Fundamental highlights in FM and small EM:
- Euro-linked FX rate weakness: eg Iceland, Poland, Romania, Turkey
- Oil price drag: Colombia, GCC, Nigeria, Russia, (Kazakhstan an exception)
- China-linked direct disruption: Vietnam, Thailand
- Debt restructuring uncertainty: Argentina, Lebanon
- Poor policy: Bangladesh rate cap, Philippines contract revisions
- Interest rate cut expectations pushed out: Egypt, Pakistan
- Locusts: Kenya (as well as Ethiopia, Tanzania, Uganda)
- Government stress: Malaysia coalition ends, Iraq cabinet approval snags
- Foreign friction: Philippines (US), Qatar (Saudi), Turkey (Russia, EU)
- Trade friction: India (US), Nigeria (Ecowas), Kenya (AfCFTA)
- Violence: India (Hindutvadis), Ethiopia (ethnic), Algeria-Mozambique (Islamist)
- Protests (anti-government): Dominican Republic, Haiti, Lebanon, Kazakhstan
- Elections: Iran (pre-selected hardliners), Azerbaijan (boycott), Togo (disputed)
Underperformers in FM and small EM (all down over 7%):
- Commodities: copper (Chile, Peru), oil (Nigeria, Saudi), palm (Indonesia)
- Euro depreciation: Czech, Poland
- Tourism: Dubai, Thailand
- High inflation (rate cuts pushed out): Pakistan
Outperformers (all markets with very low trading liquidity):
- Georgia: run up prior to strong results from Bank of Georgia
- Kazakhstan: run up prior to strong results from Halyk Bank
- Oman: hope for post-succession reform
In this report, there is a hyperlinked catalogue of our strategy and macro notes published this month (p4), updated charts on performance, liquidity, valuation (p5), a screen for FX rate vulnerability (p9) and country snapshots of market, macro, political and social indicators (p11).
Chart: Equity market performance, month-to-date (US$ total return)
Source: Bloomberg (28 February). * local indices, otherwise MSCI.