EM PM, Ecstrat

Emad Mostaque

EM PM

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
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More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Thematic (Sector/Industry)

It has been an eventful few days for those involved with Turkey as a coup was foiled and the clean-up has begun in earnest.The situation, as is the norm in the region, appears to be hideously complex with various factions vying for control in Turkey and the instigators of the putsch potentially anyone from the rapidly marginalised secularist establishment to another Islamic group with whom the AKP had been formally allied.This note attempts to untangle some of these complexities in a concise manner and consider what the impact of these events is likely to be on Turkey going forward, both in terms of the politics, which now seems to be headed fully toward an illiberal democracy and in terms of the market, which fell over 7% back to the level of two weeks ago before its post-Brexit rally.

It has been an eventful few days for those involved with Turkey as a coup was foiled and the clean-up has begun in earnest.The situation, as is the norm in the region, appears to be hideously complex with various factions vying for control in Turkey and the instigators of the putsch potentially anyone from the rapidly marginalised secularist establishment to another Islamic group with whom the AKP had been formally allied.This note attempts to untangle some of these complexities in a concise manner and consider what the impact of these events is likely to be on Turkey going forward, both in terms of the politics, which now seems to be headed fully toward an illiberal democracy and in terms of the market, which fell over 7% back to the level of two weeks ago before its post-Brexit rally.

Reports all over press now of an attempted coup in Turkey highlight yet again the underpricing of geopolitical risk across markets, something we had been given a warning about by Brexit mere weeks ago.If successful, this would mark quite the comeback by the embattled CHP, who are falling apart at the seams but are by far closest to the military establishment, even after the purges of Sledgehammer and Ergenekon where it seems the AKP were not too paranoid after all about an impending coup.We…

Reports all over press now of an attempted coup in Turkey highlight yet again the underpricing of geopolitical risk across markets, something we had been given a warning about by Brexit mere weeks ago.If successful, this would mark quite the comeback by the embattled CHP, who are falling apart at the seams but are by far closest to the military establishment, even after the purges of Sledgehammer and Ergenekon where it seems the AKP were not too paranoid after all about an impending coup.We…

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

Riedel provides equity research and analysis to leading financial organizations. By becoming members of a region (Asia, Latin America, Emerging Europe or Global), organizations have access to an integrated set of services including:

Regular company coverage reports
Up-to-date investment decision advice (buy, hold, sell)
Monthly regional and global conference calls
Customized company reports and unlimited on-line access to the program's services.

Riedel provides research coverage of companies across the full range of market capitalization. Experienced research professionals in each market develop company reports and analysis as well as earnings models and projections. Ratings are Buy, Hold and Sell with a focus on compelling investment ideas - both long and short. Downloadable, dynamic earnings models are built to facilitate sensitivity analysis.

Please feel free to contact us for complimentary access to our written research.  We want to show you that our unique research flow can add value and help develop a long-term, high value-add relationship.

Riedel's model focuses on providing clients with unique insights and consulting in addition to unlimited access to all produced research This model allows members to receive exponential benefits for their retainer fees.

Growth remains the main topic of conversation in the financial markets and among economists. But inflation is slowly surely becoming an equally important issue. Since we are seeing some degree of growth there is now also talk about the resurgence of inflation. That scourge remains quite limited as governments are still trying to get a good handle on economic expansion. Inflationary pressures are subdued everywhere.Inflation is not yet an issue, but if things develop according to expectations, it will be an issue by late this year. As inflation rises so will interest rates. Expectations are that we will see rates climb to 3% by the fourth quarter this year. Country Specific Developments:Russia: GDP begins to stabilize in April helped by oil and better global growthTurkey: Tourism drops sharply on tensions with RussiaChina:  Manufacturing sector continues to stagnate in May

Growth remains the main topic of conversation in the financial markets and among economists. But inflation is slowly surely becoming an equally important issue. Since we are seeing some degree of growth there is now also talk about the resurgence of inflation. That scourge remains quite limited as governments are still trying to get a good handle on economic expansion. Inflationary pressures are subdued everywhere.Inflation is not yet an issue, but if things develop according to expectations, it will be an issue by late this year. As inflation rises so will interest rates. Expectations are that we will see rates climb to 3% by the fourth quarter this year. Country Specific Developments:Russia: GDP begins to stabilize in April helped by oil and better global growthTurkey: Tourism drops sharply on tensions with RussiaChina:  Manufacturing sector continues to stagnate in May

EM Macro Insights: As Policy Makers Focus on Growth Inflationary Pressures Build

<div>“Erdogan once said that democracy, for him, is a bus ride … 'once I get to my stop, I’m getting off’ ” - Jordan's King Abdullah recalling a conversation with the Turkish President</div><div> </div><div>Tonight is Hıdrellez in Turkey, celebrating spring and the day on which the Prophets al-Khidr and Elijah. Traditionally wishes come true today and it would seem that President Erdoğan's wish for an executive Presidency has come one step closer to reality with the resignation of Prime Minister Davutoğlu.</div>

“Erdogan once said that democracy, for him, is a bus ride … 'once I get to my stop, I’m getting off’ ” - Jordan's King Abdullah recalling a conversation with the Turkish President Tonight is Hıdrellez in Turkey, celebrating spring and the day on which the Prophets al-Khidr and Elijah. Traditionally wishes come true today and it would seem that President Erdoğan's wish for an executive Presidency has come one step closer to reality with the resignation of Prime Minister Davutoğlu.

Global Head of Research, Smartkarma

Mark Artherton

Global Head of Research

Macroeconomics

Dollarization does not appear to be an 'active' decision by market participants. &nbsp;Unfortunately it is starting to cause issues for the banking sector, leading to rapid growth in off balance sheet derivative positions. &nbsp;Some banks are managing the gap, others seem to be struggling.We also consider the factors contributing to the weakness of the Lira, the central bank is culpable.

Dollarization does not appear to be an 'active' decision by market participants. &nbsp;Unfortunately it is starting to cause issues for the banking sector, leading to rapid growth in off balance sheet derivative positions. &nbsp;Some banks are managing the gap, others seem to be struggling.We also consider the factors contributing to the weakness of the Lira, the central bank is culpable.

TURKEY:  The 'accidental' Dollarization and what is 'off' bank's balance sheets

Turkey

iShares MSCI Turkey ETF is an exchange-traded fund incorporated in the USA. The ETF seeks investment results that correspond to the performance of the MSCI Turkey Investable Market Index.

iShares MSCI Turkey (TUR US)

After the Attemped Coup

It has been an eventful few days for those involved with Turkey as a coup was foiled and the clean-up has begun in earnest.The situation, as is the...

Emad Mostaque

Turkey Flies the Coup

Reports all over press now of an attempted coup in Turkey highlight yet again the underpricing of geopolitical risk across markets, something we...

Emad Mostaque

EM Macro Insights: As Policy Makers Focus on Growth Inflationary Pressures Build

Growth remains the main topic of conversation in the financial markets and among economists. But inflation is slowly surely becoming an equally...

David Riedel

Erdoğan Gets His Wish

“Erdogan once said that democracy, for him, is a bus ride … 'once I get to my stop, I’m getting off’ ” - Jordan's King Abdullah recalling a...

Emad Mostaque

TURKEY: The 'accidental' Dollarization and what is 'off' bank's balance sheets

Dollarization does not appear to be an 'active' decision by market participants. Unfortunately it is starting to cause issues for the banking...

Mark Artherton