Report
Dave Nicoski ...
  • Ross LaDuke
EUR 44.79 For Business Accounts Only

Vermilion Int'l Compass: Global Equity Strategy

Stick With EM Over EAFE



The MSCI EM index (local currency) remains in an uptrend and it has continued to outperform relative to the MSCI EAFE index as shown by the intact uptrend in the EM vs. EAFE ratio -- remain overweight EM relative to EAFE. A big reason for additional near-term outperformance has been due to the US dollar (DXY) breaking down from its short-term consolidation pattern and below 98.50. DXY support to watch is at 95.80, however as long as it remains below 98.50 resistance we believe EM's outperformance is likely to continue... see chart below.



Below we highlight attractive and actionable themes within EM:



· EM Countries. China (Shanghai Comp., CSI 300) continues to offer many attractive setups and accounts for the vast majority of today's recommendations. India (SENSEX) is making bullish price and RS inflections -- add exposure. Taiwan (TAIEX) continues to be worthy of an overweight within the EM universe... see page 2.

· EM Sectors. With RS uptrends intact we continue to recommend Sector overweights to MSCI EM Technology, Consumer Discretionary, Health Care, and Communications. Materials remains an attractive cyclical value Sector as both price and RS show signs of bottoming -- add exposure...
Underlyings
Chongqing Brewery Co.Ltd Class A

Chongqing Brewery is engaged in the production and sale of beer. Through its subsidiaries, Co. is also engaged in the manufacture and sale of biochemical medicine, tablets and capsules and other pharmaceutical products; the provision of food, beverage and bar services; and the sale of commodity which including subsidiary food, beverage and liquor. Co.'s products include Sancheng beer, Chongqing beer, Daliangshan beer, Guoren beer and Jiuhuashan beer. Co.'s business is mainly operated in Chongqing, Zhejiang Province, Sichuan Province, Hunan Province and Anhui Province.

Ecovacs Robotics Co. Ltd. Class A

Ecovacs Robotics Co., Ltd. is a China-based company principally engaged in the research, development, design, manufacture and sales of various kinds of family service robots, clean household appliances and other small household appliances, as well as related parts and components. The Company's main products are divided into two categories: service robots and clean household appliances. The Company's service robot products mainly include Ecovacs branded family service robots. The Company is also involved in the research, development, manufacture and sales of business service robots. The Company's clean household appliances mainly include Original Equipment Manufacturer (OEM)/Original Design Manufacturer (ODM) vacuum cleaners and its own TEK branded series of clean household appliances. The Company distributes its products in domestic market and to overseas markets.

Fibocom Wireless (A)

Fibocom Wireless Inc. is a China-based company principally involved in the design, research, development and sales of wireless modules, as well as provision of IT solutions for application industries. The Company's main business is primarily engaged in the sales of wireless modules which have been applied in machine to machine (M2M) and MI (Multi-intelligent) consumer electronics, provision of solution plans, sales of parts and components, as well as other business.

Foshan Haitian Flavouring & Food Co. Ltd. Class A

Foshan Haitian Flavouring and Food Company Ltd. is a China-based company, principally engaged in the manufacture and distribution of seasonings. The Company's products portfolio consists of soybean sauces, general sauces, oyster sauces, chicken essence seasonings, vinegar and others, with soybean sauces, general sauces and oyster sauces as its main products. Its general sauces are applied in barbecue sauces, hot pot sauces and others. Its oyster sauces are applied in cooking, salad dressings and others. The Company conducts its businesses mainly within domestic markets.

Guangdong South New Media (A)

Guangdong South New Media Co Ltd. Guangdong South New Media Co., Ltd. is a China-based company principally involved in new media business. The Company is mainly engaged in Internet Protocol Television (IPTV) and Internet TV businesses, as well as the provision of cable TV network value-added services and province outside private network audio-visual program integrated services. The Company is also engaged in the provision of program event technical services, subway TV technology services and mobile channel technology services. The Company mainly conducts its businesses in domestic market.

Jiangsu Hengshun Vinegar-Industry (A)

Jiangsu Hengshun Vinegar Industry is engaged in manufacturing and selling table vinegar, soy sauce, pickle, compound seasoning, flavoring agent, non-staple food, grain and oil products, beverage and wine. Through its subsidiaries, Co. is also engaged in manufacturing and selling heath care product, packing case, and photo-electricity product; manufacturing, selling and research and development of biological heath care product, development and selling of real estate; property management; processing special glass and its equipment; sale of grocery and general merchandise; manufacture and sale of plastic product; and recycling old paper carton and vinegar bottles. .

Jiangsu King's Luck Brewery Joint-stock Co. Ltd. Class A

Jiangsu King's Luck Brewery Joint-Stock Co., Ltd. is a China-based company, principally engaged in the production and sales of distilled spirits. The Company mainly distributes its products under three brands, including Guoyuan, Jinshiyuan and Gaogou. The Company conducts its businesses mainly within Jiangsu province.

Jonjee Hi-Tech Industrial and Commercial Holding Co. Ltd. Class A

Jonjee Hi-Tech Industrial & Commercial Holding is engaged in urban infrastructure investment; property management; secondary water supply; hi-technology industry investment and development; industrial investment; equipment leasing; provision of technology and communication consultation services; and sale of industrial materials, general merchandises, hardware, electrical appliances; chemical products, needles, textile products and construction materials. Through its subsidiaries, Co. is also engaged in production of sauce, flavoring, non-alcoholic beverage, and automobile and motorcycle accessories.

Kweichow Moutai Co. Ltd. Class A

Kweichow Moutai is engaged in the manufacture and sale of "Guizhou Moutai" series distilled spirits; manufacture and sale of beverages, food and packaging materials; development of anti-counterfeiting technologies; and research and development of relevant IT products. Through its subsidiaries, Co. is also engaged in the wholesale of agricultural vice-local products, building materials, decoration materials, metal materials, machineries, electronic products, telecommunication products, hardware, rubber products, general merchandises and furniture. Co.'s products include millesimes liquor, gift liquor, common liquor and other liquor series.

Nikkei225 Bull 2x ETF

Sichuan Swellfun Co. Ltd. Class A

SICHUAN SWELLFUN CO., LTD is a China-based company principally engaged in the manufacture and sales of alcoholic products. The Company mainly provides liquor series products under the brand of Swellfun. The Company's wine products include Swellfun Diancang, Swellfun Jingtai, Swellfun Zhenniang No. 8, Swellfun Yuanmingqing, Swellfun Jingcui, Swellfun Hongyun, Swellfun Jindian, Swellfun Meilanjuzhu, Xiaoshuijing, Shuijingshangpin and Tianhaochen, among others. The Company distributes its products within both domestic and overseas markets.

Tencent Holdings Ltd.

Tencent Holdings Limited is an investment holding company principally involved in the provision of value-added services (VAS) and online advertising services. The Company operates through three main segments. The VAS segment is mainly involved in provision of online/mobile games, community value-added services and applications across various Internet and mobile platforms. The Online Advertising segment is mainly engaged in display based and performance based advertisements. The Others segment is mainly involved in provision of payment related services, cloud services and other services.

Wuliangye Yibin Co. Ltd. Class A

Wuliangye Yibin is engaged in manufacture and sale of "Wuliangye" liquors and other series of alcoholic drinks. Through its subsidiaries, Co. is also engaged in the supply of raw materials; packaging and publication printing; investment activities; provision of parking service; and manufacture and sale of industrial-used steams, fine chemicals, fruit wines, white wines, white carbon, and black and lactic acids.

Provider
Vermilion Research
Vermilion Research

Vermilion Research delivers timely, actionable, and unique research inputs to professional investors. Our research strategists highlight securities which we believe are at major inflection points, based on our various proprietary technical indicators, and offer asymmetric risk/return profiles. We believe our research methodology, which is not limited by industry sector or market capitalization, enables us to deliver superior investment recommendations.

Our process begins by organizing all actively traded stocks into coherent sectors, then into logical industry groups. We then apply our proprietary relative strength tools to identify developing price trends. Once attractive trends are identified within a selected sectors or groups, we screen for individual stocks which we believe offer the best risk/reward profile. Vermilion offers U.S. and global equity market research products. Vermilion’s research team, which has received numerous awards and accolades, has a combined 70 year of experience in the analysis of investment securities.

Analysts
Dave Nicoski

Ross LaDuke

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