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Emerging Markets Daily - January 24
The Top 5 EM Stories Of the Day
The Top 5 Emerging Markets Stories - January 24
Warren Buffet’s $7 Billion China Electric Vehicle Win - Business Insider
“Warren Buffett's Berkshire Hathaway has made more than $7 billion on its BYD investment to date, representing a roughly 3,000% gain. The famed investor's conglomerate spent $232 million to buy 225 million shares in the Chinese electric-vehicle company in 2008, paying about $1 per share.”
“BYD's Hong Kong-listed shares have skyrocketed 30-fold to the equivalent of $33 since then, quintupling in value over the past year alone. Its market capitalization has mushroomed from less than $3 billion to more than $95 billion as a result.”
“Here's a closer look at one of Berkshire's most unusual investments,” Business Insider reports.
Fund flows to EM hit $17 Billion in First Three Weeks 2021 - Financial Times
“Investors have piled billions of dollars into emerging market assets at the start of 2021 after a banner end to last year, showing how the flood of central bank stimulus continues to drive a frantic hunt for returns.”
“A group of 30 major developing countries has attracted $17bn in inflows in the first three weeks of January alone, according to a Financial Times analysis of daily data from the Institute of International Finance. The strong start to 2021, with inflows largely aimed at equities, comes after a dramatic shift last year.”
“After a record exodus of almost $90bn in March at the onset of the pandemic, investors returned to EM stock and bond markets in a rising flood, with almost $180bn in the fourth quarter bringing total inflows in the final nine months of 2020 to more than $360bn, according to a broader IIF dataset that tracks 63 emerging economies,” the Financial Times reports.
India IPO Pipeline Strong and Growing - Business Standard
“Reflecting strong momentum, India witnessed 19 initial public offers worth USD 1.84 billion in the fourth quarter of 2020 and market sentiment remains positive in what could be a stellar 2021, according to a report.”
“Leading consultancy EY's India IPO Trends Report: Q4 2020 showed that there were a total of 10 Initial Public Offers (IPOs) in the main market and 9 in the SME (Small and Medium Enterprises) segment during this period.”
“In the latest December quarter, there were 19 IPOs valued at USD 1.836 billion and the largest was that of Gland Pharma with an issue size of USD 869 million. There were just 11 IPOs in the year-ago period.”
“India ranks ninth globally in terms of the number of IPOs in 2020 with 43 IPOs raising USD 4.09 billion, as per the report,” Business Standard reports.
Oil Market To Tighten, Goldman Sachs Says - The National
“Oil markets are poised to tighten near-term, as the prospect of Iranian barrels flooding the market is delayed by the new US administration's domestic priorities, according to Goldman Sachs.”
“The US investment bank raised its forecast for Brent, the international benchmark to $65 per barrel by summer, as it expected crude to remain in tight supply due to Opec+ action in the first quarter.”
"‘The new administration’s focus on reaching bipartisan policy support suggest a lessened incentive to quickly revisit the divisive Iran nuclear deal,’” the bank said. ‘Delays in a full return of Iran production would reinforce our bullish oil outlook since we already forecast a tight 2022 crude market with low Opec spare capacity.’” The National reports.
Huawei Entering Smart Vehicle Fray - South China Morning Post
“Chinese tech giant Huawei Technologies Co, facing US sanctions that have hobbled its core networking business, is targeting the new growth area of smart vehicles, setting the goal of ‘bringing the digital world to every car.’”
“Huawei’s move into the smart vehicle industry has created a stir in a sector that Beijing is pushing amid ongoing US-China tech tensions. While some believe Huawei’s participation could lead to technology breakthroughs that accelerate the roll-out of autonomous cars and other types of smart vehicles, some are concerned that the telecoms giant will build a dominant position and squeeze out smaller players.”
“Shenzhen-based Huawei’s semi-stealth approach in revealing its smart vehicle ambitions comes as its core business of telecommunications and smartphones is hurting badly under US sanctions that have blocked the company from acquiring key software and components since 2019,” South China Morning Post reports.