Investment strategy Correspondent
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Sep 10, 2014
via Global Investing

Bleak investment outlook sours mood at Russia forum

By Alexander Winning

What are the chances that Western investors will rush back to Russia if a shaky ceasefire in Ukraine leads to a more lasting peace? Pretty slim, judging by a keynote speech at a recent Russia-focused investment conference in London.

Dmitri Trenin, director of the Carnegie Moscow Centre, told the conference organised by Sberbank CIB, the investment-banking arm of Russia’s top state-controlled lender, there was little prospect of significant Western investment in Russia over the next 5 years:

Sep 10, 2014

Emerging-market currency turbulence picks up, options markets flash red

LONDON, Sept 10 (Reuters) – The cost of hedging against
sharp fluctuations in many emerging-market currencies jumped to
multi-month highs on Wednesday, and derivatives markets indicate
that bets against them are on the rise as the dollar

A rising dollar and higher Treasury yields are spooking
investors engaged in dollar-based carry trades – borrowing at
low interest rates to invest in a higher-yielding, riskier
asset. The result has been a sudden spike in volatility, after
it spent the summer trading near long-term lows.

Sep 10, 2014

Dollar batters emerging assets; rand, lira at forefront

LONDON, Sept 10 (Reuters) – Emerging currencies fell more
than 1 percent on Wednesday and currencies such as the lira and
rand extended losses to trade at multi-month lows on growing
expectations of a broad-based rally in the U.S. dollar.

The dollar is near 14-month highs versus a basket of major
currencies and could breach levels not seen since 2010 after a
paper from the San Francisco Fed indicated markets are well
behind the curve in pricing the U.S. rate rise trajectory.

Sep 8, 2014

Stocks inch up on easy money hopes, Ukraine calm

LONDON, Sept 8 (Reuters) – Russian shares and the rouble
edged lower on Monday as a ceasefire in Ukraine appeared to be
largely holding, while easy global monetary policy kept eastern
European bonds and emerging stocks near multi-year highs.

Though emerging markets, especially in Europe, are
vulnerable to loss of trade and other pressures stemming from
Ukraine’s conflict with pro-Russian rebels, they are still
supported by the stream of cheap cash from developed world
central banks.

Sep 4, 2014

Easing inflation offers Peru more monetary policy room-central bank

LONDON, Sept 3 (Reuters) – Peru’s economic growth pace may
slow to 4 percent in 2014, less than previously expected, but
easing inflation is offering room to ease monetary policy,
central bank governor Julio Velarde said in an interview.

Speaking to Reuters and Reuters Television on the sidelines
of an investment conference in London on Thursday, Velarde said:
“What we are seeing gives us more room for expansionary monetary
policies … if inflation is negative it gives us more room.”

Sep 3, 2014

Russia Ukraine assets rally on peace talk; emerging stocks at 3-yr high

LONDON, Sept 3 (Reuters) – Russian and Ukrainian bonds
rallied on Wednesday, and Moscow-listed shares leapt 4 percent
after Kiev said a “permanent ceasefire” had been agreed in the
Donbass area, the news also sparking gains across emerging

The Kremlin watered down the talk of a formal ceasefire, but
it confirmed that steps for peace had been discussed.

Sep 1, 2014

Bracing for debt troubles as Ukraine gloom deepens

LONDON/KIEV Sept 1 (Reuters) – Global investors’ view of
Ukrainian bonds as a relatively safe bet anchored by Western
support is taking a battering as the country’s economic gloom
deepens, with many starting to brace for some form of debt

Fund managers, among whom Templeton’s Michael Hasenstab is
prominent, have until now figured that Ukraine would avert
all-out war with Russia, allowing its economy to recover.
Second, they have reckoned the International Monetary Fund,
which has pledged a $17 billion loan deal, has Ukraine’s back.

Aug 29, 2014

Russian assets fall, broader stocks steady near 3-yr high

LONDON, Aug 29 (Reuters) – Military tensions and a worsening
economy put Russian dollar-denominated stocks on track on Friday
for a 4 percent loss on the month, bucking broader emerging
equities that were poised for their seventh straight month of

Russia stands accused of sending troops into Ukraine to
shore up a separatist rebellion that had appeared to be ebbing.
That has sharply escalated the five-month conflict over eastern
Ukraine and raised the spectre of fresh sanctions from the West.

Aug 20, 2014
via Global Investing

Betting on (expensive and over-owned) Indian equities

How much juice is left in the Indian equity story? Mumbai’s share index has raced to successive record highs and has gained 24 percent so far this year in dollar terms as investors have bought into Prime Minister Narendra Modi’s reform promises.

Foreign investors have led the charge through this year, pouring billions of dollars into the market. Now locals are also joining the party – Indian retail investors who steered clear of the bourse for three years are trickling back in – they have been net investors for 3 months running and last month they purchased Rs 108 billion worth of shares, Citi analysts note. 

Aug 20, 2014

Russia economic funk ripples out through ex-Soviet states

LONDON/ALMATY Aug 20 (Reuters) – Farangees Islomova is
worried. Her husband, who labours on a construction site in
Moscow’s Schelkovo suburb, usually sends 15,000 roubles home to
Tajikistan every month. But in July he sent her just two-thirds
of that.

“My husband says they haven’t started a new building yet. He
had wanted his younger brother to join him in Moscow…but
recently he called and said: ‘The master says he won’t take any
new workers and there will be lay-offs'”, said Islomova, a 36
year-old mother of three, whose family relies on the money her
husband sends from Russia.