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News
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Financial News
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Emerging markets have been one of the worst-performing asset classes in 2011, weighed by heavy losses in markets such as Brazil and India. Some of the issues that affected emerging markets earlier this year include rising inflation and an anticipated slowdown in growth due to local tightening monetary policies and weaker export demand. And when global market volatility shot up in August and September, emerging markets dropped far lower than did U.S. equities, though not to the degree observed in late 2008. Investors in emerging markets were also negatively affected when strong risk aversion resulted in a rising U.S. dollar--in September, the Brazilian real fell about 16% and the South Korean won fell 9% against the U.S. dollar. Will emerging-markets equities have a better year in 2012?Valuations in emerging markets (as measured by the MSCI Emerging Markets Index) are near 10-year lows, excluding 2008, which reflects slowing GDP growth rates and manufacturing activity. [Read the full article]
Texas Instruments' (TXN) recent purchase of National Semiconductor surprised many, but the combination shows promise. Now that it's under TI's wing, National's product portfolio should have plenty of opportunities to regain lost market share. National's business will suddenly benefit from a salesforce that is 10 times larger and TI's long-standing customer relationships, both of which bode well for future growth. Also, we have become less fearful about the integration risks surrounding this massive acquisition.National's analog chip business has grown at a below-average industry rate in recent years, which we think made the firm vulnerable to an acquisition (and made the 78% premium that TI paid so eye-popping). National lost share in the handset market and drove away some of its key customers by raising prices, refusing to budge from these prices, and walking away from these customers when they declined to accept National's terms. [Read the full article]
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