EM Fund Stock Picks & Country Commentaries (February 21, 2023)

This week, an Asia based EM fund manager’s bond and stock picks from their various Asia-focused funds covering China (extensively), Korea, SE Asia, and India are in focus. In addition (for the sake of diversification), this post covers an EMEA fund’s and a Latin America fund’s stock picks (as the latter fund has an extensive update with commentary which included a number of stocks that have not come up yet in previous posts).

The funds mentioned a number of Hong Kong or Chinese real estate stock picks which may or may not be attractive depending on your thoughts about the sector (see: Chartbook #194 Can Beijing halt China’s housing avalanche? The most important economic-policy question for 2023? and The Chinese Property Market: The Most Important Industry Globally Which Few Understand recently mentioned in our Monday weblink collection posts for a varied perspective on the sector).

For India, it was observed there are good quality businesses in the country, but valuation multiples are among the highest in Asia. This means investors in India will need to be more more cautious and selective with their stock picks.

Meanwhile, the EMEA fund mentioned a couple of high profile upcoming elections in the region. Unlike many other past elections, these will matter for investors as economic policies will be up for a vote and country risk profiles may change. The earthquake in Turkey is also impacting that country in particular.

Finally, there is a Latin American clean copper producer with a North American stock listing who is developing a new project that could double its production profile. The company is also working on ramping up throughput at its existing mines and is embarking on an aggressive exploration campaign.

Other interesting Latin American stock picks included a retail drug store chain poised to take advantage of aging and eCommerce trends in the region; a utility benefiting from increased electrification consumption; a vehicle insurance stock poised to benefit from growth opportunities in USA-Mexico cross-border fleet insurance (no doubt as nearshoring rises); a port operator benefiting from the disruption in the issuing of new contracts caused by the change in administration in Brazil; and a tortilla producer who continues to shift to higher value food products while controlling costs.

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For a further disclaimer and an explanation of the reasoning behind these posts: DISCLAIMER: EM Fund Stock Picks & Country Commentaries Posts.

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