Multilingual AI-driven EM Outlook
Thailand and Vietnam have come to terms with their new tariff regimes on exports to the US, and local investor sentiment is brimming, as is that of domestic investors in Mexico who are rallying behind the government’s success in rehabilitating oil giant Pemex. But the mood is very dour in India and South Africa over the tariffs in the latest week of sentiment tracking in the EM universe. EMAlpha’s Macro Monitor uses multilingual AI to track the current state of local sentiment in the newsflow across the EM universe.
Fig. 1: EMAlpha’s Multilingual AI inspected local Thai media and used local language sentiment analysis to detect sentiment scores for various macro themes. The scores are normalized such that +1.00 signifies extreme optimism and -1.00 signifies extreme pessimism.
worse-case scenario. Signs of investors shifting from large cap stocks into medium and small caps is noted in the sentiment along with the comforting validation of foreign portfolio investors, who have only now shifted to being net buyers of Vietnamese equities after the VN Index’s 25% gain YTD.
its financial strategy. It’s the first credit upgrade for Pemex in a decade. The government has been helping Pemex reduce debt and restructure its operations but ultimately plans to cut its financial ties with the firm by 2026. Domestic investors are cheering the relief that this presents to the government’s budget.
Fig. 2: Vietnam Macro Theme Sentiment Scores: EMAlpha’s Multilingual AI inspected local Vietnamese language news and used local language sentiment analysis to detect sentiment scores for various macro themes for the country. The scores are normalized such that +1.00 signifies extreme optimism and -1.00 signifies extreme pessimism.
Tariffs darkened in the run-up to the official start date, but has been poor since the last week of July when it became likely that a trade deal with the US was not likely. Forecasts are for a loss of 30,000-70,000 jobs in an economy that already suffers from a 33% unemployment rate. So far, South African equities have been unphased, rising 24% YTD and 4.2% over the past month, as domestic investors perhaps see deepening ties to China in the offing.
$86 billion of exports to the US hangs in the balance, along with India’s once warm relation relationship with the US. Local investors appear to understand that this puts Prime Minister Modi in a very difficult position and sentiment for most all macro themes have deteriorated since late July. Indian equities have also been strained by the trade uncertainty, declining more than 4% over the past month and are barely in positive territory YTD, severely lagging the
MSCI EM Index return of +16%.
Fig. 3: EMAlpha’s Multilingual AI inspected India media sources and used local language sentiment analysis to detect sentiment scores for various macro themes. The scores are normalized such that +1.00 signifies extreme optimism and -1.00 signifies extreme pessimism.
For Media Inquiries, contact Brad Durham, [email protected]
Over half of the world’s web content is in languages other than English. Book a demo to discover how the Macro Monitor leverages EMAlpha’s multilingual AI to uncover investable signals in local-language content.
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