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Warning Signs Amid Emerging Markets Record Rally - Bloomberg
“Emerging-market stocks have set a new swath of record highs this week, driven by optimism over additional U.S. stimulus and a dovish Federal Reserve. The rally’s gaining momentum even as some technical indicators are showing a pullback is overdue.”
“The MSCI Emerging Markets Index has now gained more than 9% this year, extending a rebound from its low during the coronavirus sell-off in March to a heady 88%. Goldman Sachs Group Inc., UBS Global Wealth Management and Wells Fargo Investment Institute all added to the positive chorus this week, releasing bullish calls on developing-nation equities.”
“Exchange-traded funds covering developing-nation assets drew the highest inflows in more than a year last week, with traders increasing their holdings by a combined $3.56 billion, according to data compiled by Bloomberg. Inflows went into stock ETFs, while bond funds suffered withdrawals. In total, that was an 11th straight week of inflows, increasing total assets to $332.1 billion, with the highest proportion of new money going to China, Taiwan and South Korea,” Bloomberg reports.
Record Flows Into Emerging Markets - IR Magazine
“Investors have upped their holdings in emerging markets to record levels while pulling back on US exposure, according to the latest fund manager survey by Bank of America’s (BofA) global research team.”
“The report, based on a poll of 194 investors managing around $560 bn in assets, says allocations to emerging market equities rose 7 percentage points over the last month to a net 62 percent overweight – the highest ever reading.”
“Emerging markets – particularly China – are expected to benefit this year from strengthening economies, low interest rates and the weak dollar. Underlining investor bullishness, this week the MSCI Emerging Markets Index hit an all-time high,” IR Magazine reports.
De-listed China Telecom Firms File for Reinstatement to NYSE - South China Morning Post
“Hours after Joe Biden was sworn in as the 46th president of the United States, China’s three telecommunications companies filed requests with the New York Stock Exchange (NYSE) to review their delistings, seeking to reverse the November 2020 executive order by Donald Trump to expel them.”
“China Mobile, China Telecom and China Unicom said they asked for the trading suspension and delisting of their American depositary shares (ADSs) to be reversed while their review request is being considered. Under NYSE rules, a review must be scheduled at least 25 business days after receiving request.”
“‘Investors are cautioned that there is no assurance that the company’s review request ad stay request will be successful,’ according to a statement by China Mobile to the Hong Kong stock exchange, the primary market where shares of the world’s largest mobile phone network are traded,” South China Morning Post reports.
India Stocks Continue to Soar, Sensex Breaks 50,000 - Business Standard
“The BSE barometer of top 30 firms, S&P BSE Sensex, reached the 50,000-mark for the first time on Thursday, hitting a record high of 50,140 in morning deals. The market capitalisation of listed firms on the BSE, too, touched a record high of Rs 199 trillion.”
“Strong liquidity support and hopes of a quicker economic rebound have nearly doubled the Sensex’s value in 10 months. From its 3-year lows of 25,639, hit on March 24, 2020 amid the outbreak of Covid-19 pandemic, the benchmark index is now up 96 per cent.”
"‘Sensex crossing the important milestone of 50,000 is a telling sign of economy and markets shifting orbits on broad-based recovery and better days ahead. The combination of strong capital inflows, low interest rates and leaner balance sheet of India corporates along with government measures for growth is expected to lift the economic growth ahead. The same is likely to resonate in capital markets, thereby keeping the markets buoyant in the long term,’ says Vijay Chandok, managing director and CEO of ICICI Securities,” Business Standard of India reports.
ASEAN IPO Numbers and Deal Size Rose in Q4 - Business Times
“PROCEEDS from initial public offerings (IPOs) in Asean rose significantly in the fourth quarter of 2020, though the number of listings held steady, according to the EY Global IPO Trends: Q4 2020 report on Thursday.”
“This could signal the return of more medium-cap IPOs in 2021, rather than just small-cap ones, said the report.”
“There were 34 IPOs on Asean exchanges in Q4 2020, compared to 33 in the previous quarter. But average deal size rose, with proceeds trebling to US$3.3 billion, from US$1.1 billion previously.”
“Exchanges in Thailand were by far the most active, with 19 IPOs that raised US$1.9 billion. This was followed by Malaysia, with 5 IPOs raising US$407 million; Indonesia, with 5 IPOs raising US$25 million; Singapore, with 4 IPOs raising US$510 million; and the Philippines, where 1 IPO raised US$522 million,” Business Times of Singapore reports.
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