Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>It is hard to get constructive on iron ore due to poor lending data in China, with August TSF down 38% YoY, negative mill margins, and expectations of increased supply.</li>
<li>We believe, though, that we are now bumping up against the higher end of the cost curve as iron ore prices have drifted down to 90-91 USD/ton. </li>
<li>While we see a small bounce in prices, we find it hard to be positive on equities, as elevated diesel and shipping costs are causing a margin squeeze.</li>
</ul>


It is hard to get constructive on iron ore due to poor lending data in China, with August TSF down 38% YoY, negative mill margins, and expectations of increased supply.
We believe, though, that we are now bumping up against the higher end of the cost curve as iron ore prices have drifted down to 90-91 USD/ton. 
While we see a small bounce in prices, we find it hard to be positive on equities, as elevated diesel and shipping costs are causing a margin squeeze.


Iron Ore Prices: Small Bounce From 90 USD/Ton, Cost Pressures Still Negative For Equities

Breaking Down the Mining News of the Day, Money of Mine

Money of Mine

Breaking Down the Mining News of the Day

An ex-underground miner, an ex-investment banker, and an ex-equity research guy breaking down the mining news of the day. It's a bit of entertainment, information, and occasionally some alpha.

Thematic (Sector/Industry)

<ul><li>Interview with Vuslat, who runs a mining investment company in South Africa</li><li>South Africa is rich in commodities like PGMs, Chrome, Manganese, Coal, and Iron Ore</li><li>South Africa offers rule of law, democracy, and security of tenure, making it an attractive investment destination for mining companies</li></ul>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Interview with Vuslat, who runs a mining investment company in South AfricaSouth Africa is rich in commodities like PGMs, Chrome, Manganese, Coal, and Iron OreSouth Africa offers rule of law, democracy, and security of tenure, making it an attractive investment destination for mining companiesThis content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Extracting value from overlooked mines (Vuslat Bayoglu Interview)

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSMC (Taiwan Semiconductor Manufacturing) / Technical Analysis

TSMC (Taiwan Semiconductor Manufacturing) (2330 TT)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>We believe there is significant evidence that global equities (MSCI ACWI) have bottomed, and a year-end rally has begun. Buys highlighted in global Technology, Discretionary, Real Estate, and Steel/Mining.</li>
<li>We discussed in our prior Int'l Compass (11/2/23) how the false breakdown in MSCI ACWI (local currency) was bullish, and a potent rally has ensued. We expect more upside ahead.</li>
<li>Now getting bullish 3+ month downtrend reversals and false breakdowns in the EURO STOXX 50, ACWI-US, MSCI ACWI ex-US (ACWX-US), MSCI EM (EEM-US), and EAFE (EFA-US). Major risk-on signals everywhere.</li>
</ul>


We believe there is significant evidence that global equities (MSCI ACWI) have bottomed, and a year-end rally has begun. Buys highlighted in global Technology, Discretionary, Real Estate, and Steel/Mining.
We discussed in our prior Int'l Compass (11/2/23) how the false breakdown in MSCI ACWI (local currency) was bullish, and a potent rally has ensued. We expect more upside ahead.
Now getting bullish 3+ month downtrend reversals and false breakdowns in the EURO STOXX 50, ACWI-US, MSCI ACWI ex-US (ACWX-US), MSCI EM (EEM-US), and EAFE (EFA-US). Major risk-on signals everywhere.


Year-End Rally Underway; Many Bullish Reversals/False Breakdowns; Buys: Tech, Cons. Disc., RE, Steel

iShares MSCI Emerging Markets / Technical Analysis

<ul>
<li>In our prior EM Strategy (October 2) we discussed that as long as EEM-US is above our important line-in-the-sand at $37, we were buyers on the pullback.</li>
<li>This support level held and EEM-US now displays a bullish 3-month downtrend reversal as the DXY appears to be breaking below $105.70, all bullish signals signaling additional upside-- buy.</li>
<li>We are bullish as long as $36.50-$37 support holds on EEM-US. Our first target is $42, which is 1.5+ year resistance. Remain overweight India, and we're upgrading Poland/Greece to overweight</li>
</ul>


In our prior EM Strategy (October 2) we discussed that as long as EEM-US is above our important line-in-the-sand at $37, we were buyers on the pullback.
This support level held and EEM-US now displays a bullish 3-month downtrend reversal as the DXY appears to be breaking below $105.70, all bullish signals signaling additional upside-- buy.
We are bullish as long as $36.50-$37 support holds on EEM-US. Our first target is $42, which is 1.5+ year resistance. Remain overweight India, and we're upgrading Poland/Greece to overweight


MSCI EM Index Reversing 3-Month Downtrend -- Buy. Remain Overweight India, Upgrading Poland & Greece

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

The last decade has seen EMEA allocations in active GEM portfolios drift ever lower, with Asia becoming the dominant weight.  However, the recent rhetoric from China has seen Asian allocations fall from their peak and EMEA allocations rally from their lows.  Average weights in EMEA stocks stand at 13.72%, marginally overweight the iShares MSCI Emerging Markets ETF by 0.24%, with just under half of the active managers in our analysis overweight. <ul>
<li>Over the course of the last decade, exposure to each EMEA sector has either fallen dramatically or at best stayed largely unchanged.  Those that have seen a big decline in investment are led by EMEA Industrials and Health Care, with over 40% of investors closing exposure.  </li>
<li>The largest sector exposure, EMEA Financials allocations sit towards the lower-end of their historical range.  Top holdings are <a href="https://www.smartkarma.com/entities/sberbank-of-russia-pjsc" target="_blank" data-smartkarma-citation="entities:24142:1" rel="noopener">Sberbank Of Russia Pjsc (SBER LI)</a> and <a href="https://www.smartkarma.com/entities/otp-bank-nyrt" target="_blank" data-smartkarma-citation="entities:28806:1" rel="noopener">OTP Bank Nyrt (OTP HB)</a> with 59% and 31% of funds invested respectively.  <a href="https://www.smartkarma.com/entities/tcs-group-holding-plc" target="_blank" data-smartkarma-citation="entities:28148:1" rel="noopener">TCS Group Holding PLC (TCS LI)</a> and <a href="https://www.smartkarma.com/entities/capitec-bank-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27628:1" rel="noopener">Capitec Bank Holdings Ltd (CPI SJ)</a> saw ownership levels increase the most over the last 6-months.</li>
<li>Consumer Discretionary weights hit another all-time high this month of 1.46%, representing a 1.04% overweight versus the iShares MSCI EM ETF.  Underpinning the overweight are out-of-benchmark holdings in <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> and Fix Price Group, though in general stocks in the sector are not widely held.  Funds with big overweights are led by Comgest's GEM Promising Companies Fund (8.98%) and Van Eck's Emerging Markets Fund (7.21%).  </li>
<li>With active ownership declining throughout 2020, <a href="https://www.smartkarma.com/entities/gazprom-pjsc" target="_blank" data-smartkarma-citation="entities:23749:1" rel="noopener">Gazprom PJSC (GAZP RX)</a> has finally been the recipient of some inflows.  Over the last 6-months, 2% of funds added Gazprom to their portfolios with a combined $217m in inflows.  Leading those were Fidelity (2.7%), Virtus Allianz (2.67%) and JP Morgan ($64m).</li>
</ul>The analysis looks in detail at all sectors in the EMEA region, together with some of the key stocks that underpin investment in the region.Analysis taken from our GEM fund research, covering 250 active GEM strategies with combined AUM of $500bn

The last decade has seen EMEA allocations in active GEM portfolios drift ever lower, with Asia becoming the dominant weight.  However, the recent rhetoric from China has seen Asian allocations fall from their peak and EMEA allocations rally from their lows.  Average weights in EMEA stocks stand at 13.72%, marginally overweight the iShares MSCI Emerging Markets ETF by 0.24%, with just under half of the active managers in our analysis overweight. 
Over the course of the last decade, exposure to each EMEA sector has either fallen dramatically or at best stayed largely unchanged.  Those that have seen a big decline in investment are led by EMEA Industrials and Health Care, with over 40% of investors closing exposure.  
The largest sector exposure, EMEA Financials allocations sit towards the lower-end of their historical range.  Top holdings are Sberbank Of Russia Pjsc (SBER LI) and OTP Bank Nyrt (OTP HB) with 59% and 31% of funds invested respectively.  TCS Group Holding PLC (TCS LI) and Capitec Bank Holdings Ltd (CPI SJ) saw ownership levels increase the most over the last 6-months.
Consumer Discretionary weights hit another all-time high this month of 1.46%, representing a 1.04% overweight versus the iShares MSCI EM ETF.  Underpinning the overweight are out-of-benchmark holdings in Prosus (PRX NA) and Fix Price Group, though in general stocks in the sector are not widely held.  Funds with big overweights are led by Comgest's GEM Promising Companies Fund (8.98%) and Van Eck's Emerging Markets Fund (7.21%).  
With active ownership declining throughout 2020, Gazprom PJSC (GAZP RX) has finally been the recipient of some inflows.  Over the last 6-months, 2% of funds added Gazprom to their portfolios with a combined $217m in inflows.  Leading those were Fidelity (2.7%), Virtus Allianz (2.67%) and JP Morgan ($64m).
The analysis looks in detail at all sectors in the EMEA region, together with some of the key stocks that underpin investment in the region.Analysis taken from our GEM fund research, covering 250 active GEM strategies with combined AUM of $500bn

EMEA Sectors Deep-Dive.  Active Positioning in the EMEA Region

South Africa

Kumba Iron Ore Limited mines for and produces iron ore.

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Kumba Iron Ore (KIO SJ)

Iron Ore Prices: Small Bounce From 90 USD/Ton, Cost Pressures Still Negative For Equities

Iron ore prices have drifted lower due to weak Chinese lending data and negative mill margins. We update readers on the iron ore industry's current...

Sameer Taneja

Extracting value from overlooked mines (Vuslat Bayoglu Interview)

In summary, Mina is a private mining investment company in South Africa, benefiting from the country's rich ore deposits and supportive government...

Money of Mine

Year-End Rally Underway; Many Bullish Reversals/False Breakdowns; Buys: Tech, Cons. Disc., RE, Steel

There is significant evidence that global equities $ACWI have bottomed, and a year-end rally has begun. It all started when we discussed that the...

Vermilion Research

MSCI EM Index Reversing 3-Month Downtrend -- Buy. Remain Overweight India, Upgrading Poland & Greece

In our prior EM Strategy (10/2/23) we discussed that, if $EEM is above $37, we were buyers on the pullback. Support held and now EEM displays a...

Vermilion Research

EMEA Sectors Deep-Dive. Active Positioning in the EMEA Region

The last decade has seen EMEA weights drift ever lower. We look in detail at all sectors in the EMEA region, together with some of the key stocks...

Steven Holden

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