EM Fund Stock Picks & Country Commentaries (November 24 2024)
Trump’s win + tariffs, Korea + Vietnam trip reports, what's growing in India, IMF fall meetings, Saudi Arabia, local asset managers (& the long hand of globalisation), case for European stocks, etc.
As of late November and just before the USA’s Thanksgiving holiday, more October fund updates have dropped (our continuously updated post containing all funds is here) along with some more US election impact assessments:
🔬🌐 A “Trump” card for US small caps? (abrdn) - A look at Trump presidency's potential impact, from policy implications to market dynamics, with a focus on the unique positioning of small cap stocks.
🔬🌐 US elections: The European impact - Trump’s mercantilism could spell instability (Capital Group)
President-elect Trump has identified the US’s trade deficit with Germany as a concern, suggesting German exporters could be the target of new trade tariffs.
Germany is effectively sacrificing domestic consumption and recycling its surplus saving to the US in the form of large capital flows, which has allowed the US to ‘overconsume’ and run a trade deficit.
US pressure on Germany (and China and Japan) to boost domestic demand and reduce trade surpluses could lead to more instability in inflation, interest rates and exchange rates.
🔬🌐 Americas CIO View: Trump returns: Priorities are growth and winning (DWS)
Trump returns: Decisive election win for Trump and Republicans – a mandate!
Tariffs & Taxes: Tariffs likely by executive action, tax cuts by an act of Congress
Deregulation & energy: New agency heads likely have pro-growth orders
We raise our 2025E S&P EPS to $275 from $270, 2026 S&P EPS likely $300
We take neutral S&P 500 tactical view after exceptionally strong but justified year
🔬🌐 Chart to Watch: Healthcare valuations drop following Trump’s RFK Jr. pick (Janus Henderson Investments)
New Asia Fund Documents & Research
Asia Frontier Capital’s latest monthly newsletter (detailed economic and portfolio) is from the end of October (Asian Frontier Markets Should Be Able to Manage a Second Donald Trump Presidency - October 2024 Update):
📈🌏 AFC Asia Frontier Fund’s newsletter noted that South Asian and Central Asian frontier markets have a relatively low exposure to exports as a percentage of GDP as they are more dependent on their domestic economies to support economic growth. Markets that were positive contributors included Iraq, Pakistan, Sri Lanka, and Kazakhstan while negative contributors were Vietnam and Uzbekistan. Stocks mentioned or discussed by name included Kazakhstan based KASPI (NASDAQ: KSPI / LON: 80TE / FRA: KKS) who will become the controlling shareholder of Turkish eCommerce platform Hepsiburada (NASDAQ: HEPS) or D-MARKET Electronic Services & Trading; Sri Lankan banks Commercial Bank of Ceylon PLC (CSE: COMB / COMBt) and Hatton National Bank (CSE: HNB / HNBt); Vietnam digital IT service provider FPT Corp (HOSE: FPT) and HDBank (HOSE: HDB); while other stocks were mentioned or discussed without their names being given.
📈🇮🇶 AFC Iraq Fund’s October newsletter (economic and portfolio) noted the expansionary 2023 and 2024 budgets are boosting the non-oil economy while structural changes in the financial sector are accelerating the adoption of banking and transforming the sector and its role in the economy.
📈🇺🇿 AFC Uzbekistan Fund’s October newsletter discussed the partial sell-down of The Uzbek Commodity Exchange (TSE: URTS) by the Uzbek government and noted the macroeconomic outlook for Uzbekistan remains robust.
📈🇻🇳 AFC Vietnam Fund’s October newsletter noted impressive growth in 3Q 2024 (despite the impact of Typhoon Yagi in September), full leadership stability at the national level (as new leaders assumed key posts), and that many listed companies released quarterly earnings. Earnings reports discussed included those of stationery maker Thien Long Group Corp (HOSE: TLG), Mercedes car dealer Hang Xanh Motors Service JSC (HOSE: HAX), garment maker Tng Investment And Trading JSC (HNX: TNG), and Agriculture Bank Insurance JSC (HNX: ABI).