EM Fund Stock Picks & Country Commentaries (December 20, 2023)
200+ Chinese stocks have gone up by more than 50% in US$ terms over the past 12 months, what friendshoring data reveals, 2024 outlooks covering emerging markets from various asset managers, etc.
Some quick takes for this week:
Links to 2024 outlooks covering emerging markets from various asset managers.
Several Singapore listed stocks that have been the subject of recent broker notes or research.
An Indian ethnic wedding and celebration wear fashion stock that has expanded its reach overseas.
Several South African stocks with recent research reports out plus a recent podcast covering a number of potential South African stock picks.
Links to more recent sector or macro research reports for China and Korea (not covered in our monthly CMBI or Mirae Asset Securities stock pick posts) have been added to this template, along with recent broker calls for Singapore listed stocks.
Most emerging market or frontier market funds with good economic and/or portfolio commentaries, etc. have updated their documentation up to the end of November.
In a recent podcast noted later in this post, it was mentioned how, despite everything that’s happened in the past 12 months, there are over 200 Chinese stocks that have gone up by more than 50% in US dollar terms. In other words, opportunities can still be found in China, but careful stock selection matters even more now.
The same can probably be said about South Africa - another “hated” market with a steady stream of mostly negative news. Later in this post, we cover several South African stocks along with a lengthy podcast that details potential South African small and midcap stock picks.
Finally, a recent research report that looked at various “friendshoring” related data points concluded that half the loss of China’s market share in US manufactures is down to “genuine” reshoring rather than the rerouting goods through other countries (to skirt rules trade rules or skew trade data…). Of Course, Chinese companies are also building factories in SE Asia and Mexico - trends that will negatively impact employment and economic growth at home BUT be positives for regions and countries where they have chosen to locate in.
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For a further disclaimer and an explanation of the reasoning behind these posts: DISCLAIMER: EM Fund Stock Picks & Country Commentaries Posts.
Note: Where possible, company links are to their respective investor relations or corporate pages. Region and country links are to our ADR or ETF pages where there are further country specific resources (e.g. links to local stock markets and media websites). Please report any bad links in the comments section.
🗄️ Fund documents / updates; ⚠️ Disclosures or restricted access e.g. based on your location, investor status, etc.; 🎥 Video; 🎙️ Podcast; 🎬 Webinar; 📰 Newspaper/magazine article; 🗃️ Archived article; 📯 Press release; 🔬 Research analysis (including articles/blog posts from fund managers, etc.)
EM equity performance (along with the performance of other key asset classes) have been all over the place in recent years:
🔬 The winning asset classes of 2023: Bitcoin and oil trade places (Macrobond)
This piece has a number of good charts and graphics to help you invest ex-China:
🔬 Beyond China: what does the rest of the EM equity world have to offer? (Wellington Management)
Our research suggests that investors should consider breaking out emerging market (EM) ex-China equities from Chinese equities in their EM allocations. We believe EM ex-China offers the potential for higher returns and lower risk than China, as well as a superior translation of GDP growth to earnings and returns. In this paper, we share the research behind these conclusions, including our observations on:
The growing divergence in the behaviour of EM ex-China equities and Chinese equities
The composition of the EM ex-China opportunity set (e.g., sector/market breakdown, concentration in top stocks, valuations)
The link between economic growth and EPS growth and why it has proven to be stronger in EM ex-China
The structural outlook for EM ex-China
This piece includes a number of good charts, tables, and other graphics plus a detailed discussion of key upcoming 2024 elections:
🔬 2024 Outlook: Resilience, Tails, and Inflections (Ashmore) December 2023
Other firms have posted their 2024 outlooks for emerging markets: