Emerging Markets 01 (May 08 - Dec 11)

[winston]

TOL:-

Did you sell because you were afraid of the fund outflows ?

And that the perhaps prices now are much higher than the price that you sold ?

[winston]

EM equities could rise 15%-20% in 2011: Schroders
Author: Heidi Lee

Allan Conway, head of global emerging market equities at Schroders, expects the emerging market equities could go up 15%-20% in 2011 and doesn’t believe there is a ‘bubble scenario’.

He noted that emerging markets equities are miles away from a bubble territory as they are trading on a PE multiple of 11.5x which is obviously not at a ‘bubble stage'.

"If they are trading at PE ratio of 18x to 20x, it could be a bubble," he added. However, he warns that emerging markets equity valuations could reach bubble stage in 2012.

Although investors withdrew around $23bn from the emerging markets equities year-to-date (YTD), he says this is just a short term impact and believes emerging markets equities will start seeing inflows in near term as the fears on inflation fade.

He predicts the economic growth of emerging markets will be 6% and 5.5% in 2011 and 2012 respectively, compared the global growth of 3.6% and 3.5%.

He believes the China stock market could perform better than last year despite the ongoing tightening measures and says China's economy is likely to benefit from surging population and income growth.


http://www.professionaladviser.com.sg/p ... -schroders

[winston]

Fund flows BACK into emerging markets

Brokers are finally catching up with what we have been saying for a month. The Emerging Market flow into into Developed Market trade is long over (of course brokers are catching this now!).

The EMERGING MARKET trade is BACK ON! In fact if you were long EEM and short the SPY(SPY), or Germany's DAX index (EWG) for last month, you are +6.5%.

Inflows for emerging markets are up $1.3billion for this week, with Korea up $95mm, Russia up $135mm and China up $230mm.

In terms of broad based ETFs, VWO is garnering more interest than EEM. This almost makes you ask if you should be going in the other direction...I don't think so, but the emerging trend is becoming more of a consensus view which is always a little alarming.

A Goldman Sachs report expects economic growth in China to speed up after the first quarter, with Chinese stocks upgraded to "overweight" from "market weight." The report recommends banking and property shares in China and maintined a 12-month target of 16,500 for the Hang Seng China Enterprises Index which gauges Chinese companies listed in Hong Kong.

http://community.nasdaq.com/News/2011-0 ... ryid=69057

[winston]

There was a parrot on CNBC a while ago that mentioned that outflows will continue for a few quarters and was very negative about the market.

Anyway, there were some inflows 2 weeks ago and the outflows did not even last a quarter.

Well, he's back on CNBC today and I have just muted my TV

[winston]

Second straight week of inflows.

For the week ended Wednesday, EPFR Global reported that a total of $5,693m was invested into emerging market (EM) funds. That compares with a net $2,645m the week earlier and is the largest weekly investment into the EM asset class since early November.

That is only the second straight week of gains after a nine week stretch of weekly redemptions during which investors transferred over $25bn from EM funds to, mainly, US equity funds.

GEMBalanced funds took the bulk of the new money with $3,887m ast week.


http://www.emergingmarkets.me/2011/04/f ... -are-back/

[winston]

Investors shift focus to emerging markets

According to EPFR Global, the second week of April saw Emerging Markets Equity Funds post bigger inflows than their developed market counterparts for the first time in the current calendar year.

Emerging Markets Equity Funds posted inflows for the third straight week, a run that has seen them shave off $10.3 billion year-to-date (YTD) outflows that stood at over $26 billion going into the final week of March.

Further, investors showed a preference for diversified exposure with Global Emerging Markets (GEM) Equity Funds accounting for over 80 per cent of the week’s total inflows.

According to Bloomberg, India saw net inflows of $877.60 million in 2011, the second-highest among leading Asian markets. Taiwan ($289.90 million), Thailand ($561.80 million) and Philippines ($270.60 million) have all attracted inflows less than that of India.

Only Japan with a net inflow of $38.116 billion has fared better. South Korea, meanwhile, saw outflows of $156.30 million since the beginning of 2011.

Flows into EPFR Global-tracked Developed Markets Funds slowed sharply during the week ended April 13 as investors digested the Eurozone’s ongoing debt crisis, the European Central Bank’s shift to a tightening bias, the impact of high oil prices on growth and consumption in the US and Europe, a mixed start to the first quarter of 2011 earnings season and Japan’s struggle to contain the radiation leaking from the stricken Fukushima nuclear power plant.

Of the five major developed markets fund groups, Europe Equity Funds posted the biggest inflow for the week. Behind the overall number, however, was a big shift away from regional funds to those concentrating on Germany with strong institutional commitments helping Germany Equity Funds post their biggest weekly inflow since the second week of May, 2010.

Meanwhile, with optimism about the US and its appetite for Asian exports taking a knock from the latest consumer spending data and China raising interest rates again, flows into Asia ex-Japan Equity Funds were less than a tenth of the previous week’s total. But Korea Equity Funds had another solid week as investors bet that Korean exporters will benefit from Japan’s troubles by grabbing additional market share, says EPFR Global.

Japan Equity Funds recorded outflows for the third consecutive week as authorities upgraded the severity of the crisis at the Fukushima plant and downgraded the outlook for the economy, foreign brokerages turned sour on key sectors and the post-tsunami cooperation among the country’s political parties began to unravel. Retail investors have now pulled money out of this fund group for sixth straight week.

http://www.business-standard.com/india/ ... ts/432471/

[winston]

UPDATE: Emerging-Market Fund Inflows Outshine Developed Markets - EPFR

NEW YORK (Dow Jones)--Emerging-market funds continued their winning streak in the latest week, as they attracted more fresh capital than their developed-market counterparts, according to data collected by fund tracker EPFR Global.

Flows in general, however, were less aggressive as markets remained uncertain about a wide spectrum of global risks, including the economic implications of Japan's massive March earthquake, the euro-zone sovereign-debt crisis and worries about U.S. dollar weakness, said EPFR analyst Cameron Brandt.

"With developed markets' debt problems brought sharply into focus by Standard & Poor's downgrade of the outlook for U.S. paper, fresh speculation that Greece will be forced to default on its crushing debt burden and the debate in Japan over additional bond issues to finance reconstruction, investors gravitated towards emerging markets assets," EPFR said.

Emerging-market equity funds drew in fresh net capital inflows of $1.59 billion for the week ended April 20, marking the fourth straight week of inflows and the second straight week that they outperformed developed-market equity funds.

Emerging-market bond-fund inflows picked up slightly, posting net inflows of $486 million, compared to $306 million the previous week. In their fourth straight week of inflows, they also outpaced their developed-market counterparts, which drew in just $190 million for the week ended Wednesday, EPFR said.

Funds focused on emerging economies stood out especially when compared to U.S. equity and bond funds, which saw net outflows of $3.83 billion and $942 million, respectively. Ratings agency Standard & Poor's shift to a negative outlook for U.S. government's debt rating and a soft U.S. dollar added to market jitters about the U.S.

"People are getting fairly nervous about holding cash or cash equivalents in U.S. dollar form," Brandt said.

But even in the case of emerging-market funds, concerns about global inflationary pressures, the ongoing conflict in Libya and rising oil prices are still factors that investors are considering, he added.

"It's a tough climate to make bold bets," Brandt said.

Source: Dow Jones Newswires

[winston]

Wonder how many people panicked and sold, when the parrots on CNBC were saying that the outflows may last a few quarters ?


Emerging-Market Equity Funds Post Fifth Week of Inflows, Citigroup Says By Shiyin Chen and Weiyi Lim

Emerging-market equity funds attracted inflows for a fifth straight week amid optimism economic growth in developing nations can weather policies to curb inflation, Citigroup Inc. said.

The funds lured $1.8 billion in the week ended April 27, taking inflows in the past five weeks to $13.8 billion, analysts Markus Rosgen, Kelly Kwok and Yue Hin Pong wrote in a report today that cited EPFR Global data.

Emerging funds have regained about 50 percent of outflows in the previous nine weeks, they wrote. Inflation in Asia will peak in the middle of this year, Kwok said in a phone interview from Hong Kong today.

http://www.bloomberg.com/news/2011-04-2 ... -says.html

[winston]

Emerging Equity Funds Post First Outflows in Eight Weeks as Appetite Ebbs By Weiyi Lim

Emerging-market equity funds reported the first net withdrawals in eight weeks as the strengthening dollar and weakening commodity prices sapped demand for riskier assets, Citigroup Inc. said.

Funds investing in developing nations reported outflows of $1.6 billion for the week ended May 18, Citigroup analysts led by Markus Rosgen wrote in a report today, citing data compiled by EPFR Global. That compares with net inflows of $265 million in the previous week.

“U.S. dollar strength and commodity weakness amidst concerns with Greek debt restructuring has probably led to investor risk aversion and thus selling in emerging-market equities as a risk asset,” the analysts wrote.

‘Hard Landing’ Risk

Economic data from China, the largest copper consumer, suggest that the risk of a “hard landing” is rising, JPMorgan Chase & Co.’s Adrian Mowat said in a Bloomberg Television interview on May 17. Global markets, including commodities, will continue to be “correcting,” Mowat said.

Copper for three-month delivery has dropped 6.6 percent this year on the London Metal Exchange. Crude oil traded at $98.89 a barrel on the New York Mercantile Exchange today, down from this year’s high of $114.83 a barrel.

http://www.bloomberg.com/news/2011-05-2 ... -ebbs.html

[winston]

I just muted my CNBC.

The same parrot that was telling you that there would be a few quarters of Outflows is on.

Well, he's actually correct. The Outflows have lasted two quarters now. He just forgot to tell you that in between, we had 8 weeks of Inflows