World Country Valuation

Even as world equity has rebounded from its March’s low, many stocks are still cheap relative to its historical valuation. Book value multiple remains depressed as earnings multiple stayed at its historical average, as profitability declined significantly this year for majority of the market. Our three main top pick markets, Mexico, Turkey and Chile, remainContinue reading “World Country Valuation”

Revisiting Our View on Brazil, Mexico, Turkey, and South Africa

Download PDF: Brazil: Negative Outlook Valuation is dearer than the average EM countries, although the rout has knocked out excessive valuation for Brazilian stocks. Book value multiple has indeed declined from 2.3x to 1.8x currently, but weak profitability due to depressed commodity prices has translated into an expensive forward earnings multiple at 14x, which isContinue reading “Revisiting Our View on Brazil, Mexico, Turkey, and South Africa”

Indonesia: An In-Depth Analysis

Download PDF: Preparing the Groundwork for A Takeoff Indonesia’s macro profile has significantly improved in the past decade despite still running fiscal and current account deficit. First, government spending has been reoriented toward building human and capital stock, supported by the country’s high savings rate, while public debt level remained among the lowest across EMContinue reading “Indonesia: An In-Depth Analysis”

Russia: Do You Hear the People Sing?

In the past few weeks, Russians have been venting their rage in both the street and online due to the increasing hardship resulting from various lockdown measures. But even before the virus struck, many have been protesting against the government, including against the planned constitutional reform that would extend President Putin term limit until 2036.Continue reading “Russia: Do You Hear the People Sing?”

LATAM Countries Revisited

Download PDF: LATAM Countries Revisited PC Argentina The Fernandez government is taking a hard stance on the debt renegotiation, postponing interest payment until 2023 and forcing a 5-12% haircut on the bond principal value. The “Globales” bond’s principal under restructuring amounts to 6.7% GDP and its annual interest expense close to 0.4% GDP. The keyContinue reading “LATAM Countries Revisited”

Emerging Market Equities: Betting on the Underdog

Download PDF: Monthly_202005_Betting On the Underdog Reflection on the Past Decade  The financial market is characterized by the ebb and flow “leader” and “laggard” over time. The last decade was marked by the strong dollar cycle and boom in fast-growing technology stocks. In hindsight, the weak post-crisis growth outside U.S. and Fed’s tighter monetary policyContinue reading “Emerging Market Equities: Betting on the Underdog”

Assessing the Risk of Banking Crisis in Turkey, Russia, Mexico and Brazil

Download PDF: Assessing EM Risk Apr20 The Framework: The starting point is to analyze on a big picture scale, which EM countries will potentially undergo a banking crisis arising from the combination of unsustainable hard-currency debt and FX collapse in the current rout. Indonesia, South Africa, Chile, Mexico and Turkey are particularly vulnerable due toContinue reading “Assessing the Risk of Banking Crisis in Turkey, Russia, Mexico and Brazil”

Research Note: A Look at Emerging Market Financials

Download PDF: A Look at EM Financials K List of Interesting EM Banks: EM Banks EM banks are relatively more interesting compared to its DM counterpart, especially European and Japanese banks, that have become a collateral damage from negative interest rate policy. EM firms are heavily underleveraged compared to its DM counterpart. Banks in Indonesia,Continue reading “Research Note: A Look at Emerging Market Financials”

Visegrad Countries: Bright Spot Amid Slowing European Growth

Download PDF: Visegrad Country Research Visegrad countries growth post-Soviet collapse has been impressive, averaging 4% for Poland and 2.5% for Hungary and Czech Republic, compared to 1.5% for Germany. Exports as % of each country GDP has more than doubled in the last two decades (page 13). Faster growth has narrowed the GDP per capitaContinue reading “Visegrad Countries: Bright Spot Amid Slowing European Growth”

Russia: How’s the Troubled Kid Doing?  

Download PDF: Russia_Country_Research Russia’s growth rate has experienced a dramatic slowdown since the Global Financial Crisis. Domestic imbalances, correction in oil prices and sanctions imposed by the U.S. in 2014 have all contributed to the slack. Since, Russian government has been trying to fix its budget imbalance, reducing reliance on imports and building economic warContinue reading “Russia: How’s the Troubled Kid Doing?  “