Emerging Markets Week Ahead: Will Markets Cheer a Greece Deal?


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Futures markets and currencies are welcoming news on Sunday of approval for further austerity measures in the Greek parliament. The news could support the markets but earnings will still dominate over the next week. Though a Greek deal will take some risk off the table in the short term, the credit problem in Europe should be far from over and investors may want to position for volatility on further headline risks.

Markets were generally flat last week after a 0.69% loss on Friday wiped out earlier gains in the week. Investors were disappointed at the slow pace of deal negotiations from Greece and the investor-represented "troika" of the European Union, European Central Bank and International Monetary Fund.

Chinese stocks came under pressure last week as lower-than-expected lending and weak imports lead investors to believe the world's second-largest economy may be slowing more than expected. The iShares FTSE China Fund ( FXI , quote ) slipped 2.9% on the last day of the week.

Monday, February 13

Mexico ( EWW , quote ) releases its industrial production report, widely expected to show a slowdown to 2.8% from the last reading of 3.2% on a year ago basis.

The Colombian ( GXG , quote ) Central Bank reports its monetary policy report as investors and exporters look for guidance on the bank's dollar-purchase program to stem the appreciation in the peso. Latin American currencies have strengthened this year and put pressure on the region's exporters, increasing rhetoric of the "currency wars" seen last year. Both Colombia and Brazil ( EWZ , quote ) have enacted dollar purchase programs while Chile ( ECH , quote ) is also expected to enact its own program at some point.

Concord Medical Services ( CCM , quote ) is expected to report $0.14 per share in fourth quarter earnings after the market closes. This would be slightly above earnings last quarter and during the same quarter a year ago at $0.13 per share. The company operates a network of radiotherapy and diagnostic imaging centers in China across 36 cities and 21 provinces.

Tuesday, February 14

Brazilian ( EWZ , quote ) retail sales should show a slowdown to around 6.0% from last month's annualized figure of 6.8%. Though the economy is generally rebounding from a weak quarterly performance recently, import restrictions in neighboring Argentina ( ARGT , quote ) and a strengthening Real could put pressure on specific industries.

Chile ( ECH , quote ) is expected to keep its overnight rate at 5.0% on Tuesday though the risk is to a surprise cut. Inflation reports have generally moderated and an increase in rates would put further upward pressure on the country's currency. Peru ( EPU , quote ) kept its rate on hold at 4.25% last week as inflationary expectations came down to within the bank's target range and growth looked to be on a strong pace.

Wednesday, February 15

Singapore ( EWS , quote ) retail sales come out on Wednesday and are expected to decrease to around 5.1% from last month's reading of 6.4% annualized.

Malaysia ( EWM , quote ) reports GDP and is expected to show a slowdown to 4.8% from 5.8% reported last quarter. The country's economy has held up relatively well through the European debt crisis due to a stronger dependence on internal demand compared to other emerging Asian economies.

Netease.com ( NTES , quote ) will report earnings after the close with expectations for $1.02 per share, up three cents from the last quarter but up 23% from the same quarter last year. The company develops and delivers online gaming applications to the internet in China. Though the company has beaten expectations regularly in the past, there is some fear that the shares will come under the same weakness that hit SOHU.com ( SOHU , quote ) when it reported first-quarter revenues last week.

Soufun Holdings ( SFUN , quote ) is expected to report earnings of $0.54 per share before the market opens. The $1.3 billion company operates a real estate internet portal and home furnishing website in China.

Tam Airlines ( TAM , quote ) reports earnings before market open on Tuesday. The Brazil-based company is expected to report a gain of $0.44 per share. LAN Airlines ( LFL , quote ), a Chile-based airline, recently reported that the country's supreme court should take up its case for mitigation measures of the merger for the two companies in early March and that the merger may be consolidated in the second quarter.

Teva Pharmaceuticals ( TEVA , quote ) reports earnings before market open and is expected to show a gain of $1.58 per share for the fourth quarter. This would be 26.4% above earnings for last quarter and the same quarter last year, both at $1.25 per share. The Israeli company develops, produces, and markets generic drugs in all treatment categories across the globe. Shares trade for 13.1 times trailing earnings and pay a 2.0% dividend yield.

Ultrapar Participacoes ( UGP , quote ) is expected to report earnings on Wednesday. The $28 billion Brazilian holding company operates in three sectors: fuel distribution, chemicals, and logistics for liquid bulk. Shares are 3.4% off their 52-week high and trade for 21.7 times trailing earnings.

Thursday, February 16

Mexico ( EWW , quote ) reports GDP numbers on Thursday and could show a slowdown to around 3.8% from last quarter's report of 4.5% on an annualized basis. A weaker currency over the last quarter may support exports but an appreciation of almost 9.0% against the dollar since the beginning of the year could mean export weakness in the current quarter.

Baidu Inc ( BIDU , quote ) reports earnings after the close and is expected to show a gain of $0.90 per share. The company is a Chinese-language search provider and generates revenues through online marketing services provided through its website. The company has beaten expectations 11 consecutive quarters but shares have been relatively flat over the last 12 months.

Friday, February 17

Gold Fields ( GFI , quote ) is expected to report earnings of $0.52 per share on Friday. The $11.9 billion South African company is engaged in the exploration and extraction of gold and copper in mines primarily in South Africa, Ghana, Australia and Peru.

Yingli Green Energy Holdings ( YGE , quote ) is expected to report a loss of $0.18 per share before the market opens on Friday. This would be the second consecutive quarterly loss after eight quarters of profits. The Chinese manufacturer of photovoltaic modules and systems has seen its shares drop from $13.59 over the last year but are currently off the 52-week low of $5.34 per share. Shares have been under pressure over the last few weeks as the Chinese government announced a cut in solar subsidies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks

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