Portfolio Management 101 > Emerging Markets

System Dynamics and the Effect of Emerging Markets

For years I have been working with international clients so I’ve had exposure to emerging markets both on the equity side and the fixed income side. It was always amazing to me when comparing the portfolios of our US clients with those that were based offshore and how much less exposure the US client had to emerging markets. It wasn’t for lack of trying on our part. If emerging market equities make up 14% of the world equity market capitalization, for example, then 14% allocation should be your base allocation.

Hydrocarb’s Opportunity in Africa To Boost Up-Listing Ambitions

Hydrocarb Logo

A lot has happened over the last eight months at Hydrocarb Energy (NASDAQ:HECC). The company has experienced an acquisition, a reverse split, and is now preparing for an up listing at NASDAQ. All this has taken place at a time when the company is making giant steps towards unearthing the opportunity at its African operations, in Namibia.

Several reports indicate that since the beginning of this year, there have been so many IPOs such that, you would have to go back some 14 years to find a bigger number. Indeed, reports suggest that the first quarter of 2014 registered the most number of IPOs since the year 2000, when compared to similar quarters.

Now, Hydrocarb seems to have seized this IPO-frenzied opportunity to move one-step up, by listing in one of U.S’s top-tier exchanges. The company had gone through an acquisition, after Duma Energy, aggressive-growth oil and gas exploration and Production Company, with onshore and offshore operations in the U.S. bought it late last year.

Emerging Markets Deserve Some Portfolio Love Too

Emerging Markets from Forbes.com

The forecasts for emerging markets in 2014 don’t get much better either. Based on variety of factors that may (KEYWORD: (MAY)) affect emerging market equities, the consensus forecast is for emerging markets to underperform developed markets again. Only one of the research providers shown below has an overweight to emerging markets. The rest of them are either underweight or neutral. Developed market equities and European equities are the clear favorites.

But lumping all emerging markets together leaves out the fact that there are certain global economic trends that may actually benefit specific countries in the emerging market space. Identifying and investing in those markets will be the key to emerging market success.

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