Over the last three months and from the lows set back in early February, the Emerging Money Country Allocator Index (EMCAI) has outperformed the benchmark MSCI.
We have made changes to our Emerging Money Global Index to reflect changes in underlying prices of the components based upon our view of the remaining 2Q investment and allocation dynamics for these multinational companies who count EM as key to their revenue and growth vision.
After a blistering two month period where the Ibovespa rallied 24% in USD terms (EWZ, quote) and the Istanbul XU 100 Bourse (TUR, quote) rallied 3-% we have downgraded these top overweights 20% and raised Russia (RSX, quote, 9% from 6.5%) and Korea (EWY, quote,14% from 12.3%) on underperformance.
After a month in which Chinese internet and technology stocks were battered along with the global internet rout, we have made adjustments in the Emerging Money Chinese Internet Index which we feel reflect increased upside in a handful on index components and a reweighting which then adjusts proportionately.
Looking at the technicals of the Emerging Money Chinese Internet Index (EMCHI) after todays -4/5% break lower, Fibonacci levels to respect are about 10% lower around 62.50 on the index.
After a major rally founded more on expectations of change than actual change, we are cautious on some charts in Brazil.
The EMGEI trades higher today as pharma heavyweights Teva Pharmaceutical (TEVA, quote) and GlaxoSmithKline (GSK, quote) are well bid with M/A activity in the sector running full tilt and global thematic tailwinds driving the entire sector.
With the successful IPO today for Weibo we have added the micro-blog site to our index with a 4% weighting.
We have made the following adjustments to the EMCHI as of April 15th: Baidu (BIDU, quote) and Tencent (TCEHY, quote) as mega-cap plays in the index already occupy the two largest weightings but have seen healthy pullbacks to core support and remain the best mix of proven revenue growth and valuation attractiveness.