Africa Banking and the New Reality McKinsey Cash splash: how Sea became south-east Asia’s biggest public company FT TSMC: how a Taiwanese chipmaker became a linchpin of the global economy FT China’s SWIFT joint venture a ‘defensive move’ in US financial war after Alaska talks underlined ongoing tensions SCMP Gramercy EM Weekly Here is how […]
Uzbekistan was nearly closed off to foreign investors until 2016. Unlike Russia, Kazakhstan and other Soviet states, However in recent years, Uzbekistan has started to change in a big way. In 2017 the new president started a reform program, simplifying business regulations, divesting SOEs, floating the exchange rate, allowing visa free access for tourists and […]
Modern Monetary Theory is becoming mainstream in developed markets. Governments are suddenly pursuing plans that lead to deficits that would have been unimaginable a decade ago. The US, UK, and Japan, for example are all engaging in record spending sprees to support the economy in the wake of Covid-19. Yet MMT has been slow to […]
Chile was once the neoliberal poster child for Latin America and the broader world of emerging markets. The nominal cause of protests that broke out in October 2019 was a slight increase in the subway fare. But it was connected to something much bigger. According to OpenDemocracy: How could a mobilization that began with an […]
I came across an intriguing investment idea recently while reading hedge fund letters. Broyhill Asset Management has a note on emerging market airports A perfect storm has hit airports located in emerging economies. Even before a global pandemic decimated travel, emerging market equities and currencies had drastically underperformed their developed market peers, particularly in Latin […]
We’ve written in the past about how the way deglobalization is creating a new opportunity set. Trade policy changes will drive a rearranging in company supply chains. In general the latest wave of trade policies encourage more regional supply chains. Additionally, they encourage companies to diversify suppliers across markets. Covid-19 will accelerate these changes. Investors […]
In May Xi Jinping introduced China’s “dual circulation strategy”. At first this passed without much comment, even from China insiders. However, seasoned China hands are starting to talk about the serious economic implications.Part of the reason this dual circulation strategy took so long to get attention is its vagueness. The specifics aren’t finalized yet, and […]
Part of the reason we built this site is because of the historical divergence in equity markets. Developed markets, led by the US are historically expensive. In contrast, emerging markets and frontier markets are historically cheap. There are several ways to take advantage of this historical opportunity. One way is through a top down approach, […]
Often companies in emerging markets look deceptively cheap if you don’t consider the macro background. For example, we were recently looking at buying stocks in Uzbekistan. We found a rapidly commodity exchange business that was trading at 4x P/E. But is 4x P/E really cheap if inflation is rampant, and the currency is rapidly depreciating?You […]
Its hard for active managers to outperform passive. Yet one area provides an opportunity: emerging markets. It turns out a simple trick can help boost performance when compared to standard emerging market benchmarks. The trick is to avoid State Owned Enterprises. Here is a chart from the FT showing how much better private companies in […]