http://www.emergingmarketsmonitor.com Emerging Markets Monitor RSS Feed from Business Monitor International en Copyright 2008, Business Monitor International Ltd Fri, 29 Aug 2008 06:30 GMT Fri, 29 Aug 2008 06:30 GMT AFP RSS Generator Singapore's dollar looks poised for further weakness over the near term as the return of the greenback continues to undermine the currency. Since reaching an all-time high of SGD1.3438/US$ on July 15, the unit has shed 5.7% to drop as low as SGD1.4201/US$ on August 19, and is now heading towards three-year trendline support around SGD1.4400/US$. Failure to hold this level could see the unit drop as far as http://www.emergingmarketsmonitor.com/file/68482/SGD:-Medium-Term-Strength-To-Persist.html Fri, 22 Aug 2008 00:00 GMT Mozambique's economy grew by 3.4% y-o-y in Q108 (on a non-seasonally adjusted basis), a significant slowing from the 10.3% y-o-y growth seen in the preceding quarter and the 8.1% y-o-y growth seen in the same period in 2007, due in large part to widespread flooding at the start of the year. While preliminary figures from the Ministry of Planning and Development have H108 growth at 6.7% y-o-y, we do not believe that, despite the anticipated pick-up in Q2 and Q3, growth in 2008 will meet the government's 8.0% target. We have pencilled in growth similar to the 7.0% seen in 2007. http://www.emergingmarketsmonitor.com/file/68481/Slower-Q1-Growth-To-Undermine-Government-Target.html Fri, 22 Aug 2008 00:00 GMT With dollar looking well poised to head back towards US$1.4000/EUR over the medium term, we are turning our attention towards alternative funding currencies to take advantage of high yields and solid macroeconomic stories still on offer across much of the emerging markets universe. And with carry costing just 2.75%, as well as further weakness expected for the unit, the Swiss franc has been the currency to really catch our eye. http://www.emergingmarketsmonitor.com/file/68480/Spotlight-Falls-On-Swiss-Franc-As-Dollar-Strength-Persists.html Fri, 22 Aug 2008 00:00 GMT We remain broadly constructive on the Israeli shekel, which has bounced back sharply over the last two days, breaking out of its six-week downtrend, in line with the positive view we expressed on Monday. Although we concede that the best of the bull run may be over, we still do not see substantial downside ahead, particularly if the dollar remains on the weak side. Even without a rate hike on Monday, Israeli interest rates are a generous 200bps higher than the US Fed Funds rate, and we still forecast growth of 4.0% this year (compared with 0.9% in the US). http://www.emergingmarketsmonitor.com/file/68478/Shekel-Call-Playing-Out.html Fri, 22 Aug 2008 00:00 GMT The Pakistani financial markets have displayed a wide emotional register this week, with a brief burst of hope following former President Pervez Musharraf's resignation on Monday and then a backslide to pessimism towards the end of the week, chiefly as there were no signs that the coalition deadlock was easing. The Karachi Stock Exchange-100 Index, which rallied as far as 11,061.45 on Tuesday, has subsequently slid below the weekly start at 10,264.71 to close at 9,993.81 (2.6% down on the week). http://www.emergingmarketsmonitor.com/file/68479/Politics-Will-Continue-To-Dictate-Market-Fortunes.html Fri, 22 Aug 2008 00:00 GMT On the back of a downward revision to Nigeria's forecast oil export volume by our oil and gas team, delays in a government investment programme, and new estimates for growth in Q108 and Q208, we have revised down our 2008 real GDP growth forecast for Nigeria to 7.0%, from 9.6%. We have similarly revised down our 2009 forecast to 7.4% from 8.8%. http://www.emergingmarketsmonitor.com/file/68477/Headwinds-To-Growth-Forecast.html Wed, 20 Aug 2008 00:00 GMT We have long maintained a positive view on the Moldovan leu versus its benchmark dollar and euro cross rate and recently highlighted our expectation for continued appreciation in the short term (see August 8 2008 Further Leu Appreciation). This view applies to other major leu crosses and we have turned our attention to the upside potential in MDL/GBP. Indeed, from a technical perspective, the Moldovan leu is looking very positive having recently propelled through a key resistance level at MDL19.50/GBP to trade at a multi-year high of MDL18.03/GBP on August 21. With limited resistance to be found beyond this point, the potential for further major gains is there. http://www.emergingmarketsmonitor.com/file/68448/MDL-GBP:-Further-Upside-In-Short-Term.html Thu, 21 Aug 2008 00:00 GMT We retain our positive outlook on the Azeri manat, which at one point traded at AZN0.8115/US$ on August 21, taking the total gains to 4.3% ytd. We expect that further appreciation lies ahead for the manat against the dollar, with our short-term target for the unit set at AZN0.8000/US$. While we are bullish the Azeri manat, we caution that a break through key support at AZN0.8200/US$ may result in short-term depreciation to AZN0.8500/US$ - although we stress that this is not our core scenario. http://www.emergingmarketsmonitor.com/file/68449/Further-Appreciation-Ahead-For-AZN-US$.html Thu, 21 Aug 2008 00:00 GMT BMI View: The Korean won is on the precipice, and could fall towards KRW1,200/US$ in the short-to-medium term. The Bank of Korea will continue to try defending the KRW1,050/US$ area, but the best that it can hope for is to cushion the won's falls, since the main downward pressures are still in play. http://www.emergingmarketsmonitor.com/file/68447/Won-On-The-Precipice.html Thu, 21 Aug 2008 00:00 GMT Growing by 2.3% m-o-m in July - the largest monthly increase since January 2004 - Namibian CPI pressed up in July to 11.9% y-o-y, increasing the pressure for a hike by 50bps at the Bank of Namibia 's monetary policy meeting today. While NCPI exceeded South Africa's CPIX for the first time since September 2007, the bank's prime function is supporting the ZAR-NAD peg. As such, with the SARB having held its Repo rate at 12.00% suggesting a near peak to inflationary pressures (especially with the forthcoming basket reweighting) as well as avoiding a widening differential between the two countries' rates, we expect the BoN to maintain its policy rate at 10.50%. http://www.emergingmarketsmonitor.com/file/68444/Bank-of-Namibia-Likely-To-Hold.html Thu, 21 Aug 2008 00:00 GMT We believe that Mexico's brief, but effective, tightening cycle has come to an end. Headline prices are still accelerating (at a four-year high of 5.4% y-o-y in July), but the delivery of three, quick-fire 25bps rate hikes since May has reinforced Banxico's inflation-fighting credentials immeasurably. http://www.emergingmarketsmonitor.com/file/68445/Credentials-Reinforced-Now-Time-To-Hold.html Thu, 21 Aug 2008 00:00 GMT Taiwanese stocks are experiencing another shaky week, with the benchmark TAIEX index dipping back below the 7,000 mark for a weekly loss thus far of 3.8%. This confirms our view that the air has not cleared, with inflation high (5.9% in July), discernible trade-related headwinds and continued global risk aversion. Currently at 6,918.48, we would not be surprised to see a move down towards key support at 6,700 for the TAIEX, a breach of which could set up a slide to the next level of assistance at 6,550 http://www.emergingmarketsmonitor.com/file/68446/Stocks-And-FX:-Not-All-Doom-And-Gloom.html Thu, 21 Aug 2008 00:00 GMT Uncertainty regarding commodity prices, weakening domestic demand, an ongoing power crisis and ongoing political uncertainty will make South African equities a relatively risky investment choice over the coming 12 months. That said, thanks to a rebound in economic growth during the latter half of 2009 and potential recovery in commodities, there will be attractive entry points into the South African equity market over the longer-term horizon. http://www.emergingmarketsmonitor.com/file/68442/Equities:-Beware-The-Commodities-Bear.html Thu, 14 Aug 2008 00:00 GMT The Kenyan shilling made a strong move toward our short-term KES70.00/US$ target on August 20, having sold off by 2.1% to KES68.85/US$. The currency has since come back a little, trading at KES68.58/US$ at one point on August 21. On a technical basis, the fall through short-term trendline support at KES67.70/US$ sets up further losses for the shilling towards KES70.00/US$ (a target http://www.emergingmarketsmonitor.com/file/68443/Shilling-Heading-To-KES70-00-US$.html Thu, 21 Aug 2008 00:00 GMT BMI View: Bangladesh's Dhaka Stock Exchange (DSE) General Index looks set to fall further in the near term, as weak investor sentiment continues to pervade the market. Moreover, political risk is likely to rise over the next few months ahead of general elections scheduled for December. http://www.emergingmarketsmonitor.com/file/68388/Stock-Market-Primed-For-Further-Losses.html Wed, 20 Aug 2008 00:00 GMT