Emerging markets

Everybody Loves MBS at These Oil Prices

05 September 2022
Remember Jamal Khashoggi. Neither does anyone else with oil over $100. The young Saudi prince is shaking up society in some good ways. Just don't bet on his zillion-dollar pet projects. Barron's, June 2022

Saudis Bank Their Oil Windfall, Offering an Opportunity for Investors

By 

Craig Mellow

June 3, 2022

 

Remember Jamal Khashoggi? Neither, apparently, does the global power elite these days. Crude oil pushing $120 a barrel has expunged concerns about the Saudi Arabian journalist dismembered in 2018, reportedly by minions of Crown Prince Mohammed bin Salman.

French President Emmanuel Macron and United Kingdom Prime Minister Boris Johnson have both trekked to Riyadh to cajole more production from MBS, as the de facto Saudi leader is known. President Joseph Biden may well follow suit this month, while attending a Gulf Cooperation Council summit in the Saudi capital. That would be thanks for Saudi-dominated cartel OPEC+ lifting output targets by 200,000 barrels daily at a June 2 meeting.

 

MBS isn’t just raking in political capital. The kingdom earned $1 billion a day on petroleum in the first quarter of 2022, yielding a $15 billion budget surplus.

 

Russia is a Fertilizer Superpower, Too

05 September 2022
A few companies control world fertilizer supplies. The Ukraine War and sanctions may knock the Russians offline. That is rocking world food prices, and company stocks.

Fertilizer Stocks Have Soared on Putin’s War. Proceed With Caution.

By 

Craig Mellow

Updated March 23, 2022 8:26 am ET

 

Haven’t earned enough on your oil stocks since Russia invaded Ukraine? You should have bought Nutrien , the Western Hemisphere’s top fertilizer producer, based in Saskatoon, Canada. 

Its shares (ticker: NTR.Canada) have climbed 37% in the month since Vladimir Putin launched his “special military operation.” The Energy Select Sector SPDR exchange-traded fund (XLE), a proxy for Big Oil, is up a mere 13%. 

 

As big as Russia is in oil, it’s more critical to global fertilizer markets. Farmers around the world rely on fertilizer derived from three different natural resources: potash, phosphate, and natural gas. Russia and its satellite Belarus produce more than a third of global potash, and of course dominate in natural gas. Belarus’ potash exports were strangled by Western sanctions even before the war. Russia cut its own off by executive order March 4. 

 

Cashing in on Vietnam's Boom Won't be Easy

22 September 2019
Vietnam's economy is on a tear, and may benefit more from U.S.-China trade conflict.But pickings for investors are slim.

Barron's June 14, 2019

 

Vietnam is an ascendant nation. Economic growth is cruising at 6% to 7% annually, powered by an export sector ranging from T-shirts to smartphones. (Samsung makes most of its handsets there.) The population of 97 million is young (median age 31), cheap to hire, and offers “the best-positioned workforce in Southeast Asia from an educational perspective,” says Sriyan Pietersz, an investment strategist at Matthews Asia.

 “The investment thesis is simple,” he adds. “This is a classic emerging markets story.” And oh, yeah, multinationals spooked by the trade war on China can move production to Vietnam, hopefully out of harm’s way.

Can Chinese IPOs Break Their Losing Streak?

22 September 2019
Chinese unicorns are not shy about coming to market, Just one problem: Most have been dogs so far.

Barron's April 5, 2019

Silicon Valley’s super-start-ups are teasing investors about whether they will follow Lyft to the public market. Chinese unicorns are less coy. At least eight raised more than $1 billion through initial public offerings in Hong Kong or the U.S. last year, offering a smorgasbord of access to the country’s burgeoning economy.

There’s just one problem: Nearly all of the issues have been dogs. Shares in phone maker Xiaomi (ticker: XIACF) have plunged 45% since a few days after the company’s $4.7 billion IPO. Food-delivery service Meituan Dianping (MPNGF) is off nearly 30% since raising $4.2 billion.

Cautious Excitement over China's A-Shares Market Opening

13 March 2019
MSCI's index gurus opened hundreds of exciting Chinese growth companies to global investment with its latest weightings adjustment. But it's a work in progress.

March 8, 2019 1:13 p.m. ET

 

Chinese stocks are hot again. Very hot.

The KraneShares Bosera MSCI China A Share exchange-traded fund (ticker: KBA), which tracks domestically-listed A-shares, rose 22% year to date. The iShares MSCI China ETF (MCHI), invested in offshore H-shares, is up 15%.

Rumors of trade peace with the U.S. are the primary driver. Beijing authorities have also done their bit by tilting away from deleveraging and toward economic stimulus. The index gurus at MSCI further bolstered the bull case on Feb. 28, more than quadrupling the weight of A-shares in their global emerging markets basket by the end of 2019. “This is definitely a game-changer,” enthuses Brendan Ahern, KraneShares’ chief investment officer.

 

Tencent Faces Middle Age

13 March 2019
What's next for a web phenomenon after securing 1 billion regular users? Tencent's bosses, and shareholders, are trying to figure that out.

Barron's

Jan. 18, 2019 

 

What does an online company do next after securing a billion regular users? Chinese phenomenon Tencent Holdings is trying to answer that question against the trickiest economic backdrop in China for at least a decade.

The company issued the 7.0 version of its ubiquitous social platform, WeChat, in December, the first “full number” upgrade in four years. WeChat creator Allen Zhang, whose aura among the faithful resembles Steve Jobs’, preached its virtues for four hours at a subsequent developers’ conference, focusing on new video-streaming features that will “let people record what they’re really experiencing.”

Brazil, India Top 2019 Emerging Markets Political Calendar

13 March 2019
Brazil's election is over, but the struggle to pass crucial pension reforms just starting. India goes to the polls this spring, with Modi's re-election far from certain.

Barron's

Jan. 4, 2019 9:00 a.m. ET

 

Geopolitics is top of mind for emerging-market investors at the dawn of 2019, as U.S. trade negotiators head for Beijing on Jan. 7. But national politics also loom large in other key markets. Nowhere more so than in Brazil, where capitalists’ enthusiasm for new President Jair Bolsonaro rests on the assumption that he will push through long-stymied pro-market reforms.

That won’t be easy. Bolsonaro’s Social Liberal Party controls just one-tenth of the 513 seats in the lower house of Brazil’s Congress; the rest are split among 30 other parties. And the mother of all reforms, a pension cutback that would force voters to retire in their 60s, not their 50s, requires a three-fifths majority.

Emerging Market Stocks are (a Little) Cheap

13 March 2019
Emerging market stocks start 2019 at a discount to historical valuations, but risks abound too. EM bonds look like the surer bet

Emerging market assets have certainly been beaten up over the last 12 months. The Vanguard FTSE Emerging Markets exchange-traded fund (ticker: VWO) has lost 17%, the iShares JP Morgan Emerging Markets BondETF (EMB) 9%. Does that make them a bargain now? The short answer is: sort of, though external risks remain higher than usual, and bonds, with a few exceptions, look better than stocks.

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