Category Archives: Turkey

Charts of the Day: The Future Of Emerging And Frontier Markets

CarnacTheMagnificentThanks to Ernst & Young, I’ve got my retirement destination all picked out: Turkey.

Because, you see, in 2040, when I’m 67 years old, forget the BRICs or Mexico or Dubai or South-South anything; Turkey’s gonna be an export boomtown. Or at least that’s one of the forecasts E&Y is touting in its new Rapid Growth Markets forecast. And if, come 2040, I’m not rolling G-style through the souks of Istanbul, I’m definitely suing the crap out of the 2040 incarnation of Ernst & Young,  which by then might be better known as ErnstPWCDeloitte-Slim/Gates LLC dot unit D sector. 

In all fairness E&Y does a dependable job of summarizing the main economic characteristics of developing markets for those who don’t plug into this stuff every day.

And they also have a nifty online interactive tool you  can play with here.

For the rest of us…the thing is I really just have a hard time taking seriously any forecast that goes out to 2040. But let’s try anyway. According to the charts, those of us lucky enough to still be alive in 2040, assuming there’s still a human race by then, should probably be doing something with exports. But definitely not anything between the Eurozone and the US:

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Chart Of The Day: Emerging Markets Currency Wars Landscape

This is interesting:

2013.03.06.Swan FX Diagram

2013.03.06.Swan FX Table

And here’s an explanation of what we’re looking at:

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Caravel Management makes a case for Frontier Markets

You may have heard by now that the jig is up on the BRIC acronym as an investment class. But we’ll all still have to spend at least another couple years discussing how it doesn’t work, so if you’re just getting used to BRIC, fear not, you can still throw that one around and give the appearance of knowing what you’re talking about.

In any event, I have a new investment theme acronym. This is better than CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa), MIST (Mexico, Indonesia, South Korea, Turkey), PIIGS (Portugal, Italy, Ireland, Greece, Spain), CASSH (Canada, Australia, Singapore, Switzerland, Hong Kong) and even SWAG (Silver, Wine, Art, Gold).

Ready? Here it is: VIMBENT.

You heard that here first.

Vietnam
Indonesia
Mexico
Bangladesh
Egypt
Nigeria
Turkey

These, apparently, are the countries New York-based Caravel Management is invested in, according to a Bloomberg interview with portfolio manager Caglar Somek earlier this week:

There’s only so much one can fit into a six-minute segment, so to the credit of both interviewer and interviewee, here’s what seem to be the main ideas behind the VIMBENT strategy:
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Chart of the Day: The top 10 stock exchanges of 2012

This is actually going to be a few charts, because the first chart as you can see looks ridiculous:

Top 10 Frontier Market stock exchanges v DJIA

It should go without saying that there’s something very wrong with this picture, and indeed Miguel Octavio sums it up better than anyone I know here, but the long and short of it is that runaway inflation and an ass-headed capital controls regime has wildly overstated the “returns” in Venezuela. So let’s get rid of Venezuela and look at how the rest of these stack up against the Dow Jones Industrial Average. Here’s what we get:

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Carry trade returns: winners and losers as of mid-November

From the Hindu Business Line:

Though this comes from a story headlined, “Rupee depreciation erodes carry trade returns”, it’s interesting (though perhaps not surprising) to note that Asia is nowhere in this table.

Rapid Growth Markets: Behold THE FUTURE

I’ve just spent way too much time playing with Ernst & Young’s interactive spider graph thingy that allows you to compare their 25 “rapid-growth” markets across a range of macroeconomic indicators. According to E&Y, these 25 countries possess the most promising “long-term potential to generate strong business opportunities.”

So since a picture is worth a thousand words, here’s how all 25 of these economies will change from 2011 to 2016 from the meta-macro view, compared against each other:

Okay! Is everybody ready to go out and make some money?
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9 Emerging and Frontier Markets Uncle Sam wants YOU to export to

On the heels of the latest update to the World Bank’s annual Doing Business index, I thought I would use this opportunity to try a different take on the usual blather surrounding this study about which country did or didn’t move up five spaces in the shareholders’ rights category.

I recently happened to attend a function sponsored by the US Export-Import Bank that was part of its Global Access for Small Business Initiative. In the interest of not getting bogged down here by too much bureaucratese, the nutshell of this initiative can be summed up as such:

“Increasing exports and access to foreign markets is a proven tool for strengthening our economy and creating durable jobs. The United States is well positioned to capitalize on the types of products and services that fast-growing markets around the world are demanding. Ex-Im Bank is committed to ensuring that American small businesses can compete in this global climate.”

For those not in the habit of tuning in to this sort of thing, this initiative basically is targeting American small businesses looking to export to emerging and frontier markets. At first glance, this isn’t too far off from what the Overseas Private Investment Corporation (OPIC) does, but the focus here is less about investing overseas and more on businesses looking to export overseas. Where exactly overseas? Officially, anywhere, but Ex-Im representatives made a point of letting the audience know that those looking to export to the following nine countries would receive special attention, determined by “a variety of macroeconomic indicators”:
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EMPEA’s Sarah Alexander on a post-BRIC world

An old saw from the journalism universe has it that once you start hearing the same quotes from different people, it means one of two things: either you’ve reported the hell out of the story and it’s time to start writing; or you haven’t dug deeply enough and have more reporting to do.

Helpful, right?

Anyway, Emerging Markets Private Equity Association President Sarah Alexander was on CNBC yesterday saying some things that I know I’ve heard somewhere before…I just can’t remember where…

Basically, for those looking for more assurance they’re not alone, EMPEA members apparently like these countries and regions:

Turkey
Indonesia
Sub-Saharan Africa
Colombia
Peru
Mexico

…and these industries:

Health care
Pharmaceuticals
Consumer goods
Infrastructure

Is there an echo in here?