Last month was quite for most of the Eur-Asian emerging markets.
The war in Syria is moving into a more stable situation while IS looks like defeated. This takes pressure away from Turkey. Also within the this country there is more stability. The tourism season has started and the number of visitors to Turkey is recovering. Last month it resulted in a solid 2.5% gain on our Turkish equity positions.
Russian markets moved sideways through July. With the ‘right’ selection of investments in Russia we were able to gain almost 0.5% on the Russian equity positions. The stabilisation of the oil price and other commodity prices were the positive drivers. On the other side we have the increased tensions between Russia and the USA. The new sanction law, still not approved by the President of the USA, Mr. Trump, is threatening the spark of hope we had of an environment with lower tensions. The position of Europe is unclear. When Mr. Trump became president of the USA, Europe was frightened he would lift the sanctions. Now at this moment Europe is defending its own economic energy programs and opposing this new sanction law. Especially Germany, Turkey but also The Netherlands can seriously be hurt by this new sanction law.
Last month was a weak one for India, resulting in a small loss of 0.4%, not really surprising after the solid gains India has posted in the last year.
Neighbour China was in better shape, outperforming all other markets with a gain of 3.7%. We are happy to see this solid result in our most heavily weighted market in our portfolio. In the next months we will work on a more diversified portfolio by cutting the over allocation of the Chinese markets down to a max of 30%, not due to a weakening of China, but we see potential and momentum gaining in other markets.