The best 'out of balance' emerging market opportunities

Emerging Markets

Erik Landgraff, portfolio manager on the SKAGEN Kon-Tiki fund, explains the best way to take advantage of forced sellers and situations where supply and demand for shares are out of balance

It is common knowledge a company's share price and market value are determined by the supply and demand for its shares. However, stock market participants do not just take a company's economic development into account when choosing stocks. Psychology and ownership constraints on institutional investors can also play an important role. Take ‘spin-offs' for example, whereby part of a company is separated to form a new listed company. This could be due to the company operating outside of the group's core business; other investments may be deemed to be more attractive; or an overextended fin...