.Manager Michael Kass credits Baron's philosophy of deeply researching companies for the successful run. Doing his homework helped him find such obscure companies as Shuaa Capital, a United Arab Emirates financial firm (and the fund's only holding in so-called frontier markets); Steinhoff International, a South African furniture maker; and China's Sihuan Pharmaceutical. All three stocks have at least doubled over the past year.

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Emerging Markets to Gain Most from ECB Easing

The European Central Bank has given investors an excuse to keep buying in emerging markets into the second half of the year, as a worldwide “hunt for yield” runs out of assets to buy in advanced economies.  They will have to be more selective than they were during the post-financial-crisis stampede into developing countries, but as the global economy stabilizes and rich-country interest rates plumb new depths, global investors can now finally put the “taper tantrum” behind them.

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-Igor P Purlantov

What Estee Lauder Has Done In Emerging Markets

Estée Lauder, with a market capitalization of $31 billion, is an enterprise that manufactures various prestige cosmetic products across the skin care, hair care and make-up categories. The company operates primarily in the $77 billion prestige cosmetics market and reported revenues of approximately $10.4 billion in CY13. 

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Three Reasons to Buy Emerging Markets Stocks

For those of you who haven’t noticed, emerging markets have been on a tear.  Since Jan. 31, the S&P 500 has gained a little more than 7%. However, the iShares MSCI Emerging Markets Index Fund and the Vanguard FTSE Emerging Markets ETF are each up almost double that — 12%.  Those are two of the largest ETFs on the planet, with $84 billion in assets under management between the two of them. So when emerging market funds like these move, investors better start paying attention.

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Jobs Data Lift Emerging-Market Currencies

Emerging-markets currencies climbed against the dollar on Friday after the U.S. jobs report, as traders bet improvement in the labor market in May wasn't strong enough to push the Federal Reserve to an earlier increase in interest rates than expected.  Many investors in the developing world have kept a close watch on U.S. economic indicators to gauge when the Fed will raise rates. Higher U.S. rates, analysts say, could strengthen the dollar and draw cash out of emerging markets.

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-Igor P Purlantov

Dubai Tops The World's Best Performing Stock Markets

Call it a perfect market storm of wealth creation. Since the start of 2013, the Dubai stock market has registered a near 200% gain to become the best performing financial market in the world.  The Gulf emirate's securing of the World Expo in 2020 is likely one factor behind this success as is the wider UAE's reputation as a safe-haven in a region riddled with uncertainty.  Oil averaging more than $100 a barrel for three years running, meanwhile, is driving growth towards record spending on infrastructure.

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Investors Rewarded for Trek Into Little Known Markets

Investors who ventured into frontier markets—the smaller, lesser-known cousins of emerging markets—have been rewarded with impressive equity returns over the past 18 months.  While the MSCI Emerging Markets Index has been essentially flat since the start of 2013, the MSCI Frontier Markets Index has shot up by more than 50%. Developed markets grew strongly too, but the 32% surge in the MSCI World Index was still dwarfed by frontier markets’ growth.  Individual countries have posted some significant returns, too. Since the start of 2013, Bulgaria’s market has soared 91%, Pakistan’s has jumped 88%, and Nigeria’s has risen 47%. 

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-Igor P Purlantov

Investor Confidence in Emerging Markets Highest in Years

Investor confidence in emerging markets is at its highest level for more than a year, according to one of the world’s largest independent financial advisory organisations, deVere Group.  Nigel Green, founder and chief executive of deVere Group, commented that there has been a considerable jump in client interest in this sector: “Our independent financial advisers in every global region in which we operate report that a growing number of clients are now actively expressing a keen focus on emerging markets.

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Are Emerging Markets The Next Great Trade?

I love it when perception differs from reality... that's when you can really make money in the stock market.  Take emerging markets for instance.  If you read the news regularly, you'd think emerging markets were the last place you'd want to put your money. Almost every day there's a headline decrying how the economies in these developing nations are on the verge of collapse. In 2010 it was Greece... in 2012 Egypt... last year it was Syria... and today it's Ukraine.

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http://tinyurl.com/mnuada6

-Igor P Purlantov

Emerging Markets Bounce Back

Investors are settling in for another ride in emerging markets.  Uneven stock indexes and low bond yields in the U.S., Europe and Japan are pushing waves of investor cash into markets from Brazil to South Africa that suffered big losses as recently as this past winter. Government-bond yields in the U.S. and Germany hit 2014 lows on Wednesday in response to the latest signs of soft Western growth.

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-Igor P Purlantov