China's trade data posted overnight showed scant evidence of the Sino-US trade war with exports steady and imports on the rise. It is likely too early for the US tariffs to skew the data much yet, however, and another drop in Chinese equities shows that the situation is far from resolved.
Article / 27 November 2014 at 7:31 GMT

PBoC rate cut fuels gains in life insurers

Head of Equity Strategy / Saxo Bank
  • Saxo EM equity picks advances 3%
  • China Life Insurance lead the pack
  • Brazilian banks log good gains too
By Peter Garnry

Our conviction buy list portfolio on emerging market equities has advanced 3% in the past week driven by strong gains in China Life Insurance and Brazilian banking stocks such as Banco do Brasil, Banco Bradesco and Itau Unibanco. MSCI Emerging Markets Index has risen 1.4% in the same period.

Emerging market performance

Chinese banks and life insurers in particular have been among the strongest gainers in emerging markets in the past week driven by PBoC's rate cut. China Life Insurance shares are up 20% as investors are betting that central bank's action will stimulate growth and inflate asset prices leading to investment gains that will offset the expected slowdown in premium growth.

Below is our quant model's updated conviction buy list on emerging market equities.

Emerging markets equities top pick
 Source: Bloomberg, Saxo Bank

— Edited by Clare MacCarthy

Peter Garnry is head of equity strategy at Saxo Bank — the home of social trading

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Conviction Buy List - Emerging Markets equities

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