From Gary Booysen on the top floor,

Dear Money Morning Reader,

“The spring has sprung, the grass is rizz, I wonder where them birdies is?” This was Ashburton MD, Peter Bourne’s reply when Leon Kok asked how the markets are fairing. There’s no question that the second and third quarters of 2009 have seen fantastic growth in markets across the globe. We’ve seen especially strong returns in the commodity driven shares of emerging markets. But, as fundamentals continue to disappoint, it’s all beginning to look a little overcooked.

But don’t despair. As Templeton Asset Management executive chairman, Mark Mobius says, “it’s usually possible to find at least a few bargains in most markets, all emerging market regions are looking exciting”. And he’s put his money where his mouth is. Templeton’s largest exposure is in the BRIC countries (Brazil, Russia, India and China) as well as South Africa. While we might be looking at a short-term correction, in the longer-term we can expect emerging markets to trounce developed economies six/love. Morgan Stanley’s Asia/Pacific analysts warn that while the world economy has recovered sharply, developed countries are still feeling the effects of unprecedented policy stimulus. They’ll still have to cope with subsequent withdrawal.

But, emerging markets have long-term potential. They’ve faired much better than first world countries, thanks to higher savings rates. “For example, Brazil is one of the world’s largest suppliers of iron ore, Russia the largest supplier of natural gas. Also, since emerging markets have the most people in the world the potential demand for commodities in those countries is also the greatest.”

A defensive Asian play for the long run

Asian stock markets have risen 30% this year, while small-caps are up more than 50%, surprising even the most optimistic pundits. “It’s glaringly obvious any well constructed long-term international portfolio needs to include emerging market Asian exposure”, says Jonathan Schiessl, an Asian Pacific specialist at Ashburton. China and India have the potential to outperform the markets in the long run. If you’re looking for aggressive returns, the Chindia Fund is for you.

It divides its exposure roughly in half between China and India. The Chinese currency exposure is mainly in Hong Kong. It launched two years ago and has racked up an impressive gain of 40% this year so far… although it’s still marginally down over 12 months.

Both China and India are countries set to boom in the longer term. Economists laughed when President Hu Jintao’s predicted 8% growth for the country. But he’s delivered it. As for India, it underperformed other Asian markets over Christmas, but come March this year, it grew legs and began to run. Even that’s an understatement. It rose 40% in the run up to the election, but made truly amazing gains the day after the election, when “the Bombay Sensex posted a 17% gain in 60 seconds”.

Turning to the markets...

The JSE all share index advanced 1.09% yesterday. The gold mining index gained 1.59%. Resources added 1.4%. Banks and financials grew 0.47% and 0.95% respectively. Industrials bounced 0.8% and the platinum mining index jumped 1.08%.

London's FTSE100 climbed 0.69%. The Dow Jones collected 0.43% and the Nasdaq closed up 0.74%.

Tokyo's Nikkei closed down 0.68%. Hong Kong's Hang Seng lost 0.67%.

Brent crude is currently trading at $78.16 per barrel.

Spot gold's trading at $1,122.45 and platinum was last quoted at $1,380.00.

And here's how the rand is performing against the major currencies:
R/$7.40
R/₤12.27
R/€11.10