We have a Buy recommendation on GHANA '32s.
While mainly a value play, given weak fundamentals, our positive view has been reinforced by the government’s surprise announcement on 1 July to seek an IMF programme – much earlier than we had expected.
This may help to reinforce policy discipline and stave off default, which investors had increasingly come round to thinking was all but inevitable without Fund support.
Chile has a c28% output market share of copper. The sharp drop in the copper commodity price – down over 30% since early May – and the valuation de-rating of the Chile equity market — now on a 30-40% discount to the five-year median forward price/book multiple – may present an opportunity for those with a long-term perspective.
It remains one of the largest liquid country plays on short-term China stimulus – outside China itself, of course – and the long-term renewable energy transition – which may accelerate as a result of persistently high oil prices and the European shift away from Russian gas.
Despite an elevated risk of distress, we think Pakistan’s eurobonds are compelling from a value perspective, especially given the ongoing price drop and recent steps towards restoring its IMF programme, which the market has not priced in at all.
We affirm our Buy recommendation on the PKSTAN 7 ⅜ 04/08/2031s.
We reiterate our Buy recommendation on Indonesian e-commerce firm Bukalapak.
Bukalapak stands out in the world of emerging markets e-commerce (sometimes known as the 'Baby Amazons') primarily for its robust cash metrics. Nirgunan Tiruchelvam doesn't think the market fully appreciates the firm's relatively low cash burn rate or its lengthy cash runway.
It is also comparatively cheap, at 3x p/sales, set to gain market share and is on a path to EBITDA positivity.
Report: Bukalapak – Bargain basement
Recent high inflation prints in North America and Europe have shocked many observers, leading some commentators to revise upwards their central bank rate hike forecasts. But single digit inflation is already a distant memory in many emerging markets, with the strong US dollar exacerbating existing supply chain and input cost issues.
According to the international accounting standards board (IASB), 10 countries should have adopted 'hyperinflation accounting' in their 2021 financial statements, and more may soon need to follow.