Utilities, Precious Metals, Real Estate, Canada, France are among the worst

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Our Stance We are publishing our third issue of GEM monthly series. Its a document which highlights tactical stance for key emerging markets into the year end, which is still positive for the countries like Turkey, India, China and South Korea. It is less positive for Brazil, Russia and South Africa, although weaker commodities currencies have created some opportunities in SA, Brazil and in Russia. Russia's treatment by the west is not unexpected. Russia has grabbed Crimea just like Armenia grabbed Nagorny Karabakh, like the West has grabbed Kosovo and like Turkey has grabbed Cyprus. Stocks are performing sluggish in Brazil down over 6% YTD on the back of the slump in commodities prices and there is no turnaround in sight as coal, iron ore as well as oil prices have all collapsed. A hope for political change did not materialise either as Dilma Rousseff was elected. Brazil should be quite attractive for bond investors in reais .. China did not collapse this year despite lots of anticipation. Moreover recent weakness in oil prices created opportunities for the PBoC to loosen up the monetary stance and could even remove barrier for yuan revaluation as lower oil prices should be able to subdue pressure on price growth in China while yuan move up will be offset by the increase in net exports on the back of cheaper imports. South Korean stocks in utilities, technology and consumer discretionary sectors trade with large discounts to emerging market peers. They have also been putting on pretty good performance this year. While industrials stocks are also cheap - industrials stocks lag. We favor Korea technology stocks as well as consumer names. India stocks look toppish. It is difficult to find a sector where Indian stocks offer discount to emerging market peers. Perhaps consumer discretionary is the only such. Yet for consumer discretionary stocks there has been some slowdown in India car sales and Tata Motors has been under pressure. While Turkey is feeling the benefits of lower oil price environment, Turkey is approaching a nervous period, as year passes and corruption scandal and mine accident of last year remembered. But we would not fix profits in Turkey just yet. South Africa continues its slow stagnating motion forward, facing the same issues, that are facing most of the other emerging markets commodities exporters, albeit South Africa is more immune given its more developed x-commodities sectors. Gold price has recovered somewhat in November up 4%. On the back of that some SA gold stocks has been doing quite well. We think strength in Gold Fields could continue. Oil price weakness has put oil stocks under stress - Sasol bonds are likely to feel further pressure.