What a difference six months can make.  After a disappointing 2013, the commodities market came roaring back full throttle, outperforming the S&P 500 Index by more than 4 percentage points and 10-year Treasury bonds by more than 6.

Commodities Are The Best Performers for First Half of 2014
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Leading the rally was nickel, delivering a 37.14 percent return, followed by palladium (17.70 percent) and gold (10.90 percent). Nickel also saw the largest gain from last year, climbing more than 55 points to settle close to $19,000 per metric tonne. Gold jumped 38 percentage points to $1,327 an ounce, and palladium rose 16 points to $843 an ounce.

At the back of the herd lagged lead, copper and wheat, which was the best performer only two short years ago.

Below you can see the 2014 halftime edition of our periodic table of commodity returns, which has proven to be a perennial favorite among our investors.

The Periodic Table of Commoditiy Returns
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That commodity prices often fluctuate so wildly supports the need to have your investments in the resources space diversified and actively managed by an experienced team of professional investors. Simply put, there are far too many worldly factors—some of them political, others acts of God, all tugging and pulling at the market in tandem—for any one person to reasonably keep track of. It’s important to have a limber group of managers and analysts with the expertise and diligence to monitor and anticipate the most pressing global trends.  

What we know is that now many investors have become bullish on resources. At a conference in New York at the end of last month, Credit Suisse polled 350 investors and found that 42 percent of them were planning to be overweight in commodities in the coming months. For some perspective, when the same question was asked of them the previous year, only 19 percent had a rosy attitude toward commodities.

As I said, what a difference six months—or, in this case, a year—can make. With money flowing back into commodities, the market is finally trying to reverse the downtrend that we’ve been up against since 2011.

Commodities Markets on the Rise
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As usual, government policy is often a precursor to change. Nowhere did we see this adage in action more transparently this year than in Indonesia, whose government shocked the market in January by enacting an outright ban on nickel ore exports. Because the Southeast Asian country is the world’s second-largest producer of nickel ore, accounting for about a fifth of global supply, any alteration to its export policy was bound to send far-reaching ripples throughout the market.

Nickel prices have soared this year as a result of supply shortage

China, one of the leading importers of not just Indonesian nickel but other global raw materials as well, reacted by stockpiling the silvery-white metal, 75 percent of which is used worldwide in stainless steel production. This in turn encouraged investors to drive prices even higher out of fear of a supply shortage.

A repeal of the export ban is unlikely to happen in the near-term, as both Indonesian presidential contenders, Joko Widodo and Prabowo Subianto, who are both claiming victory in the recent election, favor its continuation. We will keep our eyes on nickel, as a correction might very well come when and if the ban is ever rescinded.

Palladium and Platinum
Prices of the platinum group metals (PGMs) hit three-year highs following the double whammy of a five-month-long miner strike in South Africa and trade sanctions against Russia, the world’s leading producer of palladium. Fear of a shortage in PGMs, which are essential to the production of catalytic converters in automobiles, drove prices skyrocketing.

This comes at a time when U.S. auto sales have surged to 16.9 million in June alone, an increase of 9.2 percent over the same time last year. Auto manufacturing is expected to grow 10.3 percent in the third quarter, according to International Strategy & Investment (ISS).

Increase in Platinum & Palladium Prices, Compared to Rise in Number of U.S. Auto Sales
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Although the labor strike ended last month, PGM production cannot reasonably resume within the next three to five months. And with a separate strike underway, this one led by the National Metalworkers of South Africa, country leaders fear yet another economic setback that has already threatened a third of South Africa’s manufacturing output.

Our Gold and Precious Metals Fund (USERX), rated four stars by Morningstar,* continues to excel because we intimately understand the dynamics of both the Love and Fear Trade in the global goldmarket. We also know how to read and act on China’s positive purchasing managers index (PMI), which has recently hit a six-month high of 51. Any number over 50, of course, indicates strong growth in the manufacturing sector. China is already the world’s largest producer andconsumer of gold, and because its middle class is swelling in rank—the country is expected to have over 670 million middle class citizens early next decade—gold sales should remain robust.

Besides China, other global drivers of gold consumption at this time include India and the Middle East. Diwali—otherwise known as the Indian Festival of Lights—Christmas and other international celebrations encourage generous giving of gifts, of which gold jewelry is one of the most traditional and popular. Ramadan, scheduled to end on July 28, involves a type of alms-giving called zakāt, which is one of the Five Pillars of Islam. Zakāt is obligatory for all observant Muslims, who handsomely give precious metals such as gold to those in economic hardship.

As I told Catherine Murray on BNN’s Business Day PM back in May:

So we’re coming to that trough on a seasonal pattern, and that seasonal pattern is predominated by what I call the Love Trade, where you have jewelry demand, et cetera, coming out of Asia, Middle East and India... And this is the first time that we had what they call the Flash HSBC PMI. And this is very important for job creation and GDP per capita rising, and that’s highly correlated with consumption of gold for the jewelry trade. So the second half [of 2014] looks great, and I think it’s also very important for all exports of any resources.

Crude Oil
Although not one of the top leaders in the first half, crude oil deserves a shout-out. Its 7.06 percent annual return is closing in on the 7.19 percent return in 2013, when oil was the second-best performer. Because of unrest in Iraq, North Sea Brent crude has set a record for trading between $107 and $112 a barrel for 12 consecutive months, handily beating the 170 consecutive days in 2008 when it traded over $100 a barrel.

In its monthly energy report, the U.S. Energy Information Administration (EIA) forecasts that 2015 will represent the highest level of West Texas Intermediate (WTI) crude production since 1972. Global consumption of oil, driven largely by China once again, is expected to reach 94 million barrels a day (bbl/d) by the end of next year.

World Liquid Fuels Production and Consumption Balance
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Global Resources Fund (PSPFX) portfolio manager Brian Hicks reiterates these points on why we are bullish in light of the current domestic oil production boom:

Within our portfolio, we are investing heavily in the shales through upstream oil and gas companies, oil services companies and equipment companies. Shale is transformational; it is really changing the energy landscape. Almost overnight, companies are developing resources that are long-lived and repeatable. Remember, only five years ago we were talking about peak oil. Now, we're producing roughly 8.4 million bbl/d. That's the highest we've seen since the mid-'80s. It is a trend that is going to continue.

Always Remaining Vigilant
Even though the commodities market has so far exceeded everyone’s expectations this year, especially following a lackluster 2013, a correction could occur with little warning. That’s why the portfolio managers of PSPFX, USERX and our World Precious Minerals Fund (UNWPX) are constantly looking out for opportunities and threats as well as ensuring that the fund is optimally diversified to protect against changes in the market.

For now, however, it appears as if resources could continue their strong performance for at least the near-term and hopefully much longer.

*Morningstar Overall Rating™ among 71 Equity Precious Metals funds as of 6/30/2014 based on risk-adjusted return.

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Index Summary

  • Major market indices finished lower this week. The Dow Jones Industrial Average was down .73 percent. The S&P 500 Index lost 0.90 percent, while the Nasdaq Composite closed down 1.6 percent.
  • The Hang Seng Composite dropped 1.2 percent for the week.
  • The 10-year Treasury bond yield fell two basis points to 2.52 percent.

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Domestic Equity Market

The S&P 500 depreciated this week, finishing 0.9 percent lower.  The price action indicated investors preferred the defensive nature of utilities, telecom and consumer staples and spurned the financials, industrials and energy sectors.

S&P Economic Sectors
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  • The utilities sector closed up .79 percent. This can be attributed to this week’s drop in interest rates and the actions of investors looking to buy dips in the utility sector since it was down about .4 percent last week. The electricity and natural gas distributor PG& E was a top performer for the week, appreciating approximately .8 percent. 
  • The telecommunications sector finished up .6 percent.  The integrated communication company CenturyLink was the strongest performer in the group finishing up 1.91 percent.   Not only was the company the proud recipient of a 10-year colocation contract worth about $63 million, but it was also named company of the year by the Indiana Telecommunications Association.
  • The consumer staples sector closed up a mere .3 percent.  Archer Daniels Midland was the biggest gainer up 4.54 percent for the week.  ADM announced its intention to purchase Wild Flavors for $3.1 billion.  Wild Flavors is the maker of the popular Capri Sun flavored drinks.


  • Energy was the worst performing sector, declining 1.8 percent due to the 5.9 percent drop in natural gas prices.  Range Resources was the biggest laggard of the group declining 5.2 percent.
  • Financials was the second worst performing sector in the S&P 500.  Investors are still somewhat concerned about the fines and investigations levied against some of the big banks.  Genworth Financial was down the most in the group, declining 5.6 percent. Apparently the company may be required to raise approximately $400 million in additional capital to comply with new proposed rules from the government sponsored enterprises. 
  • Industrials finished down 1.2 percent for the week.  Fastenal, the construction and supply wholesaler missed earnings estimates and announced additional store closings. Fastenal closed down 8 percent for the week.


  • The markets trend is still up and this week’s decline offers investors the opportunity to put additional capital to work.
  • Job openings continued to rise, topping expectations.  Openings are at a new high since the economic recovery began and layoffs have been declining.
  • Mortgage applications rebounded, breaking a three week decline.


  • Investors have remained complacent for an uncharacteristically long time. 
  • Earnings season started this week and the bulk of the companies will be reporting in the next few weeks.  Wall Street analysts expect the margin of upside surprises to be more limited this quarter.
  • Stock buybacks declined to $23 billion in June. This is the lowest point in a year and a half.

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The Economy and Bond Market

Treasury yields declined this week, as the short end of the yield curve retreated from its highest level since late summer 2013. U.S. economic data were relatively scanty following the long Fourth of July weekend, with no major surprises. Earnings season kicked off this week, and will ramp up in earnest next week.  The Federal Reserve’s June minutes were released Wednesday, and confirmed that the eventual concluding “taper” will be in the form of a $15 billion increment, placing the Fed on pace to fully exit the tapering process at its October meeting.       

Two-Year Tresurey Yield
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  • The U.S. market escaped resurgent European peripheral concerns this week largely unscathed, shaking off a Portuguese scare in healthy fashion.
  • The Fed’s June minutes were released on Wednesday, confirming that the expected pace of “tapering” will include a final $15 billion increment, in turn confirming an expected October conclusion to tapering.
  • U.S. bonds rallied as yields retreated in the face of European concerns.


  • Small business optimism retreated from its recent cycle highs, coming in at 95.0 and missing expectations of 97.0.
  • When an affiliate of Banco Espirito Santo failed to make good on a payment this week, it sent the Portuguese markets into a tailspin and led to some profit taking across Europe. While the issue does now appear to be largely company specific and peripherals have been major outperformers year-to-date, concerns linger.
  • German industrial production weakened, down 1.8 percent month-over-month, and added to recent European growth and deflation concerns.


  • With key global central banks back into easy policy mode and inflation trending lower in many parts of the world, the path of least resistance for bond yields continues to be down.
  • Mortgage Banker Association mortgage applications ticked higher this week, up 1.9 percent.
  • The bond market has gone through fits and starts over the past year and the recent run up in yields may be an opportunity if recent history is any guide.


  • The Portuguese debt scare this week caused a lot of volatility in European markets, sending peripheral yields higher and many indices lower.  While Portugal’s second-largest bank did quantify some of its risk today, the drama highlights the possibility of continued, and perhaps unseen, fragility in the European periphery.
  • Confirmation this week of the pace of tapering continues to highlight strength in the U.S. economy.  With the European Central Bank and Bank of Japan taking the global lead in easy monetary policy, the Fed could possibly transition to a tighter policy sooner than many expect. 
  • Wage growth continues to remain sluggish despite the recovery and rising rents nationwide.

World Precious Minerals Fund - UNWPX • Gold and Precious Metals Fund - USERX

Gold Market

For the week, spot gold closed at $1,338.62, up $18.07 per ounce, or 1.37 percent. Gold stocks, as measured by the NYSE Arca Gold Miners Index, rose 3.1 percent. The U.S. Trade-Weighted Dollar Index fell 0.1 percent for the week.

Date Event Survey Actual Prior
July 8 U.S. June NFIB Small Business Optimism 97.0 95.0 96.6
July 9 China June Imports 6.0% 5.5% -1.6%
July 9 U.S. June Fed FOMC Meeting Minutes - - -
July 11 Germany June CPI 1.0% 1.0% 1.0%
July 15 Germany July ZEW Survey Expectations 28.2 - 29.8
July 15 China June Retail Sales YoY 12.5% - 12.5%
July 17 Eurozone June CPI YoY 0.8% - 0.8%
July 17 U.S. June Housing Starts 1025K - 1001K


  • Gold posted its sixth consecutive week of gains after rising $18.07 per ounce for the week. Assets in the largest physical gold ETF erased this year’s decline as investors begin to realize the need for inflation protection as prices rise and the Fed vows to keep rates low for a considerable time. Not surprisingly money managers increased their net long positions in gold for a fourth consecutive week, leading all known ETF gold holdings to rise at the fastest pace since at least 2012.
  • Christian Noyer, head of the French central bank and ECB governing board member, believes the global expansion of U.S. regulations will encourage diversification away from the U.S. dollar, threatening its reserve currency status. Noyer’s comments come as a result of the hefty fines the U.S. government is levying on French bank BNP Paribas after it was accused of dealings with Iran. Mr. Noyer added that trade between Europe and China does not need to use the U.S. dollar, especially now that China has agreed to the creation of an offshore renminbi clearing in Paris. Mr. Noyer concluded by stating the French central bank will now actively avoid U.S. dollar transactions in order to escape the application of U.S. regulations to its dealings.
  • Northern Star shares rose as much as 15 percent in Australian trading as the miner announced it had surpassed its quarterly production guidance and had earned substantial margins at all its operations. Similarly, Coeur Mining reported a 48 percent increase in silver and a 13 percent increase in second quarter production at its Rochester Mine in Nevada. Lastly, Premier Gold confirmed a 69 percent increase to its open pit indicated resources at its Hardrock property in Ontario.

Northern Star Resources Jumps to 52-Week High
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  • British Columbia’s Fraser Institute’s Centre for Aboriginal Policy Studies warned that a recent Canadian Supreme Court ruling granting a group of 6 B.C. First Nations title to a large piece of land outside their reserves “will likely stunt economic development across Canada.” There are an estimated 200 First Nations bands in British Columbia, which raises concern among the mining community, that’s already been subject to numerous lengthy negotiations with these groups. In a related note, Australia’s Federal Court ruled in favor of the Ngadju people and against Gold Fields with regards to the St. Ives mining tenements. The Court sided with the Ngadju people after determining Gold Fields operations violate the native-title rights, to which Gold Fields objected, arguing it complied with its obligations at all times.
  • Polyus Gold entered into a hedging contract to sell 310,000 ounces of gold over the next two years, which led to numerous headlines stating the gold sector would return to the era of gold hedging. However, data shows the hedge book volume stood at 87 tonnes as of the end of the first quarter, slightly up from the previous quarter, but miles away from the 3000 tonnes reached in the 1999 peak.
  • Banro Corp. tumbled after announcing the throughput capacity at its Twangiza mine may not reach the expected 1.7 million tons design capacity. In addition, the miner said a plant at its Namoya operation will run below capacity as a result of technical setbacks. Banro’s troubles open the possibility of default and bankruptcy as the miner will struggle to repay a heavy debt load with a significant reduction in revenues.


  • Renowned technical analyst Carter Worth, chief market technician at Sterne Agee, reports gold’s chart pattern is “extremely” bullish as prices continue to post higher lows. In addition, the 150-day moving average appears to have bottomed out as markets enter a period that historically has provided seasonal support for gold, silver, and related equities. With this background, it is not surprising that Goldman Sachs Asset Management, which runs India’s largest gold ETF, issued a note to investors explaining that the risk profile of the investment had changed since the issuer (i.e. Goldman Sachs) may not be able to return the physical gold. Dhirendra Kumar, CEO of Value Research states Goldman Sachs has probably lent the gold out, and will be unable to deliver physical gold for early redemptions.
  • Dundee Precious Metals announced that Bulgarian authorities have moved the company’s Krumovgrad permitting application to the final step toward full permitting. The Krumovgrad deposit is a high quality open pit project with above average 4 gram per tonne ore, and potential to produce 80,000 ounces per year at very low cost. In addition, the company reported its recently refurbished Tsumeb smelter processed 60,332 tonnes of concentrate in the second quarter, a 23 percent improvement from the previous quarter.
  • Lawrence Roulston, a renowned mining industry authority, referred to Klondex Mines in a recent interview with Streetwise Reports. In his interview, Roulston agrees that Klondex is on its way to developing very profitable underground operations, while warning that management is critical for advancing projects and adding value. However, he is not concerned with existing management at Klondex; instead, he praised their efforts to acquire Midas, which gave the company a clear short-term path to profitable production. As a matter of fact, Klondex has constantly sought to enhance its management team, and recently appointed Mike Isaak, ex-Barrick, Henry Follman, ex-Coeur, and Rosa Whisenand, ex-Barrick as high-caliber additions to its senior team.


  • Gold futures fell this week as analysts anticipate an earlier rise in U.S. interest rates. The Fed minutes released this week led analysts to revise their forecasts. Goldman Sachs, for example, now predicts increases to borrowing costs will take place in the third quarter of 2015, rather than its previous estimate the first quarter in 2016.
  • Rising interest rates, bond yields, and low inflation expectations are creating a perfect storm with strong headwinds for gold in the future, according to Morgan Stanley analyst Joel Crane. According to Crane, it is highly unlikely that gold will continue to rise in the coming quarters given current market conditions and the expected improvement going forward.
  • BCA Commodity strategists have reiterated their underweight gold call within the commodity complex. According to BCA, the strength of the dollar and the stabilization of the U.S. equity risk premiums suggest gold will remain trendless in the second half of the year. Volatility in the aforementioned areas has been a key driver for gold in the past, thus their stabilization implies that it is unlikely gold prices will rise much further.

Energy and Natural Resources Market

2014 Commodity Scorecard
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  • Gold’s break above the April high to $1,338 helped related mining shares post a gain of 3 percent on the week.  Royalty companies led the advance as Franco-Nevada, Royal Gold and Silver Wheaton made new 52-week highs this week with an average gain of 2.7 percent.
  • Shares of Africa Oilfield Logistics (AOL) bucked the negative trend of the FTSE AIM exchange in London with a 5 percent gain this week.  The sub-Saharan support services and logistics company gained 19 percent this quarter following news of a successful expansion at its Adran subsidiary. 
  • Despite a pullback in clean energy stocks this week, SunEdison Inc. gained nearly 6 percent the week, reaching a new 52-week high, on news of the company’s plan to spinoff TerraForm Power via an initial public offering.


  • Dry bulk shipping rates remain weak and remain just above multi-year lows.  The BDIY freight index is down over 49 percent from its high set in March.  Knightsbridge Tankers Ltd. declined 6 percent for the week.
  • Oil service and equipment stocks generally underperformed the broader energy sector following strong gains in the prior two weeks.  CHC Group Ltd declined 12 percent this week after reducing futures revenue and earnings growth forecasts that came in below analysts’ expectations. 
  • The price of WTI crude oil and NYMEX natural gas declined by 3 and 6 percent, respectively this week as supply risks eased in Libya and Iraq, and cooler weather across much of the country this week.  Suncor Energy and Sanchez Energy fell by 5 and 8 percent, respectively.


  • The International Energy Agency has reported that global oil demand will rise at the fastest pace in five years, climbing 1.5 percent to a record 94.1 million barrels a day in 2015. The dramatic increase is primarily the result of China and other emerging market growth.
  • Through recent press releases, Indonesian Economic Minister Chairul Tanjung has implied that an agreement has been reached between the government and Freeport-McMoRan. The ongoing export disputes over concentrates at Grasberg, which have dropped Freeport’s production to roughly 40 percent of its nominal capacity over the last two quarters, may soon be at an end.
  • Coldelco, a Chilean mining company, is likely to cancel shipments of around 10,000 tonnes of refined copper due to problems in its new Ministro Hales mine. Totaling roughly 3 percent of its 2014 contracted term shipments to China, the cancelled orders will likely lead Chinese importers to purchase spot refined copper on international markets.  The result would be supportive for copper prices, which have already risen more than 10 percent since March.


  • Non-commercial speculative positions in the oil futures market now stand near the highest level on record.  If this unwinds abruptly it could materially weaken oil prices near term.
  • News of increased supply coming out of Libya and new pipelines in the U.S. has created a negative forecast on oil prices through the rest of the year. Futures could weaken further on news of additional supply gains.  
  • Old and decrepit highways in southern Texas and North Dakota are hindering thousands of 18-wheel trucks. The crumbling roads threaten billions of dollars of investment in oil production in the U.S.

China Region Fund - USCOX  •  Emerging Europe Fund - EUROX

Emerging Markets


  • Indonesia was the best performing country in Asia this week, driven by the apparent victory of Jakarta’s governor, Joko Widodo, in the presidential election. The victory was a preferred outcome for the financial markets, as eight of the 12 unofficial quick-count polling sources showed favorable results.
  • Utilities was the best performing sector in emerging markets this week, led by one of China’s five-largest power producers, Datang International Power Generation Co. The company has plans to restructure its coal-to-chemicals business, which has been holding back its earnings and valuation since 2008.
  • Turk Traktor, a Turkish manufacturer and retailer of agricultural tractors, rose to a 52-week high following better-than-expected sales volumes. According to the company, domestic sales in June rose 9.1 percent, while exports surged 34 percent as the company expands beyond Europe and into Africa as well as the Middle East. In addition, Turkish sell-side analysts have reiterated their buy ratings on the stock, forecasting improving margins due to the company’s recently completed capacity expansion.

Turk Traktor Rises to 52-Week High
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  • Greece was the worst performing emerging market for the week, falling around 7.1 percent after comments by European Union (EU) officials at the monthly meeting of Eurozone Finance Ministers, urging Greece to make more efforts to meet the bailout program requirements. The statements resulted in rumors that Greek banks would need more capital in the form of a third bailout. The speculation, together with weak trading volumes, led to outsized selling pressure.
  • South Korea was among the worst performing countries in Asia this week, as Samsung Electronics Co., the single-largest company in the index, announced disappointing second-quarter results. The competition for Samsung is intensifying from local Chinese smartphone makers and a rising Korean won.
  • Consumer discretionary was the worst performing sector in the emerging market complex for the week, led lower by Indian automakers as analysts forecast earnings to remain under pressure. Automobile demand in the region was “a mixed bag,” leading analysts to revise revenue growth numbers lower to 5 percent, while earnings’ growth is now expected to remain flat year-over-year. In addition, investors were disappointed by the government’s decision to extend export duty concessions until December, rather than to reduce them permanently as initially expected.


  • HSBC raised the emerging market region to overweight within its global portfolio, arguing that we are beginning to see signs of improvement in both the near-term outlook, and the longer-term structural story for the complex. According to the bank’s analysts, the region has fared better in 2014, performing broadly in line with developed markets year-to-date, and outperforming by over 5 percent since March. HSBC believes this period of outperformance will continue. The strength is evidenced by operating margins in emerging markets stabilizing relative to developed markets, along with recent data showing outperformance from here on.

Emerging Markets Margins Are Stabalizing and Set to Recover
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  • According to International Data Corporation, unit growth of installed smart devices, thanks to the advent of Internet of Things, is expected to more than triple by 2018. Internet connectivity is proliferating from telecommunications to more traditional industries such as durable goods and infrastructure.  Taiwanese technology manufacturers in cloud servers, semiconductor foundries and various connected devices should benefit from this emerging global trend.

Internet of Things Promises Growth for Taiwanese Technology Complexclick to enlarge

  • Emerging markets equity funds attracted solid inflows this week, mainly to broad-mandate global emerging markets funds and Asia ex-Japan equity funds. Out of the reported inflows of $1.35 billion, Indonesia, India and Malaysia reported the largest inflows relative to assets under management. China reported the largest absolute inflows for this week.


  • UBS is recommending investors to sell Gazprom given the upcoming headwinds for the Russian stock. The main reason is gas prices in the EU have fallen around 40 percent year-to-date, mostly due to a massive increase in storage levels resulting from a record warm winter. Even if Gazprom can retain its premium pricing, its volumes should weaken as excess inventories are sold to the market. In addition, the stock came under pressure as the Russian Minister of Finance cut the outlook for Gazprom dividends, a move that has also affected other state-owned Russian companies.

Gazprom Enjoying Premium Differential to European Gasclick to enlarge

  • Softening of European demand, combined with reduced export channels via land, are affecting Turkey’s successful export story. Despite Turkey posting a better than expected current account deficit of $3.4 billion in May, taking the gap to $19.8 billion in the first five months (and down 39 percent from the same period last year), the markets are questioning the sustainability of further improvements. The lira weakened as economists focused on Turkey’s export dependency on Iraq, the second-largest market for Turkish products, which slid 21 percent in June from a year earlier.
  • More than six months after the second-child policy was approved in China, eligible couples have been slow to embrace looser restrictions based on provincial statistics.  Growth prospects of China’s mass consumer sector, such as infant foods and diapers, has significantly diminished due to structural migration to e-commerce and rising competition to name brands.

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