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.
Weekly investor research

Hormuz hostilities and a memory stock correction

US-Iran hostilities push oil back to nearly USD 80 and Korean memory stocks fall in a positioning unwind. SK Hynix’s ADRs debut on Nasdaq, China’s central bank adds to gold, and Ukraine secures EUR 140bn in weaponry pledges at the Ankara NATO summit.

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Market Commentary

Unlocking the potential of frontier market debt

Traditional EM indices, such as the JP Morgan EMBI Global Diversified (EMBI GD), provide great yield enhancement for global fixed income portfolios. However, the high average duration of this index exposes it to volatility from global risk factors.
Weekly investor research

India cautiously cut rates for first time in five years

Trump’s 25% tariffs on steel and aluminum apply globally. US eyes cost cuts; MAG 7 dips. Russia-Ukraine peace plan at Munich. RBI cuts rates. Philippine VP impeached. Fitch affirms Korea’s AA-. Argentina to end FX controls by 2026. Japan wages surge.
Weekly investor research

Trump pulls the tariff trigger

Trump imposes new tariffs on Canada, Mexico, and China. Investors assess DeepSeek’s AI impact. India unveils 2025 budget. Political shifts in Argentina. Brazil commits to deficit cuts. Colombia plans tax reform. Panama affirms canal control.
The Emerging View

The inconvenient truth behind US exceptionalism

This month’s EV quantifies the magnitude of fiscal stimulus which turns out to be surprisingly close to the market capitalisation surge over the past eight years. US exceptionalism now has a disruption narrative with DeepSeek...
Weekly investor research

DeepSeek impacts AI industry and EM

EM gains as tariffs ease (except Colombia). DeepSeek impacts AI supply chains. Trump-Putin talk Ukraine. Strong Asian exports; Indonesia reforms. Argentina pushes markets. LATAM leftists under pressure. Türkiye cuts rates; Egypt plans Eurobonds...
Weekly investor research

Positioning driving price action ahead of Trump’s inauguration

EM assets rallied on US CPI data; Indonesia cut rates, South Korea held steady. Trump-Xi call signals diplomacy; Gaza ceasefire agreed. TSMC posts record profits. Argentina slows FX depreciation after surplus; Türkiye’s macro recovery stays on track.
Weekly investor research

The US Treasury yield wrecking ball

Strong US jobs data lifted yields, pressuring equities. Oil topped $80, China hit a record trade surplus, and Moody’s upgraded Argentina’s foreign currency ceiling. Fitch boosted El Salvador’s credit rating. Key elections are set in Ecuador and Gabon.
Weekly investor research

2025: Lights, Camera, Action!

2025 begins after a pronounced move higher in US real yields and term premium. Trump denied Wall Street Journal report that his tariff plans would be narrower and focus on key industries, leading to USD volatility today. Nine new countries, including...
Weekly investor research

Until next year…

‘Risk-off’ and higher rates after US Fed meeting caused a cross asset sell-off last week, including in EM. Ukraine assassinate Russian commander inside Moscow. Erdogan urges foreign countries to withdraw support for Kurdish fighters in Syria.
Weekly investor research

Fed Funds lower, but 10-year higher: Can it last?

US 10-year Treasury yield 75bps higher since start of rate cuts. Israel continued to strike Syrian air defences and weapon depots, as Turkish-backed opposition assumed control. China’s Central Economic Work Conference signalled ongoing commitment to...
Weekly investor research

Bashar al-Assad falls in two weeks after a 13-year Civil War in Syria

The impact on EM and global macro of the fall of the Bashar al-Assad regime in Syria. Ukraine cease-fire discussions ongoing. Global PMI shows sentiment to manufacturing in EM improving. The Politburo vowed to stabilise real estate & equities and moved...
The Emerging View

2025 Emerging Markets Outlook

The theme of our 2024 Outlook was a hit. Emerging market (EM) economies’ newfound resilience had more legs this year, despite a lacklustre performance from China. The positive effects of post-pandemic structural reforms and fiscal discipline have been...
Weekly investor research

The 2024 winner: Vote for change

Romania and Uruguay voted for change last weekend. The fact that both these countries have very different historical backgrounds and economic situations confirms the overarching anti-incumbency bias faced by most politicians today...
Weekly investor research

Trump trades wobble

Stocks struggled and the US yield curve steepened as markets took back post-US election gains on higher inflation expectations. Trump’s choices for foreign policy positions were hawkish and have raised geopolitical risk at the margin. Attention now...
Live at the Sub-ICs

Qatar: Do investors risk myopia for a country with a vision?

The economic roadmap Towards the end of the 1990s, Qatar saw a step-change in the magnitude and sustainability of its economic growth based on a competitive LNG value chain with global reach. Qatar succeeded in scaling up, integrating downstream and...