By Gustavo Medeiros, Ben Underhill
The Emerging View

The case for emerging market small cap equities

EM small caps are assumed to be the risky cousin of US small caps. The data says otherwise: nearly nine in ten are profitable, on half the forward multiple of the Russell 2000. We make the case for the asset class.

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Weekly investor research

Oil relief welcome before Wednesday’s FOMC

After 13 consecutive nights of strikes, the US paused its attack on Iran over the weekend, welcome relief ahead of Wednesday's FOMC. Elsewhere, Samsung and SK Hynix signed USD 950bn of US supply deals and Bank Indonesia's governor resigned.
Weekly investor research

The arrival of Kimi K3 tests investors’ faith in Jevons’ Paradox

Chinese open-weight model Kimi K3 raises questions over AI lab monetisation, testing investors’ faith in Jevons’ Paradox. The Korean memory stock unwind extends, US CPI turns negative and the Bank of Korea hikes for the first time in three years.

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Ready for the summer

The European Central Bank (ECB), US Federal Reserve (Fed), and the Bank of England (BoE) statements suggested they are all getting ready to cut policy rates in June. The central banks of Türkiye and Taiwan unexpectedly hiked policy rates, while...
The Emerging View

The big picture behind Egypt’s big deal

Egypt’s currency macro rebalancing was the main Frontier Markets event of the month. The plan involved several bilateral and multilateral deals, and policy announcements that seemed disconnected at first but suggest a deeper strategic move with big...
Weekly investor research

Will the Bank of Japan exit NIRP after eight years?

A central bank-heavy week, with the Bank of Japan (BoJ) potentially departing from its negative interest rate policy (NIRP) after eight years. In the United States (US), investors will likely carefully analyse the statement, dot-plot estimates and...
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All eyes on inflation data

Inflation rose above expectations in most Emerging Market (EM) countries. Inflation is at far from concerning levels, but may slow down the pace of rate cuts in a few countries in our view. Last week, US Treasury (UST) yields declined after the...
Weekly investor research

Frontier markets drive EM Sovereign debt returns

The G-20 talked up a soft global economic landing, despite many risks. Inflation rebounded in January for the US and surprised to the upside in the Eurozone in February, which led to a re-pricing on the number of policy rate cuts implied in interest...
The Emerging View

An EM ex-China manufacturing renaissance

Since its accession to the World Trade Organization (WTO) in 2001, China has posed formidable competition for other countries in the manufacturing sector. The country’s rapid ascent since the turn of the century has seen it emerge as the dominant force...
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Hawkish FOMC minutes meet AI exuberance

The minutes of the most recent Federal Open Market Committee (FOMC) meeting were more hawkish than initially expected. Artificial Intelligence (AI) exuberance has brought Nvidia valuations to extreme levels, but value may yet be found across its Asian...
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Prabowo’s landslide victory is positive in the short term

General Prabowo Subianto won the Indonesian presidential election in the first round. Domestic travel and tourism spending hit records during the Chinese New Year. China has been exporting deflation to the world, regardless of the state of the local...
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EM Asia regulators acting to boost cheap equity market valuations

Stock markets and bond yields rose last week, led by strong economic activity numbers. Israel rebuffed a ceasefire proposal and attacked Gaza’s southernmost city of Rafah. China replaced its securities regulator, a sign that measures to boost the stock...
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The Fed delays the easing cycle while EM central banks press on

Chile, Brazil, Colombia, Hungary, and Ghana cut their policy rates. Egypt hiked by 200 basis points (bps), moving to an orthodox policy stance favoured by the International Monetary Fund (IMF) as it stepped up its conversations to receive a fresh loan...
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Less Dovish or More Hawkish?

The disruption in global shipping from Houthi attacks in the Strait of Bab al-Mandeb may have a larger than expected impact, if continued...
Weekly investor research

Taiwan: incumbent party wins election, but loses majority in Congress

Taiwan's Vice-President Lai Ching-te was elected President although the Democratic Progressive Party (DPP) lost its Congress majority. Houthi disruptions in the Red Sea caused a spike in shipping costs. Despite an upside US consumer price index (CPI)...
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More dovish Fed boosts EM debt towards year-end

The December meeting of the US Federal Open Market Committee (FOMC) proved a pivotal moment for markets. Whilst the target policy rate was unchanged, the median forecast for the Fed funds rate at end-2024 fell from 5.1% in September to 4.6%, triggering...