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With hedge fund manager, CNBC regular and long-time veteran of the Russian markets Tim Seymour at the helm, Emerging Money (http://www.emergingmoney.com) provides education, trading analysis and comprehensive views of emerging markets around the world. As economies in the BRIC group and beyond... More
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  • The week ahead in emerging markets, macro trades on inflation, Dubai again?

    In the week that was, we went from the edge of an emerging markets correction to a place where a lot of stocks are trading at levels that look interesting as an entry point.

    After the pullback, global emerging markets valuations are nowhere near as stretched as they were back at the April peak. In fact, the only caution flags should be related to higher inflation readings in BrazilChina and Turkey — among others.

    This demonstrates how macro trades are still dominating all markets. China and emerging credit markets will be the keys that either let us rally into the new year or put coal in the stockings of market players.

    China dodged a bullet this week but inflation will not go away in the food sector. Beijing may still move interest rates higher, so keep an eye on the press this weekend for a potential announcement. In fact, the government did raise reserve requirements last night, has let the yuan appreciate and has promulgated a list of policy operations aimed specifically at curbing a 10% surge in vegetable prices.

    Brazil: Dilma will meet with the head of the central bank to determine his future. Comments and body language have led the markets to expect that Henrique Meirelles may not stay much longer in his job once Dilma takes over running the country. In any event, Brazil has traded poorly all year except in the consumer names. If Dilma wants to win the market’s confidence, she needs to prove that she is serious about fiscal adjustments.

    The macro data calendar is very light in what U.S. traders know is a holiday-shortened week. Do not gloss over the Fed minutes due out Tuesday, but in general, the lack of macro headlines should give you a decent glide path to see the recent snapback continue.

    Caution: It was last Thanksgiving that many emerging market traders were dragged out of bed at dawn by the Dubai debt crisis and the ensuing volatility took over the news for days afterward. Dubai made comments last week that sounded eerily similar.

     

     

    Disclosure: no positions
    Nov 20 6:27 AM | Link | Comment!
  • Emerging Markets key for SABMiler

    London-traded brewer SABMiller, distributor of global brands like Coors Light, Miller and Pilsen, attributes its consensus-beating quarterly results to strong emerging economies.

    According to the company, which trades fairly thinly in ADR form as  SBMRY , demand for beer is so robust in Africa and China in particular that selective price increases are on the horizon in some markets.

    Even though  grain   costs have receded somewhat since the price spikes of the summer, SBMRY says enhanced productivity will only "moderately" protect its margins going forward.

    Overall revenue came in at $14.2 billion, up 6% and ahead of $14 billion consensus. Net earnings climbed an unexpectedly robust 19% to $47 billion, well above estimates.

    Africa, China and a weak dollar were the primary factors in the company's strong results, with Western Europe actually coming in "reasonably depressed" -- sales dipped 4% in the region. However, North America also performed extraordinarily well, with net profits in that region up 27%.

    The global  beer   trade is another big theme for us and we watch these stocks carefully as primary consumer plays. Consolidation in the space is leaving fewer and fewer strong players to dominate the market, but those that survive are strong indeed.

    All in all, these results are a good omen for  BUD

    Disclosure: no positions
    Nov 18 9:32 AM | Link | Comment!
  • BHP formally kills POT offer

    After months of sometimes fractious suspense, giant Anglo-Australian mining company BHP Billiton has conceded defeat and will no longer pursue a merger with fertilizer producer PotashCorp.

    Instead, BHP  will be spending a bit of its $12 billion cash hoard to engage in a previously paused share buyback program.

    As it stands, PotashCorp (POT) now looks likely to go its own way unless a serious merger offer that values the company at more than $39 million emerges. Shares of the company are still up 24% from where they were before the BHP offer.

    Previously, interests ranging from Native Canadian groups to government-backed Chinese and Indian chemical companies were touted as gearing up to make a bid for POT, but as yet none have materialized.

    The abortive merger attempt ended up costing BHP roughly $350 million — a fairly stunning 12 cents per share — in preliminary financing costs.

    As it stands, BHP is now free to develop its own massive potash assets without fear of infringing on Canadian or other regulatory authorities’ anti-monopolistic concerns. When the company’s Jansen mine gets into production, it will be the biggest single potash project in the world, with roughly 3.37 billion tons of the increasingly strategic fertilizer component in its reserves.

     

     

    Disclosure: no position

    Disclosure: no positions
    Nov 15 10:06 AM | Link | Comment!
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