InvestmentWorld.ch’s Post

Emerging market investment is laden with risks, more notably, political risks. Staying with consumers, who loosen their purse strings when they feel secure about the future ( = locals' view of political risks), is a very effective way of mitigating these risks. After all, Proya Cosmetics in China demonstrates that the desire to look nice is universal and predictable.. #emergingmarkets #consumerbehavior

The World Intellectual Property Organization (WIPO) has released its 2023 Global Innovation Index ranking Switzerland at number one. WIPO evaluated innovation levels across 132 economies focusing on a long list of criteria such as human capital, institutions, technology, and creative output as well as market and business sophistication, among others. As Statista's Katharina Buchholz reports, the 2023 index has found that while innovation is still blossoming, the coronavirus pandemic and the war in Ukraine have had their effect on the ranking as a range of economies and industries were severely affected. Switzerland topped the rankings once with a score of 67.6 out of 100, the 13th time it has been named the world leader in innovation. (Sources: All index- and returns-data from Norgate Data and Commodity Systems Incorporated; news from Reuters, Barron’s, Wall St. Journal, Bloomberg.com, ft.com, guggenheimpartners.com, zerohedge.com, ritholtz.com, markit.com, financialpost.com, Eurostat, Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet.) 

The World Intellectual Property Organization (WIPO) has released its 2023 Global Innovation Index ranking Switzerland at number one. WIPO evaluated innovation levels across 132 economies focusing on a long list of criteria such as human capital, institutions, technology, and creative output as well as market and business sophistication, among others. As Statista's Katharina Buchholz reports, the 2023 index has found that while innovation is still blossoming, the coronavirus pandemic and the war in Ukraine have had their effect on the ranking as a range of economies and industries were severely affected. Switzerland topped the rankings once with a score of 67.6 out of 100, the 13th time it has been named the world leader in innovation. (Sources: All index- and returns-data from Norgate Data and Commodity Systems Incorporated; news from Reuters, Barron’s, Wall St. Journal, Bloomberg.com, ft.com, guggenheimpartners.com, zerohedge.com, ritholtz.com, markit.com, financialpost.com, Eurostat, Statistics Canada, Yahoo! Finance, stocksandnews.com, marketwatch.com, wantchinatimes.com, BBC, 361capital.com, pensionpartners.com, cnbc.com, FactSet.) 

GLOBAL INVESTORS PIVOT FROM FLAGGING CHINA TO INDIA, VIETNAM Global capital flows are pivoting away from China in favor of other emerging Asian markets such as India and Vietnam, as investors seek alternatives with fewer economic and geopolitical risks. For the first time since 2017, foreign investment inflows into Asian emerging-market stocks excluding China over the past year topped the net buying of mainland China stocks via the Stock Connect program. Those totals were $39 billion and $32 billion, respectively, according to data from Goldman Sachs. China's economy is in the midst of an unexpectedly slow recovery from the pandemic, hampered by a real estate slump and high youth unemployment. But sluggish growth is not the only problem. Hiroshi Matsumoto, senior fellow at Pictet Asset Management (Japan), says American and European investors worry about the fallout of a potential Taiwan conflict. "There's concern that assets could be frozen or otherwise become difficult to sell, like what happened to Russia after its invasion of Ukraine," he said. "Investing directly in mainland Chinese stocks is risky." This comes on top of persistent concerns about human rights in China. Investors are gravitating to India as an alternative destination. Surging since April, the benchmark Sensex index is now hovering in record territory. A total of $12.8 billion in foreign capital has flowed into Indian equities so far in 2023, beating Taiwan and South Korea despite their markets being buoyed by semiconductors. Part of India's appeal lies in expectations of growing domestic demand fueled by an expanding middle class. United Nations data shows the country's population climbing above China's midyear as it reaches around 1.43 billion, with the gap only expected to grow. Investors also anticipate big multinationals moving manufacturing from China to India. U.S. chipmaker Advanced Micro Devices said Friday it plans to invest $400 million in the country over five years, including in a new design center that will be the company's largest. Money is also flowing into Vietnam, which MSCI considers a "frontier market." Its benchmark VN-Index has jumped 20% this year. Labor costs are low and it's politically stable, so there's a lot of interest in it as a new manufacturing hub and investment destination in place of China," said Shinichiro Akematsu at Aizawa Securities in Tokyo. South Korean electronic parts maker LG Innotek, part of the LG conglomerate, is investing $1 billion to ramp up production of camera modules in the Vietnamese city of Haiphong. Anticipation of more foreign direct investment has boosted the shares of industrial park developers Kinhbac City Development Holding and Long Hau, which have gained 36% and 31%, respectively, since the end of last year. Fecon, an infrastructure company specializing in foundation engineering and underground construction, has surged 80%. Source: Nikkei Asia #inchamhanoi #investment #vietnam #india #china

I’m thrilled to moderate an industry panel at #FundsForum Poland, organized by Izba Zarządzających Funduszami i Aktywami this Monday! Join us as we explore the key megatrends in Asset Management: 1. 🌍 Changes in Asset Allocation 2. 📉 Passive vs. Active Investing 3. 🤖 Technological Innovations & Digital Assets 4. 👵 Impact of Demographic Shifts 5. 🏢 Growth in Alternative Investments 6. 🌱 Emphasis on Sustainable & ESG Investing Looking forward to a provocative and engaging discussion. Stay tuned! 🚀 #AssetManagement #Investing #Finance #ESG #Technology #EmergingMarkets 🚀 Frederic Dodard Aleksander Mokrzycki, CFA Daniel Morris Tomas Packa, CESGA® Alexander Prawitz

Amid the dazzle of US markets, Europe's equity market holds untapped treasures for the discerning investor. Despite perceptions, the European market, with its mosaic of industries, harbors growth companies that shine with #potential.   While the S&P 500 soared, Europe's MSCI Index also made a notable leap in 2023. The real story, however, is in sectors like industrials, semiconductors, and electrical equipment, which are forecasting robust #earnings through 2026, driven by technological innovations, healthcare advancements, and the green transition, despite Europe's modest GDP growth.   Global reach is a key advantage here; European companies often derive the bulk of their #revenue internationally, making them resilient against regional economic shifts. But to truly capitalize on Europe's potential, investors must delve deeper, identifying businesses within these vibrant sectors that stand out for their enduring quality and competitive edge.   Take the semiconductor industry, energized by AI and cloud computing's insatiable demand. ASML, a Dutch firm, exemplifies this with its unique EUV #technology, a product of decades of R&D and a testament to the competitive moats that protect such businesses from economic vicissitudes.   Then there's the industrial sector, where innovation in efficiency drives #growth. Companies like Spirax Sarco, though not household names, are pivotal in optimizing operations across industries, from food to pharma, underpinning their growth with a resilience to economic cycles.   Largely unnoticed beside US giants, Europe's equity market offers a rich bed for growth-driven #investors seeking strong valuations. Digging past stereotypes reveals hidden gems that promise sustainable growth and solid returns, underscoring the true, diverse potential of Europe's innovative sectors for the discerning investor.   💵🫣   Better #StayAheadOfTheCurve   If you have any questions about investing/investment portfolios, don’t hesitate to contact us.   Kind regards, Your gigant Team

US and European firms are shifting investment away from China to other developing markets, with India receiving the vast majority of this redirected foreign capital, followed by Mexico, Vietnam and Malaysia, reports Reuters. These companies are turning their backs on the world's 2nd largest economy even as its share of global growth continues to increase, highlighting how concerns over China's business environment, economic recovery and politics weigh heavy on the minds of foreign investors. The value of announced US and European greenfield investment into India shot up by some $65 billion or 400% between 2021 and 2022, Wednesday's report said, while investment into China dropped to less than $20 billion last year, from a peak of $120 billion in 2018. "Diversification is well underway," the research organisation said, but acknowledging: "it will take years for advanced economies to achieve the objectives behind their 'de-risking' policies," as China is so central to global supply chains. https://lnkd.in/gUTFZfGf

“China’s stock market has certainly been battered recently, rattling both consumer and investor confidence. But we shouldn’t be too quick to categorise this disappointing phase as a crisis. Investors should tread cautiously, of course, given that Chinese consumers remain nervous about a still-shaky property market and high youth unemployment. But rather than completely writing off the growth potential of China’s domestic market — one arguably too big to ignore — here are some points to consider. The constructive summit between Presidents Joe Biden and Xi Jinping in California last year achieved some semblance of comfort over geopolitical tensions. And Xi’s recent meeting in Beijing with US business executives, including Apple CEO Tim Cook, discussing topics such as artificial intelligence, could bode well for stabilising relations. We’ve been encouraged by China’s private investment in AI, which is second only to the US.” “China has also made impressive progress with industrial robot installations, which have now outpaced those of the rest of the world combined. Its innovators comprise nearly half of all global patent applications filed. China’s remarkable development over the last few decades gave birth to a middle-class population of 500mn people who have now tasted prosperity. From 2017 to 2021, its luxury market tripled in size and should be supported by another projected 80mn middle-income earners joining the ranks of potential customers by the end of this decade. But this extraordinary pace of economic growth was always bound to hit some speed bumps and it’s important to remember that China is still undergoing a major transition from export-led growth to a more sustainable model that is increasingly driven by consumption and services. China’s passenger vehicle exports, and particularly its electric vehicle sales, are other key areas of progress to watch.” “Partly because of China’s increasing demographic troubles, there’s been much fanfare over whether India is ‘the next China’. However, we should also keep in mind that India is a quite different economy from China, with its own distinct merits and challenges. Unlike China, India is a noisy democracy with still-high barriers to trade. In 2022, India had one of the highest import duties globally, according to the World Trade Organization. So, perhaps only China is ‘the next China’. While investors do not expect a swift rebound in China’s market, some are seeing alluringly cheap valuations as an attractive entry point to the world’s second-largest economy. Further afield, China has endeavoured in recent years to increase its influence in Latin America. Trade agreements, foreign direct investment and loans have played an important role in strengthening ties with the region. All of which means that the sheer extent of China’s global influence should not be overlooked.”

Unlocking global investment insights with Freddie Gabbertas! Freddie Gabbertas explores the 'China Plus One' strategy, and the opportunities emerging. https://bit.ly/3UxLcvh #helpingyougofurther #chinaeconomics #InvestmentStrategies #GlobalShifts

It may not yet be the end of globalization. But it sure is the end of global synchronization. 🌍 Over the weekend, Holcim, a Fortune Global 500 company and one of the largest construction material companies in the world, announced plans to spin off its U.S. division. Holcim USA has been the largest, fastest growing, and most profitable part of the Switzerland-based company. On its own, the U.S. division will be the “leading pure-play North American building solutions company,” its parent company claimed. So why would Holcim want to spin off its crown jewel? The answer is simple: It’s in the shareholders’ interest, Holcim said. Here’s how it works: As of this writing, Holcim had a market capitalization of roughly CHF 39 billion ($45 billion). But according to Jan Jenisch, Holcim’s outgoing global CEO and incoming U.S. division CEO, “the North American business could be valued in the ‘ballpark’ of $30 billion despite just accounting for about 40% of sales last year,” Ivan Levingston reported yesterday. If that makes you blink in confusion, you’re not the only one. The era of globalization was meant to erase arbitrage and other hocus pocus between financial markets, limiting the variability in company valuations depending on where they’re listed. But this part of globalization seems to have come to an end. Thanks to American growth and protectionism, it once again pays to be made and listed in the United States. When I spoke to Jenisch this fall for a Fortune feature story on Holcim, he told me just how transformational the Biden administration’s green industrial policy has been. “The Build Back Better bill, and the famous IRA, it helps a lot, it sets the framework,” he told me. “They are supported by the government and tax credits. It sets the right incentives.” These government incentives, combined with the ever-increasing growth rate gap between the U.S. and European economies, has convinced Jenisch that Holcim USA will “unlock value” for its shareholders almost immediately. The spun-off U.S. company is aiming to nearly double its sales by 2030, and, based on that glowing prospect, its share price may well soar from the get−go. If Holcim becomes a textbook case of increasing shareholder value in the 21st century, though, the end of globalization may be nearer than we previously thought. And in the current macroeconomic environment, that would be bad news for every economy—except the exceptional American one. #globalization https://lnkd.in/eRZ-aq9R