Emerging Markets

A Preview of the Emerging Markets

EM assets are starting the week off on a firmer footing.  Sentiment has been helped by optimism over a Greek compromise, as well as perceptions of a less hawkish Fed.  Both of these factors could turn negative very quickly.  Besides the global backdrop, idiosyncratic risks within EM argue for continued differentiation by investors.  We remain most optimistic on Asia as a region, while Latin America and EMEA remain most vulnerable in the current environment.

Labor Migration is but One Hurdle for African Sport

The Egyptian government recently took steps that have led to labeling football fans as terrorists. The arrest and detention of alleged members of the Ultras White Knights (UWK), a highly politicised supporters group associated with Cairo club Al Zamalek SC, has marked renewed attempts by the government to curb the influence of some fans on Egyptian society and politics.

An Emerging Markets Status Update

1) The EU sanctions on Russia will be extended for another six months, 2) Lawmakers in Hong Kong voted down a Beijing-backed plan to change the political system, 3) Argentine presidential candidate Scioli of the ruling alliance has picked Zannini as his Vice Presidential candidate, 4) Malaysia‘s opposition alliance has collapsed, 5) Brazil’s corruption investigation is heating up again

A Preview of the Emerging Markets

In a familiar refrain, EM starts this week on a soft note.  Most EM currencies are softer against the dollar.  MSCI EM is having trouble gaining traction, and appears headed for the March lows.  EM bond yields are rising in tandem with DM bond yields even though we have only seen an increase in expectations for tightening in Brazil.

Strong Dollar Poses Economic Dilemma in Emerging Markets

When the dollar starts to gain ground, it comes as a double-edged sword for economies in the emerging markets. Generally a strong dollar means more expensive imports for the emerging markets especially from the US. On the other hand, this means that exports from the emerging markets become cheaper in the US and other countries which prefer making their payments in USD.

But as it is always in the dynamic economic environment, there are numerous factors that always come into play and complicate the whole smooth picture.

An Emerging Markets Status Update

1. Turkey looks to have a coalition government for the first time since 2002.  2. Brazil’s central bank is reducing its rollover of FX swaps.  3. Hungary recorded the first positive y/y CPI reading in 8 months.  4. MSCI deferred its decision on including China A-shares in its indices.  5. Mexican President Pena Nieto would not commit to reappointing central bank Governor Carstens.  6. Poland will see a cabinet reshuffle as three ministers and the parliamentary speaker resigned.  7.

Snapshot into Private Equity investments in Africa

Going by the growing investment opportunities in emerging markets, their popularity with investors from the developed economies is not dying down any time soon. Most of the investors are looking for high returns that their mature markets cannot offer, and hence finding prime investments in the emerging markets.

Are Remittances Undermining the Democratization of Africa?

Much has been written about the impact of remittance inflows on economic and social outcomes, including economic development, inequality, and poverty. However, little is known about the effect they have on the attitude of remittance recipients to democracy in sub-Saharan Africa.

A Preview of the Emerging Markets

EM has started the week on a weak footing.  The results of the Turkish elections knocked the lira down over 3% and the BIST down nearly 6%.  More broadly speaking, the uncertainty surrounding the Greek situation along with the risk of another leg higher for yields in Germany and the US will keep EM assets on the defensive.  On Wednesday, the Brazilian lower house votes on one of the elements of the fiscal adjustment, and any sign of backtracking there could hurt the government’s credibility.