The Capital Markets Authority of Saudi Arabia recently announced its intention to open the local equity market to direct investment by qualified foreign investors at some point in 2015. These investors must be reputable and substantial financial institutions that manage a minimum of US$ 5 billion in assets. While foreign investors have obtained economic exposure…
US dollar strength has been building for some time, with the trade-weighted index on an uptrend since mid-2011. However, until the middle of this year the dollar rally had been hesitant, with movements in underlying major currency pairs idiosyncratic. But since early July, the US dollar has strengthened rapidly against a basket of currencies as…
Benchmark ten-year US Treasury yields will be hard pressed to go above 3.5% to 4.0% in this cycle The interconnection of a number of variables affects how far rates can rise: growth, Treasury supply/demand, volume of debts and the costs of servicing them relative to revenues, and the distribution of assets and liabilities. Outside of…
On 18 September, Scotland will vote in a referendum on whether to break away from the United Kingdom. The ‘Yes’ to independence campaign is led by the Scottish Nationalist Party (SNP) and its wily leader Alex Salmond. The ‘No’ camp is run by a motley collection of UK politicians under the banner of ‘Better Together’,…
On July 23, the SEC voted in a set of long-debated reforms to the rules governing money market funds (MMFs). The reforms, which will take effect in 2016 to allow managers and investors time to adapt, are aimed at preventing a replay of the dangerous 2008 run on MMFs triggered when the Reserve Primary Fund…
The big drop in US Treasury yields this year has once again confounded the consensus. Benchmark ten-year Treasury yields have declined from 3% to around 2.5% in under five months. Investors that took duration risk were handsomely rewarded, as 30-year long bonds have returned 12.2% year-to-date through May 23, the best performance over this period…
While emerging markets equities remain attractive in the long term, the short-term risks posed by the European debt crisis and the potential for a global recession to pressure earnings growth merit caution. We recommend remaining at policy target allocations and considering building overweights on further weakness.
MENA markets do not offer compelling value today, but may prove attractive from a long-term growth and development perspective for investors that can withstand the volatility inherent to the region.