Emerging Markets Stock Writeups

Given its exposure to the global PC and electronics market, we believe the company is now at threat from a curb in global IT spend, as corporate profitability dwindles and thus exited the position.

Delta Electronics is the world's largest supplier of power systems to the global IT industry. Rising demand for laptops in Asia, coupled with higher power requirements for the new Windows Vista operating system, are strong drivers of demand. In addition the company now manufactures the power systems for Microsoft's Xbox 360, Sony's PS3 and Nintendo's Wii - meaning that 95% of all new games consoles sold contain Delta components. Management have been very good at controlling costs and the high (6%+) and well covered dividend yield is an added boon.

Sedol	Type	Price	Date
6260734	Sell	TWD 109.245	27/12/2007
6260734	Buy	TWD 126.292	25/07/2007

The exposure to the global auto market makes the stock now highly susceptible to earnings downgrades. We are comfortable sellers.

Depo Auto Parts is the world's largest manufacturer of 'after market' (AM) auto lamps - i.e. lamps used as replacements in existing cars. AM lamps are generic lamps unlike OES (original equipment supplier) lamps, which are manufactured by the actual auto maker. In Asia, AM lamps have always had a major market share but the trend to use generic lamps rather than car-maker-supplied ones is now growing in both Europe and America, as happened with tyres twenty years ago. Depo is well situated to benefit from this.

Sedol	Type	Price	Date
6741411	Sell	TWD 118.982	03/12/2007
6741411	Buy	TWD 122.646	09/08/2007