EM Fund Stock Picks & Country Commentaries (February 16, 2025)
AI experiments to improve these posts + Substack tech glitch. DeepSeek deep dives, searching for black swans, South Africa in a cyclical uptrend, Argentina turnaround, dollar "Mar-a-Lago Accord?" etc
A quick note about some experiments with AI and improvement to these posts: I’ve been playing around with DeepSeek (when the server is not giving a busy message - which is a good portion of the time…) and another Chinese AI service that has not been hyped as much (and I won’t mention by name as I don’t want it to start giving a “server is busy” message!).
Both services can be used to extract stock names or other key information from fund updates or my Monday links posts and organize them into tables (albeit DeepSeek, when the server is not busy, produces a less reliable table output with missing stocks/articles…). For example and from my Monday post using the other Chinese AI service - my request and the truncated output (I only screenshotted the top of the table…):
We subsequent requests, I was able to get them to include the embedded links into the previously produced table to make the article headline clickable to the article. However, I could not get them to embed the links for the stock names and tickers (as for some reason, the AI kept searching the internet and including Google, etc. links…) plus the AI would run out of steam (or server capacity/bandwidth. etc.) before completing the task with all stocks and articles from my Monday post.
In addition, I used the AI to extract/list stock names from some several page fund annual reports or transcripts covered later in this post. However… there are still AI teething issues e.g.:
The AI gets confused if you don’t start fresh conversations b/w completely different requests - especially when uploading files - and you often need to make follow-up requests…
Some words don’t register with the AI e.g. asking for which stocks on the list were detractors or detracted (the most common word funds used to describe weak performers) seem to miss finding stocks that are described as having “weakened,” etc. This means everything still needs to be rechecked - something that can also be time consuming (just like outsourcing work to a third party in a foreign country, etc.)
Nevertheless, the AI’s ability to extract some basic data/info and organize it into tables or lists is very useful/helpful.
Note that I just listened to an alt-finance type of podcast interview where the point was made that AI is not necessarily going to cost people their jobs, but rather the people who use AI (or know how to use it) will take the jobs of those who don’t know how to use it or incorporate into their work…
However… my next problem is with Substack’s continued inability to allow writers to create tables from within the platform as they continue to be focused on becoming Twitter/Tik Tok/Spotify etc. with a blogging platform thrown in.
Substack does have an integration with a useful table/chart/graph generation service called Datawrapper; but the table must be created in and can only be edited within Datawrapper plus it appears links cannot be embedded into the tables. In other words, not writer friendly. I also don’t like the idea of relying on a third party service e.g. Tweets still cannot be embedded into Substack due to them pissing off Elon Musk with their Notes clone…
With that in mind: I have further cleaned up and simplified our continuously updated post containing all funds (who’s summarized changes then get emailed out on Sunday) - for example:
And please let me know if the following emojis cannot be read by any particular browsers or phone models:
📈 Contributors; 📉 Detractors; 🏧 Transactions; 🚩Discusses/mentions stocks by name.
UPDATE ABOUT A SUBSTACK TECHNICAL PROBLEM:
Tonight while finishing up updating our continuously updated post here, the post became hopelessly mired in Substack Save redirects to the point that I can no longer edit it or access it from the editor. I was able to make a copy of the post (Note: 🏦 Invesco Emerging Market Funds (Various) ⚠️ section was what I was almost done updating before adding to and emailing out this summary post…), deleted the original one, and republished the copy under the same url except for the [COPY] [COPY] in front of the title (as again, I can’t save edits from the editor…), and I am still having the same problem attempting to edit/save the republished post:
I suspect that I have once again hit a word or character limit (maybe in part given the emoji use) preventing saves - something I ran into when creating our Frontier & Emerging Market Stock Index. I will likely need to briefly unpublish again, use the em-fund-stock-picks-and-country-commentaries link as a table of contents post (as I did with the stock Index), and break the rest of the post up into other shorter posts - basically what I did for the stock index which is separated by region (or maybe I should put fund updates into one post and fund research into a separate post…)…
I will contact Substack technical support and will think of a solution next week to both prevent this from happening again and to improve things for readers e.g. separating out research pieces that don’t mention stocks by name or spending less time covering them…
As of early mid-February, more January or Q4 fund updates (our continuously updated post containing all funds is here) have dropped along with new research. Starting with some non-emerging market focused research pieces:
🔬🌐 What Trump 2.0 Means for the Economy and Markets (Amundi) - China is likely to implement fiscal support measures to shift production chains to Asia and Latin America, reducing US imports and mitigating tariff effects. In contrast, Europe lacks this flexibility but could accelerate reforms and investments.
Speaking of DeepSeek:
🔬🌐 Market experts take a deep dive into DeepSeek (Invesco)
Market impact - DeepSeek had a short-term bearish impact, but the market has been sorting out potential winners and losers and generated some rotation in the technology space.
Valuations - When priced for perfection or near perfection, a stock is more vulnerable to a significant sell-off — even based on news flow with little in the way of details.
Tech giants - Before COVID, the S&P 500 Index’s composition was drastically different than it is today. With the rise of mega-cap technology names, this has changed.
🔬🌐 What’s Next for China AI after Deepseek’s Debut? (Invesco) - While the jury is still out, data points are coming in that DeepSeek may not be superior to its US rivals.
🔬🌐 Could DeepSeek lead to re-rating of Chinese equities? (Invesco) - We believe that the various benefits brought by DeepSeek, including higher efficiency, cost savings, strong computing power, and a much lower barrier for various industries to use AI, could benefit many listed companies in China and eventually lead to a re-rating of Chinese stocks.
🔬🌐 China’s DeepSeek – A “Sputnik moment” or a leap not to be underestimated? (East Capital) - DeepSeek R1 is an open source AI tool developed by a team funded by Wenfeng Liang, the co-founder of the Chinese hedge fund High-Flyer. Their new release, R1, has topped the free download list in Apple’s App Store since 26 January 2025, and in China we see it being used absolutely everywhere.
🔬🌐 Swan Lake: The risks that would most disrupt consensus in 2025 (New York Life Investments) - A black swan is a high-impact, unpredictable event that disrupts investor consensus. Investor attention around them may ebb and flow, but these events always can, at any time and with no warning, upend entrenched economic narratives and reset market expectations. Read the report and listen to the podcast to hear our views.
🌐🎙️ Searching for Black Swans (18:42 Minutes) - It’s Swan Lake week, and Lauren Goodwin and Michael LoGalbo are diving into the unknown. Tune in for the top 4 black swan risks that could disrupt investor consensus.
🌐🎙️Searching for Black Swans, Part 2 (18:42 Minutes) - Lauren Goodwin and Michael LoGalbo are back for round two of our annual Black Swans discussion. From climate risks to maritime threats, tune in for three outside-the-box risks that could most disrupt investor consensus this year. [Too much obligatory “climate change” talk… But the Brazil Dengue research portion was interesting…]
🔬🌐 Dead Reckoning: Investing Lessons from the High Seas (MAWER) - Does this mean that successful investing is as futile as the HMS Wager’s ill-fated journey? We certainly don’t believe so! The following article will illustrate several ideations and tools investors can incorporate into their processes to navigate the choppy, mercurial waters of long-term investing.
🔬🌐 Capital Market Assumptions: 2025 Edition (Northern Trust) - Explore the investment themes likely to drive global markets over the next 10 years and our detailed return forecasts across stocks, bonds, real assets and alternatives.
🔬🇮🇹 Innovation, Italian Style (First Sentier Investors Group / Stewart Investors) - Despite Italy's challenging macroeconomic indicators, such as political instability and low fertility rates, the country remains a hub of innovation and dynamic businesses.
🇮🇹 Brembo NV (BIT: BRE / FRA: Y8O / OTCMKTS: BRBOF) - Braking components for passenger cars and motorbikes.
🇮🇹 DiaSorin SpA (BIT: DIA / FRA: 34D / OTCMKTS: DSRLF) - Specialty diagnostic tests for use in hospitals, labs and point-of-care systems.
🇮🇹 Technoprobe SpA (BIT: TPRO / FRA: K8B / OTCMKTS: THNBY) - Specialised probe cards for chips.
New Asia Fund Documents & Research
🗄️🌏 Quarterly reports for the Malaysia based Apollo Asia Fund don’t typically mention stocks by name and frankly include a bit too much extraneous political/ESG type talk. However, the manager's report for 4Q24 is worth reading and discussed the following stocks:
🇹🇭 Thai Stanley Electric PCL (BKK: STANLY / STANLY-F / OTCMKTS: TSETF) - Automotive bulbs, lighting equipment, molds & dies.
🇻🇳 Refrigeration Electrical Engineering Corp (HOSE: REE) - Hydroelectric, solar, wind & thermal energy.
🇲🇾 Telekom Malaysia Bhd (KLSE: TM / OTCMKTS: MYTEF)
Asia Frontier Capital (AFC)’s January newsletter is available:
🗄️🌏 AFC Asia Frontier Fund January newsletter (detailed economic and portfolio - Stable Start for Asian Frontier Markets in 2025 - January 2025 Update) noted that January performance was led by Sri Lanka, Cambodia, Uzbekistan, Timor-Leste, and Georgia while Pakistan and Bangladesh faced headwinds. A number of stocks were mentioned without giving their specific names, but can be guessed IF you are very familiar with certain frontier markets.
🗄️🇮🇶 AFC Iraq Fund’s January newsletter (economic and portfolio) made some market observations as they believe the Iraq market is in a multi-year uptrend.
🗄️🇻🇳 AFC Vietnam Fund’s January newsletter discussed the Tet holidays, potential implications of Trump’s trade policy on Vietnam, the economic stimulus package(which will benefit 🇻🇳 Lam Dong Mineral and Building Material JSC (HOSE: LBM)), Ho Chi Minh City’s first metro line beginning operations, and stationery/ballpoint pen manufacturer 🇻🇳 Thien Long Group Corp (HOSE: TLG) in detail. The fund’s largest positions were mentioned.
🗄️🇺🇿 AFC Uzbekistan Fund’s January newsletter noted they are we awaiting news regarding the Tashkent Stock Exchange's integration with Clearstream and further clarity on the existing integration with Bloomberg (which is currently experiencing some data display issues).
Asia Frontier Capital (AFC) also had these recent frontier market press mentions:
📰🇵🇰 Radio Pakistan: Global funds eye Pakistan as 84% stock rally set to continue (Radio Pakistan)
📰🇵🇰 Bloomberg: Global Funds Turn to Pakistan as 84% Stock Rally Set to Extend (Bloomberg)
📰🇧🇩 The Financial Express: Stable policies to lure foreign investors to present market (The Financial Express)
📰🇧🇩 The Business Standard: Asia Frontier Capital sees green shoots in Bangladesh stock market, said its fund manager (The Business Standard)
🎥🇧🇩 The Worst is Over - Ruchir Desai, Co-Fund Manager of the AFC Asia Frontier Fund discusses the Outlook for Bangladesh with The Business Standard in Dhaka, Bangladesh (The Business Standard) 29:19 Minutes