EM Fund Stock Picks & Country Commentaries (June 16, 2024)
Why EM investors need to resist latching on to the latest theme (long India, short China), China trip report, evolving BRICS, digesting South Africa + India elections, India infrastructure bets, etc.
As of mid-June, more May factsheets have become available starting with some more new pieces digesting the implications of the recent Indian elections:
🇮🇳 Mobius Capital Partners has this piece: A Surprising Indian Election Result, But What Does it Mean for Investors?
🇮🇳 Robeco has this piece which ties back into what was said in the interviews covered in last week’s post: Domestic flows underpin India’s equity valuations - India’s valuation premium to the MSCI Emerging Markets (EM) index is being sustained by inflows from domestic investors, and the trend can continue as long as economic fundamentals are positive… India’s savings pool is increasingly being invested in domestic equities… India is outperforming global and EM benchmarks post-Covid… Domestic investors are favoring small and mid-cap stocks
🇮🇳 This HSBC AM piece covers equity market implications by bullet points: 2024 India elections - market impact - The incumbent political alliance emerged victorious in India’s recently concluded general election, but the race was much tighter than expected for Prime Minister Modi’s party. As the dust continues to settle, questions around how the election result will impact future political stability and policy outlook in the world’s largest democracy remain. Find out how we expect this situation to play out here
🇮🇳 Amundi has this piece: India's election outcome and its economic implications: 1) What is the overview of India's national election? 2) What should we expect from the next government’s political agenda? 3) What has been the market's reaction to Modi’s reduced majority? 4) What are our current views on the Indian economy and the macro-economic outlook going forward? Are there any risks that investors should watch out for? 5) Where do you see opportunities for foreign investors? 6) What does the inclusion of Indian bonds in benchmarks mean for Indian markets?
📈🇮🇳 Van Eck has this piece which discussed conglomerate Reliance Industries Limited (NSE: RELIANCE / BOM: 500325) and privately owned banks ICICI Bank (NYSE: IBN) and HDFC Bank (NYSE: HDB): Significant Strides in India’s Infrastructure - Angus Shillington recently sat down with Barron's to discuss why infrastructure is key to Prime Minister Modi's ambitions to make India a global manufacturing center.
📈🇮🇳 The previous piece mentioned this recent Barron’s article that covered the above stocks along with Adani Green Energy (NSE: ADANIGREEN / BOM: 541450), engineering & construction stock Larsen & Toubro (L&T) (NSE: LT / BOM: 500510), Indian Railway Finance Corp (NSE: IRFC / BOM: 543257), Siemens Ltd (NSE: SIEMENS / BOM: SIEMENS) & ABB India (NSE: ABB / BOM: 500002) (the Indian subsidiaries of European MNCs), state-owned energy providers Power Grid Corporation of India (NSE: POWERGRID / BOM: 532898) & NTPC Ltd (NSE: NTPC / BOM: 532555) (formerly National Thermal Power), and Ultratech Cement (NSE: ULTRACEMCO / BOM: 532538 / OTCMKTS: UCLQF):
India Is Building More Roads and Railroads. 7 Stocks to Buy. 🗃️ - Infrastructure is key to the prime minister’s ambitions to make India a global manufacturing center.