Reynolds Holding and Breakingviews columnists discuss the funds’ risky rush to emerging markets in search of high returns.

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The breakneck rise of developed world stock markets this year is probably over, but major emerging markets will rally strongly from here after a poor start, according to the latest Reuters poll of 450 stock market strategists and fund managers from around the globe. Today’s graphic shows how markets performed in Q1 2013 relative to two different forecasts.

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I came across a story today that literally made my jaw drop. It doesn’t happen too often anymore, because after so many years of seeing changes in the space, you almost feel like it is impossible to be surprised. And yet I was.

The reason for my surprise came via the incredibly progressive operator Safaricom from Kenya. Readers of my posts may recall that Safaricom made M-PESA the shining star of mobile payments/transactions in Kenya – essentially creating a solution for millions of “unbanked” people. Last year alone, Kenyans moved over $16 billion via mobile phones - and recall that this is a nation with a total population of about 42 million people.

Safaricom announced that it would stop selling feature phones in an effort to move citizens towards exclusively using smartphones. “Nzioka Waita, Director-Corporate Affairs at Safaricom told the Mobile Web East Africa (MWEA) conference: ‘Safaricom is soon going to stop selling the cheap feature phones in all our retail outlets, as we try to skew the Kenyan market towards smartphones.’” Wow. The reason that Safaricom reckons it can do this simply comes down to the fact that the price of Android smartphones is reaching the point of availability for everyone. We’ve seen this occurring as a mobile team with every trade show we visit. In addition to the big boys bringing out their shiny new smartphone toys, Chinese manufacturers beyond Huawei and ZTE are cranking out low cost Android phones with brand names that are new to the scene. The race to commoditize smartphone hardware is on, and in probably less than 3-5 years time, it would not surprise me to see feature phones literally vanish from the shelves. However, what is interesting is the fact that it is Africa and in particular Safaricom in Kenya that is leading the way. (more…)

The dean of emerging markets, Franklin Templeton’s Mark Mobius, picks stocks and sectors on the Asian frontier. NagaCorp has more than doubled in 12 months.

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Emerging markets guru Mark Mobius discusses the upcoming China leadership transition and why he remains confident on the Chinese economy despite its recent slowdown. Lisa Yuriko Thomas reports.

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The following are some highlights from the Q1 Emerging Markets M&A Review. For more information, follow@DealIntel on twitter.

 

Highlights:

• Emerging Markets M&A announced in the first three months of 2012 accounted for 27.5% of global activity and reached US$132.5 billion, representing a 32.9% decrease compared to the same period in 2011 and a 19.3% drop compared to the previous quarter.
• The most targeted Emerging Market nation so far this year was China, with 674 deals worth a combined US$31.3 billion. Brazil and India followed, with US$21.2 billion and US$10.6 billion of activity, respectively.
• Materials was the most active sector during the year accounting for 18% of Emerging Market volumes with US$24.4 billion in deal activity, closely followed by Financials with US$23.8 billion.
• Estimated fees earned from completed Emerging Market M&A deals during the first quarter of 2012 totaled US$1 billion, a decrease of 37.3% compared to 2011, according to Thomson Reuters/Freeman Consulting.

Download the full report. 

In partnership with leading Islamic finance institutions today we launched the world’s first Islamic finance benchmark rate. It is designed to provide an objective and dedicated indicator for the average expected return on Shariah-compliant short-term interbank funding. Learn more about the benchmark in this factsheet.

Rates for Shariah-compliant US dollar (USD) funding will be contributed by the 16-member panel in the morning each business day to Thomson Reuters systems and will be published daily on Thomson Reuters terminals at 11:00am Makkah time (GMT+3).

The new benchmark can be used to price a number of Islamic financial instruments, including common overnight to short-term treasury investment and financing instruments, and other Shariah-compliant capital markets and fixed income instruments. Interested to learn more about our Islamic Finance offering? Click here.

For Eikon users click here to watch a quick video on how you can access the IIBR benchmark. If you are not already an Eikon user, click here for a quick demo, or you can contact us to learn more about how you can benefit from our expertise in Emerging Markets.

Thomson Reuters Eikon is a single destination for the Emerging Markets content, community and pools of liquidity you rely on. Check out this product demo and get in touch!

Edith P. Quintrell, director of the Operations Group Multilateral Investment Guarantee Agency (MIGA) at the World Bank, says global economic turmoil is prompting investors to pull money out of the developing world.

In conjunction with the Forum for Women In Leadership, WILL Forum India, we’re pleased to invite you to an evening of women’s networking including a lively panel discussion addressing “India as an Emerging Market and the Growing Role of Women in Business”.

Moderated by:

• Stella Dawson, US Economics Editor, Reuters News

Featuring panelists:

• Ms. Poonan Barua, Founder & Chairman Forum for Women in Leadership
• Dr. Rita Anand, Deputy Global Head of HR at TCS (Tata Consultancy Services)
• Ms. Rena Nigam, Co-founder and Executive Vice President for aSpark
• Ms. Sarah Buitoni, Senior Associate, Center for Microfinance Leadership at Women’s World Banking

When: September 22nd, 6:00pm EST

Where:
195 Broadway
btwn Dey and Church Street
New York, NY 10007

REGISTER HERE