EM Fund Stock Picks & Country Commentaries (June 27, 2023)
EM Fund Stock Picks & Country Commentaries (June 27, 2023)
We dig into some emerging and non-emerging market fund investor letters for potential EM stock picks plus another China strategy and investing in global spirits stocks (or their local subsidiaries).
For this week, we dig into some emerging and non-emerging market fund investor letters (including those of hedge funds) for potential EM stock picks that include (among other stocks also getting mentions in this post):
A couple of Western liquor or spirits stocks who are key players in both China and India. In the latter country, one has a listed subsidiary that has outperformed the parent.
A Hong Kong based alternative investing and lending stock that is well diversified to ride out market uncertainties.
A Hong Kong manufacturing stock that was a pioneer in small motor manufacturing albeit shares are near COVID lows (they fell even further during the 2008 financial crisis).
A Korean personal and household goods stock still waiting for Chinese demand to rebound.
Two Taiwanese tech stocks who's shares are bucking the tech slowdown.
Two Indian bank stocks that have been outperformers plus some Indian IT service stocks and a lesser known (at least to those of us outside of India) B2B eCommerce player.
An IT stock offering a digital SAAS platform for law enforcement investigations. With crime on the rise in the USA and in many other countries, they should have no shortage of clients.
A stock that makes protective gear aimed at participants in extreme sports along with motorcycle and bike enthusiasts.
A couple of Polish stocks. Two have been performing well while the other is a leading restaurant operator and franchisee who should start to see their shares recover now that COVID is gone.
A Mexican transportation stock that should benefit from increased nearshoring.
Our March 21st and June 13th posts covered some fund strategies for investing in China. This post covers how one fund has pointed out how the benchmarks for investing in China include far too many stocks that foreign investors may not want to invest in e.g. state-owned enterprises (SOEs) or state-influenced companies along with cyclicals or industrials.
Instead, they invest according to three broad categories with the first two containing some obvious Chinese stocks that have either emerged from the pandemic in a stronger competitive position or had already built great franchises that will be hard to dethrone.
Another fund article noted how some global players in the spirits industry offer investors instant diversification across product lines and emerging markets - including China and India where they are key players. Investing in them (or some of their listed subsidiaries) rather than, for example, Kweichow Moutai, will tend to make more sense (See: Kweichow Moutai (SHA: 600519): China's Communist Spirit and Most Valuable Company).
This same sort of investing logic could be applied to other consumer focused stocks and industries. In other words, either invest in the global players domiciled in the USA or Europe or invest in their listed emerging market subsidiaries (who hopefully have fewer corporate governance type issues).
Finally, last week’s post covered how funds rarely seem interested or excited about SE Asian stocks. This week we cover a fund who is overweight in the region and believes stocks there will benefit from China’s reopening and higher raw materials prices.
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