In partnership with T. Rowe Price, the Investment Innovation Institute [i3] is pleased to convene a webinar to discuss emerging markets equity strategies for superannuation funds and institutional investors.
A Perfect Storm for Emerging Market Stocks?
It currently appears that we have a bubble in technology stocks, as in 2001. But this time round, it is combined with a deep global recession and a heightened focus on sustainability.
The world has never experienced this combination of “asset bubble + ESG focus + economic recession” before.
At T. Rowe Price, Ernest Yeung believes this perfect storm, coupled with the value/growth divergence in emerging markets at an historical extreme, could lead to overlooked emerging markets value stocks re-rating once a broader and more sustainable global recovery takes hold.
3:28 Is value investing dead?
4:30 How value compares to growth in 2020.
5:27 More liquidity is being pumped into the system than assets available to buy.
6:25 How will the recovery compare to previous events? Things have changed this time around, governments know they need to do something different.
8:49 Money supply has changed in major economies and it’s working.
11:04 There’s a good chance of recovery within the next 6-12 months.
11:47 Emerging Markets (EM) has been a pretty bad asset class – but the headline index doesn’t show the real picture. Some EM countries have their best current account numbers in 10 years.
14:43 Lockdown is still being talked about a lot, but lockdown is a developed markets phenomenon. Things are quite different for EM countries.
15:50 We are not in a typical recession pattern.
17:31 Same type of stock, totally different lockdown cycle and usage patterns …… but same result. How does that happen?
18:36 Where are the opportunities in this COVID-on vs COVID-off environment?
22:22 Investors need to make sure they aren’t ignoring those stocks that currently have ‘average ESG’ but upside potential.
26:46 OECD standards for ESG are hard to apply in the EM space so operating in that arena needs more pragmatism. The banking sector is a good example. Another example is the use of PET bottles to transport water in India – is it realistic to stop using them?
29:57 There are differing views on how airports and airlines will fare through COVID.
33:06 Cosmetics used to be considered a structural staple consumption, but they’re now providing a good opportunity.
34:34 How are banks coping with the current headwinds – rates, deflation, technology, etc, and will they turn around?
37:48 Where in the cap spectrum are the better opportunities?
39:22 Is there still value in oil, and how does that sit with the risk of stranded assets?
42:18 The new US administration will have implications for EM and China, but not through geopolitics.
Ernest Yeung, Portfolio Manager – Emerging Markets, T. Rowe Price
Ernest is a portfolio manager for the Emerging Markets Discovery Equity Strategy at T. Rowe Price. He was the co-portfolio manager for the International Small-Cap Equity Strategies from 2009 to 2014. Ernest is a vice president of T. Rowe Price Group, Inc. and T. Rowe Price Hong Kong Limited.
Ernest has 17 years of investment experience, 15 of which have been with T. Rowe Price. Prior to joining the firm in 2003, he was an analyst with HSBC Asset Management in London.
Ernest earned an M.A., with honours, in economics from Cambridge University. He also has earned the Chartered Financial Analyst designation and the Investment Management Certificate.Enquire about this event