October 17, 2023 | News
Around the World With Our Analysts
William Blair News
General William Blair News
Key Takeaways
- India’s economy is becoming more digital.
- There are value opportunities in the metals and mining sector.
- Egypt’s plans for privatization could impact its external financing needs.
- Consumers are still spending, but budget priorities are beginning to shift.
As part of our commitment to staying informed, research trips are an integral component of our active, fundamental investment process.
Our investment teams are dedicated to traveling around the globe to conduct comprehensive research and gain a deeper understanding of potential investments. Where others talk only to CEOs, we also talk to the supply chain. Where others ask whether a market, industry, or company is attractive, we also dive deep into relative valuation. And the more we ask, the more you can trust the answers.
Below, we highlight some of the research trips our teams have taken.
Digitalization Creates Opportunity in India
The adoption of digital tools and infrastructure among consumers and businesses is creating unique investment-related opportunities in India. After traveling to Mumbai, Jay Kannan, CFA, a research analyst on our global equity team, explains why.
“We are particularly excited about the digitalization of India’s economy, and this comes with the formalization of the economy where both consumers as well as small and medium businesses and merchants are adopting digital tools and infrastructure to conduct their business,” he says.
“A lot of this digitalization is enabled by what is called ‘The India Tech Stack.’ Think of this as a set of public goods and tools, all digital, which are aimed at unlocking the economic primitives of identity, data, and payments, but at a population scale,” says Kannan. “It’s a unified software platform, with many layers, one that is the basic building blocks for digital infrastructure and digitization.”
Metals and Mining Sector Could See Better Economics
Greg Czarnecki, portfolio specialist and research coordinator, and other members of our U.S. value equity team attended the BMO Metals and Mining Conference in Hollywood, Florida, to assess opportunities in the sector.
The metals and mining sector is expected to experience structural supply and demand tightness that could support better economics. The team also found that the transition to electric vehicles will require huge amounts of minerals relative to current production levels, which should be supportive for the mining sector in terms of increased demand.
In addition, a renewed focus on energy and supply chain security will likely drive investment in infrastructure and industrial production, which is set to be enhanced by large fiscal stimulus spending.
Egypt’s Plans for Privatization Could Make Debt More Attractive
Egypt has already identified many companies to which it can sell state-owned enterprises. Yvette Babb, a portfolio manager on our emerging markets debt team, examines if these plans could impact Egypt’s ability to meet external financing needs.
“I just returned from Egypt, where we spent several days in Cairo discussing the government’s privatization plans as well as the border reform package that is currently in place. These reforms are currently being implemented with the support of the International Monetary Fund (IMF),” she says.
“But our discussions in Cairo focused predominantly on the privatization plans of its government. They’re looking to sell as state-owned enterprises to strategic partners, and they’ve identified 32 companies in which they are seeking to sell, or at least stakes thereof,” continues Babb. “This discussion was particularly relevant to the way in which we view the ability of Egypt to meet its external financing needs over the short to medium term.”
On the Ground at the Jeffries Consumer Conference
Brad Ernst, CFA, a research analyst on our U.S. growth and core equity team, attended the Jeffries Consumer Conference in Nantucket, Massachusetts.
After hearing from almost 50 different companies, he found that consumers are still spending, but budget priorities are beginning to shift. Entertainment and travel are still a priority for many consumers who value experiences, while spending on essentials—food, beverage, pet care, and beauty—remains consistent, and will likely be an area of defensive growth in 2023 and 2024.
However, discretionary goods spending continues to be deemphasized after a pull-forward of demand during the COVID-19 pandemic.
In Summary
For our investment teams, visiting companies, attending conferences, and traveling to new markets provides invaluable insights.
Not only are research trips an important part of our teams’ investment processes, they also help us seek out potential opportunities for our clients.