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Evergrande: Maybe Not a Lehman Moment but Risks Are Real
As one of China’s largest property developers, Evergrande’s size and precarious financial position pose real risks for China’s authorities, economy and financial markets.
Latin America’s Pandemic Election Cycle
Featured Author: Meagan Nace
Meagan Nace is an analyst on the Artisan Partners Sustainable Emerging Markets Team.
In addition to the public health tragedy, the pandemic has been a source of significant economic and fiscal setbacks for Latin America—at a time when social discontent over inequality was already beginning to surface. While we see some signs of economic improvement, the pandemic led to drops in much-needed investment—foreign, corporate and government—while fiscal conditions have become further strained. Now, a series of elections will reveal what leaders and policies each country feels will help it move forward—with potentially significant implications for the region’s financial markets.
Potential Implications of a Wider Chinese Stock Blacklist
In November 2020, US President Donald Trump signed an executive order prohibiting US investors from investing in a group of Chinese companies. The targeted companies are believed to supply and/or support China’s military. Subsequently, there have been media reports of the US government potentially adding companies to the blacklist. Most recently, media reports indicated the US government was considering adding Alibaba and Tencent.
The Spread of E-Commerce Accelerates in the Pandemic
Featured Author: Jessica Lin
Jessica Lin is an analyst on the Artisan Partners Sustainable Emerging Markets Team.
E-commerce was growing markedly faster than overall retail sales before COVID-19, especially in EM. But the global response to COVID-19—drastic containment measures and cautious economic reopenings—led to a surge in online shopping fueled largely by millions of consumers shopping online for the first time. China’s Alibaba reported an increase of 28 million mobile active users in Q2, while Latin American e-commerce company MercadoLibre reported 16 million new active users during the quarter.
Emerging Markets Case Study: India Amid COVID-19
Featured Author: Gurpreet Pal
Gurpreet Pal is an analyst on the Artisan Partners Sustainable Emerging Markets Team.
As the COVID-19 pandemic evolves, emerging markets are set to take center stage. The US, Italy and other developed markets appear to be flattening the curve and starting to reopen their economies. In comparison, many emerging markets appear to be in much earlier phases of an outbreak. Within EM, India is an especially intriguing country to watch as it seems to be managing the pandemic better than previously feared.
India has the seemingly right conditions for a high number of cases and rapid transmission:
Emerging Markets Opportunities Amid Market Volatility
Global financial markets have been experiencing sharp drawdowns and extreme volatility. Although the catalysts may be unique—COVID-19 and an oil price war between Saudi Arabia and Russia—the occurrence of such dramatic turns in global financial market and economic conditions is not. We believe a narrow focus on sustainability helps account for such unpredictable periods. While we are not immune to these gyrations, we believe we are also in a period of opportunity. We continue searching for companies with sustainable competitive advantages or unique access to growth—characteristics that enable companies to persist through volatility, succeed after the dust settles, and generate alpha over the long term.
Defining Sustainability in Emerging Markets
To me, sustainability means having the ability to endure. It includes—but goes beyond—environmental, social and governance (ESG) considerations. More broadly, it entails businesses making the right strategic choices that bring continuity to their shareholders, employees, customers and the communities around them. Ultimately, my team invests in emerging markets because as a team of people who were born, educated and have spent large amounts of time in these countries, we want to direct capital to companies that can have a long-term positive impact on emerging markets’ people.
We believe companies manifest and embody sustainability in a variety of ways.
A Forward-Looking Approach to Sustainability
Portfolio Manager Maria Negrete-Gruson explains how the sustainability of a company's earnings goes hand-in-hand with its environmental, social and corporate governance factors.
ESG in Emerging Markets: A Differentiated Perspective
Sustainable Emerging Markets Portfolio Manager Maria Negrete-Gruson discusses her team’s differentiated perspective on identifying ESG opportunities in emerging economies.