Emerging markets

Private Equity Cools on Emerging Markets

30 April 2017
Is the smart money fleeing EM just as the herd rushes in?

Barron's Sept. 2016

 

Investors are finally warming to emerging markets. The iShares MSCI Emerging Markets exchange-traded fund has jumped 17% this year, and emerging markets funds of all kinds have marked more than $130 billion in inflows, according to the Institute for International Finance in Washington.

But numbers from the private-equity sector make you wonder if something is wrong with this picture. New capital commitments to emerging market private-equity funds dropped 42% in 2015 to about $40 billion, and are plunging again this year toward 2009 levels, says London-based data tracker Preqin.

Where's the Emerging Market Oil Dividend?

30 April 2017
Cheaper oil is supposed to help most EM economies, which import energy. Hasn't happened so far.

Barron’s, May 14, 2016

 

Low oil prices are obviously bad for some emerging markets, such as Russia and Brazil. But they should be good for most of them, including India and China. Crude exporters represent just 20% of the global MSCI Emerging Markets Index, says Marcus Svedberg, chief economist at East Capital in Stockholm.

Markets have ignored this logic, however. Emerging market indexes have plummeted since the great oil crash began in mid-2014, and only started to recover as crude prices rebounded recently. Analysts who waited on an oil dividend for the developing world are giving up hope. “If you haven’t seen it for more than 20 months, you probably won’t see it now,” says John Baffes, who oversees the World Bank’s commodities forecasting. Here’s why:

Indian Software Falls Behind Digital Curve

30 April 2017
Tata, Infosys and Wipro made Bangalore a global tech nexus. But they haven't kept up with the times

Barrons, July 2016

A technological generation ago—the early 2000s—upstart software outsourcers from India like Tata Consultancy Services , Infosys , and Wipro wrought an industry revolution and put their country on the map as a global brain center. Now they are in danger of falling behind the times. Shares of all three have slumped over the past month or so after quarterly results disappointed on growth, margins, or both.

 

High Anxiety Over Emerging Market Corporate Debt

23 January 2016
Emerging market debt may hit a crisis again, but this time the problem is companies, not governments
Emerging Market Cities that Debt Built

Institutional Investor,  Oct 22, 2015

 

Emerging-markets debt has reached worrying levels again, but the focus of anxiety is different than it was during the crises of the 1980s and ’90s. Sovereign states have largely heeded the lessons learned from those debacles. Much unlike their developed-world peers, they’ve held debt steady since 2000, at about 40 percent of gross domestic product, according to the Institute of International Finance in Washington.

Emerging Markets Haven't Hit Bottom Yet

23 January 2016
EM equities will get worse before they get better, but bonds may offer value
Emerging Markets: How Low Can They Go?

September 26, 2015

 

 

When Mark Mobius urges caution on emerging markets, you know they’re in trouble. The septuagenarian executive chairman of Franklin Templeton’s emerging-markets group has been boosting the asset class for decades, exhorting investors to pile back in after crises and meltdowns. Now, not so much. “Things have changed since the 1998, 2008, and 2011 downturns,” he says. “It would be dangerous to make an overall or categorywide judgment.”

Iran Can't Just Open the Oil Spigot

23 January 2016
Energy companies won't rush to invest billions in the Islamic Republic

July 18, 2015

The biggest ripple for investors from the landmark July 14 agreement that could free Iran from international economic sanctions in return for curtailing its nuclear program will be felt in the oil markets. They didn’t take the news well. The price of Brent crude fell 2.5%, to $57.06 a barrel, from what was already close to a four-month low, before falling a bit further later in the week.

China's Internet Stocks May Be Oversold

23 January 2016
Baidu, Tencent and others may rebound from the broader market rout

July 11, 2015 2:22 a.m. ET

Chinese Internet companies, led by search provider Baidu and wide-ranging conglomerate Tencent Holdings, held their value for nearly a month after the broader Chinese market started crumbling in late May, and with good reason. These two fast-growing giants, along with Chinese e-commerce king Alibaba Group Holding and its upstart rival JD.com, are listed on U.S. and Hong Kong exchanges. They are bought by global tech investors a world away from the mom-and-pop Chinese punters who have been borrowing money to gamble on little-known companies traded in Shanghai or Shenzhen.

 

Raiffeisen Bank Shrinks to Fit the New Eastern Europe

17 June 2015
Austria's Raiffeisen Bank International outraced competitors into Russia and Ukraine. Now it needs to rethink.
One More Retreat from Russia?

Foreigners over the centuries have found it easier to enter Eastern Europe than to extricate themselves from it. Vienna–based Raiffeisen Bank International (RBI) is learning this painful historical lesson anew.

Austrian banks naturally leapt at the chance to expand eastward after the Berlin Wall and Soviet Communism fell. Erste Bank and Bank Austria (since acquired by Italy’s UniCredit) dueled Raiffeisen for market share across the former Warsaw Pact. But RBI ranged farthest and most aggressively of all, establishing itself as the largest foreign bank in both Russia and Ukraine, with the former as its top profit center.

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