Achieving 20% upside in this market

This was the statement made recently by Mr. Mark Mobius, the executive chairman of Templeton Emerging Markets. You can read more about this piece of news from here. In fact, he also predicted that there will be 20% upside in the Chinese market in the same piece of news. It is not easy to find such an attractive upside in today's bullish market. When one mentioned the Chinese market, you will hear many stories about investors who had previously lost their money. Let's take a look at some of these data and numbers and make some intelligent analysis so that we protect our capital this time.

STI performance

In the last couple of weeks, STI had a spectacular performance. At closing, it is now near to where we had started beginning of the year 2014 by just a few points below. In this post, I want to look at how did STI compare against some of the other indexes such as Indonesia, Brazil and China. Hey, isn't this the BRIC without Russia.

Below is the chart which I had done to compare these indexes, Brazil(blue), Indonesia(orange), China(green), STI(red)

Since February, Indonesia is the strongest of the group, having rebounded strongly as shown in the chart. Brazil is the next strongest, rebounded strongly after a second correction. As compared with these 3 countries, STI has not been doing that well, mostly in the range bound and had just started trending up but not much.

In the table below, it has shown clearly how each of these market has performed for the last 6 months as compared with closing on 28Mar.

What are the factors that is likely to cause this ?

Starting with Indonesia, this is an election year for them, and as mentioned in an earlier post, this has a positive effect on the Jakarta composite index based on the last 2 elections.

Brazil has got 2 major events this year, one is the coming election. For the soccer fans, it's the World Cup in June, so will the World Cup fever spread to the stock market.

So will this trend continue ... no one knows, but remember to cut loss if you are wrong.

Disclosure - I am long on EWZ and IDX.

Related post: Where to invest in Asia