South Africa: The Not So Good, The Bad, and The Ugly

Download PDF: Last November we discussed the cyclically bullish but bleaker longer-term outlook for South African assets, in which the former has played out nicely until the end of second quarter this year. Our long position on South African bond was closed on August 10 with 10.2% gain while our overweight recommendation on South AfricanContinue reading “South Africa: The Not So Good, The Bad, and The Ugly”

Research Note: South Africa Local Curve

Download PDF: South African local curve will likely continue to bear flatten in the coming months as the central bank start to raise policy rate as inflationary pressure rises – in line with other EM countries. Currently we see sufficient spread of ZA 10-year bonds against global benchmark amid the backdrop of abundant global liquidityContinue reading “Research Note: South Africa Local Curve”

South Africa: The Good, The Bad, And The Ugly

Download PDF: South African government released its medium-term budget plan late last October, highlighting the steps it will take to bring the country’s spiraling public debt under control. South African assets had been bombed out this year, which offers attractive investment opportunities from a tactical point of view. However, structural outlook remains bleak and theContinue reading “South Africa: The Good, The Bad, And The Ugly”

South Africa: Is The Worst Yet To Come?

Download PDF: South African government fiscal situation turned from bad to worse this year amid a shortfall in tax revenue and increase in spending to support growth (Chart 1). The government’s revision to its budget in June mainly reflects a shifting of its spending, i.e. delaying projects to 2021/2022 or beyond while prioritizing funds forContinue reading “South Africa: Is The Worst Yet To Come?”

Reassessing the Investment Thesis on EM Countries: Russia, Colombia, Chile, South Africa, and Indonesia

Download PDF: Russia -Neutral View + The tendency for oil prices is to move higher as global lockdown restrictions are lifted and a nation-wide lockdown is averted amid the virus’ second wave infection. Half of Russian equity index is dominated by energy companies and the economy is also very dependent on oil prices, making RussianContinue reading “Reassessing the Investment Thesis on EM Countries: Russia, Colombia, Chile, South Africa, and Indonesia”

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”

South Africa: Country Overview

Download PDF: South Africa Research South Africa could easily pass as a country that combine various Emerging Markets sins: rampant corruption, mismanagement of government assets and low productivity. Unless a clear economic and political reform is done, it is likely that the country will slowly drift deeper into the abyss. From a political point ofContinue reading “South Africa: Country Overview”

Update on Brazil and South Africa

Download PDF: Brazil and South Africa Update Brazil’s economy is slowing, but positive development on pension reform has charged the market of late. Much of the positive development has been priced in and the risk of further slowdown in the economy is rising. Brazilian stocks are not cheap relative to EM overall, currently at itsContinue reading “Update on Brazil and South Africa”

EM Country Overview: Mexico, Turkey, Brazil, South Africa, Russia

Download PDF: Q12019_LATAM_EMEA_Update A revisit of our investment thesis on emerging markets equities Mexico + (Overweight) Last year Mexican stocks were among the worst performer in the EM universe for two main reasons. First, the domestic economy is experiencing a sharp slowdown from industrial and oil production. Second, the increase in global risk aversion hasContinue reading “EM Country Overview: Mexico, Turkey, Brazil, South Africa, Russia”