Emerging Market Value Analysis – September – October 2007

by | Oct 20, 2007 | Archives

The numbers are in.  We now have two years of performance from our Multicurrency Portfolios to learn from.

Here is how the portfolios we created and tracked with Jyske Bank performed in 2006:

US Dollar Long 9.04%
US Dollar Short   10.43% 
S Dollar Hedge  11.46%
Emerging Market  42.93%
Asia Emerging Market  114.16%

Then we formed five new portfolios last November 2006.

Here is their performance in 2007.

Swiss Samba 47.94%
Emerging Market 105.22%
Dollar Short 42.06%
Dollar Neutral 37.19%
Green   236.47%

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 Multi-Currency Portfolios we are tracking in our Borrow Low-Deposit High Multi-Currency Sandwich Educational Service. Because of this performance one of the largest financial publishers will have began a cooperative plan to offer our Multi Currency Educational Service and are testing a much higher subscription fee. Enroll now before the fee rises. To take advantage and save during these last days simply go to https://garyascott.com/catalog/bldh


The main reason these portfolios have performed is that we look first and foremost for value in our selection process.

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

After a quick sharp setback in August, Emerging Markets equities reached new all-time highs at the end of September. The underlying strength becomes most evident by looking at the equally weighted Emerging Markets Index, which — with the exception of August — has reached new all-time highs every month since October 2006.

Last month, the Morgan Stanley Capital International (MSCI) Emerging Markets Total Return Index gained a whopping 11.0 % in US dollars.

During the first nine months, the MSCI Emerging Markets Total Return Index advanced 34.5 % in dollars and 24.7 % in euros.

The strongest regional index was Latin America with a 12.5 % gain in September, followed by Asia, which gained 11% and Europe, Middle East and Africa (EMEA), which was up 8.3 % (performance numbers are in US dollars unless indicated otherwise).

Year-to-date, Asia (+40.8 %) is slightly ahead of Latin America (+40.6 %). EMEA returned 17.9 %.

Twenty-six markets advanced in September and two declined. Brazil leads the winners’ list with a 20.1 % monthly gain. China , advancing 19.9 %, came in a close second, and India gained 16.8 %.

Venezuela (-7.3 %), Sri Lanka (-4.5 %) and Chile (+0.5 %) finished last.

Year-to-date, twenty-seven markets are up and one market is down. Peru with a triple digit percentage gain (+103.8 %) is the clear year-to-date winner. Other top performing markets include Turkey (+64.5 %) and Brazil (+58.6 %).

Sri Lanka, losing 17 %, was the only declining market. Also underperforming year-to-date have been Jordan (+0.1 %) and Venezuela (+1.6 %).

There are no changes in our performance ratings this month. The Top Value Model Portfolio contains seven markets  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 (see two fo them above have performed even more).

We will introduce our new 2008 multi currency portfolios and much more at International Investing and Business Made EZ course in Ecuador .  Join us November 9-11. See https://garyascott.com/catalog/IBEZec/

Stay on for our Ecuador real estate tour and shamanic Mingo and save $398. See https://garyascott.com/catalog/ecuador-tours-november-2007

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