Top research

Macro Analysis /

Nigeria

Nigeria: CBN's elevated funding to the government increases risk to the naira

Janet Ogunkoya @ Tellimer Research

12 August 2022

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Macro Analysis / Kenya

Macro Analysis /

Kenya

Banxico – Monetary stance reaches restrictive territory, but hikes will continue

Alejandro Padilla Santana

11 August 2022

This evening's briefing

China-Taiwan-US tension means the chips are down for EM's largest stock. Taiwan Semiconductor Manufacturing Company (TSMC) has ridden the tech wave, buoyed by the increasing demand for chips in everything from vehicles to smart appliances. It has become the largest single stock in the MSCI EM index, with a 6.3% weight. Taiwan overall now has a 14.2% weight, second only to China-HK (31.7%). The spike in China-Taiwan-US friction compounds existing global growth concerns. However, with forward 12-month PE of 13.8x, a c25% discount to the 5-year median, a good deal of risk is perhaps already reflected. Get the full story →

Abortion rights in Emerging Markets and what it means for ESG. The overturning Roe vs Wade in the US in June, and this week's news that Meta handed over data which inadvertently led to a woman being charged with illegal abortion, again raises questions over whether emerging markets deserve their tag of being generally less ethical (ESG-friendly) than developed markets. Data on abortion rights and abortion incidence shows that India and Taiwan have among the most liberal abortion laws in emerging markets, with the Middle East region generally most restrictive, and with wide variation in Africa (eg liberal South Africa versus restrictive Egypt), Asia (eg India versus the Philippines), and LatAm (Argentina versus Jamaica). The incidence of abortion is relatively high in Kenya in Africa, Vietnam in Asia, Georgia in Europe, and Peru in LatAm. Data on which to base estimates are insufficient in the Middle East and North Africa. Get the full story →

Sri Lanka banks face severe effects of any domestic debt restructuring. President Ranil Wickremesinghe’s recent comments relating to the potential inclusion of domestic sovereign debt within any financial restructuring programme carry significant implications for investors. In his new report, Tellimer's Rahul Shah focuses on the impact on the commercial banks, but insurance firms, asset managers, large corporates and wealthy households could also be directly affected. Indeed, non-banks hold around half of the stock of domestic debt. The knock-on consequences could be severe. For example, the Employee’s Provident Fund is the single largest holder of domestic sovereign debt, with over a quarter of total stock. Sri Lankan workers and pensioners would therefore directly suffer a loss in value arising from any domestic debt restructuring. Get the full story →

Water remains an acute long-term vulnerability for Egypt. One of the high-profile current examples of regional climate conflict is over water flow in the Nile River between Ethiopia, which wants to use water for hydroelectric generation upstream, and Sudan and Egypt, which rely on downstream flow. Egypt is increasingly water-stressed (the amount withdrawn from freshwater resources annually). And this is likely to worsen the more that Ethiopia fills up the Grand Ethiopian Renaissance Dam (GERD). The issue has already caused considerable friction between Egypt and Ethiopia, but the goal posts for negotiation are being moved as the GERD fills up. For all of Egypt's geopolitical importance to the US, Israel and the GCC, it has not leveraged this into a decisive change in relations with Ethiopia. The silver lining for the Egyptian military is that nothing builds popular support more than a genuine, external national security threat, which is, long term, what the loss of control of Nile water flow amounts to. Get the full story →

Five key trends in the BNPL sector. The Buy-Now-Pay-Later industry is evolving and the current tough market conditions are driving five trends in the sector: 1) Regulatory tightening; 2) Enhanced risk management; 3) Intensifying competition. 4) BNPL product portfolio to increase; and 5) Consolidation and M&A activity to pick up. Rohit Kumar explores this in detail in his report. Get the full story →

We've updated our alternative dataset showing currencies at risk of devaluation. In March we created a “parallel premium proxy” using quotes on crypto trading platform Binance P2P for 61 emerging market currencies against Tether (USTD), a cryptocurrency that is pegged to the US$. This provides a rough approximation of where a given currency may trade against the US$ in the parallel market, if such a market exists (eg. Nigeria). A significant parallel market premium can be a clear, if imprecise, indicator that a currency is overvalued and/or suffering from FX shortages in the official market (see here for a full explanation of the methodology). Given tightening global financial conditions and an associated rise in external imbalances in many emerging and frontier markets in recent months, we have updated our dataset. Click below for the results. Get the full story →

Latest

Global

Macro Analysis /

Global

Bystanders No More

&nbsp &nbsp Italians were outraged when no one intervened to help a Nigerian street vendor as he was attacked and killed last month by a man using his bare hands in the middle of the day on a busy street in the town of Ci...

Project Syndicate @ Project Syndicate

13 August 2022

Weekend Reading /

Global

Investing is suffering from growing information asymmetry

Investment professionals and investors are increasingly separated from expertise. Trading in some investments has been democratised. But access to the information to make trading decisions has not. Can the creator economy ride to the rescue?

Tellimer Research @ Tellimer Research

13 August 2022

Macro Analysis /

Global

Week Ahead: More Evidence US Consumption and Output are Expanding, and RBNZ and Norges Bank to Hike

After two-quarters of contraction, many still do not accept that the US economy is in a recession.  Federal Reserve officials have pushed against it, as has Treasury Secretary Yellen. The nearly 530k rise in July nonfarm rolls, more than...

Marc to Market @ Marc to Market

13 August 2022

Macro Analysis /

Global

Mexico: Ahead of Curve

INEGI’s Timely Indicator of Economic Activity to show an upward revision for June, with July more positive. June’s retail sales could post a 0.2% m/m contraction, with some headwinds in the period impacting dynamism. Light week in terms of economic r...

Banorte @ Banorte

12 August 2022

Macro Analysis /

Global

Bolstering building blocks and silicon shields

Despite the United States’ passage of the Chips and Science Act to bolster competitiveness, US chipmakers still face a long road ahead in their aim to overtake rivals in Asia. Shipping activity passing through the waters near Taiwan’s southern port o...

Franklin Templeton @ Franklin Templeton

12 August 2022

Macro Analysis /

Global

Can open-source technologies support open societies?

Commit to safeguards and inclusion. There is a need for donors to counter the narrative that the public sector cannot be trusted to design and govern technical solutions in the interest of people. The public sector has proven examples of developing a...

Brookings @ Brookings

12 August 2022

Macro Analysis /

Global

Emerging Markets: Sailing Out of the Storm

This episode’s focus is on the current investment climate for emerging markets and why now might be a good time to reconsider the asset class. &nbsp &nbsp https://media.allspringglobal.com/audio/ottd/ottd_20220810.mp3 &nbsp   &nbsp ...

Wells Fargo @ Wells Fargo

12 August 2022

Macro Analysis /

Global

The economic significance of intra-African trade—getting the narrative right

By Andrew Mold Abstract &nbsp Hardly a presentation is made (or a paper written) on the topic of the African Continental Free Trade Area (AfCFTA) without starting with a lamentation about how intra-African trade is “abysmally low” comp...

Brookings @ Brookings

12 August 2022

Strategy Note /

Global

Temperature Check

Returning to the NYC blast furnace from the cool Catskills air, my temperature gauge, much like investors', is messed up. One way to gauge the market temperature is to look at the technicals - all of our TPW 20 positions are above the 50dmav. Updatin...

TPW Advisory @ TPW Advisory

12 August 2022

Equity Analysis /

Pakistan

Pakistan Autos: Highest sales slump since May 2020; FY 23 a challenging year

Automobile industry witnessed the sharpest decline in sales since Jun’20, owed to production constraints. INDU witnessed the largest decline in sales (65% YoY); AGTL continued to shine in the tractor space. Going forward, FY23 will be a challenging....