Investment strategy Correspondent
Sujata's Feed
Jul 14, 2013

Sting in dragon’s tail for foreign companies in China

LONDON, July 14 (Reuters) – China’s vast market for foreign
goods and services, once seen by global companies as a
modern-day El Dorado, is becoming a weight around their necks as
its growth slows.

The rise of the Chinese economic “dragon” over the last two
decades has transformed international business. But now the
country is in the grip of a slowdown due to a slump in exports
and banking sector excesses, as recent data has shown.

Jul 11, 2013

Without Turkish rate rise, foreign investors may cut losses and run

LONDON, July 11 (Reuters) – Foreign investors sitting on
losses of 5-15 percent in Turkey are likely to cut and run
without a swift and substantial interest rate rise to stabilise
the plunging lira.

Foreign fund managers have yanked around $3 billion from
Turkish stocks and bonds since the last week of May, central
bank data shows, reversing only a tiny part of the investment
inflows the country has received in recent years.

Jul 5, 2013

Egypt’s financial position may be even worse than previously estimated

LONDON (Reuters) – Egypt’s crumbling public finances may be in even worse shape than previously estimated.

While stock and bond markets have cheered the ouster of unpopular President Mohamed Mursi by the army and Egypt’s debt insurance costs have tumbled, data shows that financial risks are about to escalate.

Jul 2, 2013
via Global Investing

“Contrarian” Deutsche (a bit) less bearish on emerging stocks

For an investor in emerging equities the best strategy in recent years has been to take a contrarian stance, says John-Paul Smith at Deutsche Bank.

Smith, head of emerging equity strategy at Deutsche, has been bearish on emerging stocks since 2010, exactly the time when bucketloads of new cash was being committed to the asset class. Investors who heeded his advice back then would have been in the money — since end-2010 emerging equities have underperformed U.S. equities by almost 40 percent, Smith pointed out a couple of months ago.

Jul 1, 2013
via Global Investing

A drop in the ocean or deluge to come?

Glass half full or half empty? For emerging markets watchers, it’s still not clear.

Last month was a record one in terms of net outflow for funds dedicated to emerging equities, Boston-based agency EPFR Global said.  Debt funds meanwhile saw a $5.5 billion exodus in the week to June 26, the highest in history .

Jun 28, 2013

Tightening already under way in Fed-hit emerging markets

LONDON, June 28 (Reuters) – A firmer dollar and rising U.S.
yields are fuelling a steady increase in money market rates
across emerging economies where many central banks could be
forced to raise interest rates to stem an investor exodus.

For a sector whose high growth rates and burgeoning consumer
demand were the prime draw for trillions of dollars in
investment, this effective tightening in monetary conditions,
months before the U.S. Federal Reserve even starts reducing its
money-printing, could prove a huge blow.

Jun 28, 2013

Emerging equity fund flows in red for 2013 after record June loss-data

LONDON, June 28 (Reuters) – Investment funds dedicated to
emerging market equities have posted record monthly outflows in
June, shedding their entire year-to-date takings, banks said on
Friday, citing data from EPFR Global.

It was the fifth straight week of outflow for equity funds
which lost $5.6 billion in the week ended June 26, according to
the Boston-based fund tracker which releases weekly data to
clients late on Thursday.

Jun 24, 2013

Investors need not worry about South Africa post Mandela: minister

LONDON (Reuters) – International investors need not worry about South Africa’s future when senior statesman Nelson Mandela eventually dies, as his legacy will be safeguarded, Planning Minister Trevor Manuel said on Monday.

The 94-year old Mandela, the country’s first black president, is critically ill with a lung infection, a huge concern for South Africa’s 53 million people who revere him as the architect of peaceful transition to democracy in 1994 after three centuries of white rule.

Jun 24, 2013

World Bank urged to stop ranking countries on ease of doing business

LONDON (Reuters) – An independent panel set up by the World Bank to look at the validity of one of its highest profile country reports said on Monday the Bank should stop producing headline rankings because they may be misleading.

The Bank’s annual “Doing Business” report judges 185 countries on 10 criteria and compiles an index on the ease of doing business, assigning each country a rank. The rankings can carry huge weight with governments.

Jun 21, 2013

Golden ratings era ending for emerging markets

LONDON, June 21 (Reuters) – A decade of improvement in
emerging market credit ratings is coming to an end as higher
borrowing costs and commodity price falls threaten to lay bare
many countries’ failure to reform during the good times.

Between 2007 and 2012 emerging economies earned almost 200
rating upgrades from the three main agencies, nearly half of
them promotions to the top ‘investment grade’ category.