Earnings growth has been a driver for emerging markets in recent years. Now, amid a backdrop of trade conflicts and political & economic uncertainty in some quarters, earnings downgrades appear to give investors pause for thought.
Beijing's commitment to the One Belt, One Road policy is clear. The question now is how investors can take advantage of the opportunities this policy might create.
Above the Noise
The days of treating ESG as a choice are numbered
China’s ‘One Belt, One Road’ (OBOR) initiative will have a transformational impact on participating countries. In Pakistan, for instance, OBOR is a potential win-win at virtually every level.
There is a busy election calendar across emerging markets this year, with potential consequences for the direction of prevailing economic, social and trade policies (and, by extension, conditions for businesses). Here are some of the near-term political events we are thinking about...
Chart of the Week
Source: Bloomberg, October 12, 2018. *Forward P/E values are based on Bloomberg Estimates Earnings Per Share. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.
Chart of the Week
Last week's markets left investors looking to economics for clues; Italy faced up to the EU; China's trade surplus ballooned
Navigating Emerging Markets
Only a few months ago, NAFTA (the North American Free Trade Agreement) looked dead in the water. The US seemed hell-bent on walking away from the 24-year-old deal, while Canada and Mexico were unwilling to concede any ground.
After the longest US bull market in history, some caution should be taken on valuations.
Trade is the topic du jour, with Washington having set off an apparent chain reaction in its push to extract concessions from trading partners, whether it be China, its North American Free Trade Agreement peers, the EU, or more lately – Turkey.
Blind reliance on companies' environmental, social and governance (ESG) ratings is problematic for investors. Individual companies can receive different scores depending on the ratings provider, while some companies can look better than others simply because they have more resources devoted to reporting.
Global Equity Income
Anemic wage growth in the US has been a central concern of economists in recent years, in no small measure due to its dampening effect on consumption. However, fast forward to the summer of 2018 and the situation is changing rapidly, driven by the tightening labour market.
Left-leaning Andres Manuel López Obrador (also known as AMLO) won the Mexican presidential election with 53.7% of the country’s vote – with his party, Morena, and its coalition partners together securing a majority of seats in the congress.
For a very long time, diversity has been the elephant in the boardroom as far as Japanese businesses are concerned -- but new national recommendations for corporate governance may be a catalyst for change.
There is a widely held belief that emerging markets (EM) are vulnerable to U.S. dollar strength. We're not convinced.
Many investors have historically been hesitant to invest in emerging markets, concerned about currency volatility, political instability and an over-reliance on commodities. Yet this view is increasingly outdated as the sector evolves and becomes more resilient.
India's mobile revolution
The rate of tech adoption in India is fundamentally changing the economic landscape -- primarily enabled by the increasing use of smartphones, which have seen phenomenal growth thanks to low-cost handsets and cheap data.
Above the Noise
Healthcare is frequently at the heart of political debate in the US. So, with mid-term elections on the horizon in the US, it is no surprise to see political rhetoric on the issue of drug pricing intensifying.
The North American Free Trade Agreement (NAFTA) renegotiation sought by President Trump is at risk – Canada, Mexico and the U.S. are still far apart on six key issues.
Key Themes from Proxy Season
With proxy voting season under way across most markets, it is worth taking a look at the most prominent themes emerging from annual general meetings (AGMs), many of which are highly relevant from a stewardship perspective.
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