Download PDF: monthly_202008Download The Money Flow: How the Money Goes Around From a macro perspective, there is only three players that drive the economy and financial markets in a country: households, private corporations (including banks) and the government. Each player’s action impacts the other and altogether they drive the economic machine of supply and demand,ContinueContinue reading “August 2020: Gathering Thoughts and Some Investment Ideas”
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Turkey Revisited: The Good, Bad and Ugly
For the past several quarters, we have maintained a constructive view on Turkish assets, particularly on the country’s equity and currency, as valuations are already significantly depressed even before the COVID-19 rout. Percentile of equity multiples for Turkish equity is near its two decades low and the Turkish Lira is more than 20% undervalued, accordingContinueContinue reading “Turkey Revisited: The Good, Bad and Ugly”
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, remainContinueContinue reading “World Country Valuation”
Revisiting Our View on Brazil, Mexico, Turkey, and South Africa
Download PDF: revisiting-latam-and-emea-countriesDownload 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, whichContinueContinue reading “Revisiting Our View on Brazil, Mexico, Turkey, and South Africa”
Indonesia: An In-Depth Analysis
Download PDF: the-investment-case-for-indonesian-equitiesDownload 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 acrossContinueContinue reading “Indonesia: An In-Depth Analysis”
Russia: Do You Hear the People Sing?
Download PDF: russia-do-you-hear-the-people-singDownload 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 termContinueContinue 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 keyContinueContinue 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 policyContinueContinue 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 toContinueContinue reading “Assessing the Risk of Banking Crisis in Turkey, Russia, Mexico and Brazil”
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 capitaContinueContinue reading “Visegrad Countries: Bright Spot Amid Slowing European Growth”
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