As of early this morning, it appears that the leftist candidate has narrowly won Colombia’s runoff election for President. Given the backtracking towards statist economics that is happening in Mexico under a leftist President, this may not bode well for the Colombian economy, stocks and ETFs while much of the rest of Latin America continues to be threatened by food inflation (and the political unrest that comes with it).
Meanwhile, Mark Mobius thinks China has hit bottom, likes India and that the US Dollar will continue to strengthen – something that will surely impact emerging markets. And a former NYSE President thinks capital markets will be dead for a long time…
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Russia’s bourse to start trading HK stocks (Asia Times)
- Russia’s Saint Petersburg Stock Exchange has announced it will allow the trading of 12 Hong Kong stocks from Monday, June 20, raising concerns that Russians may use Hong Kong to evade western sanctions. It remains unclear how the proposed cross-border stock trading can be done without the SWIFT.
- Taiwan presently accounts for 92% of the world’s semiconductor manufacturing capacity, and should China invade the sovereign territory, those manufacturing facilities may wind up destroyed. Last year, American academics recommended that Taiwan threaten to destroy its own factories to deter a Chinese invasion.
- Driving the new record high in risky ratings was a spate of downgrades on Chinese real estate developers as worries grew over their ability to repay debt.
- Moody’s said it issued 91 downgrades for high-yield Chinese property developers in the last nine months.
- That’s a record pace, the agency said, considering it issued only 56 downgrades for such companies in the 10 years ending December 2020.
- Mexico’s populist leader Andrés Manuel López Obrador, who took office in 2018, is shifting the country to a 1970s industrial policy focused on the domestic market, natural resources such as oil and greater state intervention, from backing state-run energy giants to using the army for major public-works projects.
Latin America’s Vicious Circle is a Warning to the West (The Economist) $ (NON-PAYWALL)
- Latin America is stuck in a worrying development trap, as our special report this week explains. Its economies have suffered a decade of stagnation or slow growth. Its people, especially the young, who are more educated than their parents, have become frustrated by their lack of opportunity. They have turned this anger against their politicians, who are widely seen as corrupt and self-serving. The politicians, for their part, have been unable to agree on the reforms needed to make Latin America’s economies more efficient. The region’s productivity gap with developed countries has widened since the 1980s. With too many monopolies and not enough innovation, Latin America is falling short in the 21st-century economy.
Four Scenarios for Argentina’s Inflation Crisis (America’s Quarterly)
- Previously running around 50% per year, inflation is set to hit 70% in 2022, presenting a massive challenge for the fractious Peronist coalition led by President Alberto Fernández. With the 2023 elections approaching, outsider figures like libertarian Javier Milei have emerged as contenders, bringing with them ideas for radical solutions to inflation, such as dollarization of the economy.
How Food Inflation is Swallowing Latin America’s Dietary Staples (Financial Times) $ (NON-PAYWALL)
Meanwhile in Ecuador:
Mark Mobius thinks China has hit bottom, likes India and that the US Dollar will continue to strengthen:
Note: Investing.com has a full calendar for most global exchanges BUT you may need an Investing.com account, then hit “Filter,” and select the countries you wish to see company earnings from. Otherwise, purple (below) are upcoming earnings for US listed international stocks (Finviz.com):
Click here for a full weekly calendar from Investing.com (my filter excludes USA, Canada, EU, Australia & NZ). Some frontier and emerging market highlights:
Frontier and emerging market highlights (from IFES’s Election Guide calendar):
- Colombia President Jun 19, 2022 (d) Second Round if needed Jun 17, 2018
- Grenada Grenadian House of Representatives Jun 23, 2022 (t) Snap Mar 13, 2018
- Grenada Grenadian Senate Jun 23, 2022 (t) Snap Jul 8, 2008
- Papua New Guinea National Parliament of Papua New Guinea Jul 9, 2022 (d) Date not confirmed Jun 24, 2017
- Tunisia Referendum Jul 25, 2022 (t) Confirmed Oct 24, 1999
- Senegal Senegalese National Assembly Jul 31, 2022 (d) Confirmed Jul 2, 2017
- Congo (Brazzaville) Congolese National Assembly Jul 10, 2022 (d) Confirmed Jul 16, 2017
- Angola Angolan National Assembly Aug 3, 2022 (t) Tentative Aug 23, 2017
- Kenya President Aug 9, 2022 (d) Confirmed Dec 27, 2007
- Kenya Kenyan National Assembly Aug 9, 2022 (t) Confirmed Aug 8, 2017
- Kenya Kenyan Senate Aug 9, 2022 (t) Confirmed Aug 8, 2017
- Brazil President Oct 2, 2022 (d) Confirmed Oct 30, 2022
- Brazil Brazilian Federal Senate Oct 2, 2022 (t) Confirmed Oct 7, 2018
- Brazil Brazilian Chamber of Deputies Oct 2, 2022 (d) Confirmed Oct 7, 2018
Check out:Emerging Market SkepticThoughts for Investors: Bongbong Marcos Wins the 2022 Philippines Elections in a LandslideLike many people nowadays, I don’t spend much time looking at my Facebook feed anymore. When I did late last night, I noticed that a friend (a member of a Filipino political clan that has produced a number of politicians and even a President or two) had posted a meme about moving to Canada. That’s when I remembered to check the 2022 Presidential electio…Read more4 months ago · Emerging Market Skeptic
- “We are a leading provider of Spanish tutorial services in China in 2019, according to the Industry Report. Established in 1997 and headquartered in Shanghai, China, we have over twenty years of experience providing educational services that focus on the development of each of our student’s strengths and potential, and the promotion of life-long skills and interests in learning. Prior to the Reorganization, we operated one premium primary private school and one premium secondary private school through two VIEs, in addition to our current operations that include tutorial centers for children and adults, one educational company that partners with high schools to offer language classes to their students, and one logistics company that provides logistic and consulting services. . Since the Reorganization, we no longer operate primary or secondary private schools and no longer use a VIE structure.”
- “Our China-based subsidiary, Golden Sun Wenzhou, and its subsidiaries, operate tutorial centers in China.”
- (Note: This is an IPO of American Depositary Shares (ADS) on the NASDAQ. The ordinary shares trade on the Australian Securities Exchange.)
- “We are a provider of hardware products and software and cybersecurity solutions that we design, develop and manufacture and that are embedded into small drones or small unmanned aerial vehicles, which we refer to as SUAVS, and into robotic systems, or robotics. We hold both patented technology and unique know-how. We are aiming to further develop our global customer base by increasing our number of design wins and targeted pilot projects and ultimately cross-sell our other solutions to those same customers in order to become a leading end-to-end provider to SUAV and robotics systems manufacturers, or OEMs, who, in turn, sell their systems into the security and surveillance, process industry (processing of bulk resources into other products), infrastructure inspection, first responders, homeland security and courier market segments. By “design win” we are referring to the large-scale and exclusive adoption of our component products by our OEM customers on an ongoing basis. The “pilot projects” refer to initial small-scale sales and implementation. As an “end-to-end” provider is one that provides all of the key components its customers need for their products… Our solutions have been deployed by our various customers worldwide, including in the United States, Europe, Israel, Japan and other Asian countries.”
Climate change and ESG are clearly the latest flavors of the month for most new ETFs. Nevertheless, here are some new frontier and emerging market focused ETFs:
- 4/21/2022 – FlexShares ESG & Climate Emerging Markets Core Index Fund FEEM – Passive, equity, ESG
- 4/6/2022 – India Internet & Ecommerce ETF INQQ – Passive, equity, thematic
- 2/17/2022 – VanEck Digital India ETF DGIN – Passive, India market, thematic
- 2/17/2022 – Goldman Sachs Access Emerging Markets USD Bond ETF GEMD – Passive, fixed income, emerging markets
- 1/27/2022 – iShares MSCI China Multisector Tech ETF TCHI – Passive, China, technology
- 1/11/2022 – Simplify Emerging Markets PLUS Downside Convexity ETF EMGD – Active, equity, options strategy
- 1/11/2022 – SPDR Bloomberg SASB Emerging Markets ESG Select ETF REMG – Passive, equity, ESG
Frontier and emerging market highlights:
- 6/10/2022 – Infusive Compounding Global Equities ETF JOYY
- 5/3/2022 – ProShares Short Term USD Emerging Markets Bond ETF EMSH
- 4/7/2022 – DeltaShares S&P EM 100 & Managed Risk ETF DMRE
- 3/11/2022 – Direxion Daily Russia Bull 2X Shares RUSL
- 1/27/2022 – Legg Mason Global Infrastructure ETF INFR
- 1/14/2022 – Direxion Daily Latin America Bull 2X Shares LBJ
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Emerging Market Links + The Week Ahead (June 20, 2022) was also published on our Substack.
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