MILLTRUST INTERNATIONAL
 

Milltrust Alert – Selected News and Insights from the Emerging Markets and Around Our Business

March 28, 2019

BY Alexander Kalis
MANAGING PARTNER

WHAT YOU NEED TO KNOW – EMERGING MARKETS

Emerging Market Equities: Looking Beyond Near‑Term Fear

  • Over the past year, emerging market (EM) equities have been one of the most volatile segments of the global market.
  • Fundamentals don’t justify the fear.
  • Valuations appear attractive for the long-term investor.
  • While we see favorable fundamentals and valuations, investors should not dismiss the risks – which can be sudden and severe – associated with the EM equity market, which has both rewarded and bewildered many investors.

Pakistan’s Emerging-Market Status Just Got Into Big Trouble
Pakistan’s inclusion in the MSCI Inc.’s emerging-market indexes has come under a cloud as the nation’s stocks fall below the market-size threshold. The South Asian nation, which got promoted from a frontier nation in June 2017, has erased about $44 billion of equity value since then. That has narrowed its weight in the MSCI Emerging Markets Index to just above 3 basis points, lower than the 8 basis points Morocco and Jordan had when they were downgraded.

Stock of the Week

China Everbright International Limited is a Hong Kong incorporated company that specialized in environmental resource management in mainland China. Its head office is the Far East Finance Centre in Admiralty on Hong Kong Island. On the mainland it has offices in Beijing, Jinan, Nanjing, and Shenzhen

The Case for China Everbright International Limited: What Do Analysts Think About The Future Of China Everbright International Limited’s (HKG:257)?

WHAT YOU NEED TO KNOW – SUSTAINABLE INVESTMENTS

Why Impact Investing is Attractive in Volatile Times
Marisa Drew of Credit Suisse says there is an “enormous” amount of investment going into green technology, and there are compelling opportunities in environmental investments, especially in Asia.

WHAT YOU NEED TO KNOW – AGRICULTURE INVESTMENTS

Australian citrus industry focuses on increasing exports

Fresh fruit exports from Australia exceeded a billion dollars in 2018 for the second consecutive year, and citrus led the way. Citrus Australia chief executive officer, Nathan Hancock, has stated that the industry had made considerable advances in export markets in the past few years. “There were 250,000 tonnes of citrus exported last year, generating $453 million in exports,” he said. Hancock said downturns in crops such as mandarins affected trade, but this decreased quantities only marginally: “Overall we were only 4.5 per cent down in volume, but we were up in value.”

With China being the main export destination, taking 45pc of the market which mostly goes to three key ports, Hancock said growth into areas of greater China and other nations such as India, Japan and Korea was key. “It’s time to do some expansion, and the reason being is that we have competition breathing down our neck. We’ve already felt the impact of South African Valencias coming into the market, which meant we had to adjust our shipments.  Even though we have a different product, it still had a disruptive effect.”

The high quality of Australian citrus products gives Australia a competitive edge, and Hancock said maintaining this standard had to be a priority moving forward. Despite the successes abroad, Hancock said it was important to focus on potential risks on home soil.

WHAT YOU NEED TO KNOW – SCIENCE, TECHNOLOGY & INNOVATION

Nirveda Cognition, a key investment in Milltrust’s Cerracap II Fund, is the developer of an enterprise AI platform that brings the benefits of AI to back-office processes. The Company’s platform is capable of augmenting and replacing skilled and semi-skilled labor for repetitive back-office tasks, where improvements can have massive impacts on cost and productivity. According to IDC, 90% of unstructured data is never analyzed. Traditional AI solutions have difficulty processing unstructured information, which represents the vast majority of enterprise data. This leaves employees with the challenging task of manually identifying, locating and interpreting this information that is required for various back-office processes. The Company’s solution harnesses the power of cognitive search, intelligent process automation, and natural language generation into a unique, ground-breaking offering. By combining these capabilities into a single platform, the Company’s solution enables organizations to automate end-to-end content-centric business processes that until now relied on human cognition, while simultaneously eliminating human error. The Nirveda platform uncovers, interprets and transforms unstructured and semi-structured data (“dark data”), automating business processes faster and more efficiently, while its Continuous Learning features ensure process improvements over time.