Cash in on change in emerging markets

After a strong start to 2019, emerging-market equities have hit turbulence. Professional investor Chetan Sehgal tips the stocks to back.

Each week, a professional investor tells us where he'd put hismoney. This week: Chetan Sehgal, Lead PortfolioManager, Templeton Emerging Markets Investment Trust.

After a strong start to 2019, global and emerging-market equities have hit turbulence thanks to changing US Federal Reserve policy and ongoing US-China trade-related negotiations or tweets. Against this volatile backdrop we continue to search for companies with sustainable drivers of earnings growth that can withstand ongoing market uncertainty.

Domestically orientated businesses may be well positioned to benefit from structural demand drivers, such as the confluence of technology and consumption in e-commerce, or consumers' need for financial services.

Seek out Korea's top search engine

Naver (Seoul: 035420)

Naver is also among the leading payment companies in both Korea (Naver Pay) and Japan (through its social-media subsidiary, Line). It is thus facilitating e-commerce growth as well as benefiting from it. Reflecting the success of this online ecosystem, Naver was ranked ninth on Forbes' Most Innovative Companies listin 2018.

A boost for Brazil

Banco Bradesco (NYSE: BBD)

The company is leveraged to the economic recovery, benefits from a concentrated banking sector and gains from an extensive retail-distribution network that provides exposure to household spending. Ongoing government-led reforms are also expected to unlock demand for corporate lending.

Roaring ahead in Russia

Sberbank (Moscow: SBER)

Smaller competitors without access to the state deposit insurance system have fallen by the wayside as they have struggled to attract retail depositors. Sberbank has a strong focus on technology, dominating peer-to-peer transfers and card issuance, while its online mortgage app and e-commerce business are growing. An emphasis on reducing costs (by closing retail branches, for instance) is improving overall efficiency and margins.

Recommended

I wish I knew what an emerging market was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what an emerging market was, but I’m too embarrassed to ask

This week's “too embarrassed to ask” explains what emerging markets are, and why you might want to invest in them.
9 Sep 2020
Bullish investors return to emerging markets
Stockmarkets

Bullish investors return to emerging markets

The ink had barely dried on the US-China trade deal before the bulls began pouring into emerging markets.
27 Jan 2020
Share tips of the week
Share tips

Share tips of the week

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
17 Jan 2020
Share tips: eight stocks that should deliver robust returns
Share tips

Share tips: eight stocks that should deliver robust returns

Ryan Ermey of US publication Kiplinger’s Personal Finance chooses his favourite stocks for the next decade, which should be able to grow for years.
28 Dec 2019

Most Popular

The Bank of England should create a "Bitpound" digital currency and take the world by storm
Bitcoin

The Bank of England should create a "Bitpound" digital currency and take the world by storm

The Bank of England could win the race to create a respectable digital currency if it moves quickly, says Matthew Lynn.
18 Oct 2020
Negative interest rates and the end of free bank accounts
Bank accounts

Negative interest rates and the end of free bank accounts

Negative interest rates are likely to mean the introduction of fees for current accounts and other banking products. But that might make the UK bankin…
19 Oct 2020
What would negative interest rates mean for your money?
UK Economy

What would negative interest rates mean for your money?

There has been much talk of the Bank of England introducing negative interest rates. John Stepek explains why they might do that, and what it would me…
15 Oct 2020