When it comes to Sub-Saharan African markets, I favour equities as an asset class. Of course, selectivity is key: I prefer Nigerian, Ghanaian and Zambian stocks. In Nigeria’s case, I think improved investor confidence following the election will drive the market higher as participants reduce the political risk premium and focus on the attractive macroeconomic… [Read more]

China’s 2010 real GDP growth figure came in at 10.3%, slightly exceeding BMI’s revised forecast of 10.2%. With no breakdown of the data available as of yet, I can only conclude that growth momentum ended 2010 on a stronger note than expected (by ourselves and the market). Data on retail sales, which rose by 19.1%… [Read more]

The future movements of the Chinese yuan have been one of the most hotly debated issues in the global economy for many years. The initial 2.1% revaluation of July 21, 2005, after a decade at CNY8.28/US$, was almost as eagerly awaited as the release of the first Star Wars prequel, and like the latter, it… [Read more]

The devaluation of the Vietnamese dong by 5% on November 25 comes as little surprise for anyone having observed Hanoi’s woes in trying to combine a fixed exchange-rate regime with strongly pro-growth fiscal and monetary policy in recent years. Previous devaluations (in December 2008 and March 2009 most recently) have done little more than to… [Read more]

Let’s rewind two years, to a time before ‘credit crunch’, ‘quantitative easing’, ‘TARP’ or ‘staycation’ had entered the popular vocabulary. I’m talking about a time in which the term ‘currency manipulator’ was part of the zeitgeist of US-China economic relations. Today, G20 summits come and go without this phrase, which once seemed almost ubiquitous, being… [Read more]

Regular readers of RiskWatchdog will recall that back in July, I flagged up the upside potential of several sub-Saharan African currencies. At that time, the units looked well-positioned to appreciate, thanks to rising global risk appetite, bullish technical patterns and the high yields on offer. I am pleased to say that this view has played… [Read more]

If a picture is worth a thousand words, than here is a 3,460 word essay which illustrates the problems Nigeria is having with its currency, and why I think the naira has further to drop. Start with chart one, which shows the total amount of US dollars the central bank sells to commercial banks each… [Read more]