Emerging Markets
Today, we are sending you the BCA annual outlook for 2023. The report is an edited transcript of our recent conversation with Mr. X and his daughter, Ms. X, who are long-time BCA clients with whom we discuss the economic and financial market outlook for the next twelve months toward the end of each year.
Despite a recent pro-growth bias in the policy tone, the Chinese authorities remain reluctant to open the stimulus taps to the same extent as they did in the past, especially when it comes to the ailing property market. China’s policy framework has shifted…
Both Brazilian equities in USD terms and the currency have dropped below their 200-day moving averages since the electoral return of ex-President Luiz Inácio Lula da Silva on October 31, as investors discount a reversal in the Goldilocks scenario of economic…
Peruvian equities and bonds are well positioned to outperform their EM peers, given strong economic fundamentals. First, inflationary pressures are relatively muted. Core CPI stands at 5.7% and is the lowest among major LATAM countries. Moreover, Peru’s…
China’s property price declines are accelerating. The contraction in new home prices in Chinese 70 large and medium-sized cities widened to 1.6% y/y in October, compared with 1.5% y/y in September. Meanwhile, 70-city secondary home prices shrunk further by…
Indonesian equities have outperformed their EM peers since mid-2021, returning 30% in local currency terms (20% in USD terms). However, these relative gains are likely unsustainable. Our Emerging Markets strategists point out that the outperformance was…
China is on the verge of experiencing a full range of deflation. Poor domestic demand will likely continue into 1H 2023 amid the ailing housing market, subdued private-sector sentiment and the zero-Covid policy, warranting a cautious stance on Chinese equities.
Unlike other hydrocarbon economies in the Middle-East, UAE stocks are also leveraged to global growth conditions and interest rate dynamics, given the prevalence of non-oil plays and interest rate-sensitive sectors. The confluence of these three forces has…
Taiwanese export orders in USD terms contracted by 6.3% y/y in October, down from a 3.1% decline in the previous month and short of expectations of a milder decrease. Exports to China and Hong Kong drove the bulk of the contraction, which was broad-based…
Despite Saudi Arabian stocks having outperformed their EM peers over the past couple of years, our Emerging Markets strategists argue that this bourse is due for a breather. Saudi fiscal policy is experiencing a major shift. In a departure from past…