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Emerging Markets Get a Hard Lesson in Tech Hype

AI boom thrusts emerging market stocks back into the limelight TSMC, Samsung and SK Hynix have all soared in value Recent volatility has been too much to handle for some investors LONDON, Aug 6 Reuters A few years ago, when almost every bank research note seemed to focus on soaring U.S. tech stocks, veteran emerging market fund manager Carlos von Hardenberg was struggling to get investors interested in anything else. Not any more. Now the AI boom has lit a rocket under the South Korean and Taiwanese firms that dominate hightech memory chip making and, as of this year, the global EM stock indexes that have emerged from Wall Street39;s shadow. Investors would say they were only interested in the U.S. and Magnificent Seven, and this is all you need because they were doing so well, said Hardenberg, who cofounded MCP Emerging Markets in 2018 alongside pioneering EM bull Mark Mobius. Now this year, everything turned the other way around. But riding the AI boom has come at a cost. Since late June extreme volatility has taken hold, almost as if investors suddenly got altitude sickness. South Korea39;s KOSPI index, which had doubled in value on the back of even bigger gains for Samsung Electronics and SK Hynix, ripped back 40 in just six weeks on a mix of concerns and curbs. Taiwan39;s TSMC, by far the biggest company in the EM stock universe, fell almost 14. It sent volatility in South Korea skyrocketing and even for MSCI39;s 1.8 trillion EM benchmark, which contains...

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