Reuters blog archive
from Global Investing:
Global emerging markets equity funds have cut average weightings to Brazil and South Africa for the fourth straight quarter, according to the latest allocations data from fund research firm Lipper.
You can see a full interactive graphic of the allocations data here or by clicking on the snapshot below.
The average allocation to Brazil has fallen by 1.75 percentage points over the past year to stand at 11.6 percent of portfolios by the end of the April-June 2013 quarter. South Africa's average weighting has fallen to 6.0 percent from 7.3 percent in the second quarter of 2012.
The data comes from about 400 GEM funds for which Lipper has recent allocations data. At the last count they held combined assets of $175 billion. GEM funds offer a useful gauge of investor sentiment around emerging markets as they can generally allocate money across the sector.
By John Foley
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Alibaba is Yahoo’s best investment, and its most frustrating problem. The U.S. Internet group’s 24 percent stake in China’s biggest online retailer is probably worth more than Yahoo’s entire booked assets of $16 billion. But a future initial public offering, in which Yahoo has promised to sell half its shares, may deliver much less. That’s because Alibaba holds most of the cards.
from The Great Debate:
Fickle investors have spurned emerging markets in recent weeks, but this rout has obscured a more alluring vista out on the horizon.
Developing economies now account for 50 percent of global output and 80 percent of economic expansion and are projected to continue growing far faster than developed nations. They are expected to possess an even larger share of global growth, wealth and investment opportunities in years to come. So much so that the labels investors use to classify some of these nations will change as the developing develop and the emerging emerge into more potent economic powers
from Ian Bremmer:
In 2008, before the financial crisis had even reached its nadir, Rahm Emanuel famously said: “You never want a serious crisis to go to waste.” Emanuel’s quote became the conventional wisdom for crisis management, even if the idea is age-old: John F. Kennedy Jr. famously pointed out that the Chinese word for “crisis” is composed of two characters, one for “danger” and one for “opportunity.
Nearly five years after the global economic meltdown, we can now look at the world’s major powers and assess how well they’ve responded to their various crises. Three categories emerge. Who took advantage of crisis? Who never really had a true crisis? And who is letting crisis go to waste?
By Robyn Mak and John Foley
(The authors are Reuters Breakingviews columnists. The opinions expressed are their own)
Baidu is digging itself a deep trench in China’s mobile wars. The country’s biggest search engine by user traffic reported a 39 percent increase in revenue for the second quarter of 2013 compared to the same period in 2012. Mobile revenue hit over ten percent of total for the first time. Google and Facebook have shown how heavy investments can pay off over time. Yet the cost is high and margins get squeezed. In China, competitive lines are more blurred. Returns may be even longer in coming.
By Robert Cyran
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)
Apple has overcome its China blues for now. One of the tech giant’s most reliable engines for growth has been booming Chinese demand. It flamed out during the quarter ended June 29, however, with revenue from the Middle Kingdom shrinking 14 percent. Solid sales in the larger U.S. market helped compensate, leaving revenue flat compared with the same period last year at $35 billion. But the performance shows just how badly Apple needs new products if it wants to shine again.
The PMI surveys take top billing today. China’s report showed a further slowdown in manufacturing activity with the index following to an 11-month low and well into contractionary territory.
Flash readings for the euro zone, Germany and France are due later. Whisper it, but it could just be that Europe's economy is past the worst.
By John Foley
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
China’s central bank has just whetted the appetites of reformists. The People’s Bank of China said on Friday that starting immediately it will let banks lend as cheaply as they like, removing the floor of around 6 percent for one-year loans. It smells like interest-rate liberalisation, but it’s only an amuse-bouche.
from Ian Bremmer:
Recently, it seems no developing country is safe from sudden, unexpected protests. In Brazil and Turkey, empowered middle classes pushed back against perceived governmental injustice; protests erupted, and leaders’ approval ratings dropped precipitously. In Egypt, the economic picture was as ugly as the political one, and the military’s ouster of President Mursi has fomented conflict and instability.
China may look like a candidate for the type of protests currently sweeping the developing world. Not only is a newly empowered middle class demanding better services and more accountability from government -- growth has also tapered off in recent quarters. Don’t hold your breath. At least for the time being, China is well-positioned to navigate such challenges far better than its emerging market competitors.