Edition:
United Kingdom

David Randall

RPT-ANALYSIS-Emerging market stocks' descent to 17 month lows entices U.S. investors

08 Oct 2018

(Repeats without change) * U.S. vs Emerging Markets stock valuations https://tmsnrt.rs/2BWwo16 * Select EM stock benchmarks performance year to date https://tmsnrt.rs/2zTPbZm * Select EM currencies performance year to date https://tmsnrt.rs/2Mh3iA9 By David Randall and Rodrigo Campos NEW YORK, Oct 7 The steep decline in emerging market stocks since early this year are attracting some U.S. fund managers who think they may find long-term bargains amid the sell-off. Portfolio managers from Harding Loevner, Federated Investors, and Wells Fargo are among those who have been adding emerging markets stocks to their portfolios in the face of the imposition of import tariffs by President Trump and rising interest rates in the U.S. Emerging market asset prices have been hit hard this year. The MSCI index of emerging market stocks closed Friday at its lowest since May 2017 and it is down about 21 percent from January's high. An MSCI index of emerging market currencies is down 8 percent from its 2018 high, hit in March. On Thursday, JPMorgan cut its rating on Chinese equities, the largest weight on the benchmark index, to neutral from overweight on expectations that a protracted trade war with the United States will hurt the Asian giant's economy next year. Yet some U.S. international and global fund managers say that emerging markets offer better deals than the U.S. market, where stocks continue to hit record highs. "We're finding opportunities because of the trade war," said Chris Mack, a portfolio manager of the Harding Loevner Global Equity fund. U.S. President Donald Trump has slapped tariffs on more than half of the $500 billion the U.S. imports from China yearly, for which Beijing has retaliated. Investor concern about the impact of the trade war has sent stocks in China and other emerging markets sharply lower this year. Mack's fund has its highest weighting in emerging market stocks since 2006 and its lowest in the U.S. since the same year in search of better values, he said. The fund sold its position in Google's parent Alphabet Inc and bought South Korea's Samsung Electronics . Investors pay more than $25 for every $1 in earnings expected over the next 12 months at Alphabet, while they pay just over $6 at Samsung according to forward price-to-earnings estimates. "You're getting the benefits of a company that is being boosted by a secular trend at a much cheaper price," Mack said. Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management, said his firm recently upgraded its stance on emerging markets from negative to neutral. The reasoning behind the move included compelling valuations and the likelihood the trade tariffs will not hurt emerging market companies as much as the broad market expects. "People are slow to come around to the realization that the U.S. isn't going to close its borders to all emerging markets," he said, adding that Vietnamese companies could stand to benefit if the U.S. and China continue to slap tariffs on each other's goods. Overall, U.S. global funds have nearly 7 percent of their portfolios in emerging market stocks, a 25 percent increase from 3 years ago, according to Lipper, a Refinitiv company. Yet this year the $58.1 billion Vanguard FTSE Emerging Markets ETF is down almost 15 percent and posted about $2 billion in outflows since July, according to Lipper. It closed on Friday at its lowest since March 2017. However, there are signs the tide could already be turning. Investors pumped money into emerging market equities and debt at the fastest weekly rate since April, a Bank of America Merrill Lynch analysis of EPFR data showed on Friday. "I've never seen sentiment (on emerging market equities) be so negative when fundamentals are actually pretty good," said Teresa Barger, co-founder and CEO at hedge fund Cartica Management. "When you get a situation like this, what you usually see is the retail investors getting scared and exiting but institutional investors entering." Barger is looking beyond China to India and Brazil, both of which may be less affected by the U.S. trade tariffs, she said. Yousef Abbasi, global market strategist at INTL FCStone in New York, also sees a silver lining for emerging market countries outside of China if the Washington-Beijing trade war intensifies, pointing to Brazil and Indonesia. "I'd be very selective in where I look for my exposure in emerging markets," he said. "Look for countries with a large U.S. dollar reserve, direct trade partners with the U.S. and that have (relatively) less exposure in terms of exports to China." (Reporting by Rodrigo Campos and David Randall; Editing by Christian Plumb and Daniel Bases)

Emerging market stocks' descent to 17 month lows entices U.S. investors

08 Oct 2018

NEW YORK The steep decline in emerging market stocks since early this year are attracting some U.S. fund managers who think they may find long-term bargains amid the sell-off.

RPT-ANALYSIS-Tech index refresh could give under-the-radar names their day in the sun

24 Sep 2018

NEW YORK, Sept 24 A reshuffling of Wall Street benchmark industry sectors that transferred high-flying FANG stocks like Facebook Inc and Google-parent Alphabet Inc out of the technology label may be a boon to some under-the-radar companies that used to compete with them for investor attention.

Tech index refresh could give under-the-radar names their day in the sun

24 Sep 2018

NEW YORK A reshuffling of Wall Street benchmark industry sectors that transferred high-flying FANG stocks like Facebook Inc and Google-parent Alphabet Inc out of the technology label may be a boon to some under-the-radar companies that used to compete with them for investor attention.

How tech jobs helped Rust Belt become house-flipping hotspot

12 Sep 2018

PITTSBURGH, Pa In the run-up to the 2008 financial crisis, millions of amateur investors kept adding fuel to the overheating U.S. housing market by betting on quick profits in hotspots like Las Vegas or Miami. A decade later, house-flipping is making a comeback, but this time in some Rust Belt cities the last boom passed by.

Las Vegas is booming again, and bracing itself for next slump

11 Sep 2018

LAS VEGAS Diane Han is trying to leave the Las Vegas of her childhood behind. | Video

GLOBAL MARKETS-World stock markets on pace for worst week since March as trade, rate hikes weigh

07 Sep 2018

NEW YORK, Sept 7 World share indexes limped toward their worst week in almost six months on Friday, with Asia equities hitting a 14-month low and U.S. stocks down in early trading as investors braced for additional trade tariffs and higher U.S. interest rates.

RPT-Wall St Week Ahead-US fund managers trim bank stocks on profit worries

02 Sep 2018

NEW YORK, Aug 31 U.S.-based mutual fund managers worried about the outlook for bank earnings have been trimming financial stocks from their portfolios, although some value-oriented portfolio managers and analysts said they still see attractive opportunities in the sector.

U.S. fund managers trim bank stocks on profit worries

01 Sep 2018

NEW YORK U.S.-based mutual fund managers worried about the outlook for bank earnings have been trimming financial stocks from their portfolios, although some value-oriented portfolio managers and analysts said they still see attractive opportunities in the sector.

Global stocks edge higher as Turkey worries offset U.S.-China trade talks

17 Aug 2018

NEW YORK - Another steep decline in the Turkish lira on Friday pushed emerging market equities lower and kept other world markets cautious, overshadowing hopes that an upcoming U.S.-China meeting would resolve concerns over trade tariffs.

World News