The Changing Media Landscape...The Buzz About Bots...Rebuilding Exposure to EMs

Insights on markets, industries and the global economy [Goldman Sachs] [BRIEFINGS] August 29, 2016 The Changing Media Landscape: Disrupting Distribution Who's winning the content wars? Right now, it might be technology companies, which have used their unprecedented ability to aggregate large audiences to challenge the traditional media industry on its home turf. Legacy players have seen their profit pools squeezed -- and their investors unsettled -- by companies that are providing easier access to content. Michael Ronen and Dave Dase of our Investment Banking Division consider the next round in this budding rivalry on the latest episode of our podcast, Exchanges at Goldman Sachs. [Listen to podcast] [Subscribe on iTunes] SHARE: [twitter] [facebook] [LinkedIn] [email] Buzzword of the Week: Bots A bot is software you can talk to. It's a concept generating big-time buzz among developers, tech companies and enterprises, with the potential to change the way we do everything from ordering a pizza to shopping online to scheduling a doctor's appointment. While the idea itself is not new, supporting technologies have made great strides in recent years. As Jesse Hulsing of Goldman Sachs Research explains, machine learning has developed rapidly, coinciding with the rise of a number of messaging platforms. For more on the next big things in business, check out our ongoing 'Buzzwords' series on [GS.com]. [Watch video] SHARE: [twitter] [facebook] [LinkedIn] [email] Briefly... on Rebuilding Exposure to Emerging Markets Despite concerns over a slowdown in global growth, investor flows into emerging market (EM) assets are continuing to hit new highs, marking a departure from the disappointment over EMs over the past several years. Prashant Khemka, chief investment officer of Global Emerging Markets Equities at Goldman Sachs Asset Management, explains the turnaround, challenges and opportunities in EMs today. What's driving the flows into EM assets? Prashant Khemka: Much of the negative sentiment that had weighed on EMs last year -- primarily due to falling commodity prices and the prospect of interest-rate hikes in the US -- has largely stabilized and improved after the market selloff at the start of the year. Since then, EM equities have actually outperformed their developed market (DM) counterparts. We're getting a record number of queries from investors looking to rebuild their exposure to EMs. The positive flows into EMs are likely to continue at a varying pace if EMs stay stable or continue to outperform. But since investor sentiment is largely driven by the markets, if the market falls back investors could start getting concerned about some risk or another. Which EMs are looking attractive? PK: We think India has one of the best macroeconomic backdrops of any major economy. As nearly 80 percent of India's net oil requirements are imported, India has been a beneficiary of the drop in commodity prices. India is also less linked to the Chinese economy so the country hasn't suffered as much as other emerging markets. The pro-business and pro-reform government recently passed the Goods and Services Tax (GST) bill, which is a unified sales tax bill that is expected to ease the costs of doing business. Meanwhile, the country is likely to benefit from favorable demographics and a less severe monsoon season, which could lead to accelerated corporate earnings growth. What are some of the most challenging EM countries to invest in? PK: China is particularly challenging given that state-owned enterprises (SOEs) make up roughly two-thirds of the market. These SOEs are effectively an extension of the state and can often serve government or public interests, rather than those of minority shareholders. The misalignment of interests can undermine corporate governance, resulting in the misallocation of capital to the detriment of minority shareholder interests. Books for Back to School and Back to Work For the next few weeks, we're sharing book recommendations from some of our senior leaders in offices around the globe. As you might expect, selections run the gamut from the serious to the Seinfeld. The first picks are live now on [GS.com]. [Read more] SHARE: [twitter] [facebook] [LinkedIn] [email] Goldman Sachs Media Highlights Responsible Investor - August 22 [Goldman Sachs on the low carbon technologies that could save 5 gigatonnes of emissions by 2025] Financial News - August 26 [Michael Sherwood shares advice with Goldman Sachs interns] [Subscribe] The data provided in this newsletter is for information purposes only and should not be construed as investment or tax advice nor as a recommendation to buy, sell, or hold any particular security. Goldman Sachs believes the data in this newsletter is accurate, but does not verify its accuracy independently and does not warrant or guarantee that it is accurate or complete. Goldman Sachs has no obligation to provide any updates or changes to the data. No investment decisions should be made using this data. 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