Emerging Market Investments Value Analysis – June to July 2007

by | Jul 16, 2007 | Archives

Emerging market investments generally fall fastest in times of turmoil. There has been trouble brewing in markets this last month. This is why it’s vital to select markets and shares that offer good value when investing in emerging markets.

One way we keep track of value is to follow the analysis of our friend, Michael Keppler. Michael continually researches international emerging stock markets and compares their value based on current book to price, cash flow to price, earnings to price, average dividend yield, return on equity and cash flow return. He compares each emerging stock market’s history. From this he develops his Good Value Emerging Stock Market Strategy. His analysis is rational, mathematical and does not worry about short ups and downs.

He is in my opinion one of the best market statisticians in the world and numerous very large fund mangers use his analysis to manage funds. In January, his company, Keppler Asset Management, was, for the third consecutive year, named Best Fund Company in the Fund Specialists’ category by Capital, a leading German business magazine. Keppler’s firm was one of only six out of 100 companies tested that received the highest five-star rating based on an independent evaluation of fund quality, management, and customer service by Feri Rating & Research and Steria Mummert Consulting.

Once a month we share Michael’s emerging market analysis with you.

Here is a summary of Keppler’s current comments on recent developments & outlook in international emerging equity markets.

Recent Developments & Outlook Emerging Markets continued their strong performance in June to mark their fourth consecutive monthly all-time high regardless of the currency in which performance is measured. The MSCI Emerging Markets Total Return Index (December 1988 = 100) returned 4.7 % in US dollars and 4.3 % in euros.

Year to date, the MSCI Emerging Markets Index is up 17.5 % in US dollars and 14.8 % in euros.

Of the three regional indices, Asia stood out with a 6 % monthly gain, followed by Europe, Middle East and Africa (EMEA) and Latin America which advanced 3.5 % and 2.7 %, respectively.

With regard to year-to-date performance, Latin America is the clear winner with a total return of 27 %. Asia came in second returning 18.5 % and EMEA — a distant third — is up 9 % year to-date. All performance numbers are in US dollars with net dividends reinvested unless mentioned otherwise.

Nineteen markets included in the MSCI Emerging Markets universe rose last month, eight markets declined.

The best performing markets of the month were Hungary (+11.7 %), China (+11.5 %) and Taiwan (+10 %).

Venezuela (-5.1 %), Argentina (-3.5 %) and Morocco (-3 %) came in last.

Compared to their levels at the beginning of the year, twenty-five markets were higher and two markets were lower.

The biggest winners this year have been Peru (+66.9 %), Pakistan (+42.1 %), and Turkey (+32.2 %).

Sri Lanka (-9.1 %), Russia (-2.7 %) and Jordan (+4.2 %) performed worst so far this year.

There are no changes in our performance ratings this month. The Top Value Model Portfolio contains the seven national MSCI markets of Brazil, Korea, Malaysia, Poland, Taiwan, Thailand and Turkey at equal weights. According to our performance ratings, these markets continue to offer the highest expectation of risk-adjusted returns.

There are no changes in our performance ratings this month. The Top Value Model Portfolio contains the seven national MSCI markets of Brazil, Korea, Malaysia, Poland, Taiwan, Thailand and Turkey at equal weights. According to our performance ratings, these markets offer the highest expectation of risk-adjusted returns.

SELL CANDIDATES (Low Value) Argentina, Egypt, India, Indonesia, Mexico, Morocco, Pakistan, Peru, South Africa.

NEUTRALLY RATED MARKETS Chile, China, Colombia, Czech Republic, Hungary, Israel, Jordan Philippines, Russia, Sri Lanka, Venezuela.

For more details on Keppler’s analysis, contact Roderick Cameron at

1-212-245-4304 or email roderick.cameron@kamny.com

You can get ideas on shares in these top value emerging stock markets from Thomas Fischer at Jyske Bank at Fischer@jbpb.dk

Jyske Bank is the second largest Danish bank with 450,000 domestic clients, 35,000 international clients, USD 23 Billion in total assets, and a Moody’s rating of AA1. Jyske has over 35 years’ specialization in private banking and Denmark is ranked by Moody’s as the safest country in the world to have a bank account in.

Jyske Bank uses a good value system as well and their affiliated fund management company has been rated #1 by Morningstar. They use this value system to help us select shares for Multi-Currency Portfolio Educational Tracking Service. This has worked pretty well. In 2006 the mainly equity portfolios we tracked rose 42.93% (Emerging Market) and 114.16% (Asia Emerging Market) in a year. This year the five portfolios we track are up in the past eight and a half months:

PortfoliosDec 29Feb 26Apr 30June 8July 10
Swiss Samba8.10%20.49%26.60%40.40%45.22%
Emerg Mkt15.11%19.61%32.46%39.94%62.77%
$ Short12.91%18.17%30.79%32.12%38.85%
$ Neutral7.94%20.28%25.58%32.92%38.59%

You can learn why this performance has taken place in a sixteen page email report about how 13 economic forces now clash to shape investments markets ahead that show the rewards and the risks. The report also outlines the five new Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Details are at https://www.garyascott.com/catalog/bldh

At our upcoming IBEZ in N.C., we will update our latest multi currency portfolios and much more. Join us September 14,15,16, 2007 in North Carolina, https://www.garyascott.com/nccourse

Or come to Ecuador November 9-11. See


Until next message, may all you global investments be good.


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