emerging markets: new economy emerging markets: fed impact impact on emerging markets currencies...

Download EMERGING MARKETS: NEW ECONOMY Emerging Markets: Fed Impact Impact on Emerging Markets Currencies Historically

If you can't read please download the document

Post on 19-Jun-2020

0 views

Category:

Documents

0 download

Embed Size (px)

TRANSCRIPT

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.For Financial Professional Use Only / Not for Distribution to the Public For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    EMERGING MARKETS: NEW ECONOMY OPPORTUNITIES Feng Ding Director, Emerging Markets Equity Global Product Management

    CFA® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    Emerging Markets: Why Now?

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments. 2

    Politics and Populism across Developed Markets

    Source: Boris Johnson: http://snappa.static.pressassociation.io/assets/2015/06/17124034/1434541231-dcf7a33bc96928df154a7685e03afadb-600x800.jpg Donald Trump: https://www.donaldjtrump.com/about

    http://snappa.static.pressassociation.io/assets/2015/06/17124034/1434541231-dcf7a33bc96928df154a7685e03afadb-600x800.jpg

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    EM Earnings Power And Cash Flows Continue To Improve Commodity Prices and Exports Supportive of Earnings Turnaround

    EM Exports, EM Corporate Earnings and Commodity Prices

    Source : ©FactSet Research Systems,MSCI, Bloombergrs. Note: Exports are based on the value of goods exported by developing countries and do not include services. Earnings are based on 12-month f Commodity prices are based on the Bloomberg Commodity Index. Last Updated: Exports numbers are the latest as of 09/29/2017, The rest are updated as of 12/29/2017

    '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 -60

    -40

    -20

    0

    20

    40

    60

    80

    An nu

    al C

    ha ng

    e %

    Commodity

    Exports

    Earnings Growth

    12/31/2007 - 12/29/2017

    Exports, World, USD - Emerging Economies MSCI EM (Emerging Markets) - 12 Month Forward Earnings Growth Bloomberg Commodity Index - Price

    3

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    EM Earnings Power And Cash Flows Continue To Improve Free Cash Flow Growth, EPS Growth

    For illustrative and discussion purposes only. Past performance is not an indicator or a guarantee of future results. Source: FactSet, BoA Merrill Lynch Global Research, MSCI, IBES estimates. 12 months forward EPS Growth.

    Asia ex-Japan Free Cash Flow 2007 – 2018E

    0

    50

    100

    150

    200

    250

    300

    350

    2007 2009 2011 2013 2015 2017E

    US D

    bn

    EM Earnings Expectations Rising January 2012 – December 2017

    0%

    5%

    10%

    15%

    20%

    2012 2013 2014 2015 2016 2017 MSCI EM MSCI World

    4

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    EM Valuations Cheap Relative to DM But Not Historically

    5

    Source : ©FactSet Research Systems, MSCI, Developed Markets as represented by the MSCI World ; EM as represented by MSCI EM; Last Updated:12/29/2017

    '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 6

    8

    10

    12

    14

    16

    18

    Emerging Markets: 12.50

    Developed Markets: 17.04

    12/31/2007 - 12/29/2017 MSCI EM (Emerging Markets) - Price to Earnings - Next 12 Months - Monthly (Index) MSCI The World Index - Price to Earnings - Next 12 Months - Monthly (Index)

    Source : ©FactSet Research Systems, MSCI, Last Updated: 12/29/2017

    '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 -5

    0

    5

    10

    15

    20

    25

    30

    35

    DM EPS Growth:10.02

    EM EPS Growth: 13.05

    12/31/2007 - 12/29/2017

    MSCI EM (Emerging Markets) - IBES Aggregates - EPS Growth 12 Month MSCI World Index - IBES Aggregates - EPS Growth 12 Month

    P/E NTM 12 Months EPS Growth

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments. 6

    EM Fund Flow Cycles 2003 – 2017

    EM Equity Fund Flows 2013 – 2017

    Emerging Markets: Flows Flows Accelerating but Remain Muted Relative to History

    -50

    -25

    0

    25

    50

    75

    2013 2014 2015 2016 2017

    US D

    Bn

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    0 12 24 36 48 60 72

    % o

    f T ot

    al As

    se ts

    No. of weeks

    4/9/2003 11/3/2004 3/11/2009 12/21/2011 7/13/2016

    For illustrative and discussion purposes only. Past performance is not an indicator or a guarantee of future performance. Source: Morgan Stanley Research, Citi Research, EPFR Global. As of December 2017.

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    MSCI EM Currency Index January 2015 – December 2017

    80

    85

    90

    95

    100

    105

    110

    0.0%

    0.5%

    1.0%

    1.5%

    2.0%

    Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 U.S. Fed Funds Rate (LHS) MSCI EM Currency Index (RHS) JPM EM Currency Index (RHS)

    Emerging Markets: Fed Impact Impact on Emerging Markets Currencies Historically Limited

    7

    90

    100

    110

    120

    130

    140

    150

    0.0%

    1.0%

    2.0%

    3.0%

    4.0%

    5.0%

    6.0%

    Jun-03 Jun-04 Jun-05 Jun-06 U.S. Fed Funds Rate (LHS) MSCI EM Currency Index (RHS) JPM EM Currency Index (RHS)

    MSCI EM Currency Index June 2003 – June 2007

    Jun-07

    Fed announces unwinding of QE

    For illustrative and discussion purposes only. Past performance is not an indicator or a guarantee of future performance. Source: FactSet, as of December 2017. See www.franklintempletondatasources.com for additional data provider information.

    http://www.franklintempletondatasources.com/

  • For Professional Investor Use Only. Not for Distribution to Retail Investors. 8

    Emerging Markets May Offer Promising Opportunities Rising Wealth Expected to Fuel Strong Growth Prospects

    Consumption by the Middle Class1 (USD Trillions)

    For illustrative and discussion purposes only. 1. Source: Brookings Development Indicators, as of June 2016. There is no assurance that any projection, estimate or forecast will be realised.

    Past performance is not an indicator or a guarantee of future performance.

    Emerging Markets Emerging Asia Developed Markets

    193% Growth Rate

    9.5 13.9

    20.1

    27.9

    2015 2020 2025 2030

    343% Growth Rate

    4.6 8.0

    13.4

    20.4

    2015 2020 2025 2030

    10% Growth Rate

    13.6 14.1 14.6 14.9

    2015 2020 2025 2030

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments.

    Emerging Markets: New Economy Rising

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /distributed to the public without prior approval of Franklin Templeton Investments. 10

    Technology: Secular Long Term Growth Emerging Markets Most Tech Dominated Index

    MSCI EM Index Sector Evolution January 2007 – December 2017

    For illustrative and discussion purposes only. Past performance is not an indicator or a guarantee of future results. Source: FactSet, MSCI, as of December 2016. MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This report is not prepared or endorsed by MSCI.

    IT Sector Weighting: MSCI Indices December 2011 vs. December 2017

    0

    5

    10

    15

    20

    25

    30

    35

    40

    2007 2009 2011 2013 2015 2017

    Energy/Materials Technology Consumer

    0

    5

    10

    15

    20

    25

    30

    EM USA Japan Europe

    IT S

    ec to

    r W eig

    ht in

    g ( %

    )

    Dec-17 Dec-11

  • For distributors/institutional/professional investors use only. The content of the presentation should not be reproduced /dist

Recommended

View more >