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Nearly there

Weekly investor research

20 June 2016

A bunch of ‘nearly there’ events currently dominate the EM investment environment. Within EM itself, Nigeria is now nearly there in terms of getting its FX policy right. Brazil’s new fiscal framework is nearly ready for approval and the rate cutting cycle is nearly about to begin. In China, MSCI is nearly ready to admit A-shares into the EM indices and India’s current account is nearly in surplus. The Indian government is also nearly ready to attempt to pass GST. In Venezuela, a new poll shows that Maduro’s reign may now nearly be over. In Argentina, the government has nearly restored the state of national statistics to a normal footing and Papua New Guinea’s government is nearly ready to join the global capital markets. In the global backdrop, the big ‘nearly there’ event is clearly the UK Brexit vote on 23 June. All government bonds in developed markets are also nearly trading with negative yields by now and policy makers have nearly almost all run out of effective monetary policy stimulus measures. Most ‘nearly there’ events in EM are upside risks, while most of the ‘nearly there’ events in developed markets are taking them in the wrong direction.

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