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Street signs: EM earnings lag developed mkts, paper stocks may shine & more

According to Bloomberg analysis, of the 93 companies that have reported quarterly results until Friday, only one in every four in the MSCI EM index beat dollar-based forecasts

paper, industry, investment, JK Paper — Analysts are bullish on the growth outlook for the paper industry and expect stocks like JK Paper, Star Paper Mills, and Genus Paper & Boards to do well

Sundar Sethuraman Samie Modak

2 min read Last Updated : Apr 24 2022 | 10:38 PM IST

EM earnings lag developed markets

Developed markets (DMs) could outperform emerging markets (EMs) if financial performance is anything to go by. According to Bloomberg analysis, of the 93 companies that have reported quarterly results until Friday, only one in every four in the MSCI EM index beat dollar-based forecasts, compared with four out of five in the S&P 500 Index. Further, the weighted average earnings per share for firms in the MSCI EM Index came in at 6.5 per cent below estimates made 12 months ago. Experts say with the appetite for risk assets weakening, investors could prefer DMs over EMs in the near term.

Campus, Rainbow command GMP

Shares of Campus Activewear are commanding a premium of 10 per cent in the grey market, while that of Rainbow Children’s Medicare are changing hands at around 20 per cent premium. Shoe manufacturer Campus Activewear’s Rs 1,400-crore initial public offering (IPO) opens on Tuesday. The company has fixed a price band at Rs 278 to Rs 292 per share. Paediatric hospital chain Rainbow’s IPO opens on Wednesday. It has fixed a price band at Rs 516 to Rs 542 per share. Market players said grey market activity, as well as premiums, are muted on account of volatility in the secondary market.

Analysts positive on paper stocks

Analysts are bullish on the growth outlook for the paper industry and expect stocks like JK Paper, Star Paper Mills, and Genus Paper & Boards to do well. They say that the paper industry is witnessing a paradigm shift from the demand perspective, with demand for newsprint papers (NP) and printing writing papers (PWP) dwindling, given the rising impact of digitisation. However, on the other hand, the packaging paper (PP) segment is witnessing a rise, with growing demand for packaging from e-commerce, food and food products, fast-moving consumer goods, and the pharmaceutical sector. Rating agency ICRA expects the healthy demand for packaging papers to drive growth for paper manufacturing companies in the medium term.