I'm Angeline on our focus today is emerging markets and our guest is Bob Jenkins, global head of research at a definitive Lipper.

The latest data by the Institute of International Finance showed emerging market stocks and bonds saw net inflows off 53 a half billion dollars in January, building on the momentum from the end of last year.

This inflow has been reflected in stock prices.

The MSC emerging market Index shown here is heavily weighted in favor off Chinese stocks such as 10 cent on Alibaba.

It hit another record high on January 25th and is up 30% over the past 12 months.

But this is next.

Like all emerging market investing covers differing economies on different continents and not all markets are created equal.

So how do investors avoid the pitfalls for more on this?

I'm now joined by Bob Jenkins off definitive leper.

Thank you so much for joining us now, Bob, You say emerging markets will outperform in the second half.

Why is that?

You know thanks for having me Jan Angelina.

Really?

They coming into this year the evaluations for emerging markets were really a historic lows.

If you look over the past 20 years, particularly Visa for the U.

S.

Markets, they're quite low on evaluation Perspective, performance wise, they've been doing well.

As you mentioned, e em, Emerging market equities did pretty well in 2020 equaling about the U.

S.

But the prior two years they lagged a little bit.

So I think in general, recovering global economies were gonna help ratchet up demand for basic materials.

You also have that overriding backdrop of the weaker dollar, with the feds seemingly committed to keeping it that way for at least the next 12 18 months.

That that helps countries who are exporting primarily it also a system with their debt coverage.

So, yes, the emerging markets have floated record amount of new debt over the course of the last year, and they're on a good place to do so.

That this year is Well, that could be scary down the road.

If you think about it, If the dollar starts to strengthen now, the middle of this.

You also say in your research I've been reading that China will take the lead.

Is this purely because, Bob that they were first in first out pandemic wise Or are there other reasons?

Yes, they were, you know, kind of ahead of the curve, if you will, on how they've experienced a pandemic.

And one would suspect that that kind of pent up consumer demand that we expect a lot of developed countries to start to see over the course of the second half of the year will probably hit them quicker.

And so that should kind of again be a really shot in the arm to the economy, if you will.

Using current vernacular global manufacturing in general has rebounded quite nicely, really across the board that benefits China, whether or not they're doing the manufacturing of the supplying it.

And and then you think about the hard line that they've been having with the US on trade.

Will that soften a little bit?

Biden his signal so far that he's probably gonna continue that hard line.

But I would sense that he's probably gonna mend fences a little bit with China.

We still have those current trade agreements in place and all the tariffs.

Uh, it's gonna be interesting to see whether not we actually see any softening of that stance.

But of course that would be another tailwind on Bob.

You mentioned wild cars as well in this e m space.

Which countries air these?

And of course why?

Well, you know, the biggest wildcard is just going to the efficacy of the vaccine, right?

And if that roll out of that vaccine is delayed at all, that's going to be a big problem in terms of that second half recovery that we're looking to see across the world.

But then you think about individual countries who have some sort of instability or to be political or otherwise.

Right now, Russia will be a headliner in that regard, and they've been struggling and probably were due to start having better performance this year.

But right now, what's going on over there?

And when you look at other countries such as Brazil, they perhaps even South Africa, these areas where that instability kind of wild card could pop up and create some problems.

So, given all this Bob, would you buy hold or a sell on the sector?

See, I would recommend to buy into this space.

Of course, whenever you talk about emerging markets, got to be really conscious of the volatility that comes along with it, and also that you're not gonna have this nice, smooth, long term right about performance either.

So you got to be very careful about the fact that you're going to invest appropriately according to allocations.

So it's an area where you got to be careful in that regard.

As a fund analyst, I think about this, and I think about really investing in active products At the end of the day, you wanna have a management team with experience with boots on the ground in these regions and are able to act dynamically as kind of situations change because we know they can thank you very much.

Plenty of detail there.

That was Bob Jenkins, global head of research at a definitive leper.

Now, to some of the top stories in the M space, the Russian ruble continues to be under pressure amid a government crackdown on protesters and supporters of Kremlin critic Alexei Navalny.

The threat of US sanctions on Russia helped drive the currency beyond 76 to the dollar last week.

Now, South Korea's central bank has warned of rising imbalances as a result in a surgeon, asset prices across property on stock markets and a build up in debt to the benchmark KOSPI has more than doubled since last year and housing affordability is at its worst ever on Finally, India this week boosted health care spending by 135% and lifted caps on foreigners investing in its vast insurance market to help revive an economy that suffered its deepest recorded slump as a result of the pandemic.

Delivering her budget to parliament on Monday, Finance Minister Nirmala Seetharaman also said the current year's fiscal deficit would surged to 9.5% off GDP in there currently spends about 1% of GDP on health, among the lowest for any major economy.

That is your round up off the emerging market sector.

I'm Angeline on and this is waters.