Excel Funds Management Inc.

Emerging Markets


Leave a comment

Fast-food company Yum Brands predicts more strong growth in China in 2013

Despite the slowing of the economy, the owner of Yum Brands predict that its fast growing China business will have another strong profit growth next year. There will also be more menu options in the coming year for Taco Bell in the U.S. Yum’s stock rose more than 8% to $71 in afternoon trading. The executives are confident that they will gain 15% profit growth in China next year. Analysts are forecasting a rebound in China late this year or in early 2013 after the economic growth fell to 7.6% this past spring. That turnaround in China, couples with strong profit growth at its restaurants in the U.S. and else ware around the world, helped Yum post a 23% increase in its third-quarter net income. China has 4,000 KFCs and has ramped up its breakfast offerings. Pizza Hut has a growing presence there too. In the U.S., Taco Bell has been the catalyst behind Yum’s strong performance. Third-quarter operating profit in the U.S. rose 13 per cent. Sales in U.S. restaurants open at least a year rose by 7% at Taco Bell in the quarter. This year alone, Yum expects to open up at least 750 stores in China. Yum has more than 38,000 restaurants in more than 120 countries and territories.

 

“But as I’ve said before, China is going to have its inevitable ups and downs. … We now face a slowing economy. But that doesn’t change our long-term outlook in China one iota,” Yum Chairman and CEO David C. Novak told industry analysts Wednesday. People still have hope for China and its long term growth potential. By owning our China fund, investors will gain investment exposure to one of the fastest growing regions in the world and benefit from the strengthening currency of China. And if the risk is too high for certain clients, our Blue Chip is another option where Yum brands is constantly on the radar. With our Blue Chip, investors are able to participate in the growth of the economies with lower volatility. So, you get the best of both worlds; the stability of the developed worlds, U.S and Canada, and the growth from the Emerging Markets.

 

Written by Melissa W.

 

http://www.canadianbusiness.com/article/101791–fast-food-company-yum-brands-predicts-more-strong-growth-in-china-in-2013


Leave a comment

The central bank of China, injected 265 billion yuan ($41 billion Cdn) into the country’s money markets Tuesday in a stimulus measure aimed at keeping short-term interest rates low.

The central bank of China, injected 265 billion yuan ($41 billion Cdn) into the country’s money markets Tuesday in a stimulus measure aimed at keeping short-term interest rates low.

It was the second biggest debt purchase ever by the People’s Bank of China and came a week before the government comes out with its latest report on quarterly growth.

Economists expect it will show that growth has slowed for the seventh straight quarter.

But authorities are moving more cautiously than they did after the 2008 crisis, when the huge stimulus that helped China rebound also fueled inflation and a wasteful building boom.

China’s economic renaissance is now in its fourth decade. One of its striking features, in addition to its success, is its constant state of change. The types of goods produced, the degree of dependence on cheap labor, the relative openness of markets and currency, all have changed dramatically in the 33 years or so since Deng Xiaoping first began the reform movement. From most reports, it appears that more changes in the direction of economic openness are currently at hand. The current stimulus measure should provide some easing in keeping the short-term interest rates low.

Why does this progress take place? Could it be that the leaders of China have a vision of the future that entails a continuing opening of the economy? Could it be that the leaders of China have aspirations for the Chinese people that require that they become better off economically? Could it be that the leaders of China believe that China’s future will be built on education, creativity, personal discipline, and hard work? My guess is that the answer to all of those questions is “yes”.

With this week’s stimulus measure it is another sign that the Chinese are committed to have the economy grow at a faster pace than we have seen of recent times. China will no doubt the new top economic power in the world investors must wake up to this and be invested long-term and share in this success story.

Written by Sam A.

Source: China’s central bank boosts economy


Leave a comment

Many of the BRIC countries are rich in resources, have an abundance of young and very educated work force that will continue to accumulate wealth and therefore demand and consume more.

There are numerous reasons to invest in BRIC countries over the next decade.  First and foremost, the BRIC and emerging markets nations are not riddled with debt and are building up their foreign currency reserves which has helped them enjoy credit upgrades rather than downgrades by S&P and Fitch which we have noticed with a number of developed nations over the past year.  Many of the BRIC countries are rich in resources, have an abundance of young and very educated work force that will continue to accumulate wealth and therefore demand and consume more.  Nigel Green who is the boss of the world’s leading independent financial advisory group says that “Aggregate consumption between the four countries is currently estimated to be around 4 trillion dollars and this is expected to grow by around 15% to 20%. Therefore, by the middle of the decade, the BRIC nations will see their combined consumption increase by more than a trillion dollars – and this is a conservative estimate.”  Starbucks is quick to recognize this domestic consumption story and will be trying to capture part of the growth by opening its first establishment next month as part of an overall investment of approximately $78M in the subcontinent.  Green believes it would be wise given the current market conditions to have a very diversified portfolio and to follow in Starbucks strategy and incorporating BRIC nations in your balanced portfolio.

 

Goldman Sachs Jim O’Neill also believes that the Next Eleven (N-11) namely Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam, alongside the BRIC nations are also very noteworthy countries to be investing in over the next decade.  Mr Green notes that “It is estimated that within the next decade the combined GDP of the BRIC and N-11 countries will be double that of Europe and the US together.”

 

With this in mind, our BRIC Fund not only invests in BRIC countries but also other emerging markets nations, is coming up to a 3 year track record come November 2nd, 2012.  It is not only the best performing BRIC mutual fund in Canada but it has also done well this year with a gain of 5.89% YTD (Source: Globefund as at October 5, 2012).

 

Written by Devin L.

 

Please see the following article for more information:

http://investmentinternational.com/news/alternative-investments/follow-starbucks-example-5155.html


Leave a comment

Jim O’Neill likes Chinese equities

Former Bank of America Economist, and now Director at G-SAM( Goldman Sachs Asset Management), Jim O’Neill likes Chinese equities.

In an interview with CNBC O’Neill said “At this moment, the Chinese market looks the most attractive to me. You don’t want to be with consensus; it’s quite easy to be on the wrong side of things”. O’Neill cites valuations and the Shanghai Index’s weak performance as a buying opportunity not seen in close to 3.5 years.

O’Neill goes on to recommend taking this opportunity to invest in all sectors that stand to benefit from a rising Chinese middle-class.

Excel’s China Fund, which invests in mainland Chinese equity markets and Hang Sang listed names, makes a compelling investment vehicle from a rising Chinese middle-class  and offers broad diversification, regional specificity and active/ experienced on the ground money management.

Written by Jack S.

Read More: webpage- http://www.moneycontrol.com/news/asian-markets/china-stocks-top-pick-among-brics-goldmans-oneill_763629.html


Leave a comment

Green BRICS

Investors are starting to realize that through the European debt crisis; most emerging market countries took the time to re-organize their economies, maximize efficiencies and are now better prepared for the next phase of growth. These measures have included greater debt-servicing measures, managing inflation rates and developing more sustainable resources for long term growth.

The emerging markets have immense numbers of urbanizing, educated and wealthy youth with ferocious appetites for goods and services. A massive manufacturing industry is not anything new when reading about China or India; however, reading about renewable and sustainable energy with international recognition is new to many BRIC investors.

Above and beyond the clear positive environmental effects, these initiatives speak to a maturing in BRIC country leaders. It speaks to leaders that realize with over 70% of the population of which 45% are under the age of 25, a short or even medium term plan is not enough. Most importantly it speaks volumes to investors across that the BRICs are continuously evolving to accommodate long term growth.

The emergence of the BRIC nations as global powerhouses is in full swing and their long term growth is being enhanced daily – where are you invested?

Written by Jeremie C.

Is Latin America and the Caribbean turning on to energy efficiency?

Renewable Energy – Top 5 Emerging Markets Industry Guide


Leave a comment

Return of the Emerging Market Bull

Despite the seemingly endless problems in Europe, developed markets have been outperforming while Emerging market equities have been out of favor for many months how. But following a raft of new policy initiatives in the developed world, is it time to rethink? Below are a few reasons for a fresh view.

  1. QE3 has a new dimension – it’s open-ended.
  2. The dollar – By extension, QE in the US will likely lead to weakness in the US currency which leads to strength in emerging markets.
  3. Price – Emerging market equities, as an asset class, now trade at 22% discount to developed markets meaning its a good time to get in.
  4. Volatility – While developed markets have become more volatile, emerging markets have become less so, along with their economies.

Koesterich explains that although investors may focus on China right now, the attention may gear towards the US and its ‘fiscal cliff’ in a few months. A safe play could be to get the money out of the US.

Sure enough, sentiment seems to be changing fast according to recent investor surveys, such as one conducted by SocGen. This from Benoit Anne:

Overall, EM investors are now extremely bullish on Global Emerging Markets (GEM). While only 41.8% of clients were bullish towards GEM last month, now the percentage has picked up to a remarkable 84.4% for the near-term view. Meanwhile, only 8.9% of investors are now bearish over the near term, or considerably less than a month ago.

Developed markets are up 5% since September 5, while the MSCI emerging markets index gained 7.2%. Governments may be much more wary of letting their currencies appreciate rapidly since EM growth has been much weaker than when QE1 and QE2 got going.

Emerging Markets is where the growth is. With developed countries, their bond ratings are decreasing. Our on the ground managers aid in optimizing performance and heavily reduce risks of volatility by taking defensive measures such as removing funds from various stocks and industries. 80% of the world’s population live in emerging markets and their consumers are growing 3 times faster than the developed world. The logistics are there. Excel Funds got the 2012 Lipper Award Fund for the best fund over the last year in EM equities. The fund pays a higher trailer than other EM equity funds with great results. Why not invest with the best?

Written by Melissa W.

Source: http://blogs.ft.com/beyond-brics/2012/09/19/return-of-the-emerging-market-bull/#axzz270z8CexD


Leave a comment

China Asset Managers Report

Since ancient times, the Chinese have referred to their country as “Zhong Guo,” Mandarin for “Middle Kingdom.” Today, the meaning is quite appropriate, as turmoil in Europe and anemic growth forecasts for other developed markets leave many looking to China as the world’s central growth engine.

Yet, after a roaring start in the first decade of the millennia, the Chinese asset management industry has seen its growth stall, even as the local banking sector mostly avoided the issues that plagued developed markets during the financial crisis. While GDP growth has continued to grow at 8% in recent years, funds under management today remain some 30% below 2007 levels. At the same time, the number of funds has almost tripled, and no fewer than 71 fund management companies are competing fiercely for investors, many of whom prove quite fickle. Meanwhile, declining capital markets have reduced asset values, further straining the profitability of managed assets. Citi is proud to partner with Z-Ben Advisors, an independent consultant, in closely examining the unique features of the Chinese asset management landscape and its prospects in coming years. Based in Shanghai, Z-Ben is focused solely on producing research on China, and as such, is well placed to explore the finer points of the local market.

Key findings of Z-Ben’s research show that while China’s asset management industry has taken a brief pause in terms of mutual fund growth, other sectors have flowered. Assets in private funds have tripled in less than two years’ time; monthly launches of short-term-oriented bank wealth management products number in the thousands; and on the institutional side, sovereign and retirement funds are growing with breakneck speed. The future of asset management in China remains bright, Z-Ben notes, as the shift toward a financial industry more reminiscent of developed markets is under way. The pension and insurance sectors offer tremendous promise, given the need to rise to the challenge of providing for an aging population. Continued liberalization has increased the size and number of opportunities available to domestic and foreign players, as witnessed by the recent expansion of the Qualified Foreign Institutional Investor (QFII) program. The long-term prospects of China are almost universally extolled, even if challenges remain in the short run. As a major provider of services to the investment community, by sponsoring this research Citi hopes to provide industry participants with fresh insights, making a complex market easier to navigate.

Want to read more? Click here: China Asset Managers Report Citi Sept 2012