Emerging Markets ETF & India Internet ETF Monthly Report | January

Emerging Markets ETF & India Internet ETF Key Takeaways:

The leading positive contributors to performance for the EMQQ Index in December were India-based Reliance Industries and Alibaba, posting gains of 8.9% and 5.3% respectively. The former got a boost on news that both Reliance and Disney are exploring a merger of their digital media and entertainments assets in India, which would help Reliance consolidate its lead in the space. Meanwhile Alibaba was aided by its announcement that it repurchased close to $10 billion of its own shares in 2023. The e-commerce giant said the remaining amount in the company’s share repurchase program, which is effective through March 2025, was $11.7 billion.

The two largest detractors for the month were Netease and Tencent, falling -20.2% and -10.2% respectively. In response to the steep declines, both companies ramped up their share repurchases dramatically in December. Last month alone Tencent, China’s gaming and fintech giant, repurchased over $1.3 billion of shares in a sign of long-term confidence in spite of short-term volatility.

Source of all performance data: HANetf / Bloomberg. Data as of 31.12.2023. Please note that all performance figures are showing net data. Past performance is not indicative of future performance and when you invest in ETFs your capital is at risk.

Emerging Markets Tech News

China Ramps Up Stimulus: China recently implemented a significant economic stimulus by injecting a record amount of cash into the economy, coinciding with increased support for the property sector. The central bank provided $112 billion in one-year loans to commercial lenders, alleviating concerns about cash scarcity amid a surge in government debt issuance. Concurrently, restrictions on home buying in Beijing and Shanghai were relaxed, extending policy efforts to bolster the real estate market.

Baidu’s Chat-GPT Rival Hits 100 Million Users: Chinese tech giant Baidu announced that its artificial intelligence product, Ernie bot, has exceeded 100 million users, securing a substantial share of the Chinese market. The milestone was confirmed by Baidu’s CEO, Robin Li, at a generative AI summit in Beijing, where he hinted at upcoming functionalities to boost adoption further. Positioned as a local alternative to OpenAI’s ChatGPT, Ernie Bot garnered praise and quickly rose to the top of the Chinese App Store after its launch. With China’s population hovering around the 1.4 billion mark, Ernie Bot’s 100 million users represent 7% of the Chinese population, leaving room for exponential growth.

India Fintech Revenue to Grow 10X: According to a recent report from Boston Consulting Group, Asia is poised to surpass North America to become the world’s largest fintech market by 2030. Within the region, India is expected to see some of the fastest growth rates in its local fintech sector. BCG estimates that the industry will grow from roughly $17 billion in revenues in 2022 to roughly $190 billion by 2030, suggesting it could scale by a factor of ten times.

For illustrative purposes only. Chart displays expected data. Source: EMQQ Global.

India fastest growing premium smartphone market: According to a report by industry tracker Counterpoint Research, the premium smartphone market in 2023 is expected to see record sales in China, India, the Middle East, Africa, and Latin America. India was highlighted as the fastest-growing premium market globally last year.  Despite its strong growth last year, India’s smartphone penetration still hovers around only 50%, providing a very solid base for future growth.

India Forecasts 7.3% GDP Growth for 2023: India is projecting annual GDP growth of 7.3% for the fiscal year ending in March 2024, making it the highest among major global economies. This represents an improvement from the earlier forecast of 7%. Analysts suggest that sustained growth exceeding 7% for three consecutive years, despite a global economic slowdown, could strengthen Prime Minister Narendra Modi’s chances for a third term in upcoming national elections. S&P Global Ratings anticipates India will maintain its status as the fastest-growing major economy for the next three years, positioning it to become the world’s third-largest economy by 2030.

EMQQ Global Joins CNBC to Discuss India: Last month EMQQ Global CIO and Founder, Kevin Carver, joined CNBC’s Bob Pisani to discuss the opportunities within India’s tech and internet sectors. To see a preview of the segment, please click through the following link: https://www.cnbc.com/2023/12/23/india-is-a-perfect-emerging-market-for-investors-says-etf-expert.html

Sources available upon request.

Emerging Markets ETF Performance
As of 31.12.2023

EMQQ Emerging Markets Internet & Ecommerce UCITS ETF-0.61%5.06%6.17%4.32%4.32%-27.30%-51.28%-0.07%
EMQQ Emerging Markets Internet & Ecommerce Index-0.45%5.35%6.75%5.25%5.25%-26.08%-49.81%5.89%

India Internet ETF Performance
As of 31.12.2023

INQQ India Internet Emerging Markets & Ecommerce ESG-S UCITS ETF5.96%N/AN/A7.82%N/A7.82%
INQQ The India Internet & Ecommerce ESG Screened Index6.77%10.91%15.99%35.35%35.35%8.71%

Please note that all performance figures are showing net data. Source: Bloomberg / HANetf. Data as of 31/12/2023

Performance before inception is based on back tested data. Back testing is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such strategy would have been. Back tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Please remember that when you invest in ETFs and ETCs your capital is at risk.