Country Insight: Brazil
With a population of over 214 million people, Brazil is the most populous country in Latin America, providing a large market for goods and services. Combined with abundant resource, a robust financial system, and sound regulatory frameworks, Brazil offers significant investment opportunities. Over the past decade, Brazil has undergone significant economic and political changes. After weathering the Global Financial Crisis in 2008 better than many other countries, Brazil was hailed as a poster child for economic growth and expected to become a rising global power. While the Brazilian market is known for its volatility, there are unique bottom-up investment opportunities that combine growth with resiliency, making them appealing options for investors looking for long-term returns. In this note, we explore three investment stories that demonstrate these characteristics despite the macro and political uncertainties.Investee Insight: Orizon
Hear from our Deputy Portfolio Manager, Jon Groocock, as he discusses UEM's recent trip to Brazil where he visited the Orizon's Paulinia ecopark, a landfill site. Orizon Valorizacao de Residuos S.A. is one of UEM’s largest holdings.South Korea: Shifting Investor Landscape
In January, South Korea’s top financial regulator, the Financial Supervisory Commission (“FSC”), introduced a set of measures to reform the country’s capital markets. The measures are aimed at improving foreign investors’ access to the markets and reforming regulations to be more on a par with other advanced markets. The proposed changes are bold and could trigger a paradigm shift in Korean equities, which have long suffered a valuation discount relative to global peers, by making Korea more conducive to foreign investment.ICM Monthly Outlook - April 2023
A tipping point has been reached. Almost a year to the day after the Federal Reserve embarked on a new cycle of higher interest rates and tighter monetary policy, the most aggressive in US economic history, two US regional banks and a Swiss national champion bank have failed. While bond markets are pricing in one final interest hike by the Federal Reserve in May, we believe that the current cycle of interest rate hikes should already be at an end. Tightening cycles typically end with stresses starting to appear in the financial system. The Federal Reserve manages monetary policy in response to the economic indicators of inflation and unemployment, which tend to lag the business cycle, so when stresses appear, it is often a signal that they have gone far enough and, typically, too far already.Governance in Emerging Markets
Corporate structures in emerging markets can be characterised by concentrated ownership that can have a profound effect on the governance risk, through management entrenchment, or the risk of expropriation of minority shareholders. These risks mean that investing in emerging markets can be volatile, highlighting the need for a strong and stable corporate governance structure to guide companies through challenging political and macro environments.ICM Monthly Outlook - March 2023
More information does not necessarily equal less uncertainty. February was a classic month where more new economic information only served to create more questions and drive further economic uncertainty. The key question facing markets right now is whether this rise in yields and sell-off in equities, especially growth orientated stocks, is just a one-off adjustment to reflect the fact that markets became too complacent and priced in too much inflation relief too quickly? Or does this reflect a more fundamental hawkish shift in Federal Reserve policy, where it is forced to embark on a renewed campaign of setting more restrictive financial conditions?Turkish Elections
Türkiye is currently experiencing one of its most significant humanitarian crises in this century. With over 50,000 casualties and over 26 million people directly affected in the region, the earthquake's immense human tragedy and economic damage have put the timing and outcome of the simultaneous presidential and parliamentary elections currently scheduled for May 14 into question.Country Insight: Mexico
Mexico has significant growth potential, primarily driven by secular trends like nearshoring. Over the last 20 years, there has been a strong positive correlation between the GDP growth of Mexico and the United States. Last year, the recovery of the Mexican economy was faster than anticipated, with economists revising growth upwards. To fully unlock its potential, the country needs to renew economic policies that foster private investment.Grupo Aeroportuario del Centro Norte
Grupo Aeroportuario del Centro Norte (“OMA”) is one of the three listed airport operators in Mexico that has a concession to operate, manage and develop thirteen international airports in central and northern Mexico. In 2022, OMA handled 23.2 million passengers, marginally up from its pre-covid-19 levels illustrating how strong passenger recovery has been. Read on to learn how OMA is able to offer not only reasonable growth but also an attractive dividend yield.ICM Monthly Outlook - February 2023
More often than not, when a central bank moves to loosen or tighten monetary policy, given that economics is an inexact science, they will typically end up over-tightening or over-loosening and making policy errors. It has been our belief for some time that the Federal Reserve would overtighten during the current cycle, leading to a sharp recession in the US and more significant collateral damage than was probably necessary to get inflation under control. Now we are less sure of a recession being a certainty, not because we think Chairman Powell and his team at the Federal Reserve have judged their tightening exercise to perfection, but more likely because they might have just got lucky.Eastern Europe in Focus
Eastern Europe is the often-overlooked economic success story of the 21st century. The total size of Eastern Europe’s economy is ~$4.3tn, which is comparable to the whole of Middle East, South Asia and Latin America regions. The growth continues to be driven by the expansion of manufacturing and exports, supported by a continuous extension of regional supply chains and “near-shoring” by Western companies. The integration into the EU has been another major driver for the majority of the CEE space, backed by institutional reforms and fiscal support from the EU’s budgetary framework.2023 Outlook
Hear from our Fund Manager Charles Jillings as he discusses his thoughts for 2023ICM Monthly Outlook - January 2023
As we enter 2023, there is probably no more significant determinant on markets and the economic path ahead than that of U.S. inflation and the Federal Reserve’s response to it with a view to bringing inflation back down to its longer-term target of 2%. We have a rather unusual situation where economic data is deteriorating, with U.S. manufacturing on the precipice of a recession, and yet we still have a seemingly very hawkish Federal Reserve. At this point in the business cycle, historically, the Federal Reserve would typically be about to start cutting interest rates if it had not already begun.Portfolio Insight: Eletrobras
With a population of over 214 million, Brazil is leading the way with renewable energy accounting for approximately 48% of the country energy matrix. Eletrobras is Latin America's largest utility company with a total installed capacity of 43GW, and it operates 73,800 km of transmission lines representing 40% of Brazil's main electricity grid. A number of initiatives are underway which are expected to enhance the long term value of the company.ICM MONTHLY OUTLOOK - DECEMBER 2022
Just like winter storms, not all recessions are similar. Depending on their particular characteristics, the impact and aftereffects of these storms can be very different. Our regular readers will know that, since early summer, we have been predicting a significant growth slowdown and a recession to hit the US and other major global trading blocs, such as Europe and the UK, in late 2022 and the first half of 2023.Trip update: Gujurat, India
Hear from one of our Deputy Portfolio Managers, Jonathan Groocock, as he provides an update from his latest trip to India.India
Visiting India after a COVID-induced three-year hiatus, it is remarkable to see how much has changed. While the hustle and bustle of over 20 million residents in Mumbai is a familiar sight, the ongoing development is immediately evident. New skyscrapers and apartment blocks, the appearance of two new metro lines inaugurated this year (from just one line previously), and blue hoarding envelops multiple construction sites, all a reflection of continued urbanisation and an insatiable demand for improved infrastructure. But the most significant change of all is the profound sense of optimism and determination of a nation to take its place on the world stage.An urbanising world
Emerging markets continue to provide an interesting backdrop for potential investment, as a strong global increase in urbanisation is being driven primarily by the emerging markets of certain Asian countries. As the forces of urbanisation continue to shape markets and societies around the world, it is the investment in infrastructure that will separate regions that are able to channel strong growth into enhanced living standards from those unable to keep up.Digital Infrastructure in Emerging Markets
Digitalisation – in particular, mobile internet usage – is driving large-scale social and economic change in emerging and frontier markets around the world. This burgeoning growth is providing access to information, education and financial services for populations that are often rural or living below the poverty line. Nonetheless, the speed and scale of the digitalisation process differs across regions, and sometimes even within individual nations.ICM Monthly Outlook - November 2022
Most of us enjoy a nicely paced movie with a fresh storyline and a few twists and turns to keep us guessing. Observing the Federal Reserve combat inflation with its aggressive interest rate hikes and the resulting economic slowdown emerging over the last several months has been comparable to watching a below-average movie with a relatively predictable plotline and a sloth's pace.- ← Previous
- 1
- 2
- 3 (current)
- 4
- Next →