Emerging markets redux

Well, our note yesterday in favour of bolstering the EM exposure, now has this handy set of tailwinds.

Firstly, the news today about direct market action from the national team.

Secondly, the news of a big Asia hedge fund shutting up shop (returning the capital to clients) after a difficult CY23 (and worse January based on the accompanying annoucement) is making many feel that “the bottom is in”.

That may or may not be true, but it is a useful sentiment indicator if nothing else, e.g., capitulation, the point at which corrective action begins.

The intervention (“rescue package”) from authorities to bolster the market might also lead to little, and I think it fair to say you can’t “will the stockmarket up”, and thus a long-run sustainable uplift is going to have to come from sound economic policies that enable/support/generate/lead/provide-a-stable-and-fertile-backdrop to corporate profit growth.

But in context of 2-3% DAA fund weightings, I think they are supportive new developments.

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