EM Stocks: What’s Done Well Since The 8/24 Low? by Eric Bush, CFA, Gavekal Capital Blog

The easy answer to the question posed in the title is pretty much everything. Only three countries (Brazil, Czech Republic, and Israel) have seen the median stock in their country deliver negative performance, in USD, since 8/24. The same holds if we look at average performance, as well. EM stocks have definitely had the best breadth on a country basis since 8/24. The United States has had the 14th worst performance overall.

EM Stocks

If we drill down and look at performance data by country sector, we see that for consumer discretionary stocks, three countries have returned over 20% since 8/24. Meanwhile, four countries have had negative returns for their consumer discretionary stocks with Brazil down the most nearly 14%.

EM Stocks

 

Turkey and Poland have had the best performing consumer staples sector. Once again, Brazil has had the worst performing sector.

EM Stocks

Malaysian energy stocks have performed the best by far returning nearly 42% since 8/24. On the other end of the spectrum, Israeli and Spanish energy stocks are still down nearly 10%.

EM Stocks

The best performing financial sectors have been, surprisingly, in Greece and Russia. Brazil can’t catch a break and once again has the worst performing sector.

EM Stocks

Health Care stocks have been some of the weakest off the 8/24 low. 12 out of the 27 countries that have health care stocks have seen declines since 8/24. Canada leads the way down with Valeant Pharmaceutical down -46% and Concordia down -66%, respectively, since 8/24. Asian health care stocks have held up much better.

EM Stocks

Industrial stocks have had a broad based gain off the 8/24 low. EM Asian industrials, specifically, have been on the rise. Once again, Brazil is the major laggard.

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Chinese technology stocks lead the way higher. It should be noted that there are only three Chinese technology stocks in our GCKI China Index. Brazil once again is the laggard but this time they have some company with Norway and The Netherlands nipping at their heels.

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Finally a sector where Brazil looks good! Brazilian material stocks are up nearly 27% since the 8/24 low, second only to Indonesian material stocks. South African material stocks are the ones that have been hit hardest since the 8/24 low.

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Telecom stocks have surprisingly performed poorly off the low. 13 different country telecom sectors have had negative performance with sadly, Brazil leading the way lower once again. On the other, EM EMEA countries lead the way higher.

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Lastly, we have utility stocks. Russia has gained by far the most. However, it should be noted that there is only one Russian utility company in our GKCI Russia Index. That company is Federal Hydro-Generating Company. The EM Asia countries again look great as they round out the top 5 best performing utility country sectors.

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