There’s pain, and then there’s pain.

Today marks the worst day for our Taipan Emerging Market Index, with a fall of 59%. I think the only consolation here is that the major U.S. markets took a beating too.

Last week we were up 9.3%. It looks like the world markets have gone completely bi-polar. That’s what happens when sentiment overtakes logic in an electronic web of global markets.

Key
ALL ORDINARIES IDX (ASX: ^AORD) Australia
BSE SENSEX (Bombay: ^BSESN) India
IBOVESPA SAO PAULO (^BVSP) Brazil
EGYPT CMA GENL INDX (Cairo: ^CCSI) Egypt
HANG SENG INDEX (HKSE: ^HSI) Hong Kong
COMPOSITE INDEX (Jakarta: ^JKSE) Jakarta
COMPOSITE INDEX (Kuala Lumpur: ^KLSE) Kuala Lumpar
KOSPI Composite Index (KSE: ^KS11) South Korea
MERVAL BUENOS AIRES (Buenos Aires: ^MERV) Argentina
IPC (Mexico: ^MXX) Mexico
NZX 50 INDEX GROSS (NZSE: ^NZ50) New Zealand
IGBM (Madrid: ^SMSI) Spain
TEL-AV TASE-100 IND (^TA100) Israel
TSEC weighted index (Taiwan: ^TWII) Taiwan
SSE Composite Index (Shanghai: 000001.SS) Shanghai
iShares MSCI South Africa Index (EZA) South Africa
RTSI INDEX (RUS: RTS.RS) Russia
ISHARES MSCI THAILAN (NYSEArca: THD) Thailand
iShares MSCI Turkey Invest Mkt Index (TUR) Turkey
For you true believers, all I can say is that it’s time to double down. For cynics, skeptics and scaredy cats…well you know what you have to do.

Personally, I’m of the opinion that things will get worse before they get better. For how long, I can’t really say. However, I’d love to hear your thoughts. Feel free to post a comment. We look forward to hearing from you.

Have yourself a great weekend. I think some grilled burgers and couple of beers sound good right now.

–Irwin Greenstein

Can we get a rousing Hallelujah?

Our Taipan Emerging Market Index jumped 9.3% this week as financial institutions come crashing down around us. Our 9.3% gain follows last week’s 5% rise. All I can say is that the numbers have spoken.

Key
ALL ORDINARIES IDX (ASX: ^AORD) Australia
BSE SENSEX (Bombay: ^BSESN) India
IBOVESPA SAO PAULO (^BVSP) Brazil
EGYPT CMA GENL INDX (Cairo: ^CCSI) Egypt
HANG SENG INDEX (HKSE: ^HSI) Hong Kong
COMPOSITE INDEX (Jakarta: ^JKSE) Jakarta
COMPOSITE INDEX (Kuala Lumpur: ^KLSE) Kuala Lumpar
KOSPI Composite Index (KSE: ^KS11) South Korea
MERVAL BUENOS AIRES (Buenos Aires: ^MERV) Argentina
IPC (Mexico: ^MXX) Mexico
NZX 50 INDEX GROSS (NZSE: ^NZ50) New Zealand
IGBM (Madrid: ^SMSI) Spain
TEL-AV TASE-100 IND (^TA100) Israel
TSEC weighted index (Taiwan: ^TWII) Taiwan
SSE Composite Index (Shanghai: 000001.SS) Shanghai
iShares MSCI South Africa Index (EZA) South Africa
RTSI INDEX (RUS: RTS.RS) Russia
ISHARES MSCI THAILAN (NYSEArca: THD) Thailand
iShares MSCI Turkey Invest Mkt Index (TUR) Turkey

I won’t regurgitate the bad news on Wall Street, since I don’t want to rub it in. All I can say is that while most investors are crying in their beer, readers of the Taipan Emerging Market Blog are raising a glass of Champaign. (Oops, did I just rub it in?)

Once again the best news comes out of Asia. Our biggest winner this week is India’s Sensex Index (Bombay: ^BSESN) at +3.99%. It barely beat out our long-term gainer, the Shanghai SSE Composite Index (Shanghai: 000001.SS), which rose 3.49%.

The Times of India credits the boost to expectations on inflation.

Data released after market closed on Thursday showed annual inflation at 11.91% in early July, slightly higher than the previous week’s 11.89%, but below market expectations for more than 12%, according to the Times of India.

It also reported that lower crude prices helped interest-sensitive sectors like banks and real estate.

If this trend can continue in India, it’s likely to spread to other emerging markets. Inflation has been hurting just about all of these markets — undermining otherwise thriving economies. Although it’s too soon to tell if this is a long-term trend, I’d suggest you put your broker on speed dial.

Have a great weekend.

–Irwin Greenstein

One of the biggest business stories of the year has literally been buried by the media — and it could cost you a lucrative opportunity.

On July 9, the China Investment Corp (CIC), the country’s $200-billion sovereign wealth fund, said it will start investing in global equity markets through its overseas asset managers, according to the China Securities Journal.

CIC said it will allocate $250 million to eight different overseas asset managers.

Why Big Media didn’t play this up more prominently is a real joke. CIC is the world’s sixth biggest sovereign wealth fund (SWF). The decision to start actively investing in emerging market equities is a clear indication that emerging markets cannot be ignored.

Continue Reading »

With the markets getting crushed, it should come as no surprise that our Taipan Emerging Market index gets caught in the down draft. For the week ending 6/27/08, the index dropped 30.7%.

Key
ALL ORDINARIES IDX (ASX: ^AORD) Australia
BSE SENSEX (Bombay: ^BSESN) India
IBOVESPA SAO PAULO (^BVSP) Brazil
EGYPT CMA GENL INDX (Cairo: ^CCSI) Egypt
HANG SENG INDEX (HKSE: ^HSI) Hong Kong
COMPOSITE INDEX (Jakarta: ^JKSE) Jakarta
COMPOSITE INDEX (Kuala Lumpur: ^KLSE) Kuala Lumpar
KOSPI Composite Index (KSE: ^KS11) South Korea
MERVAL BUENOS AIRES (Buenos Aires: ^MERV) Argentina
IPC (Mexico: ^MXX) Mexico
NZX 50 INDEX GROSS (NZSE: ^NZ50) New Zealand
IGBM (Madrid: ^SMSI) Spain
TEL-AV TASE-100 IND (^TA100) Israel
TSEC weighted index (Taiwan: ^TWII) Taiwan
SSE Composite Index (Shanghai: 000001.SS) Shanghai
iShares MSCI South Africa Index (EZA) South Africa
RTSI INDEX (RUS: RTS.RS) Russia
ISHARES MSCI THAILAN (NYSEArca: THD) Thailand
iShares MSCI Turkey Invest Mkt Index (TUR) Turkey

The herd mentality of the major trading centers will usually prevail — regardless of the potential of individual emerging markets. You can see this with oil’s new highs triggering another sell-off. Yesterday, the Dow hit a two-year low. Citibank now seems like it will crumble and those reverberations are felt everywhere.

There is a bright spot, however…

Our biggest winner this week is the ISHARES MSCI THAILAN (NYSEArca: THD). This follows our trend for the past three weeks of Asian markets dominating the index.

Thailand has been on a tear of late. More and more major corporations are setting up factories there as China becomes too expensive.

Since January of this year, new manufacturing plants in Thailand have been announced by the likes of Japanese food giant, Ajinomoto Co.; the UK-based Plastics Capital; Toyota is building a new 150,000-square-foot diesel engine plant; Canon is doubling capacity for a printer plant outside of Hanoi; and Hanesbrands, the underwear maker, is setting up two new factories in Vietnam.

At the same time, Vietnam’s inflation hit 25.2% last month — one of the highest in our index.

Here’s my point: Vietnam has pretty much the same story to tell as other markets in our index. Some have higher inflation than others. Some haul in money from feeding the global commodity boom instead of manufacturing things. Yet, they are all dragged down by the horrible and terrifying stories making headlines in the U.S. and other industrialized countries.

All I could say at this point is that you have to wait this out. Is this a good time to double down? Very possible. Regardless, the long-term prospects of emerging markets remains quite strong.

Have a great weekend.

–Irwin Greenstein