emea total gems funds flows usdbn multi-asset usdbn %...
TRANSCRIPT
Disclaimer & Disclosures
Disclaimer & Disclosures
This report must be read with the disclosures and the analyst certifications in the Disclosure appendix, and with the Disclaimer, which
forms part of it.
Solid EM asset performance after Brexit and year-to-date
EM funds and related assets should continue to benefit from low core rates, range-bound USD,
EM growth stabilization, low volatility and supportive oil/commodity prices. Indeed, over the last
couple of weeks, net inflows into EM funds have been quite strong, particularly into bond funds,
and performance is now at its highest for EM LCD, EXD, corporate bonds and equities y-t-d.
Although we believe further inflows and positive performance are likely, we caution that some
profit-taking might occur if some of the aforesaid conditions disappoint or political risk and
protectionism in DM rise, compromising global growth and trade beyond expectations.
There were larger net inflows into EM funds than to DM in AUM terms in the week ended 13 July.
Among EM funds, Thailand, Mexico and Brazil posted the largest gains for bond funds while India,
Brazil and Taiwan attracted the most flows into equity funds. Within DM funds, strong inflows into
US equity funds compensated for ongoing outflows from European funds (UK, France and
Germany), while solid gains in US bond funds, mainly HY funds, supported DM bond funds.
HSBC’s early signalling system points to strong demand for EM assets (pg 14). Daily financial
account portfolio flows to seven countries shows solid gains in bonds (India and South Africa),
and equities (Korea and South Africa) (p. 15). HSBC’s EM fund flows momentum (p. 5),
dispersion indicators (p. 8) and institutional and retail demand (p. 13) also show solid appetite
for EM risk.
On benchmark performance, EM LCD (14.9%), EXD (12.6%), corporate debt (11.6%), and
equities (7.8%) are at their strongest point y-t-d while EM FX (4.5%) is below its peak at the
end of April (6%). Since the Brexit vote (24 June), EM EXD (3.3%), corporate debt (2.5%),
equities (2.4%) and LCD (1.4have seen strong gains but EM FX is slightly down (-0.1%).
Next week, investors will focus on EU flash PMI and Germany ZEW for July to get a sense of
the initial impact of Brexit on the EU. The market will also follow ECB rate statement. HSBC
anticipates further easing measures in the September meeting.
Last week’s equity flows
Source: EPFR Global, HSBC
Last week’s bond flows
Source: EPFR Global, HSBC
Bertrand Delgado
Senior EM Strategist
HSBC Securities (USA) Inc.
+212 525 0745
Kishore Muktinutalapati*
Equity Strategist, Frontier & Emerging Markets
HSBC Securities & Capital Markets (India) Pvt Ltd
+91 80 4555 2756
John Lomax* Head of Global Emerging Market Equity Strategy
HSBC Bank plc
+44 20 7992 3712
Issuer of report:
HSBC Securities (USA) Inc.
Published:
15 July 2016
*Employed by a non-US affiliate of HSBC Securities (USA) Inc, and is not registered/ qualified pursuant to FINRA regulations
View HSBC Global Research at:
https://www.research.hsbc.com
GEMs funds flows MULTI-ASSET GLOBAL EMERGING MARKETS
-1.0 0.0 1.0 2.0 3.0
EM total
GEMs
AxJ total
Lat-Am total
EMEA total
USDbn
-0.7 -0.4 -0.1 0.2 0.5
% AuM
0.0 0.5 1.0 1.5 2.0 2.5 3.0
CEEMEA
Lat-Am
AxJ
GEMs
By Region
Blended
Hard
Local
By Currency
EM total
USDbn
0.0 1.0 2.0 3.0
% AUM
Record net weekly inflows to EM EXD funds
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
2
Bond fund flows
EM bond funds added the second largest net inflows
on record (last week’s inflows were the largest on
record), led by strong gains into EXD funds. LCD and
BCD funds also attracted investors. Large deposits
into GEMs and Asia ex-Japan funds led gains into
EM bond funds from a regional perspective. Year-to-
date net inflows into bond funds amount to
USD10.5bn, mainly into EXD funds (USD8.5bn) and
Asia ex-Japan funds (USD5.6bn).
EM corporate bond fund posted redemptions after
three consecutive weeks of net inflows, driven by
withdrawals from IG and LCD funds (charts 27-28).
Investments into EM corporate bond funds are
USD3.1bn y-t-d.
Japanese institutional investors bought a net
USD24.9bn in bonds issued overseas last week,
making it the second biggest net purchase since
January 2005 when the survey started. According to
the Ministry of Finance, the previous largest purchase
of foreign bonds was seen in August 2010. Since the
BoJ announced the NIRP, net buying has peaked at
USD146bn (charts 55 and 56). During the week
ended 13 July, Uridashi bond (retail bond in Japan)
issuance was triggered by issuances in TRY
(USD18.7m) and INR (USD8.7m). Y-t-d, BRL
remains the favourite currency in the EM space with
total issuances of USD927.6m, followed by TRY and
ZAR (Chart 58).
Equity fund flows
Equity funds saw significant inflows over the last
week on the back of the rally in the global equity
markets and a dovish tone in the Fed minutes
published last week hinting at a possible delay in the
rate hike. Total equity funds (EM + DM) posted
inflows of USD10.8bn (0.1% of AuM), the highest
since November last year (chart 71). Inflows of
cUSD1.6bn into EM equity funds were the highest in
about four months (chart 72). GEMs funds (with a
broad mandate to invest across EMs) saw inflows of
USD2.4bn (equivalent to 0.6% of AuM) were the
highest in almost two years (chart 73). However, the
other regional fund groups – EMEA, LatAm and Asia
– saw outflows over the past week.
By EM country, Indonesia, Poland, Malaysia and
Colombia saw inflows while Egypt, Mexico, Peru,
China and South Korea saw significant outflows
(chart 61). All sectors saw inflows with consumer
staples, utilities and IT leading the rally (chart 64).
Amongst the global regional funds, GEM funds, US
funds saw most inflows while Western European
funds saw most outflows (chart 63). Our global equity
strategy team is underweight Europe and Japan,
overweight the US and EM (see What’s giving
investors sleepless nights?, Ben Laidler et al, 14 July
2016).
In general we think the case for EM equities seems to
have been boosted by Brexit through even easier
global monetary policy. The bull case on EM equities
can be articulated as follows. It appears that the EM
cycle is stabilising – both in terms of macro and the
corporate sector. The Fed seems to be approaching
monetary policy differently this year. In 2015 interest
rates appeared to be set primarily with an eye on
domestic fundamentals; now there seems to be much
more awareness of the negative feedback loop from
EM and Europe onto the US economy itself. The
threat of a hard landing in China has receded –
accordingly the US and Chinese cycles appear more
synchronised and the risks of an uncontrolled RMB
devaluation look to be diminishing (gradual and
controlled RMB depreciation helps rather than hurts
the emerging market story). See our think piece on
the synchronisation of US and China: GEMs Equity
Strategy: EM through a “core-periphery” looking
glass, 14 July 2016. There are some idiosyncratic
developments in some individual large EM countries,
such as Brazil, which are positive enough to help
associated stock markets but also to colour the EM
landscape as a whole.
Also in our recent report (see GEMs Equity Strategy
Quarterly: Not quite so important, John Lomax et al,
13 July 2016), we discussed several ways – with both
cyclical and structural dimensions – by which Brexit
could impact EM equities. In general, we are
convinced that EM equities will emerge relative
winners.
Further, EM equity valuations look cheap compared
to their DM counterparts and the asset class is still
under-owned. We remain constructive on the outlook
for EM equities.
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
3
Historical evolution of flows to EM funds
Chart 1. Equity funds: assets under management (USDbn) Chart 2. Bond funds: assets under management (USDbn)
0
5
10
15
20
25
30
0
50
100
150
200
250
300
350
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
GEM Funds EM FundsAsia ex-Japan Funds (RHS) Latin America Funds (RHS)EMEA Funds (RHS)
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Comparison of flows to EM vs. DM
Chart 3. Equity funds: EM vs. DM Chart 4. Bond funds: EM vs. DM
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
050
100150200250300350400450500550
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
GEM Fund Totals Asia ex-Japan Fund TotalsLatin America Fund Totals EMEA Fund Totals
USDbn
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
Last Week Last Month Last 3 Months YTD
EM Equities DM Equities
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
Last Week Last Month Last 3 Months YTD
EM Bonds DM Bonds
We acknowledge the contributions of Ramya R S in this report. Ms. R S is an associate in our Bangalore office, and she is not registered/ qualified pursuant to FINRA regulations.
We acknowledge the contributions of Sougat Chatterjee in this report. Sougat is an associate in our Bangalore office, and he is not registered/ qualified pursuant to FINRA regulations.
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
4
Comparison of flows to DM and EM, and global liquidity
Chart 5. Central bank balance sheets: total assets (index, end of 2006=100)
Chart 6. Cumulative DM and EM fund flows since 2007
0
100
200
300
400
500
600
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
ECB FED BOE BOJ Global liquidity
Index
-8
0
8
15
23
30
38
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-25
0
25
50
75
100
125
EM (RHS) DM
% AUM % AUM
Source: Bloomberg, HSBC Source: Bloomberg, EPFR Global, HSBC
Chart 7. Cumulative DM and EM fixed income fund flows since 2007 Chart 8. Cumulative DM and EM equity fund flows since 2007
-10
0
10
20
30
40
50
60
70
-25
0
25
50
75
100
125
150
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EM FI DM FI (RHS)
% AUM % AUM
-10
0
10
20
30
40
50
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
EM Eq DM Eq
% AUM
Source: Bloomberg, EPFR Global, HSBC Source: Bloomberg, EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
5
EM funds: Flows momentum and total returns1
Chart 9. EM fund flows momentum (z-score) Chart 10. LCD funds: flows momentum vs. total returns
-3
-2
-1
0
1
2
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
EM Equities EXD LCD
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
GBI-EM total return LCD funds momentum
(%) Z-score
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 11. EXD funds: Flows momentum vs. total returns Chart 12. Equity funds: flows momentum vs. total returns
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
EMBI total returns EXD funds momentum
(% )(% ) Z-score
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
MSCI EM return Equity funds momentum
(% ) Z-score
Source: EPFR Global, Thomson Reuters Datastream, HSBC Source: EPFR Global, Thomson Reuters Datastream, HSBC
1 For equities, total return index is calculated with gross dividends reinvested in local currency. For bonds, the total return index calculates the effect of re-investing all the gross coupons received back into the bonds of the index.
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
6
EM funds: Bond funds related benchmark performance (y-t-d and weekly)
Chart 13. EM hard currency debt funds (y-t-d performance of related benchmark, %)
Chart 14. EM hard currency debt by country (weekly performance of related benchmark, %)
-12%
-8%
-4%
0%
4%
8%
12%
16%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015 2016
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
China
Philip
pines
Russ
iaHu
ngar
yTu
rkey
Peru
Mex
icoVi
etna
mIn
done
siaCo
lombia
Ukra
ine
Braz
ilVe
nezu
ela
Arge
ntin
aEg
ypt
Sout
h Af
rica
Euro
peAs
iaM
iddle
Eas
tEM
Lata
mAf
rica
EM H
GEM
LG
Source: Thomson Reuters Datastream, HSBC Source: Thomson Reuters Datastream, HSBC
Chart 15. EM local currency debt funds (y-t-d performance of related benchmark, %)
Chart 16. EM local currency debt by country (weekly performance of related benchmark, %)
-20%
-16%
-12%
-8%
-4%
0%
4%
8%
12%
16%
20%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015 2016
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
THB
RUB
PEN
PLN
HUF
COP
TRY
EM IDR
MYR BR
L
ZAR
MXN
FX Yield Coupon Tot Return USD
Source: Thomson Reuters Datastream, HSBC Source: Thomson Reuters Datastream, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
7
EM central banks’ monetary policy outlook (market expectations)
Chart 17. EM central bank monetary policy outlook (in 12 months, 15 countries, % of sample)
Chart 18. Market and HSBC expectations about EM policy rate actions in 12 months (bps)
0%
20%
40%
60%
80%
100%
May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16
Neutral Hikes Cuts
-350
-300
-250
-200
-150
-100
-50
0
50
100
150
BRL CLP COP CZK HUF INR ILS KWR MYR MXN PLN ZAR TWD TRY
HSBC 2Q2017 Market 12mth
Source: Thomson Reuters, HSBC Source: Thomson Reuters, HSBC
Chart 19. Market expectations about EM policy rate actions in 12 months vs. EM local currency debt yield (%)
Chart 20. EM central banks’ policy action affected by DM disinflationary expectations
5
5.5
6
6.5
7
7.5
-15
-10
-5
0
5
10
15
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
EM Monetary Policy Outlook (12month ahead, LHS) EM LCD Yield
Hawkish
Dovish
Net number of local curves %
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00
3.25
3.50
3.75
4.00
4.25
4.50
4.75
-15
-10
-5
0
5
10
15
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
EM Monetary Policy Outlook (LHS) US swaps 5yr 5yr (RHS) EUR swaps 5yr 5yr (RHS)
Hawkish
Dovish
%Net number of local curves
Source: Thomson Reuters, HSBC Source: Thomson Reuters, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
8
EM funds: Bond flows per country and dispersion indicators
Chart 21. Bond fund flows per country (USDm) Chart 22. LCD funds: Dispersion indicator (net number of funds adding or
subtracting money)
-100
0
100
200
300
400
500
Arg
entin
aD
om. R
epub
licE
gypt
Hun
gary
Jam
aica
Ser
bia
Ukr
aine
Ven
ezue
laV
ietn
amB
razi
lC
hile
Chi
naC
olom
bia
Cos
ta R
ica
Indi
aIn
done
sia
Isra
elM
alay
sia
Mex
ico
Pan
ama
Per
uP
hilip
pine
sP
olan
dR
ussi
aS
outh
Kor
eaS
outh
Afri
caTh
aila
ndTu
rkey
Uru
guay
High Beta Low Beta4wma Last week
-100%
-50%
0%
50%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 23. EXD funds: Dispersion indicator (net number of funds adding or subtracting money)
Chart 24. Equity funds: Dispersion indicator (net number of funds adding or subtracting money)
-100%
-50%
0%
50%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-100%
-50%
0%
50%
100%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
9
Bond funds: By region and currency type
Chart 25. EM fund flows by region (% of AuM) Chart 26. Fund flows by currency (% of AuM)
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
Lat-Am GEM Asia ex-Japan
Global WesternEurope
USA Japan CEEMEA
Last Week Flow 4 Week Average
0.0%
0.3%
0.5%
0.8%
1.0%
1.3%
1.5%
All EM Blend Currency Hard Currency Local Currency
Last Week Flow 4 Week Average
Source: EPFR Global, Thomson Reuters Datastream, HSBC Source: EPFR Global, Bloomberg, HSBC
EM corporate fund flows
Chart 27. EM corporate fund flows by credit quality (USDm) Chart 28. EM corporate fund flows by currency type (USDm)
-150
-100
-50
0
50
100
150
All ratings HY IG EM Corp Total
Last week 4wma
-250
-200
-150
-100
-50
0
50
100
150
200
250
300
BCD EXD LCD EM Corp
Last week 4wma
Source: EPFR Global, Bloomberg, HSBC Source: EPFR Global, Bloomberg, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
10
Bond funds: Weekly FI flows to EM and DM
Chart 29. All Bond Funds Chart 30. All Emerging Market Bond Funds Chart 31. GEM Bond Funds
-0.9%
-0.6%
-0.3%
0.0%
0.3%
0.6%
0.9%
2010 2011 2012 2013 2014 2015 2016
Flow (% of AuM)
-3%
-2%
-1%
0%
1%
2%
3%
2010 2011 2012 2013 2014 2015 2016
Flow (% of AuM)
-3%
-2%
-1%
0%
1%
2%
3%
2010 2011 2012 2013 2014 2015 2016
Flow (% of AuM)
Source: EPFR Global, HSBC Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 32. Asia ex Japan Bond Funds Chart 33. Latin American Bond Funds Chart 34. EMEA Bond Funds
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
2010 2011 2012 2013 2014 2015 2016
Flow (% of AuM)
-4%
-2%
0%
2%
4%
2010 2011 2012 2013 2014 2015 2016
Flow (% of AuM)
-4%
-2%
0%
2%
4%
2010 2011 2012 2013 2014 2015 2016
Flow (% of AuM)
Source: EPFR Global, HSBC Source: EPFR Global, HSBC Source: EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
11
Bond funds: Flows and valuations
Chart 35. EXD bond flows and spread (% of AuM) Chart 36. LCD bond flows and spread (GBI-EM Yield vs UST 10yr yield)
250
300
350
400
450
500
550-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
EMBI Global Div Spreads (rhs) 4wma flows to EXD funds
bps% AUM
3.0
3.5
4.0
4.5
5.0
5.5-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
Spread (RHS) 4wma flows to LCD funds
%% AUM
Source: EPFR Global, Thomson Reuters Datastream, HSBC Source: EPFR Global, Thomson Reuters Datastream, HSBC
Chart 37. LCD bond flows and EMFX spot Chart 38. LCD bond flows and GBI-EM Yield
60
65
70
75
80
85
90
95
100
215
220
225
230
235
240
245
250
255
260
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
EMFX spot (rhs) LCD fund flows (cumm since 2005)
% AUM
5.0
5.5
6.0
6.5
7.0
7.5-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
GBI-EM Yield (rhs) 4wma flows to LCD funds
%% AUM
Source: EPFR Global, Thomson Reuters Datastream, HSBC Source: EPFR Global, Thomson Reuters Datastream, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
12
Bond funds: Flows and volatility
Chart 39. EM bond flows and UST vol (MOVE index) and FX vol (average of EMFX vol and global FX vol)
Chart 40. EM equity fund flows and equity vol (average of CBOE and VIX)
-6.0
-4.5
-3.0
-1.5
0.0
1.5
3.0
4.5 12
18
24
30
36
FI and FX vol EM FI (RHS)
-12.0
-8.0
-4.0
0.0
4.0
8.0
12.0 10
15
20
25
30
Eq vol EM Eq (RHS)
Source: Bloomberg, Thomson Reuters Datastream, HSBC Source: Bloomberg, Thomson Reuters Datastream, HSBC
Chart 41. EXD fund flows and UST volatility (MOVE index) Chart 42. LCD fund flows and EM FX Vol.
45
60
75
90
105
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
MOVE Index (RHS) 4wma flows to EXD funds
Index% AUM
6
8
10
12
14
16-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
EMFX 3m Implied vol (rhs) 4wma flows to LCD funds
% AUM
Source: Bloomberg, Thomson Reuters Datastream, HSBC Source: Bloomberg, Thomson Reuters Datastream, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
13
Flows by investor type
Chart 43. Weekly EXD and LCD non-ETF (USDm) Chart 44. Weekly EXD and LCD ETF funds (USDm)
-2,500
-2,000
-1,500
-1,000
-500
0
500
1,000
1,500
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
Non-ETF EM EXD Non-ETF EM LCD
-750
-500
-250
0
250
500
750
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
ETF EM EXD ETF EM LCD
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 45. Weekly EXD and LCD Institutional funds (USDm) Chart 46. Weekly EXD and LCD Retail funds (USDm)
-1,500
-1,000
-500
0
500
1,000
1,500
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
Inst. EM EXD Inst. EM LCD
-1,500
-1,250
-1,000
-750
-500
-250
0
250
500
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
Retail EM EXD Retail EM LCD
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
14
Early signalling systems for turning points
Chart 47. Total weekly portfolio flows (% AuM) Chart 48. LCD flows to EM (% AuM)
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16
Confidence Band 7-Day MA 28-Day MA
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16
Confidence Band 7-day MA 28-Day MA
Source: EPFR Global, HSBC Source: National Sources, IIF
Chart 49. EXD flows to EM (% AuM) Chart 50. EM equity flows (% AuM)
-2.0
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16
Confidence Band 7-Day MA 28 Day MA
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16
Confidence Band 7-Day MA 28-Day MA
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
15
Total financial flows
Chart 51. YTD total EM bond flows (USDbn)* Chart 52. YTD total actual EM equity flows (USDbn)*
-10
0
10
20
30
40
50
60
70
80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015 2016
-10
0
10
20
30
40
50
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2013 2014 2015 2016
Source: Bloomberg, HSBC
Note: * Seven countries (India, Thailand, S. Africa, Hungary, Turkey, Mexico and S. Korea)
Source: Bloomberg, HSBC
Note: * Seven countries (Indonesia, India, S. Korea, Thailand, S. Africa, Brazil, and Turkey)
Chart 53. YTD total actual EM bond flows (per country USDbn) Chart 54. YTD total actual EM equity flows (per country USDbn)
-15.0
-10.0
-5.0
0.0
5.0
10.0
1-Ja
n
8-Ja
n
15-J
an
22-J
an
29-J
an
5-Fe
b
12-F
eb
19-F
eb
26-F
eb
4-M
ar
11-M
ar
18-M
ar
25-M
ar
1-Ap
r
8-Ap
r
15-A
pr
22-A
pr
29-A
pr
6-M
ay
13-M
ay
20-M
ay
27-M
ay
3-Ju
n
10-J
un
17-J
un
24-J
un
1-Ju
l
8-Ju
l
India Thailand S. Africa Hungary
Turkey Mexico S. Korea
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
1-Ja
n
8-Ja
n
15-J
an
22-J
an
29-J
an
5-Fe
b
12-F
eb
19-F
eb
26-F
eb
4-M
ar
11-M
ar
18-M
ar
25-M
ar
1-Ap
r
8-Ap
r
15-A
pr
22-A
pr
29-A
pr
6-M
ay
13-M
ay
20-M
ay
27-M
ay
3-Ju
n
10-J
un
17-J
un
24-J
un
1-Ju
l
8-Ju
l
Indonesia India S. Korea Thailand
S. Africa Brazil Turkey
Source: Bloomberg, IIF, HSBC
Note: * Seven countries (India, Thailand, S. Africa, Hungary, Turkey, Mexico and S Korea)
Source: Bloomberg, HSBC
Note: * Seven countries (Indonesia, India, S. Korea, Thailand, S. Africa, Brazil, and Turkey)
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
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Monitoring Japanese flows
Chart 55. Net purchases of foreign securities by Japanese residents (USDbn) Chart 56. Net purchases of foreign securities by Japanese residents (USDbn)
Source: Ministry of Finance Japan Source: Ministry of Finance Japan
Chart 57. Toshin flows (USDm) Chart 58. Uridashi bond flows (USDm)
Source: Investment Trust Association of Japan, HSBC Source: Bloomberg
-7
-5
-2
1
3
6
8
-35
-25
-15
-5
5
15
25
Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
Bonds Equities (RHS)
-5
0
5
10
15
20
25
30
Equities Bonds Money Market Total
Last week 4wma
Equities Bonds
May 3mma May 3mma
BRL (104) (8) (200) (12)
IDR (31) (3) (99) (21)
INR (45) 5 (65) 3
KRW (41) (4) (3) (1)
MXN (9) (2) (267) (80)
PHP 4 1 (3) (2)
PLN (2) (0) (17) (112)
THB (13) 1 (6) (2)
TRY (27) (6) (62) (22)
TWD (19) (10) (1) (0)
ZAR (24) (5) (65) (15)
0
100
200
300
400
500
600
700
800
900
1,000
0
5
10
15
20
25
30
35
40
45
BRL MXN RUB TRY ZAR INR
Last week 4wma YTD (RHS)
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
17
Chart 59. Weekly and year-to-date flows into fixed income funds
Source: EPFR Global, HSBC
-5.0 0.0 5.0 10.0
EM Funds by Currency
Hard Currency
Local Currency
Blend
EM Funds by Region
GEM Fund Totals
Asia ex-Japan Fund Totals
Latin America Fund Totals
EMEA Fund Totals
Developed Market Funds
Global Fund Totals
Global
Global ex-USA
Canada
USA Fund Totals
High Yield
Munis
Tips
Western Europe
Japan Fund Totals
Pacific Fund Totals
Australia
-2.0 0.0 2.0 4.0 6.0 -50 0 50 100 -10 0 10 20
0 2 4 6 8 10 12
All Fund Totals
Developed Mkts Fund Total
Emerging Mkts Fund Totals
Last week (USDbn)
0.0 2.0 4.0 6.0 8.0
Last 4 weeks (USDbn)
0 50 100 150
Year To Date (USDbn)
0.0 2.0 4.0 6.0
Year To Date (% AUM)
-0.25 0.00 0.25 0.50 0.75 1.00 1.25
Estimated Country Flows…
Emerging Asia
China
Indonesia
Korea (South)
Malaysia
Latin America
Brazil
Colombia
Mexico
Peru
Emerging Europe and Africa
Hungary
Poland
Russia
South Africa
Turkey
Middle East
0.0 0.2 0.4 0.6-2 0 2 3 5 6 -2 0 2 4 6
MULTI-ASSET GLOBAL EMERGING MARKETS
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Chart 60. Active weights with respect to EMBI Global (EXD) and GBI EM Global Div (LCD) for the moths of May 2016. Red means overweight and grey means underweight.
Source: EPFR Global, HSBC
EXD LCD
-3 -2 -1 0 1 2 3
Malaysia
Thailand
Nigeria
Colombia
South Africa
Poland
Hungary
Turkey
Peru
Romania
Chile
Philippines
Russia
Indonesia
Mexico
Brazil
Active Weight % (OW)
-4 -2 0 2 4 6
Philippines
Lebanon
Chile
Hungary
Poland
Uruguay
Croatia
Malaysia
Panama
South Africa
Serbia
Romania
Iraq
Kazakhstan
Bolivia
Vietnam
China
Zambia
Ghana
Ecuador
Nigeria
Gabon
Jordan
Egypt
Colombia
Pakistan
Peru
Guatemala
Venezuela
Turkey
Morocco
Ukraine
India
Indonesia
Argentina
Russia
Brazil
Mexico
Active Weight % (OW)
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
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Equity funds: Cross-sectional comparison (% of AuM)
Chart 61. By country (represent flows into the dedicated country funds) Chart 62. Cumulative flows by year into Emerging Market equity funds
-7.0%-6.0%-5.0%-4.0%-3.0%-2.0%-1.0%0.0%1.0%2.0%3.0%4.0%
Indo
nesi
a
Pol
and
Mal
aysi
a
Col
ombi
a
Indi
a
Bra
zil
Rus
sia
Phi
lippi
nes
Gre
ece
Qat
ar
Chi
le
Thai
land
S. A
frica
Taiw
an
UA
E
Turk
ey
S. K
orea
Chi
na
Per
u
Mex
ico
Egy
pt
Last Week Flow (% of AuM) 4 Week Average
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 63. By region Chart 64. By sector (flows into the sector equities as estimated by EPFR
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
-80
-60
-40
-20
0
20
40
60
Jan Feb Mar Apr May Jun Aug Sep Oct Nov Dec
2011 2012 2013 2014 2015 2016
USDbn
-0.8%
-0.6%
-0.4%
-0.2%
0.0%
0.2%
0.4%
0.6%
0.8%
GEM USA Japan Global EMEA Asia exJapan
Lat-Am WesternEurope
Last Week Flow (% of AuM) 4 Week Average
-0.05%
0.00%
0.05%
0.10%
0.15%
0.20%
0.25%
0.30%
0.35%
Con
s. S
tapl
es
Util
ities IT
Ene
rgy
Hea
lthC
are
Tele
com
Mat
eria
ls
Fina
ncia
ls
Con
s. D
isc.
Indu
stria
ls
Last Week Flow (% of AuM) 4 Week Average
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
20
Fund flows: By category
Chart 65. By ETFs and non-ETFs – All EM equity funds (% AuM) Chart 66. By Active and Passive – All EM equity funds (% AuM)
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 67. By Retail and Institutional – All EM equity funds (% AuM) Chart 68. Cumulative flows into bond, equity and money market funds
Source: EPFR Global, HSBC Source: EPFR Global, HSBC
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
ETFs Non ETFs (RHS)
-4%
-2%
0%
2%
4%
6%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
Active funds Passive funds (RHS)
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16
Retail funds Institutional funds
-150
-50
50
150
250
350
450
Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16
Total Bond Funds Total Equity Funds Money Market Funds
USDbn
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
21
Chart 69. Outflows streak – EM equity funds
200
400
600
800
1000
1200
1400
Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
Weeks of outflows from EM equity funds MSCI EM price index (USD)
Source: MSCI, EPFR Global, HSBC
Chart 70. EM fund flow strength index* vs. 12M subsequent performance of MSCI EM
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Fund Flow Strength Index of EM Subsequent 12M returns on MSCI EM (%, RHS)
Note: * Fund flow strength index (FSI) is calculated similar to RSI for the equity index. FSI smoothed for the last 52-weeks acts as a contrarian indicator to the subsequent returns. Helps in identifying the inflection points
Source: MSCI, EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
22
Equity weekly flow (% of AuM)
Chart 71. All Equity Funds Chart 72. All Emerging Market Equity Funds Chart 73. GEM Equity Funds
-0.5%
-0.4%
-0.3%
-0.2%
-0.1%
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
2013 2014 2015 2016
Flow (% of AuM)
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2013 2014 2015 2016Flow (% of AuM)
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
2013 2014 2015 2016
Flow (% of AuM)
Source: EPFR Global, HSBC Source: EPFR Global, HSBC Source: EPFR Global, HSBC
Chart 74. Asia ex Japan Equity Funds Chart 75. Latin America Equity Funds Chart 76. EMEA Equity Funds
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2013 2014 2015 2016
Flow (% of AuM)
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
2.0%
2013 2014 2015 2016
Flow (% of AuM)
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
2013 2014 2015 2016
Flow (% of AuM)
Source: EPFR Global, HSBC Source: EPFR Global, HSBC Source: EPFR Global, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
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23
Equity flows and performance
Chart 77. All Equity Funds Chart 78. All Emerging Market Equity Funds Chart 79. GEM Equity Funds
0%
5%
10%
15%
20%
25%
30%
0%
1%
2%
3%
4%
5%
6%
7%
8%
2013 2014 2015 2016
Cumulative flow (% of AuM)
Cum. return on MSCI ACWI equity USD index (RHS)
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
-20%
-15%
-10%
-5%
0%
5%
2013 2014 2015 2016
Cumulative flow (% of AuM)
Cum. return on MSCI EM equity USD index (RHS)
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
-14%-12%-10%-8%-6%-4%-2%0%2%4%6%
2013 2014 2015 2016
Cumulative flow (% of AuM)
Cum. return on MSCI EM equity USD index (RHS)
Source: MSCI, EPFR Global, Thomson Reuters Datastream, HSBC Source: MSCI, EPFR Global, Thomson Reuters Datastream, HSBC Source: MSCI, EPFR Global, Thomson Reuters Datastream, HSBC
Chart 80. Asia ex Japan Equity Funds Chart 81. Latin America Equity Funds Chart 82. EMEA Equity Funds
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
-20%
-15%
-10%
-5%
0%
5%
2013 2014 2015 2016
Cumulative flow (% of AuM)
Cum. return on MSCI EM Asia equity USD index (RHS)
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
2013 2014 2015 2016
Cumulative flow (% of AuM)
Cum. return on MSCI EM LatAm equity USD index (RHS)
-60%
-50%
-40%
-30%
-20%
-10%
0%
10%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
2013 2014 2015 2016
Cumulative flow (% of AuM)
Cum. return on MSCI EM EMEA equity USD index (RHS)
Source: MSCI, EPFR Global, Thomson Reuters Datastream, HSBC Source: MSCI, EPFR Global, Thomson Reuters Datastream, HSBC Source: MSCI, EPFR Global, Thomson Reuters Datastream, HSBC
MULTI-ASSET GLOBAL EMERGING MARKETS
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Chart 83. Last week’s flows (% of AuM) into equity funds – thematic map
Source: EPFR Global, HSBC
Colour Legend
<-3% -3.0% to -2.0% -2.0% to -1.0% -1.0% to 0.0% 0.0% to 1.0% 1.0% to 2.0% 2.0% to 3.0% >3%
MULTI-ASSET GLOBAL EMERGING MARKETS
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Chart 84. Year-to-date flows (% of AuM) into equity funds – thematic map (based on monthly flows data)
Source: EPFR Global, HSBC
Colour Legend
<-45% -45.0% to -30.0% -30.0% to -15.0% -15.0% to 0.0% 0.0% to 15.0% 15.0% to 30.0% 30.0% to 45.0% >45.0%
MULTI-ASSET GLOBAL EMERGING MARKETS
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26
About EPFR Global:
EPFR tracks both traditional and alternative funds
with around USD24trn in total assets under
management (AuM). Approximately 70% of money
invested in these funds comes from institutional
investors − primarily pension funds and insurance
companies. Funds covered by EPFR are domiciled
across the globe with investment focus on the US,
Western Europe, Japan, Pacific, Asia ex-Japan,
EMEA and Latin America. The fund base includes
dedicated country funds.
Salient definitions/points:
Net Fund Flows: investor purchases/redemptions
for individual funds and for various fund categories
Net Flows calculations exclude portfolio
performance and currency fluctuations
Tracks beginning of period and end of period asset
levels and flows by fund
Weekly Net Flows: investor
purchases/redemptions of fund shares (USD
terms)
Weekly Net Flows (% of AuM): investor
purchases/redemptions based on beginning of the
week assets (% terms)
Calculation of Weekly Net Flows:
Weekly Net Flows = (Weekly Net Change) –
(Weekly Portfolio Change)
Weekly Net Change = (Assets EoW) – (Assets
BoW) – (Weekly Forex Change)
Weekly Portfolio Change = (Assets BoW) x Weekly
performance of the fund*
*Change in NAV per share includes any dividend
distributions
Country Flows:
The country flow data provided in this report
represent Net Fund Flows into the dedicated funds
for that particular country and not the total inflows
into the country’s stock market. We believe that by
looking at the dedicated fund flow data, we are
better positioned to gauge investor sentiment
towards that country.
Sector Flows:
Estimated by EPFR, the sector flow data provided
in this report represent the Net Total Flows (from
the sample of funds) into the equities of that
sector. EPFR considers the ‘total flows into equity
sector funds’ and ‘the positioning of the GEM
equity funds in the individual sectors’ in order to
calculate the sector flows.
Early signalling system:
We have constructed an early signalling system
using weekly the EPFR Global fund flows to
emerging markets database. We have used
moving averages (MA) to smooth the data. We
found the 4 week MA to be useful for analysing
trends over time horizons ranging from a few
months to years, and the weekly data was helpful
in detecting short-run shifts in flows to EM. The
width of the confidence band is calculated based
on the volatility of the weekly flows over the
preceding 12 months, measured in standard
deviations (SDs). The confidence band is 2.5 SDs
wide, i.e. 1.25 SDs on the upper bound and 1.25
SDs on the lower bound of the 4 week MA. The
stars represent the breakout from the range. The
stars at the bottom denote a potential bottom and a
star at the top denote a potential high.
Caveats:
One should bear in mind that the data provided by
EPFR is derived from a representative sample of
the investment industry and therefore does not
represent the industry as a whole.
Appendix
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
27
Disclosure appendix
Analyst Certification
The following analyst(s), economist(s), and/or strategist(s) who is(are) primarily responsible for this report, certifies(y) that the opinion(s) on the subject security(ies) or issuer(s) and/or any
other views or forecasts expressed herein accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific
recommendation(s) or views contained in this research report: Bertrand Delgado, Kishore Muktinutalapati and John Lomax
Important disclosures
Equities: Stock ratings and basis for financial analysis
HSBC believes an investor's decision to buy or sell a stock should depend on individual circumstances such as the investor's existing holdings, risk tolerance and other considerations and
that investors utilise various disciplines and investment horizons when making investment decisions. Ratings should not be used or relied on in isolation as investment advice. Different
securities firms use a variety of ratings terms as well as different rating systems to describe their recommendations and therefore investors should carefully read the definitions of the ratings
used in each research report. Further, investors should carefully read the entire research report and not infer its contents from the rating because research reports contain more complete
information concerning the analysts' views and the basis for the rating.
From 23rd March 2015 HSBC has assigned ratings on the following basis:
The target price is based on the analyst’s assessment of the stock’s actual current value, although we expect it to take six to 12 months for the market price to reflect this. When the target
price is more than 20% above the current share price, the stock will be classified as a Buy; when it is between 5% and 20% above the current share price, the stock may be classified as a
Buy or a Hold; when it is between 5% below and 5% above the current share price, the stock will be classified as a Hold; when it is between 5% and 20% below the current share price, the
stock may be classified as a Hold or a Reduce; and when it is more than 20% below the current share price, the stock will be classified as a Reduce.
Our ratings are re-calibrated against these bands at the time of any 'material change' (initiation or resumption of coverage, change in target price or estimates).
Upside/Downside is the percentage difference between the target price and the share price.
Prior to this date, HSBC’s rating structure was applied on the following basis:
For each stock we set a required rate of return calculated from the cost of equity for that stock’s domestic or, as appropriate, regional market established by our strategy team. The target
price for a stock represented the value the analyst expected the stock to reach over our performance horizon. The performance horizon was 12 months. For a stock to be classified as
Overweight, the potential return, which equals the percentage difference between the current share price and the target price, including the forecast dividend yield when indicated, had to
exceed the required return by at least 5 percentage points over the succeeding 12 months (or 10 percentage points for a stock classified as Volatile*). For a stock to be classified as
Underweight, the stock was expected to underperform its required return by at least 5 percentage points over the succeeding 12 months (or 10 percentage points for a stock classified as
Volatile*). Stocks between these bands were classified as Neutral.
MULTI-ASSET GLOBAL EMERGING MARKETS
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28
*A stock was classified as volatile if its historical volatility had exceeded 40%, if the stock had been listed for less than 12 months (unless it was in an industry or sector where volatility is low)
or if the analyst expected significant volatility. However, stocks which we did not consider volatile may in fact also have behaved in such a way. Historical volatility was defined as the past
month's average of the daily 365-day moving average volatilities. In order to avoid misleadingly frequent changes in rating, however, volatility had to move 2.5 percentage points past the
40% benchmark in either direction for a stock's status to change.
Rating distribution for long-term investment opportunities
As of 15 July 2016, the distribution of all independent ratings published by HSBC is as follows:
Buy 44% (24% of these provided with Investment Banking Services)
Hold 41% (25% of these provided with Investment Banking Services)
Sell 15% (20% of these provided with Investment Banking Services)
For the purposes of the distribution above the following mapping structure is used during the transition from the previous to current rating models: under our previous model, Overweight =
Buy, Neutral = Hold and Underweight = Sell; under our current model Buy = Buy, Hold = Hold and Reduce = Sell. For rating definitions under both models, please see “Stock ratings and
basis for financial analysis” above.
For the distribution of non-independent ratings published by HSBC, please see the disclosure page available at http://www.hsbcnet.com/gbm/financial-regulation/investment-
recommendations-disclosures.
To view a list of all the independent fundamental ratings disseminated by HSBC during the preceding 12-month period, please see the disclosure page available at
www.research.hsbc.com/A/Disclosures.
HSBC and its affiliates will from time to time sell to and buy from customers the securities/instruments, both equity and debt (including derivatives) of companies covered in HSBC Research
on a principal or agency basis.
Analysts, economists, and strategists are paid in part by reference to the profitability of HSBC which includes investment banking, sales & trading, and principal trading revenues.
Whether, or in what time frame, an update of this analysis will be published is not determined in advance.
Economic sanctions imposed by the EU and OFAC prohibit transacting or dealing in new debt or equity of Russian SSI entities. This report does not constitute advice in relation to any
securities issued by Russian SSI entities on or after July 16 2014 and as such, this report should not be construed as an inducement to transact in any sanctioned securities.
For disclosures in respect of any company mentioned in this report, please see the most recently published report on that company available at www.hsbcnet.com/research. In order to find
out more about the proprietary models used to produce this report, please contact the authoring analyst.
MULTI-ASSET GLOBAL EMERGING MARKETS
15 July 2016
29
Additional disclosures
1 This report is dated as at 15 July 2016.
2 All market data included in this report are dated as at close 14 July 2016, unless a different date and/or a specific time of day is indicated in the report.
3 HSBC has procedures in place to identify and manage any potential conflicts of interest that arise in connection with its Research business. HSBC's analysts and its other staff who are
involved in the preparation and dissemination of Research operate and have a management reporting line independent of HSBC's Investment Banking business. Information Barrier
procedures are in place between the Investment Banking, Principal Trading, and Research businesses to ensure that any confidential and/or price sensitive information is handled in an
appropriate manner.
4 You are not permitted to use, for reference, any data in this document for the purpose of (i) determining the interest payable, or other sums due, under loan agreements or under other
financial contracts or instruments, (ii) determining the price at which a financial instrument may be bought or sold or traded or redeemed, or the value of a financial instrument, and/or (iii)
measuring the performance of a financial instrument.
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