Gavekal Capital: Appearances Can Be Deceiving

Wednesday, January 21, 2015

Appearances Can Be Deceiving

As we noted last week (here), emerging markets' equities are off to a better start so far this year, falling just 0.78% versus the 1.34% decline in their developed market peers.  A quick look at the winners thus far:

By Country
























By Sector















Top 10 Companies Overall














Top 10 EM Asia














Top 10 EM EMEA














Top 10 EM Latin America














And now, the point-and-figure charts for the leader in each region:




































































A quick glance at the price performance year to date would give the impression that these companies are off to an amazing (double-digit) start.  When we take a moment to look at performance relative to the MSCI All Country World Index benchmark, we find that, while they have certainly rallied in the first few weeks of 2015, they are all locked into multi-year downtrends and appear to be (re-)testing resistance.  Whether or not the positive start to the year can continue depends largely on the ability of each of these stocks to overcome that formidable hurdle.