Browsing: Emerging markets

Emerging markets

How Green is the Cannabis Trade?

Oct 12th, 2020 | Filed under: Newly Added, The Global Economy & Currencies, Emerging markets, Frontier markets

Last week we looked at recent developments in the state-legal marijuana markets. Among the observations we made there, these three stand out: Marijuana is becoming an essential business and a permanent feature of the landscape, surviving crises and helping the portfolios of investors do the same; The major players areRead More

Emerging Market Debts (or Funds) as a Weakened-Dollar Bet

Sep 15th, 2020 | Filed under: Newly Added, The Global Economy & Currencies, Emerging markets, Other Issues in Private Investments, Finance & Economics

A new report by the William Blair Funds illustrates why some investors may see emerging-markets debt as a good play over the near future, especially if the assets of the funds are denominated in the local currency. That is a play on dollar weakness. The report uses the JPMorgan GovernmentRead More

Opportunities Emerge in Emerging Markets Debt

Jan 5th, 2020 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, Business News, Economics, The A.I. Industry, Macroeconomics

A new year ushers in new opportunities and 2020 is no different in that respect. Emerging markets debt is one such opportunity, according to the global fixed-income team at Morgan Stanley Investment Management. In its new report, MSIM sees “attractive opportunities in countries displaying disinflationary or stable inflation dynamics andRead More


Jan 1st, 2020 | Filed under: CAPM / Alpha Theory, Financial Economics Theory, Newly Added, The Global Economy & Currencies, Emerging markets, The A.I. Industry, Institutional Asset Management, Finance & Economics

By Daniel Fang, CFA, CAIA, Quantitative Research, and Diana Olteanu-Veerman, CFA, Quantitative Strategy, Northern Trust Asset Management Composite Equity Issuance (Cei) Can be a Proxy for Intangible Returns Anomalies Even though factor investing is widely supported in academia and investment practice, forecasting and harvesting factor returns remains challenging for various reasons.Read More

Africa: Alpha for the Bold

Dec 15th, 2019 | Filed under: Infrastructure, Newly Added, The Global Economy & Currencies, Emerging markets, Operationally Intensive Real Assets, Economics, The A.I. Industry, Frontier markets, Macroeconomics

The CFA Institute, in conjunction with the African Stock Exchanges Association (ASEA), has put together a book on the challenges and opportunities in the African capital markets. In Africa as elsewhere, fortune favors the bold. For example—and this is not an example from the ASEA and CFA Institute’s book—the EnkoRead More

Quants in China: Which Factors Work?

May 28th, 2019 | Filed under: Hedge Fund Strategies, Equity Hedge Funds, Newly Added, The Global Economy & Currencies, Emerging markets, The A.I. Industry, Hedge Funds

The outperformance of the size, value, and reversal factors is strong, but the momentum factor, which has performed well in the U.S., does not work in China. This is the conclusion of a new white paper published by  Neuberger Berman about quantitative investing in China A shares. It has aRead More

The Two Faces of Investing in Renewables

May 27th, 2019 | Filed under: Hedge Fund Strategies, Investing in Commodities, Equity Hedge Funds, Newly Added, Socially responsible investing, Event-Driven Hedge Funds, The Global Economy & Currencies, Emerging markets, Alternative energy, Commodities: Examples, Energy, The A.I. Industry, Frontier markets, Hedge Funds, Emerging Alternative Investments, SRI and Clean Energy, Other Topics in A.I.

Renewable energy, however defined, is widely seen as a sustainable and socially responsible (and, if the investing is done right, very profitable) addition to one’s portfolio. Indeed, such entities as the Institute for Energy Economics and Financial Analysis, an Ohio based research-and-analysis shop, exist to show that renewables are theRead More

Alpha: The Rise of the Middle Class in Emerging Markets

Feb 21st, 2019 | Filed under: Investing in Commodities, Financial Economics Theory, Newly Added, The Global Economy & Currencies, Emerging markets, The A.I. Industry, Commodities, Finance & Economics

A new paper from State Street Global Advisors takes a sociological approach to the search for alpha in emerging market nations. It contends that the “major theme for growth” in the emerging markets moving forward will be “based on the rise of the middle class and rising consumption in theseRead More

An Emerging Market Nation Defaults: A Case Study

Jan 24th, 2019 | Filed under: Newly Added, Emerging markets, The A.I. Industry, Finance & Economics

A new book by Hassan Malik may serve as a caution for alternative investors operating in the emerging markets, in the form of a case study about the politics of default. Malik is an emerging markets strategist at Ned Davis Research in London. His new book, Bankers and Bolsheviks, beganRead More

Nick Pollard: The View from Mumbai

Jan 21st, 2019 | Filed under: Newly Added, The Global Economy & Currencies, Emerging markets, Economics, The A.I. Industry, Hedge Funds, Macroeconomics

On Jan. 11,  the CFA Society India hosted the 9th Annual India Investment Conference in Mumbai. CAIA was a platinum sponsor of this event.  The theme of this year’s IIC was “investing insights for uncertain times.” Nick Pollard, Managing Director, Asia Pacific at CFA Institute, kicked things off with aRead More

McKinsey on Asia’s Asset Managers

Dec 16th, 2018 | Filed under: Industry Size & Managers, Newly Added, Asset Managers, Regulatory, Regulatory Environment, The Global Economy & Currencies, Emerging markets, Economics, The A.I. Industry, Allocating to A.I.

Assets under management for Asia’s managers have ballooned in the last 10 years, with an increase on average of 9% annually. Performance has been such as to encourage inflow. A recent study by McKinsey suggests that the “good times” will “keep rolling.” But it also cautions that the opportunities inRead More

 Shariah Finance, Volatility, Clientele Effects

Oct 23rd, 2018 | Filed under: Financial Economics Theory, Newly Added, The Global Economy & Currencies, Emerging markets, The A.I. Industry, Frontier markets, Finance & Economics

Two recent scholarly papers take distinctive looks at the sukuk market in Malaysia. Accordingly, each contributes to the ongoing discussions and evaluations of the place of Islamic finance within the broader global (and alpha-seeking) picture. Sukuk are bond-like instruments structured to pay profit, not interest, that are sold chiefly toRead More

Modi Operandi

Oct 1st, 2018 | Filed under: Newly Added, The Global Economy & Currencies, What about beta?, Emerging markets, The A.I. Industry, Frontier markets, Macroeconomics

By Bill Kelly, CEO, CAIA Association What’s your liquidity M.O.? If you are less than certain, it is time to look east toward the country of India and the land of Modi. After all, when 1.3 billion people cough there is a decent chance the rest of the world justRead More

The View from Las Vegas: Quiet Buying? Aggressive Buying?

Sep 23rd, 2018 | Filed under: Newly Added, Emerging markets, Digital currencies, Alternative Investments in Context, Commodities: Examples, The A.I. Industry, Gold, Commodities, Emerging Alternative Investments, Personalities in AI

On Sept. 24, the 9th Annual Inside Alternatives and Asset Allocation event convenes at Wynn Las Vegas, with CAIA sponsorship. The purpose of the event: to look beyond traditional alternative investments and strategies, to take the measure of a new breed of alternatives, including impact/SRIs, cryptocurrencies, and the application ofRead More

Prepping for an Emerging Market Rebound

Sep 17th, 2018 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, The A.I. Industry, Finance & Economics

Two executives at the Neuberger Berman Group have prepared a paper on what they call the “overall case for a recovery in emerging market debts” in the months to come. Investors will want to “be around” for such a rebound, they say. There are obviously now, and there will continueRead More

Africa Still Rising (but Patience May Be Required)

Jun 12th, 2018 | Filed under: Private Equity, Newly Added, The Global Economy & Currencies, High-net-worth investors, Emerging markets, Emerging Alternative Investments, Private Investments, Other Topics in A.I.

The Emerging Markets Private Equity Association, in a new report, suggests that the “Africa Rising” narrative of a few years ago is behind us. Africa is seen still as having enormous potential. But the report also says, “the commodity downturn of the last several years has had a severe impactRead More

The Case for Bargain Hunting in South Africa

Apr 18th, 2017 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets

Charles Roth, of Thornburg Investment Management, has made the case that markets have over-reacted to the recent political shake-up in South Africa, driving asset prices below their underlying value. Thus (although Roth doesn’t put the point quite this bluntly) this could be a time for some bargain hunting.  Finance MinistryRead More

Natixis asks 500 institutional investors to look into the future

Dec 20th, 2016 | Filed under: Newly Added, The Global Economy & Currencies, High-net-worth investors, Emerging markets, Institutional Asset Management, Allocating to A.I., Finance & Economics

Natixis Global Asset Management has released the results of a survey of 500 institutional investors, asking them their views on prospects for 2017. The surveyed institutions expect that political and economic developments could cause an increase in volatility in the year to come, and active managers have to reset theirRead More

Private Equity Placements in China

Dec 8th, 2016 | Filed under: Private Equity, Currencies, Newly Added, Benchmarking & Performance Attribution, The Global Economy & Currencies, Emerging markets, Private Investments, Allocating to A.I.

A new paper by G. Nathan Dong and two other scholars investigates private equity placements in China and their consequences for the issuing firms. The study works from a natural experiment that resulted from regulations created by the PRC ten years ago. In 2006, the China Securities Regulatory Commission issuedRead More

Venezuela: Thinking of Cromwell and Crude

Oct 13th, 2016 | Filed under: Newly Added, The Global Economy & Currencies, Emerging markets, oil, Commodities: Examples, Commodities, Finance & Economics

Hedge funds, among them some of those the unsympathetic call “vultures,” bought into the bonds of the Petróleo de Venezuela SA (PDVSA) early this year. PDVSA is Venezuela’s state-owned oil company, the consequence of nationalization forty years ago. Its fate turns on (a) the vagaries of post-Chavez politics in thatRead More

The Next Crisis: BIS Warns of ‘Financial Vulnerabilities’ in EME/NFCs

Aug 25th, 2016 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, Macroeconomics, Finance & Economics

In a recent paper submitted to the G20’s working group on international financial architecture, scholars with the Bank for International Settlements have warned that an accumulation of debt in the years since the global financial crisis has left the emerging market economics (EMEs) vulnerable to capital outflows. The authors ofRead More

Latest News on Argentina and the Pari Passu Clause

Feb 25th, 2016 | Filed under: Newly Added, Insolvency, The Global Economy & Currencies, Emerging markets, Business News, Finance & Economics

The Hon. Thomas Griesa, of the U.S. District Court for the Southern District of New York, has issued an “indicative ruling” in response to a motion by the Republic of Argentina.Read More

Emerging Markets in 2016: Making Necessary Distinctions

Jan 3rd, 2016 | Filed under: Currencies, Newly Added, The Global Economy & Currencies, Emerging markets, Finance & Economics

The present depressed state of commodity prices spells continued trouble for those companies that export said commodities, but also spells opportunity for those that import and make use of them. Some thoughts from Neuberger Berman, with an addendum from BlackRock. Read More

An Official Keynesian Reading of Cap Inflows and Emerging Markets

Oct 18th, 2015 | Filed under: The Global Economy & Currencies, Emerging markets

Olivier Blanchard has just stepped down as the chief economist of the International Monetary Fund, a post he has held since 2008. Faille looks at a new article that may be considered his parting shot from that parapet.Read More

Javert Frustrated Again: This Time in the Second Circuit

Sep 8th, 2015 | Filed under: Insolvency, Emerging markets, Legislation/Court rulings

NML tried to get around the sovereign immunity of Argentina's Central Bank by arguing that it and the Republic were only one entity (the "alter ego" theory developed by the U.S. Supreme Court in an opinion concerning Cuba, in the 1980s), and that the one entity involved has waived its/their immunity. No dice. Read More

Another Southeast Asia Currency Crisis

Aug 17th, 2015 | Filed under: Currencies, Forex, Emerging markets

China's moves in recent days seem likely to set off a new Southeast Asia currency crisis, which will look a lot like the old Southeast Asia currency crisis. This was clear even on August 11th, when traders in the rest of the world were apparently working on the premise that China's move that day was a one-off. Read More

PwC Looks Ahead to 2020: Offers a Roadmap for Alternative Investment Managers

Jul 5th, 2015 | Filed under: Hedge Fund Industry Trends, Hedge Fund Strategies, Infrastructure, Technology, Emerging markets

PwC offers a glimpse of a 'day in the life' of a typical compliance analyst in 2015 and again in 2020. As these authors tell it, the day is filled with data, darkness, and drudgery at present, but it will be airy, alliterative, and analytical in another five years. Read More

Mladina on Peeling the Onion: Looking for Idiosyncratic Skill

Jun 21st, 2015 | Filed under: Performance, Analytics & Metrics, Currencies, Indexes, Emerging markets

Factor models will evolve as researchers untangle what value is to be attributed to what factor. Model selection, then, has to remain flexible to keep pace with such research, and must of course remain useful for the investment decision makers. Read More

Corporate Governance: Sunday in the Park With George

May 19th, 2015 | Filed under: Regulatory, Emerging markets

The controversy over corporate governance, and whether the changes favored by reformers show up as superior corporate performance (as measured, for example, by Tobin's q) strikes Faille as dangerously abstract. The only way to get to the pointillist painting is by starting with particular data points. Read More

Malaysia and the Sukuk World

May 4th, 2015 | Filed under: Socially responsible investing, Emerging markets

Moody’s Investor Services has assigned a provisional A3 rating to a $750 million multi-currency sukuk issuance program established by Telekom Malaysia Berhad. Meanwhile, also in Malaysia....Read More

Eurekahedge on Asia in March, and on Asia Over the Years

Apr 28th, 2015 | Filed under: Performance, Analytics & Metrics, Hedge Fund Strategies, Currencies, Indexes, Emerging markets

According to Eurekahedge the hedge fund industry globally returned $54.1 billion in performance gains in the first quarter 2015. This is the greatest first-quarter gain since before the global financial crisis. Read More

EDHEC: Geography is Not Just a Listing or Headquarters

Apr 12th, 2015 | Filed under: Alpha Strategies, Risk management, Asset allocation, Emerging markets

Indexes labeled as representing developed market equity include companies with significant and increasing exposure to macro-economic trends in the emerging markets. A portfolio that tracks such an index may well have much more such exposure than its managers or investors had bargained forRead More

Zulauf Sees Unprecedented Risks: Zhou Fears Deflation

Apr 7th, 2015 | Filed under: Currencies, Emerging markets, Macroeconomics

Felix Zulauf is the principal of Zulauf Asset Management, and a former global strategist for the UBS Group. He said that central banks have intervened on such a large scale of late that they have left "global financial markets ... more distorted than ever before and accordingly the risks are very high." Read More

Eurekahedge Airs Wide Range of Views on Indian Hedge Funds

Feb 16th, 2015 | Filed under: Alpha Strategies, Indexes, Emerging markets, Alpha Seekers

A new report from Eurekahedge tries to go beyond some obvious observations about the performance of hedge funds there in 2014, or about the performance of that country's broad economy last year. Eurekahedge talked to seven experts in the field. They took quite different views on the most basic of questions. So different that a contrarian would have a tough time finding the consensus to counter. Read More

Recent Russian Investment History: Misty Water-Colored Memories

Feb 8th, 2015 | Filed under: Hedge Fund Strategies, Emerging markets, Frontier markets

William Browder's new book, Red Notice, is a fascinating window into the recent history of Russia, both when Yeltsin (and at first Putin) welcomed foreign investment and then when things turned very ugly for those investors. Read More

Explaining Why the Portfolio-Barbell Works

Jan 20th, 2015 | Filed under: Liability Driven Investing, Risk management, Emerging markets

Most efforts to introduce "entropy" into finance have seen it as a quantity to be minimized. A new paper, which begins as an effort to explain barbell portfolios, uses entropy in a different manner. Unfortunately, it doesn't really end up clarifying those barbells. Read More

Top 5 Alpha Stories of 2014

Dec 30th, 2014 | Filed under: Commodities, Alpha Hunters, Emerging markets

In the middle of the year now ending, the U.S. Supreme Court delivered as complete a victory as it could manage to the hold-out bondholders in the Argentine-default dispute. Enforcement efforts plod on, and it seems likely a related story could make our top five list next year, too. Read More

Money Markets: The Cure to What Ails the Sukuk Space

Dec 22nd, 2014 | Filed under: Behavioral finance, Emerging markets

Two World Bank economists review the impediments that face the growth of the sukuk market, impediments often inherent in the theological precepts that gave rise to it. Part of the solution: well-functioning money markets as a context for sukuk issuance. Read More

Wars and Failed Mergers Make for a Tricky October

Dec 1st, 2014 | Filed under: Performance, Analytics & Metrics, Risk management, Emerging markets

Only two hedge fund strategies performed in the positive numbers in October, the rest were all in the red. Managed futures did best, according to the Eurekahedge numbers, benefitting from their short positions on oil prices. Read More

GFIA Hedge Fund Manager Review: The End of an Era

Nov 3rd, 2014 | Filed under: Performance, Analytics & Metrics, Alpha Strategies, Emerging markets

In what will be its last regular monthly report on such matters, GFIA tells us that a sharp correction hit markets in Asia ex Japan in September, and tells us of some of the funds that defied the outgoing tide. Read More

Hedge Funds: Good Run for India, but Troubles in Brazil

Oct 21st, 2014 | Filed under: Performance, Analytics & Metrics, Indexes, Emerging markets

India accounts for much of the positive showing of Asia ex-Japan in the hedge fund world YTD. That positive showing, in turn, may be attracting asset flow. Read More

GFIA Ruminates on Academia and Practice

Oct 9th, 2014 | Filed under: Hedge Fund Strategies, Alpha Strategies, Emerging markets

GFIA shares some ruminations about the relationship between the abundant academic work on alternative investment and the insights of practitioners. Meanwhile, the Bank of Japan seems to be engaged in some ruminations of its own, and practitioners have to await the results.Read More

Hong Kong Shariah-Compliant Launch Sells

Sep 22nd, 2014 | Filed under: Behavioral finance, Emerging markets

If I should declare that I will never eat duck, and then I simply re-name certain ducks “chickens” and eat them, then people who genuinely as a matter of principle refuse to eat duck may consider me a false friend. And those who have no objection to the eating of duck may think me a silly goose. Read More

BIS to US Fed: You’re Messing with the World

Aug 25th, 2014 | Filed under: Currencies, Forex, Emerging markets

There are several channels for spill-over effects, whereby the actions of the Federal Reserve and the ECB can have grave consequences around the world. Psychological consequence, in particular herding, is among them. Read More

Eurekahedge: Europe-Focused Managers Took Hits in July

Aug 20th, 2014 | Filed under: Performance, Analytics & Metrics, Emerging markets

Banco Espirito Santo, and its CEO Salgado, had emerged from an earlier round of crisis (way back in 2012) with a roseate smell. Their latest smell ... not so good. Read More

All Regional Mandates in Positive Territory YTD

Jul 28th, 2014 | Filed under: Performance, Analytics & Metrics, Alpha Strategies, Emerging markets

The latest report from Eurekahedge mentions that though instability is "brewing again in the Middle East," things have settled down a bit in Eastern Europe. This report was written prior to the shoot down of a Malaysian jet over the Ukraine. Read More

Looking at the Future of World Wealth McKinsey-style

Jul 21st, 2014 | Filed under: Institutional Investing, Emerging markets

In Asia the high-net-worth population still consists largely of the first-generation wealthy. So: what are these Asian entrepreneurs looking for in their private banking services? That is one of the questions McKinsey considers. Read More

Why Yellen is Wrong on ‘Resilience’

Jul 13th, 2014 | Filed under: Currencies, Emerging markets

The Chair of the Federal Reserve cannot with any plausibility look upon market bubbles as something exogenous, something that just happens to the earth, like a meteor shower, something from which she and others in her august circles can seek to protect us. Read More

May Numbers: Long Equity Beats Event-Driven Peers in Asia

Jul 8th, 2014 | Filed under: Alpha Strategies, Indexes, Emerging markets

GFIA says that most of the Asia Pacific managers it tracks generated substantial returns above the relevant index in May 2014. The long-biased firms did best there, their event-driven peers … not so much. Read More

SCOTUS Gives NML a Sweeping Win Over Argentina

Jun 25th, 2014 | Filed under: Alpha Strategies, Regulatory, Emerging markets

Justice Scalia's opinion has the support of Justices who aren’t, to say the least, reliable allies of Scalia’s in the kind of ideologically driven splits that draw so much MSM attention, Obama appointee Elena Kagan as well as Clinton appointee Stephen Breyer are on board. On Monday, June 16th, the U.S. Supreme Court delivered a stunningly complete victory for NML Capital, the holdout bondholder in the much-watched litigation arising out of Argentina’s 2001 bond defaults. On the one hand, SCOTUS refused to hear Argentina’s appeal from the Second Circuit’s decision on what the issuing documents meant by the pari passu language. A decision not to decide has no precedential significance itself, but this of course leaves the Second Circuit’s decision, issued in October 2012, intact. Both as a matter of the law as it applies to this case, and as a matter of precedential significance for many similarly worded documents, the Second Circuit is the circuit that counts. What is Left Standing? The Second Circuit left standing, and now the Supreme Court has also left standing, a district court injunction against any payments that in any way rank holders of the restructured debt over the hold-outs. What the Second Circuit said was that in the pari passu clause in the issuing documentation of these Fiscal Agency Agreement bonds (FAA), the sovereign “manifested an intention to protect bondholders from more than just formal subordination.” The language was there to protect them precisely from what Argentina has more recently tried to do, that is, to protect them from any arrangement by which “Argentina as payor [discriminates] against the FAA bonds in favor of other unsubordinated foreign bonds.” On the same day (a few minutes later) SCOTUS also delivered a full-dress opinion on a related issue. The New York district court has interpreted the Foreign Sovereign Immunities Act of 1976 narrowly, so as to allow for discovery orders that assist NML in its search for Argentina assets in third countries where they may not be immune. Since Argentina owes NML more than $1.5 billion, it has plenty of incentive to continue this search. The Supreme Court upheld that statutory construction. The opinion wasn’t closely split. There was one dissent (Justice Ginsburg) and one recusal (Sotomayor). Still, the opinion for the other seven Justices, written by Justice Scalia, had the support of Justices who aren’t, to say the least, reliable allies of Scalia’s in the kind of ideologically driven splits that draw so much MSM attention. The 7-justice majority included Obama appointee Elena Kagan as well as Clinton appointee Stephen Breyer. What Happens Next? Argentina’s immediate reaction was that it will fight on, apparently by continuing to pay the favored creditors [Exchange Bondholders] and by continuing to exclude from these payments the FAA hold-outs. “What I cannot do as President is submit the country to such extortion,” says President Cristina Fernandez. The legal fight is over, though. And I should add that part of what SCOTUS has let stand here is a district court order the copies of its pro-holdout injunction be provided to “all parties involved, directly or indirectly, in advising upon, preparing, processing, or facilitating any payment on the Exchange bond.” Argentina’s New York agents cannot now give out money to the Exchange bondholders without aiding and abetting the defiance of a court order. Argentina must now either pay $907 million to the plaintiffs by the end of this month, or lose the ability to use U.S. financial intermediaries of any kind to pay the holders it has favored. The only possible means by which Argentina can resist the “blackmail” now and continue to pursue the policy it has in recent years is if it can pay the favored creditors without the involvement of any financial intermediary subject to U.S. court orders. This would prove tricky, especially with a tight schedule. The Rest of the World And of course even success there leaves Argentine open to the second of SCOTUS’ two punches, discovery and perhaps successful seizure of assets in third countries. Leaving Argentine matters to the side: what will be the consequence of NML’s victory in this matter, and the now-regnant Second Circuit reading of the pari passu clause, on the market for EM nation bonds? If, as at least some authoritative sources have indicated through this long fight, the pari passu language used in Argentina in the FAA followed “standard language included in substantially the same form in numerous credit documents” and if this decision changes how that language has been understood, then the markets will have to develop work-arounds: because from time to time sovereigns will default, and some sort of restructuring will have to occur. How those work-arounds will work is beyond me. But then, given my poor record trying to predict the twists and turns of this saga that is perhaps for the best. Read More