A new paradigm for Emerging Market equities?
Emerging market equities have increasingly evolved into a technology and manufacturing-led asset class in the wake of a surge in AI‑related capital expenditure by the hyperscalers.
Some emerging market companies – often the providers of the “picks and shovels” in this transformation – are converting this spending into strong free cash flow. Semiconductor firms, for example, have seen earnings increase significantly thanks to rising demand for high‑bandwidth memory.
Zhikai Chen, Global Head of Emerging Market Equities at BNP Paribas Asset Management, and Daniel Morris, Chief Market Strategist, discuss how emerging market equities are benefitting from both structural economic growth and the competitiveness of manufacturing and knowledge‑based sectors. Zhikai notes that drivers of performance have come not only from North Asia’s technology leaders but also from Latin America.
Listen to this podcast to learn how the shifting of cash flows from US hyperscalers to Asian semiconductor and hardware manufacturers is potentially creating a rich hunting ground for active stock selection.
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