Blogg

Karine Hirns bild
2010-04-26 (Comments)

Only a few days left for the World Expo to start in Shanghai and visitors to the city cannot possibly ignore it since they are constantly reminded of the final countdown. After the impressive efforts put by China into the Olympic Games in Beijing in 2008 the Shanghai World Expo has been a huge focus for the Chinese authorities.

Shanghai world expo

There are many obvious reminders of the World Expo about to officially open on May 1, such as numerous outdoors signs claiming its motto of “Better city, better life”, the new taxi fleet specially introduced to service the 20 million expected visitors, the beautiful lightening of trees in the streets, newspapers headlines. But China has also once again proven its efficiency and ability to deliver quick results as regards infrastructure by making the Pudong International Airport fit to get 80 million passengers a year or by opening up brand new metro lines. But not only infrastructure: the Shanghainese people have received instructions to be polite to the city’s visitors (even though considering the way I was treated by the lady taxi driver that took me from the Maglev train station to my hotel I might think there is some work to be done) and the special World expo taxi drivers have undergone English training to be more helpful to foreigners.

The China pavilion is the tallest and largest of all. I do not know how much money they spent on it, and one could in general terms certainly question the relevancy of the spending by all the participating nations for just a few months. But more than the period of the World Expo itself, what is striking is the symbolic value of China hosting it at a time when it is showing so much strength in terms of growth while many countries in the world are still only slowly recovering from the financial crisis. The Expo is open to anyone willing to visit it (and stand in the queue) but will also attract an extraordinary concentration of prominent people from all over the world, may they be scientists, officials, artists, representatives or large corporations or experts of any sort. Some already predict that the Shanghai World Expo is the new great leap for China, as it will give the opportunity for the country to showcase its position on the global stage and give more concrete evidence of its potential for the future.

Taggar: China, Shanghai | (Comments)
Peter Elam Håkanssons bild
2010-04-23 (Comments)

Marcus and I communicated with investors from 25 countries in yesterday’s Live Q&A. It was broadcast live from Stockholm where East Capital simultaneously hosted a summit with partners and investors.

A large number of relevant questions were posted and we moved quickly around East Capital’s investment universe to cover as many of them as possible.

China was the first region to be brought up. This was specifically relating to East Capital’s recently signed acquisition of the Chinese dedicated asset manager Asia Growth Investors. Commenting on “Why China?” my short answer is that China is impossible to ignore when investing in Eastern Europe and that there has been, and certainly is a clear linkage between Russia and China. 

As usual Russia was brought up by many web TV viewers and among many other topics we discussed its main growth drivers and our favoured stocks.

The buzzword in Moscow is 'modernisation', as in modernisation of the economy and of the political system, through economic reform, fighting corruption and the move to democracy. The modernisation of such elements provokes much more positive feelings that will help Russia in maturing as a serious contender.

The successful return to the sovereign debt market also stands to benefit Russian equities.

Other markets we discussed were the Baltics, Turkey and Poland for which we pointed out opportunities as well as potential risks.

The tragic and unexpected death of the Polish President, Lech Kaczynski, has had little effect on the Polish economy. A brief blip in the currency markets in the days following, but little volatility. This shows the strength of the economy and the development of Polish institutions. Growth in 2009 has resulted in a more steady recovery and more stable market.

Growth in the Baltics is being revised and has been low but without doubt, better than expected. For example, Estonia has already met the formal criteria for the Eurozone and this has had a positive effect on its stock market, reducing market uncertainty. The impact of accessing the Eurozone will have more longer-term benefits.

Turkey is a country still very much on the East Capital Universe radar. It is area for long term focus as it is supported by what is now a remarkably strong demographic profile. The fruits of lower interest rates and inflation, coupled with a growing population, will have a profound effect on the economy.

We also commented on the less performing markets such as Greece, Slovakia and Slovenia and their relation to the Eurozone.

See all the topics and watch the programme at www.eastcapital.com/live

Taggar: East Capital Live Q&A, Poland, Russia, Turkey | (Comments)
Marcus Svedbergs bild
2010-04-21 (Comments)

A notable feature about the Czech Republic is that it offers few surprises. The economic situation is relatively stable and politics is complicated but not necessarily very volatile. In short, the country is behaving more like a developed economy than an emerging market. The Czech Republic is also one of only a handful of Eastern European members of the OECD, the rich country organisation based in Paris.

The Czech economy is comparatively well positioned when global economic activity is now picking up with a competitive currency and large export sector. The economy will grow this year by 2 per cent or so, after 4.1 per cent output loss last year. For the next couple of years, growth will stay below potential in the 2-4% range, which may be lower than many peers further East but certainly higher than most economies in the West. The Czechs enjoy the lowest interest rate in Eastern Europe, after the Central Bank’s cut of main policy rate to 1.0 per cent in December, and inflation has fallen and was only 0.4 per cent in March. It will rise during the year but stay within the target. Moreover, the current account deficit is modest and will remain so during 2010 and public debt is low although rising.

The country is led by a caretaker government and new elections will take place on May 28-29. A government led by the Social Democrats with the support of the Communists in Parliament is the most likely outcome, but coalition-building is likely to be as complicated as always in the Czech Republic. An interesting feature of the elections is that the party benefitting the most from the recent economic crisis seems to be the newly formed TOP09, which is a political movement stressing the importance of fiscal consolidation. That is very unusual and proves that Prague can, after all, surprise.  

Taggar: Czech Republic, OECD | (Comments)
Vesna Luccas bild
2010-04-21 (Comments)

Post your questions directly to East Capital’s Head of Portfolio Management team and Chief Economist.

We are broadcasting live from the mini summit in Stockholm tomorrow.

Register your question today!

Read more about East Capital Live Q&A

The previous web TV broadcast in January was watched by over a thousand investors from 25 countries.

See you tomorrow at 12:45 CET!

Ps. The programme will also be available to watch on demand

Taggar: East Capital Live Q&A | (Comments)
Vesna Luccas bild
2010-04-19 (Comments)

The last couple of days have certainly reminded us all of how vulnerable we are and how dependent we are on flights.

Due to the current air travel disruption we have been forced to postpone our East Capital Summit in Prague (21-23 April) until 8-10 September. As many of the speakers are currently in Stockholm, we decided to hold a mini version of the Summit on Thursday, 22 April, at our offices.

The presentations will be filmed and available on demand shortly thereafter. Here is the outline of the program.
 
09:30 Why Eastern Europe?
Peter Elam Håkansson, Chairman and Founding Partner of East Capital
 
10:00 Eastern European Recovery
Marcus Svedberg, Chief Economist, East Capital
Bengt Dennis, East Capital Advisory Committee Member
 
10:30 East Capital investing in Central Europe
Adrian Pop, Member of the Portfolio Management Team, East Capital

11:00 Our view on the Russian stock market
Jacob Grapengiesser, Partner and Portfolio Advisor, East Capital (Video link from Moscow)
 
11:30 Banks: turning the corner?
Margot Jacobs, Senior Analyst East Capital
 
12:45 Live Q&A
Peter Elam Håkansson, Chairman and Founding Partner of East Capital
Marcus Svedberg, Chief Economist, East Capital
 
13:30 Looking further into Ukraine
Anders Åslund, Senior Fellow, Peterson Institute for International Economics (Video link from Washington)
 
14:00 Conclusions
Albin Rosengren, Head of Sales and Partner at East Capital

Taggar: East Capital Summit | (Comments)
Karine Hirns bild
2010-04-13 (Comments)

This morning we announced the acquisition of Asia Growth Investors (AGI), a Swedish asset manager focused on China. Once the acquisition is approved by the regulator, which we expect in June, it will mean that the East Capital Universe has now grown to include China. It is an exciting step for us and on a personal basis a significant one for me as I will be relocating to Shanghai during the summer together with my family. Time to learn Mandarin Chinese for the five of us!

As an investor in Eastern Europe the emergence of China as a global economic power has not been left unnoticed to our investment team during all these years, as more and more Russian and Kazakh companies are exposed to the Chinese growth story. Actually we think that understanding China better will add value to our investments in Eastern Europe. The Chinese market itself is emerging as one of the largest equity markets in the world which made this step eastwards a natural one for us to make. We do it through the acquisition of a team that has already a proven excellent track-record, and will keep responsibility of the management of the funds. Their largest fund, the AGI China East Asia Fund will turn 5 on May 9. It has been awarded twice in a row, in 2009 and 2010, the Lipper Europe Funds Awards for Best Fund in its category.

One of the reasons behind the success of Gustav Rhenman, AGI founder and portfolio manager, is that he spends a lot of his time travelling in the region to meet companies and get his own understanding of what the growth drivers and triggers are, in order to do the right stock selection. Doesn’t it remind you of anyone? Indeed, so true to East Capital and according to our own belief in how to maximise returns and minimise risks, hence providing superior results to investors.

Gustav Rhenman’s decision to join forces with East Capital is based on his desire to dedicate most of his time on portfolio management, instead of building a business in fund markets where it is difficult for small players to prevail. He will now be able to do so. On our side we are looking forward to working with the AGI team and to being able to offer a range of funds dedicated to another exciting emerging market.

Taggar: Asia Growth Investors, China, East Capital | (Comments)
Marcus Svedbergs bild
2010-04-10 (Comments)

Lech Kaczynski, President of Poland, and a large number of senior military and political leaders, including the Governor of the Central Bank Slawomir Skrzypek, died on Saturday in a plane accident. The Polish delegation was on its way to commemorate the Katyn anniversary, the Soviet massacre of Polish officers in World War II, when the plane crashed after a failed emergency landing in Smolensk in Western Russia. National grief has been issued for a week in Poland and the accident will have substantial political consequences. The Speaker of the lower of house of parliament, Bronislaw Komorowski, has assumed the presidency, in line with the constitution. Presidential elections were scheduled for the fall but will most likely be brought forward. Deputy Governor, Piotr Wiesiolek, has become acting president of the National Bank of Poland.    

Taggar: Poland | (Comments)
Karine Hirns bild
2010-04-09 (Comments)

Based on Morningstar data our East Capital Russian Fund comes first with a 162% performance, largely ahead of the second one, also a Russia Fund that performed 125% during the same period.

Despite the difficult period for the Russian market in the second half of 2008 and beginning of 2009 the Russia funds have had a stellar performance during the last five years. This was noticed today in an article in Swedish daily business paper Dagens Industri about the performance over the last five years of the largest funds (with assets above 1 billion SEK) registered in Sweden.

To the article

This is indeed a nice news for us and for our clients to read prior to the weekend!

Karine

Taggar: performance, Russian Fund | (Comments)
Marcus Svedbergs bild
2010-04-08 (Comments)

The opposition, led by the former Minister of Foreign Affairs Roza Otunbayeva, has overthrown the government in Kyrgyzstan.

President Bakiyev, who took control after the Tulip Revolution in 2005, has been forced to leave the capital but is believed to remain in the country and has not yet issued a formal letter of resignation.

The coup happened after a day of protests in several cities and is believed to be the result of widespread displeasure with Bakiyev’s autocratic leadership, corruption and the lack of democratic reforms. The protests developed quickly into a coup but came after a longer period of discontent with the government in general and President Bakiyev in particular.

| (Comments)

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Våra bloggare

  • Karine Hirns bild

    Partner och Chief Representative, Shanghai-kontoret. Karine bloggar om East Capital, våra fondprodukter och ger direktrapporter från Shanghai.

  • Marcus Svedbergs bild

    East Capitals chefekonom fokuserar på makroekonomi, analyser och omvärldshändelser som påverkar utvecklingen i regionen.

  • Vesna Luccas bild
    East Capitals kommunikationschef skriver främst om East Capital som företag och aktuella mediefrågor.
  • Kristina Sandklefs bild

    Kristina, makroekonom Asien, delar med sig av sina erfarenheter och analyserar trender och händelser som påverkar Kina.

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