Research trips provide our emerging markets equities team a chance to find unconventional sources of information and insights.
"Visiting the factories, walking around the shop space, talking to the management, their customers and vendors allow the team and me to test if the assumptions in our valuation models are likely to be achieved."
Geoffrey Wong, Head of Emerging Markets and Asia Pacific Equities
December 2017: Russia, the prospects for digital growth
With 100 million users, Russia has the seventh largest internet user base globally. Geoffrey Wong and team visited a range of internet related companies and advertising agencies to take a closer look at the internet ecosystem and get an inside view on prospects for growth in the coming years.
Here are some of their key takeaways:
- E-commerce remains an under-penetrated market with strong potential. However, there are challenges in the near term
- E-hailing has structural underpinnings for growth
- Many companies are working to develop a 'superapp'
- Russia's internet ecosystem favours local players
- For the longer-term, consolidation is likely
June 2017: New meaning to "Made in China"
Our emerging markets equities team met with various manufacturers - drone, home appliances, industrial machinery departmental stores, internet companies and after-school education centres. What insights did they uncover?
"The technology these companies presented to us is world class and gives a new meaning to "Made in China". With many of the high-end tech products from China these days, "Made in China" also means developed and designed in China by local talents."
Head of Emerging Markets and Asia Pacific Equities
February 2017: India - Is demonetization being demonized for nothing?
In a research road trip to India, our emerging markets equities team started from the India-Pakistan border in the north Western part of India in the state of Punjab and drove down the state, finally visiting the city of Lucknow in Uttar Pradesh and New Delhi.
The objective of this trip was to visit semi-urban and rural areas and get a sense of the impact of demonetization, amongst other things. Our meetings included paint dealers, departmental stores, bank branches, farms, SME owners, and journalists. We consciously turned our focus away from meeting the large listed corporates that we typically invest in, to try and understand the broader ecosystem impacting these companies.
'Animal spirits' seem to have returned to the equity markets. Can rising dividends and share buybacks provide additional support to global equities in the coming months?