Push the tempo (Market Wrap- June 14th)

Coverage: Saudi Arabia, Turkey, UAE, Egypt, Nigeria and South Africa

Author: Tanya Rawat

“Push the tempo,
Push the tempo,
Push the tempo,
Push the tempo up,
It’s the tempo” rings out the lyrics from the FatBoy Slim 90’s classic Ya Mama.

Our region laments this very vibe as it patiently awaits Saudi Arabia market opening to foreign investors though I don’t expect any major change in momentum given we are approaching the holy month of Ramadan and this news has already been priced in since January 2015. Tadawul is up ~15% YTD. In the same vein, GCC markets are expected to have thin volumes on the lack of news and thin trading volumes during Ramadan (due to shorter trading sessions).

The catalyst of the week is the FOMC minutes and Eurozone ad nauseam discussions with Greece over its debt obligations.

In Turkey, I find this as an ideal level to enter into a long position with Grexit the only tail risk to be wary of as Europe is a major export destination. We are already seeing its effects with Turkey USD 5Y CDS at 1Y highs of 234 bps.


Source: Bloomberg

Naira remained stable at 198/$ while the Rand is expected to lose ground as the Dollar continues to strengthen on the back of hawkish comments expected by Yellen this week. This is set to continue hurting the JALSH Index akin to other emerging market indices.

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