Emerging Markets Daily - January 20
The 5 EM Stories You Need to Start Your Day
The Top 5 Emerging Markets Stories You Need to Start Your Day - January 20
Jack Ma Makes Public Appearance, BABA stock surges - Reuters
“Alibaba Group founder Jack Ma made his first public appearance since October on Wednesday when he spoke to a group of teachers by video, easing concern about his unusual absence from the limelight and sending shares in the e-commerce giant surging.”
“Speculation over Ma’s whereabouts has swirled in the wake of news this month that he was replaced in the final episode of a reality TV show he had been a judge on, and amid a regulatory clampdown by Beijing on his sprawling business empire.”
“The billionaire, who commands a cult-like reverence in China, had not appeared in public since Oct. 24, when he blasted China’s regulatory system in a speech at a Shanghai forum. That set him on a collision course with officials and led to the suspension of a blockbuster $37 billion IPO for Alibaba’s financial affiliate Ant Group,” Reuters reports.
India Markets Hit Record High - LiveMint India
“Benchmark indices hit record highs on Wednesday led by IT and auto stocks, and amid positive global cues. The indices closed in the green for the second day in a row with Sensex ending up 394 points at 49,792, while Nifty closing 0.9% higher at 14,645.”
“Sensex hit an intra-day record high of 49,874 and Nifty 14,666.50.”
“Nifty Auto and IT ended over 2% higher each, while VIX cooled off nearly 6%,” LiveMint India reports.
Emerging Markets Need Not Fear the Fed - Wall Street Journal
“Recent ructions in U.S. government bond markets have revived discussions of a potential ‘taper tantrum,’ mirroring the expectations of a sudden rise in interest rates that came in 2013 as the Federal Reserve signaled its intention to cut back its enormous bond-buying program.
“At the time, the news took investors by surprise and rocked emerging markets. There is less prospect of that this time: Federal Reserve Chairman Jerome Powell says he wants the Fed to signal any tapering well in advance.”
“It wasn’t just the taper tantrum itself that mattered for emerging markets but the currency-market shifts during the subsequent year. The ICE Dollar Index rose by as much as 25% from the spring of 2014 to the spring of 2015. That surge disrupted years of planning by corporations and governments, which had anticipated a relatively weak dollar, something that seemed like the new normal for almost a decade.”
“That wouldn’t be the case today. For one, the dollar’s decline in 2020 was far smaller than its mid-2000s plunge. A similar climb would take the dollar into rarefied territory seen only between 2000 and 2002. That isn’t impossible but doesn’t seem likely,” The Wall Street Journal reports.
China A-Shares Set to Continue Rally - Shanghai Daily
“‘Due to attractive valuations and the continued inflow of foreign capital, we believe that A-shares still have a chance to outperform average global market earnings in 2021,’ said Zhou Wenqun, head of equity investment in Fidelity International China.”
“The drivers in share prices over the past two years have been technology, media, telecoms, consumer goods and health care. Zhou said they are likely to continue to lead the way as the economy recovers from the coronavirus pandemic.”
“‘Demand appears to be stronger than supply in the short term,’ he noted. ‘The rally in optional consumption can lead to more investment opportunities, and leading Chinese companies have been showing their strength since the pandemic. Some of them are going overseas and expected to become global enterprises,’’ Zhou said.
Article includes comments from UBS, Standard Chartered and other China-based money manager. Shanghai Daily reports.
Hang Seng Index Nears 30,000, Fueled By Tech, Alibaba, and Pharma - South China Morning Post
“Hong Kong stocks rose for a fifth day, lifting the benchmark index closest the 30,000 level for the first time since May 2019 amid a rush of mainland funds. Technology and pharmaceutical stocks rallied while Alibaba Group Holding surged.”
“The Hang Seng Index closed 1.1 per cent higher at a 20-month high of 29,962.47. The gauge earlier reached 29,993.47, taking it to within less than 0.1 per cent of breaking the psychological level last seen on May 3, 2019. The market has risen 10 per cent this year, the best start to a year since 1985,” South China Morning Post reports.
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