Perspectives Blog

Emerging Markets: Waiting on exports

Anwiti Bahuguna, Ph.D., Senior Portfolio Manager | March 31, 2014

…ould infect the developed economies. Data released in the early part of the year (factory orders, PMIs) continues to show further slowdown in the Chinese economy which has the markets worrying about a “hard landing” scenario. China is reaching the limits of a debt-fuelled and investment-led growth model and could be headed for not just a slowdown but significant stress in the financial sector of the economy. Most economists believe that growth wi…

Global asset allocation outlook (as of March 2014)

Columbia Management Global Asset Allocation Team, | April 7, 2014

…oftness in housing and payback from a very strong inventory cycle in the second half of 2013. In addition, geopolitical fears intensified with Russia’s incursion into Ukraine and nervousness about the shadow banking system in China resulting in a larger than expected slowdown in the Chinese economy. Despite these setbacks, we believe U.S. growth metrics are still very positive, in the range of 2%-3% this year. Estimates for first quarter gross do…

Predicting new drug sales is more art than science

Harlan Sonderling, CFA, Senior Healthcare Analyst | April 14, 2014

…ping economies fluctuate more often and with higher variability than developed economies, and their level of regulatory oversight is lower. Several major manufacturers recently learned the hard consequences of rapid growth in China. One of the key reasons behind global, specialty and generic pharmaceutical industry consolidation may be the companies’ strategic desire to diversify product portfolios in order to hedge commercialization risk in a di…

Comments on the effect on global markets from the Ukraine crisis

Mark Burgess, Chief Investment Officer, Threadneedle Investments | March 12, 2014

…r value, although we expect both the hard and local currency markets to remain volatile in the short term. Emerging equities reflect concerns not only around Russia and Ukraine but also the weaker growth outlook in Brazil and China. In commodities, Russia is a significant oil player, supplying 30% of Europe’s gas, with 50% of that piped through Ukraine. Any move to curb Russian oil exports by the EU could easily drive Brent crude oil into the $14…

When the QE tide recedes, focus on what is revealed

Robert McConnaughey, Director of Global Research | January 6, 2014

…ped drive significant advances across emerging financial markets. However, investor concerns about declining global competiveness and stalling structural advancements began to accelerate in 2013. Recently announced reforms in China may help to lend greater sustainability to the Chinese growth story, but the details around implementation will be crucial not only to Chinese prospects (where market valuations reflect a great deal of skepticism), but…

Garbage in, less garbage out

Paul DiGiacomo, Senior Analyst | May 9, 2013

…n of these materials and haulers treated the business as a loss-leader. But, with better processing technologies, improved density and higher recycled commodity prices, the business is solidly profitable today. Interestingly, China consumes most of our waste paper, as it cannot grow enough trees to satisfy its fiber demand. Unlike traditional collection and disposal activities, recycling sales — and consequently profit — depend on commodity price…

Looking for diversification in emerging markets

Columbia Management, Investment Team | July 30, 2013

…in emerging markets are also state-owned or recently privatized and/or rely on financing from state entities for their operations. For example, more than two-thirds of the top 100 Chinese companies listed in Hong Kong and in China by market cap are state-owned. Often these state-owned companies serve as an arm of government policy and may not be oriented toward shareholders’ best interests. The case for small-mid cap investing We believe smaller…