The last time I was in India, on the domestic flight from Varanasi to New Delhi, a sign warned passengers about what would not be allowed in cabin baggage. Among the unexpected things banned on board were: bows and arrows, cricket bats, kirpans (Sikh swords), jars of pickles, or chili peppers. So the chili weapon already concerned the airline, regardless of Scoville units.
Today the Swiss Nestle group announced that it would open a food research center in Manesar, south of New Delhi in India to research local ingredients and spices using low-cost Indian researchers. The laboratory will study Indian ingredients to develop products for Indian and foreign markets. Nestle sales in India last year were 52.2 bn rupees, about $1.14 bn, and it is competing hard with Kraft (Cadbury).
There is a theory around (at Covester, for example), that this letter writes mostly about emerging markets. That is not the case. But currently the developing countries are very attractive.
The latest EPFR report on fund flows shows the following trends (to end-July) as reported by the Cambridge, Mass. trackers:
An emerging consensus that China is heading for a “soft landing” was reflected in both allocations and country flow data in July. Global Emerging Markets, global ex-US, and Pacific Equity Funds increased their exposure to this market as net buying by global-tracked funds exceeded $1.8 bn.
All 8 major EPFR Global-tracked equity fund groups cut their average cash allocations during July with Pacific Equity Funds taking their weighting to its lowest level since late 4Q07. That ended a three month run of generally rising [cash] allocations going into 3Q10.
Turkey’s allocation among GEM Equity Funds climbed to a 10-yr high despite the country’s growing current account deficit and a contentious debate about the outcome and consequences of a constitutional referendum scheduled for mid-Sept.Asia ex-Japan Equity Funds absorbed nearly all the fresh money [and] rotated exposure from Korea to Thailand where political noise is diminishing and exports surging — and to Australia.
During Jul,y Global Bond Funds increased their average allocations for South Africa, Indonesia and Brazil to their highest levels since EPFR Global started tracking this fund group. Brazil remained the biggest single country allocation among Emerging Markets Bond Funds but its average weighting fell to its lowest level in more than eight years.
More for paid subscribers from the oil patch, the drug wars, and speculative bank shares, gold funds, and other matters follows:
