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Weekend Reading /

Global

How to build a tech business that will thrive in an inflationary downturn

Paul Domjan @ Tellimer Research

21 May 2022

/article/how-em-retail-financial-services-are-changing

Strategy Note / Global

Strategy Note /

Global

This morning's briefing

China has cut its 5-year loan rate from 4.6% to 4.45%, a 15bps cut compared with consensus expectations of 5-10bps. This is consistent with Hasnain Malik's view that China has capacity for policy stimulus – a rare feature in global EM – and that the market may be more reactive to positive news on stimulus than further news on well understood negative factors like property slowdown, tech crackdown, population decline, and zero-Covid lockdowns. Get the full story →

Grab's results show ASEAN super app has been unjustly punished in the tech collapse. Grab Holdings has reported an outstanding set of Q1 22 results, with revenue of US$228mn exceeding market expectations by 61%. The take rate (the fee charged by the platform on a transaction) has improved yoy in all three segments – delivery, mobility and financial services. We are very positive about Grab as a marquee EM tech play and it is well positioned to emerge as ASEAN’s premier super app. Get the full story →

Are we heading for another left turn in Latam? Colombia's presidential election on 29 May looks set to be a two-horse race between leftist Gustavo Petro and centre-right Federico Gutierrez, as widely expected after the primary vote in March. Petro is well ahead in the polls and remains favourite to win, and is increasing his lead over Gutierrez, his main rival. The other four candidates trail a long way behind. That said, Petro seems unlikely to achieve the 50% needed for an outright victory, which would mean a run-off vote on 19 June against the second-placed candidate (most likely Gutierrez). At that point, things may not be so straightforward. Whoever wins will take over at a difficult time, as the deterioration in the external environment linked to Russia's war in Ukraine and higher global interest rates hit the economy, while a divided Congress may hamper reform efforts. Get the full story →

Nigeria is the world's best-performing equity market ytd. The NGX all share index has returned 26% year-to-date in US$ terms, compared with the MSCI Frontier return of -17%, MSCI Emerging Markets of -16% and MSCI World of -15%. The rally bucks the trend in global markets and also defies the odds, given the country's persistently weak macroeconomic fundamentals. Nigeria is the best-performing equity market in the world so far this year. We know that this raises many questions – especially as the Nigerian capital market remains a no-go area for foreign investors – so we dissect the facts behind the figures. Click here for the full report. Get the full story →

Ghana is determined to navigate its debt crisis without the IMF. Ghana's finance minister has announced that the federal government is maintaining its stance and is unwilling to take on an IMF loan to manage its debt. To address the debt challenges the country has found itself in, the central bank and fiscal authorities have adopted various measures such as introducing an E-Levy, increasing the policy rate and reducing the salaries of government officials. Will the steps taken by the government be enough to avert a debt crisis, or will Ghana eventually go back to the IMF? Read more in our latest West Africa in Focus report. Get the full story →

As Tesla is dropped from the S&P 500 ESG index, Elon Musk says ESG is a scam... is he right? Electric vehicle pioneer Tesla has been dropped from the S&P 500 ESG Index. One of the reasons given was the 'lack of a low-carbon strategy'. The S&P 500 ESG Index uses environmental, social and governance data to rank and effectively recommend companies to investors. The likes of Exxon Mobil and Amazon are part of the index. Elon Musk tweeted in response that 'ESG is a scam'. He has been a long-time critic of the metrics, tweeting in April that 'corporate ESG is the devil incarnate'. And if you think corporate ESG is a minefield, wait till you take a look at the country level. Tellimer's Hasnain Malik has written many times about the ESG blind spot of badly behaved countries, both in the emerging and developed markets — most institutional investors do not even bother screening countries for ethical behaviour. We have tried to create a solution for this. Our recently launched Tellimer EM Country Index includes an ESG factor, of which World Bank Governance Indicators are one component, and has customisable weights which can vary the importance of ESG overall, or governance specifically, in the overall score. Get the full story →

Latest

Global

Weekend Reading /

Global

How to build a tech business that will thrive in an inflationary downturn

The global economy appears to be on the brink of another recession for the second time in as many years. In many cases, this is justified on the basis that the product will achieve network effects that will allow the company to increase the price of ...

Tellimer Research @ Tellimer Research

21 May 2022

Macro Analysis /

Global

Are The 2s Already Rejecting Rate Hikes?

There was still another scramble for collateral yet again this morning. These aren’t just historical oddities to marvel over and wow at for some academic sake. Contraction of the collateral multiplier, more than what’s already been indicated thus far...

Alhambra Investments @ Alhambra Investments

20 May 2022

Macro Analysis /

Global

Mexico: Ahead of the Curve

Banxico’s Minutes (May 12th). The sequential print would be unchanged at +0.9% q/q, corroborating a recovery of the economy at the turn of the year after weakness in 2H21. Shipments abroad are estimated at +48.4% y/y, with the price of the Mexican oi...

Banorte @ Banorte

20 May 2022

Macro Analysis /

China

Xi’s National Security ‘Stimulus’ Reaches The People’s Bank of China

Xi Jinping’s true aim, in my view, isn’t to severely limit the spread of the coronavirus, seeking its ultimate eradication, rather to curtail dissent particularly any views contrary to his handling of China’s increasingly desperate economy. Well, yes...

Alhambra Investments @ Alhambra Investments

20 May 2022

Strategy Note /

Global

Recession: To Be Or Not To Be

From quoting Emerson in last week’s title to Shakespeare today – down now 7 weeks in a row, blood in the streets, it’s that kind of market. In our topsy turvy world it makes sense that the speed of this redirection should be very fast. From transitor...

TPW Advisory @ TPW Advisory

20 May 2022

Macro Analysis /

Global

Managing Concentration in Growth Stocks

Bob Gruendyke, senior portfolio manager for Allspring’s Dynamic Growth Equity team, analyzes the current market environment for growth stocks and the impact of extremely high concentration in just a handful of mega-cap growth stocks. Joining me today...

Wells Fargo @ Wells Fargo

20 May 2022

Macro Analysis /

Global

Russia-Ukraine Special Edition: The Week That Was … the Week to Come

Brian Jacobsen provides perspective on the Russia-Ukraine war and other key topics of the current week—plus, his thoughts about what the week ahead may hold. If supply chains improve (which they very well might now that China announced the shutdowns ...

Wells Fargo @ Wells Fargo

20 May 2022

Macro Analysis /

Global

We’re going to need a bigger room: Growing the 17 Rooms community for SDG action

Growing the 17 Rooms community for SDG actionZia Khan and John W. Everyone who cares about the Sustainable Development Goals (SDGs) feels concern. What makes 17 Rooms unique? Room 1 saw leaders from national governments, multilateral agencies, philan...

Brookings @ Brookings

20 May 2022

Macro Analysis /

Global

Ramping up investments in a better future: The need for a refreshed G-7 approach to realize the opportunity of global sustainable development

The world’s systems of international cooperation are facing three great conflicts at once: violent conflict in Ukraine, political conflict between great powers, and a fissure between the near-term priorities of the world’s rich and powerful societies...

Brookings @ Brookings

20 May 2022

Strategy Note /

Global

How EM retail financial services are changing and the key growth drivers

In a forthcoming report, the last of this series, we will consider how the Covid-19 pandemic has affected consumers' expectations for the industry. Financial inclusion is likely to improve most in business/property loans. Below, we dig deeper into ho...

Tellimer Research @ Tellimer Research

20 May 2022

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