11 slides from VanEck Uranium and Nuclear ETF's investor presentation, September 2017
Slide 1: Emerging Markets Outlook
September 2017 Emerging Markets Outlook
Slide 2: Disclosures
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Slide 3: Growth Driving EM: Headwinds Abate
Growth Driving EM: Headwinds Abate 3
Slide 4: Global Fears: The U.S. dollar fully valued?
Global Fears: The U.S. dollar fully valued? The U.S. dollar has strengthened 39% since 2011; in prior periods of dollar strength (most of the early 1980s and in 1997-1998), emerging markets were in crisis, but not this time around Source BAML; HSBC. Data as of June 2017 (low chart) and March 2017
Slide 5: Global Fears: EM equity performance during U.S. rate hike cycles
Global Fears: EM equity performance during U.S. rate hike cycles Emerging markets equity have historically reacted favorably during U.S. rate hike cycles EM vs. Rate Hike - Feb 1994 - Feb 1995 EM vs. Rate Hike Cycle - June 1999 - May 2000 600 6.50 520 7.00 580 6.00 MSCI EM Index (LHS) 560 5.50 500
Slide 6: Global Fears: Populism and protectionism on the rise
Global Fears: Populism and protectionism on the rise Global Income Distribution State aid is a key mechanism for trade discrimination Includes local procurement legislation, tax benefits for export and domestic industry subsidization, heightened regulatory standards, and public procurement discr
Slide 7: EM Macro: Emerging markets have less financial vulnerabilities
EM Macro: Emerging markets have less financial vulnerabilities Most emerging economies (with the exception of China) have floating currency exchange systems Currency flexibility is a natural progression from mercantilism and gives central banks more control over monetary policy Emerging econom
Slide 8: EM Micro: EM companies' earnings are exceeding expectations
EM Micro: EM companies’ earnings are exceeding expectations MSCI Emerging Markets earnings growth estimates (%) Often wrong, but never in doubt; 2017 a rare example of analyst EPS growth optimism coming true? BAML research suggests yes. EM 12m forward earnings estimates revisions accelerate Revi
Slide 9: EM Micro: Capex declining and free cash flow galore
EM Micro: Capex declining and free cash flow galore BAML predictions – all time high free cash flow in Asia ex-Japan Asia ex-Japan operating cash flow (US$ bn) Asia ex-Japan capital expenditure (US$ bn) Forecast 600 Forecast 800 752 678 488 482 700 649 500 468 452 454 599 611 444 445 562 413 600 5
Slide 10: EM Micro: EM selling at a 90% discount compared to the U.S.
EM Micro: EM selling at a 90% discount compared to the U.S. PB - Relative Value (SPX vs. MSCI EM) 120.00% SPX vs. EM -1 STD +1 STD Average 100.00% 90.50% 80.00% 60.00% 40.00% 20.00% 0.00% -20.00% Source: Bloomberg, MSCI. Data as of June 2017. See disclosures on page 2. 10
Slide 11: Structural growth versus cyclical growth
Structural growth versus cyclical growth Structural Growth Cyclical Growth $9,000 $140 $18,000 $70 EBITDA EBITDA $8,000 $16,000 Price Price $60 $120 $7,000 $14,000 $100 $50 EBITDA (Millions) EBITDA (Millions) $6,000 $12,000 Share Price Share Price $80 $40 $5,000 $10,000 $4,000 $8,000 $60 $30 $3,000