August 9, 2013, 5:09 P.M.

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The Emerging Market Power Rankings: Emerging Markets Fall, Commodity Producers Gain
The iShares MSCI Emerging Markets Index ETF (EEM) fell 0.9% this week, but truly it was a week of two halves. During the first half of the week, the MSCI Emerging Markets Index sold offand harddropping 2.9% through Wednesday. The reason: China reported a very solid services PMI. Why is that bad news? My guess is that it signals that its transformation to a consumer-heavy economy from an export-driven one was on track. But China then reported its export numbers for July on Thursday and they were out-of-the-park good: They rose 5.1%, after falling 3.1% in June. On Thursday and Friday, the iShares MSCI Emerging Markets Index ETF rose 2.1%. It also helped that U.S. Treasury yields remained range bound and the dollar weak, despite comments from U.S. Federal Reserve governors suggesting tapering was looking more likely. And that gave commodities like gold a boost as well. Winner: Commodity producing nations. Ironically, Asia didnt get a lift. The iShares FTSE China 25 Index (FXI) dipped 1.3%, the iShares MSCI Taiwan ETF (EWT) fell 3.7% and the iShares MSCI Philippines Investable Market Index ETF (EPHE) dropped 3.2%. But were here to talk about the winners. Here they are. #1 The iShares MSCI All Peru Capped Index ETF (EPU): +5.1% Finally, Peru caught a break. The beaten-down commodity-producer has done everything in its power to arrest the slide in its currencyits bought its sol in the foreign exchange markets and kept its rates on holdand finally it worked. Even after this weeks big gain, the iShares MSCI All Peru Capped Index ETF has dropped 26% this year. #2 The iShares MSCI Poland Investable Market ETF (EPOL): +2.3% Poland didnt say anything this week that would send its shares higher. But its economy is closely linked to developed Europe, and investors are betting Europe is finally recovering. Hence, Poland gains. The iShares MSCI Poland Investable Market ETF has dropped 4.1% this year. #3 The iShares MSCI Brazil Capped Index ETF (EWZ): +1.5%

Ah, Brazil. Inflation has slowed, and some are speculating that its central bank might stop hiking interest rates. But really, this is all about China. And if Vale (VALE) can gain because it sees stronger demand for iron ore from China, why not Brazil as a whole? The iShares MSCI Brazil Capped Index ETF has dropped 20% this year. #4 The iShares MSCI Mexico Capped Investable Market ETF (EWW): +1.3% As Poland is to Europe, Mexico is to the U.S. And with the economic data out of the U.S. looking goodjobless claims on Thursday were the lowest in six yearsMexico has gotten a boost. Nor does it hurt that Mexicos inflation rate fell this week, and that momentum is gaining to end the governments monopoly over the oil sector. The iShares MSCI Mexico Capped Investable Market ETF has dropped 0.7% in 2013. #5 The iShares MSCI South Africa Index ETF (EZA): +1.1% South Africa said this week that its manufacturing production slowed in June, but gold rose. Guess which one investors cared about? The iShares MSCI South Africa Index ETF has dropped 14% this year.

August 12, 2013, 3:16 A.M. ET

Emerging Markets Morning Roundup: China Rallies On Cheap Valuation; EM Losing Steam
By Shuli Ren

Good morning from Hong Kong! Today is my first day on Barrons Emerging Markets Daily, taking over Ben Levisohn whos done a fantastic job. Ben is moving over to Barrons Stocks to Watch blog. A quick self-intro: I spent the last two years writing about corporate strategies and Asian markets for a Dow Jones investment management product called Dow Jones Banking Intelligence. In my previous life back in the US, I worked on quantitative equity strategies for Lehman Brothers, and later Barclays Capital, in New York. I also taught university-level macroeconomics and finance courses at the University of Chicago and Lake Forest College. People say, those who cant teach write. So here I am. I welcome your comments and feedback.

China rallied today. One explanation: Beijing is quietly boosting financial stimulus to local governments. Another: Chinese stocks are cheap. Shanghai Stock Exchange Composite Index gained 1.5% mid-day and Hong Kong Hang Seng Index rallied 1.8%. For the first time since 2007, developed world contributes more to global GDP growth than emerging markets. The shift may reshape world capital flows out of Emerging Markets into Developed World. Physical demand for gold remains strong in India. Now that RBI restricts gold imports, Indian jewelers are paying handsome premium ahead of the Hindu festivals. Emerging Market Stocks in the News Indias largest drug producer Sun Pharmaceutical (SUNPHARMA.NS) gained 7.1% today after posting a 56% increase in profit. In an interview with Bloomberg, loss-making Chinese solar panel maker LDK Solar (LDK) said it expects to return to profit this year. Chinese sportswear company Li Ning (LNNGY) lost 6.9% today, after swinging to a first-half loss.
Emerging Markets Daily

August 12, 2013, 5:04 A.M. ET

Tata Motors Upgraded To Buy, 17% Upside Potential

By Shuli Ren

The luxury car industry in China remains strong for Audi and Mercedes, but Tata Motors (TTM) Jaguar Land Rover (JLR) sales did not manage to keep up because of petrol engine supply shortages in China. Kapil Singh and Nishit Jalan at Nomura Securities expect JLR, the main driver for the stock, to sell better as production constraints in China are getting resolved: We believe that JLRs performance will improve due to: 1) launch of the new RR Sport; 2) production constraints in China getting resolved; 3) outlook improving in US and 4) operating leverage, as 2H is seasonally strong.

We continue to value JLR at an EV/EBITDA multiple of 3x at INR259.1/sh. We value the domestic business at a multiple of 0.5x EV/sales at INR12.3/share in line with past down cycle multiples (earlier we valued the company at 7xFY15F EV/EBITDA). We value other investments at INR40/sh. Note that JLR is now trading at a discount to other luxury OEMs in the sector even though it offers higher EBITDA growth. Year-to-date, Tata Motors is down 9.7% whereas the S&P BSE Sensex Index is down (only) 2.2%. Tata Motors last trade at INR282. The analysts give a INR327 price target.