Article / 17 July 2014 at 9:11 GMT

National Bank of Greece pulls portfolio ahead of EM index

Head of Equity Strategy / Saxo Bank
By Peter Garnry

Our portfolio of top equity picks in emerging markets rose 1.2 percent over the past week compared to -0.3 percent for the MSCI Emerging Markets Index. The outperformance was driven by solid gains in Banco do Brasil (+3.9 percent) and the National Bank of Greece (+6.1 percent). The portfolio has gone up 3 percent over the past four weeks compared to only 1.5 percent for emerging markets. As we highlighted in yesterday's update to Asia Pacific, the conviction list has expanded from 10 to 20 stocks so next week's update will reflect that.

Emerging market performance

Source: Bloomberg, Saxo Bank

Banco do Brasil remains top pick
Despite gains of almost four percent, Banco do Brasil remains our top pick among emerging market equities. Our quant model has a 12-month return forecast of 21 percent with an uncertainty indicator of +5 signalling that the model is significantly more bullish than consensus. Already back in May we highlighted Banco do Brasil as our top pick in emerging markets and the shares are up 16 percent since then.

Emerging markets equities top pick

-- Edited by Kevin McIndoe

Peter Garnry is the Head of Equity Strategy at Saxo Bank. Please check out his articles and trades here.

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Quant Corner - Emerging Market equities


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