Fund managers, analysts and traders often talk about the importance of being selective in stock picking. While the emergence of the risk-off/risk-on trade in recent years has perhaps lessened the appeal of this somewhat, in many markets an investor’s choice of sector or company continues to mean vastly differing returns. Since the global financial crisis,… [Read more]

Several developments in 2010 will linger well into 2011. My colleagues and BMI’s Oil and Gas Team see industry majors continuing their push into deepwater drilling and unconventional hydrocarbons, while cash-rich national oil companies keep looking for upstream opportunities. Depressed US gas prices are unlikely to move significantly in 2011, while Asia-Pacific remains the LNG… [Read more]

Recent price action has bolstered my view that recent weakness in commodity markets is part of a temporary correction, rather than the start of a trend change. Commodities are bouncing across the board today, in line with a general recovery across asset classes. For instance, the Dow has held the key 11,000 level, while the… [Read more]

After eight months of protracted negotiations, Iraq finally appears within reach of forming a new government. Incumbent Prime Minister Nouri al-Maliki’s dogged efforts to retain the premiership have succeeded. His State of Law alliance won 89 seats in Iraq’s March 2010 parliamentary elections, and his premiership prospects were boosted by last-minute support secured from conservative… [Read more]

While my bullish Latin American fixed income views have played out really well of late, other Latin American asset classes have been much harder to call. A case in point has been Brazil’s Bovespa equity index which, despite the rapid sell-off in April and May is trading pretty much where it started the year. I… [Read more]

For decades, oil and gas investors in Africa have focused on exploiting the riches of the continent’s established producers Nigeria, Angola, Libya and Algeria. In recent years, however, spurred on by large discoveries offshore Ghana and in the Lake Albert region in Uganda, the industry has been looking beyond the traditional oil markets to a… [Read more]

Industrial commodities such as energy and base metals are highly correlated to risk appetite and hence equity markets. Below I highlight the monthly rolling correlation between Brent crude and the Dow Jones. The two main things to note are that first, on a monthly basis, the correlation stands at 0.9 (which implies a strong and… [Read more]