Excel Funds Management Inc.

Emerging Markets


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Why have Emerging Markets Equities responded favourably?

The Wall Street Journal’s Jake Lee discusses some of the reasons why Emerging Markets Equities have responded favourably, recently.

Jake mentions the recent spate of “easy money” policies out of the Federal Reserve Bank, in the US, a “dovish” ECB which recently cut rates by .25 bps and introduced its’ new bond buying program.

“If you had invested in Asian stocks you couldn’t have gone wrong” Mr Lee mention went to cite broader indices in Thailand which have risen as much as 28%.

 

The Excel Emerging Markets fund, recently recognized with the 2012 Lipper Awards for best EM equity Fund over 1 year, makes a compelling investment vehicle for investor portfolio exposures to the Emerging Markets. The fund offers broad diversification, strong and active portfolio management as well as a proven track record.

Written by Jack S.

Read More: {Video} http://live.wsj.com/video/what-driving-investors-back-to-emerging-markets/3AFE3436-A14E-46C7-A52E-88975D650FB7.html#!3AFE3436-A14E-46C7-A52E-88975D650FB7

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Emerging Markets drive Coca-Cola Profits

The Coca-Cola Co. says its net income rose 3 per cent in the third quarter, as the world’s biggest beverage maker expanded in in emerging markets and sold more of its sports drinks and teas at home.

The Atlanta-based company, which makes Sprite, Fanta, Minute Maid and Dasani water, says global sales volume rose 4 per cent during the period. But the growth was more pronounced in emerging markets, where Coca-Cola has been looking to capitalize on the growing ranks of middle-class consumers.

In its flagship North American market, the company said sales volume rose by 2 per cent. The increase was driven by what Coke refers to as “still beverages,” such as Powerade, Gold Peak and Fuze teas. Its sparkling beverage unit, which includes its namesake soft drink, was flat from a year ago.

In India, by contrast, the company saw a 34 per cent increase for its Coca-Cola brand and a 15 per cent increase for Sprite. Overall sales volume in India was up 15 per cent during the period.

This is a message that we must communicate to our clients, this just goes to prove on how large multinationals continue to seek growth outside of the traditional markets. This growth that we continue to see and growing middle class goes to show the importance of having exposure to these markets are so important. The Excel Blue Chip Fund is great for investors seeking exposure to these markets, but having the comfort of staying at home with their investments.

Written by Sam A.

Source: Emerging markets drive Coca-Cola profits


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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


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Starbucks going to open its first outlet in India by the end of October!

Starbucks said it’s going to open its first outlet in India by the end of October. Starbucks has been looking to expand globally targeting Asia, particularly China. They expect China will become their largest consumer outside the US by 2014. In India “ coffee has changed from becoming a traditional beverage consumed mainly in South India, to a mainstream beverage nationally. (Panchal, 2012)” Part of the reason is due to the fact that there have been lifestyle changes and rising incomes. Taking into account the population size, growing popularity of coffee and rising incomes  India is expected to be a large market for Starbucks in the long-run.

 

India and China have two of the largest populations in the world. Recently , India announced they were opening their doors to foreign retail markets. Multinationals have been taking advantage of the growth potential in China and are now able to expand their reach into India with these new regulations. The Excel Blue Chip fund is the only Canadian mutual fund that focuses on purchasing  these multination’s  as part of its overall holdings. Clients who are looking for growth but are nervous to venture away from North America would benefit from owning this fund.

Written by Jeff K.

Panchal, S. (2012, September 28). Starbucks to Open its First Cafe in India Next Month. The Globe and Mail. Retrieved October 1, 2012, from http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/starbucks-to-open-first-cafe-in-india-next-month/article4573990/


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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


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Wal-Mart plans to be operating in India within the next 12 -18 months!

Wal-Mart is the first multinational company to jump on the news that India is opening up its doors to foreign retail markets. Wal-Mart plans to be operating in India within the next 12 -18 months. Las week there was an announcement that foreign firms will be allowed a “ majority stake in multi-brand store for the first time.” Prior companies such as Wal-Mart were only allowed to operate as wholesale outlets. Opponents are worried that this move will hurt India’s job market and mom/pop shops. Advocates believe this will open India’s doors and attract new business as well as decrease current food prices.

Last week the Sensex increased 404 points in one day on the news that India was opening its doors to foreign companies. This will increase investments into India and allow India to flourish. India is currently going through its industrial revelation as we have seen with developed countries such as the US and UK. The average age in India is 25 years old and has a population of 1.2 billion people. As more individuals enter the workforce and India becomes more urbanized individuals will be earning more and consuming products such as housing, cars televisions etc. for the first time. By allowing foreign retail firms into India will speed up the process in its development. Now is the time to start investing in India.

Written by: Jeff K.

Kinetz, E. (2012, Sept 21). Wal-Mart to open retail outlets in India within 18 months after gov’t allows in foreign firms. Canadian Business. Retrieved September 24, 2012, from  http://www.canadianbusiness.com/article/99509–wal-mart-to-open-retail-outlets-in-india-within-18-months-after-gov-t-allows-in-foreign-firms


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India’s Blackout – leading to light at the end of the tunnel

India suffered its second power failure in two days, depriving over 600 million people of electricity in one of the world’s biggest blackouts ever.  The first power grid collapse occurred on Monday affecting more than 350 million people in northern India.

The blackouts have raised major concerns over India’s outdated infrastructure and inability to meet the population’s growing electricity demands as the country becomes an economic superpower.  The current situation has highlighted the severity of Prime Minister Manmohan Singh’s effort to attract $400 billion in investment to address electricity deficit concerns that holds back economic growth in Asia’s 3rd largest economy.

“Government investment in infrastructure is desperately needed meaning many local companies will stand to benefit.  Today one third of India households do not even have electricity to power a light bulb as they are not yet connected to the grid.  The cumulative overall investment in infrastructure in the country’s 12th Plan is targeted at around USD$1 trillion over the next five years alone.” said David Kunselman, a portfolio manager with Excel Funds Management.

In recent times, the Indian government has been very accommodating to foreign investors and has shown willingness to change policies in order to improve economic growth.  The power outage will push the government to take active steps in improving India’s infrastructure which has been a limitation on the economy.  Improved infrastructure will remove hurdles constraining growth and make India a much more competitive economy.

The Prime Minister is seeking to secure $400 billion in investments for the power industry in the next 5 years for a target of 76,000 megawatts in generation by 2017.  India has failed to meet every annual target to add electricity production since 1951.  India’s demand for electricity has soared along with its growing middle class in recent years but India’s Central Electricity Authority has reported power deficits of more than 8% in recent months.  The World Economic Forum says that India’s infrastructure is a major obstacle in doing business in that region.  Infrastructure improvement is amongst the Prime Minister’s toughest challenges as he bids to revive expansion in India’s economy.

The Reserve Bank of India which had previously blamed infrastructure bottlenecks among other factors for contributing to the nation’s price pressures, has refrained from cutting interest rates today even as growth in the $1.8 trillion economy cooled to a 9 year low in the first quarter.

David Kunselman of Excel Funds Management stated 3 reasons why investors should remain bullish on the Indian economy.

  1. India is a growing emerging market with the most promise thanks to its rapidly growing middle class.  Today India is a decade behind China and is only 30% urbanized versus China at 50%. India GDP per capita is amongst the lowest in the world and growing quickly.
  2. Today the average equity security in India is attractively priced trading below its historical mean multiple on a price to earnings basis or price to book.
  3. Today investors can benefit from the window of opportunity taking place in India and invest alongside its demographic dividend.  India’s economy has one of the youngest and largest populations and it’s just in its beginning stages of realizing the benefits of urbanization.