Frontier and emerging markets Facing the spectre

Frontier and emerging marketsFacing the spectre

Renaissance Capital 11 November 2015

Facing the spectre

The narrative surrounding emerging and frontier markets has become increasingly

pessimistic in 2015 – for understandable reasons. Why should global asset allocators

dedicate money to emerging markets (EM) when two of the core BRICS are in deep

recession while the US is growing well enough that the Fed is considering rate hikes? EM

currencies that were once overvalued have depreciated until they are now, on average,

fair value – but they are not yet cheap. Meanwhile, three-quarters of frontier market (FM)

currencies remain at least 10% overvalued against their own 20-year history. The spectre

of the Asian crisis looms over media discussion of EM debt, and we ourselves were

driven to write about the 1982 Latin American debt crisis when the dollar was rallying hard

and commodity prices had plunged. The conversation is more about the Skyfall-ing in

than about Diamonds Are Forever.

We think more problems will emerge in 2016, if the dollar continues to strengthen. We

believe there is a negative feedback loop between weak currencies and countries’

external debt burden that could bring down some EM banks and corporates that have

borrowed excessively in recent years. Glencore and Petrobras have survived their late

2015 scare, but companies like them may well Die Another Day.

So where do we find a Quantum of Solace? We believe long-term underlying trends

remain very positive for FM. They have never had as positive a combination of good

demographics and good-enough education as they do today. From FDI pouring into

Vietnam to the better budget in Pakistan and the investment in electricity in Kenya, we

find underlying fundamentals are improving. A positive political reform story in Nigeria and

Romania could soon be joined by one in Argentina. We are also increasingly interested in

Kazakhstan, given what we see as its undervalued currency and positive business reform

drive.

Meanwhile, in EM, the contrast with the 1990s Asian crisis is simply immense. Freely

floating currencies from Russia to South Africa should result in better current account

(C/A) trends that we suspect will surprise many economists. Foreign exchange reserves

are still a high $3trn even excluding China. Russia has been an interesting test-case in

which companies and banks have maintained foreign debt payments even after

commodity prices and the currency have halved, and despite sanctions. Reform is also

under way in EM. The latest World Bank data show that newly elected leaders in Mexico,

India and Indonesia have significantly improved their countries’ business environments,

while both Poland and Russia have achieved the same even without new leadership.

At Renaissance Capital, we believe Tomorrow Never Dies and a better tomorrow will

become more obvious as we progress through 2016. We think investors will want to

increase exposure to EM if currencies become cheaper and as GDP deterioration turns

into modest improvement. We hope currency depreciation could turn capital-controlled

Nigeria and Egypt into more attractive destinations for foreign capital in 2016, and that a

Vietnamese dong devaluation after the 16th party congress could allow for a useful

rebalancing of that fast-growing economy. Most interesting for us could be the expected

opening up of Iran to foreign investors. We believe Iran will experience a strong GDP

rebound from recession in 2015, to perhaps 6% growth in 2016 on the back of higher oil

exports and the return of $29bn of frozen offshore money. We hope that by late 2016,

investors will have moved on from EM as Live and Let Die, and can instead focus their

Goldeneye on new opportunities.

Facing the spectre

Charles Robertson +44 (203) 379-7835 [email protected] Daniel Salter +44 (203) 379-7824 [email protected] Vikram Lopez +44 (203) 379-7974 [email protected] Yvonne Mhango +27 (11) 750-1488 [email protected] Oleg Kouzmin +7 (495) 258-7770 x4506 [email protected] Research team See inside for details

Important disclosures are found at the Disclosures Appendix. Communicated by Renaissance Securities (Cyprus) Limited, regulated by the Cyprus Securities & Exchange Commission, which together with non-US affiliates operates outside of the USA under the brand name of Renaissance Capital.

This research is for general information purposes only, and should not be interpreted that Renaissance Capital is encouraging investment dealings, i.e., buying and

selling securities in Iran. Under U.S. law, “criminal penalties for violations of the Iranian Transactions Regulations may result in a fine of up to $1,000,000, and natural persons may be imprisoned for up to 20 years.” Under UK law, criminal penalties for violating restrictions on investment in, and certain financial transactions with, Iran

may carry criminal penalties including up to 2 years in prison and/or substantial fines.


Facing the spectre

2

Facing the spectre 1

Country summaries 4

Emergingα 6

Frontierα 7

When EM FX weakness feeds EM debt vulnerabilities 20

EM external debt 25

Strategy overview 8

The World Bank rankings on business 31

The legacy of communism on corruption & the ease of doing business 36

Where are we now in Frontier 39

Country profiles 53

Argentina 54 Bahrain 56 Bangladesh 58 Bulgaria 60 Croatia 62 Czech Republic 64 Egypt 68 Estonia 72 Georgia 74 Ghana 76 Greece 78 Hungary 82 Iran 90 Iraq 92 Jordan 94 Kazakhstan 96 Kenya 98 Kuwait 100 Lebanon 102 Lithuania 104 Mauritius 106 Morocco 108 Nigeria 110 Oman 112 Pakistan 114 Poland 120 Qatar 124 Romania 128 Russia 130 Rwanda 134 Saudi Arabia 136 Serbia 140 Slovenia 142 South Africa 144 Sri Lanka 148 Tanzania 150 Tunisia 152 Turkey 154 UAE 158 Uganda 162 Ukraine 164 Vietnam 166 Zambia 168 Zimbabwe 170

Contents


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Key economic indicators 173

Disclosures appendix 175


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Figure 1: Renaissance Capital country summaries – EM Country Weighting Comment

EM

Russia OW

Russia’s currency adjustment came ahead of other EM: oil prices halving in 2H14 led to a near-halving of the rouble, allowing much of Russia’s economic adjustment to lower oil prices to be taken by the currency. The extent of the rouble adjustment since mid-2014 means that the current oil price is equivalent to around $90/bl in rouble-adjusted terms, thus ensuring that Russia’s C/A remains in surplus, the budget deficit manageable and cushioning the economic hit, despite the impact of sanctions. Russia has its challenges (reform, corporate governance, demographics and growth), but provided oil holds above $50/bl next year, we see the economy growing and the rouble as stable/undervalued (see Russia, Kazakhstan, Georgia: FX, inflation & rates, published 3 November 2015). For equity investors, this means that domestic and consumption stocks in underpenetrated sectors should once again be able to show positive top-line growth in dollar terms, putting them back on the radar screen. We would also argue that – given the lack of dollar funding for much of corporate Russia post-sanctions – Russia should be relatively well shielded from any adverse market reaction related to the Fed’s first rate hike. Even as the Fed does hike, we expect Russia to be able to continue cutting rates through end-2016: we pencil in 400 bpts of cuts to 7% at end-2016 (with CPI falling to 6.7% YoY). Good for the risk-free rate, and we believe for equity valuations. We do not see investors as pricing in any easing of sanctions on Russia, though we note the reduction in violence in Eastern Ukraine, and the start of discussions between the various parties involved in Syria. Our most recent GEM Equity Fund Flows Weekly (Momentum stalls, published 6 November 2015) shows MSCI benchmarked GEM active funds neutrally weighted Russia; we believe investors who do not have Russia as part of their index have largely exited. Russia is one of the few EM countries to see 2016 earnings revised upwards over the past three months. Our OW rating assumes oil reaches $60/bl in 2016: at $50/bl oil, Russia would be closer to neutral.

CE3 OW

We see Central Europe as one of the best plays on recovery in the eurozone (where the last eight manufacturing PMI readings have been 52+) combined with resilience to Fed tightening, given the importance of the euro (and European banks) in the funding mix, given a dovish ECB. Hungary and the Czech Republic have C/As in surplus; the IMF expects Poland’s deficit to be c. 1% of GDP in 2016. The IMF anticipates 2016 growth of 2.6% in the Czech Republic, 2.5% in Hungary and 3.5% in Poland, all of which stacks up relatively well within an EMEA context; increased valuations for Western European equities are also supportive: all three CE3 markets trade at a discount (12M FWD P/E of 12.0x for Poland, 12.6x for the Czech Republic and 10.8x for Hungary vs 15.1x for MSCI Europe). Poland over the past decade traded on average at a slight premium to Western Europe on 12M FWD P/E, but currently trades at a 21% discount. Polish equities have been under pressure in the run-up to the recent elections, which saw the Law and Justice (PiS) party reach a majority (modern Poland’s first) in parliament. The new government promises a more socially focused policy, including a bank levy and forced conversion of Swiss franc mortgages: we believe much of this is to be priced in, but would nevertheless steer clear of the banks and state-owned companies for now, focusing on faster-growing mid-caps. The Czech Republic is supported by a 7% trailing dividend yield (against 10-year bond yields of just 0.5%), with Hungary supported by 2016 earnings growth that consensus expects at 26% (one of the highest in EM).

Turkey N

Tactically, we think the Justice and Development Party’s (AKP) recent convincing election victory is likely to boost markets to year-end, as the strength of the single-party majority is likely to provide enough near-term political clarity to alleviate pressure on the currency and interest rates (and by default equities). However, will the AKP use this strength to allow Turkey to find some political stability and economic recovery after a hugely damaging two-year election cycle? Or will it leverage this mandate to institutionalise its power and pursue an executive presidency via a 2016 constitutional referendum? We think avoiding a referendum, reduced polarisation and evidence of credible choices for key economic policymakers – including the central bank governor – will be crucial to sustaining any market recovery into 2016. One way or another we are likely to get answers soon. We would recommend being at least neutral weight on unloved and lowly valued Turkish banks/beta, with an eye to pulling the trigger one way or another as the choice of economic policymakers and the signals on a constitutional referendum begin to materialise. If we do avoid a referendum, we think political interest in market-hostile economic rhetoric is likely to fade. It would then just be a question of whether we see the right policymakers put in place with the new government (by year-end) and central bank governor (in April 2016).

Greece N

Syriza’s re-election and agreement to follow the EU austerity programme has taken the risk of Grexit off the table for now. Yet Greece still needs to tackle long-term debt sustainability (which could yet see a return to brinkmanship), recapitalise the banks, deliver on privatisation and pension reforms. Earnings may be depressed, but with the market outside of the banks trading on 14x 2015 earnings and 12x 2016, we are not sure that the valuation premium to EM is warranted, given that the IMF expects 2016 to be another year of economic contraction (we note that Greece has seen the second-worst 2016 earnings downgrades within EM over the past three months).

GCC N

Pegged currencies provide shelter from any EM currency sell-off, but lower oil prices remain a regional challenge, with equity markets lacking positive catalysts. Qatar is our preferred market in the absence of a sharp oil price/EM equity rally. Supported by a 4% trailing dividend yield, and 12M FWD P/E of 12.5x, Qatar budget’s oil price breakeven is just $55.5/bl according to the IMF, one of the lowest figures in the GCC. Combined with Qatar’s high level of sovereign wealth fund (SWF) reserves, we see little need for Qatar – in contrast to Saudi Arabia – to adopt fiscal austerity in 2016; meanwhile the IMF sees growth in Qatar accelerating in 2016. Qatar is under-owned by GEM investors (0.1% vs 1.1% index weight). We also see the market as benefiting from FTSE’s recent announcement that it would transition the country from FM to EM starting in September 2016. The UAE may warrant more caution: the IMF’s oil price breakeven is higher ($73/bl in 2015, $68/bl in 2016) but not worryingly so, given the level of FX reserves. However, downward pressure on property prices may act as an overhang in terms of confidence, investment and bank lending. According to Knight Frank, Dubai property prices fell by 12.2% during the past year (the largest drop in the world) and Cluttons, in a recent report, expects declines to continue over the remainder of the year. We suspect the recent slump in EM currencies over the course of the year may be behind the market softness, though we believe the authorities’ anti-speculative measures will have reduced the risk of a hard landing.

South Africa

UW

South Africa is trading near its 10-year relative valuation peak to EM (admittedly, boosted somewhat by Naspers' premium valuation). Though we see the rand as cheap, twin deficits remain, the sovereign rating is vulnerable to downgrade, and labour and power/infrastructure issues undermine the growth story: PMI readings remain sub-50. We get the management story and international expansion, but South African equities are trading on 15.9x 12M FWD P/E (in line with DM), while 10-year government bond yields are in excess of 8.5% and the IMF expects just 1.4% growth in 2015, slowing to 1.3% in 2016. With CPI close to the top of the South African Reserve Bank’s 3-6% range, and with twin deficits keeping the currency vulnerable, we think interest rates are unlikely to support the story. We see the market as fully valued unless we've got it wrong and the commodity cycle is about to rebound sharply. MSCI EM benchmarked active funds are still underweight the market, but the extent of the underweighting has fallen a long way (down to just 0.6% for MSCI EM indexed active funds)

Egypt UW

We like Egypt as an underbanked economic reform story, with accelerating growth and bank lending as investment projects come on-stream. However, our REER analysis shows the currency to be overvalued, and we would await a weaker currency before adding to the market. Meanwhile, the recent crash of a Russian airliner may well dampen tourism activity (and related FX receipts) over the coming quarters. We see banks, real estate and cement as likely to benefit from an acceleration in growth and investment. Bottom up, we see several names doing well operationally.

Note: OW=overweight, N=neutral, UW=underweight. Source: Bloomberg, Renaissance Capital

Country summaries

http://researchadmin.rencap.com/eng/research/MorningMonitors/streg.asp?SEC=4&EMail=1&URL=Attachments/CIS_FX_and_rates-031115(1).pdf&ITEMID=21203&TEMP=8ABC69C1-AA89-42B4-9994-3DF35BBFDE4C

http://researchadmin.rencap.com/eng/research/MorningMonitors/streg.asp?SEC=4&EMail=1&URL=Attachments/CIS_FX_and_rates-031115(1).pdf&ITEMID=21203&TEMP=8ABC69C1-AA89-42B4-9994-3DF35BBFDE4C

http://researchadmin.rencap.com/eng/research/MorningMonitors/streg.asp?SEC=4&EMail=1&URL=Attachments/Fund_Flows-061115.pdf&ITEMID=21216&TEMP=8ABC69C1-AA89-42B4-9994-3DF35BBFDE4C


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Figure 2: Renaissance Capital country summaries – FM Country Weighting Comment

FM

Pakistan OW

Investors tell us they love India’s reforms, but seemingly ignore what we see as a comparable reform story in Pakistan, trading at half the valuation: Indian equities trade on a 12M FWD P/E ratio of 17.0x, double the 8.5x ratio for Pakistan. We see Pakistan as sharing many positives of an FM country (e.g. strong demographics, improving education, urbanisation, low levels of bank lending and reform) plus characteristics of the more-established EM (market liquidity, infrastructure and impressive technocrats). MSCI’s review of Pakistan for potential reclassification back to EM (where it was until 2008) could act, we believe, to bring Pakistan back on the radar screen of EM investors. Following on from the recent fuel price increases, the market will be looking for delivery on the privatisation agenda as well as progress on the ambitious infrastructure roll-out plan. The IMF sees Pakistan’s GDP growth accelerating from 4.2% in 2015 to 4.5% in 2016, and the country’s sub-1% of GDP C/A deficits for 2015 and 2016 (on IMF estimates) also appeal to us, given Pakistan’s growth rate, which in turn should limit the extent of any currency adjustment.

Romania OW

Romania’s credit cycle has just turned positive, after several years of deleveraging, and we see the banks are experiencing an asset-quality-led earnings recovery story. We see Romania as ignored by many investors but believe the country offers exposure to: 1) a rebound in eurozone growth – Romania is on track to have the fastest growth in the EU in 2016; 2) competitive labour costs, well below even CE3 peers; 3) an under-leveraged domestic economy, with loan growth now picking up; 4) sub-2% C/A deficit and sub-3% budget deficit in 2016; 5) a reformist new president, with elections in 2016 potentially delivering a supportive parliament, with the recent resignation of Prime Minister Victor Ponta potentially accelerating that transition; 6) upside risk to the IMF’s GDP forecasts of 3.4% in 2015 and 3.9% in 2016; and 7) a 10.3x 12M FWD P/E multiple. We like exposure to the credit cycle via the banks and real estate sectors.

Kazakhstan OW

We like Kazakhstan’s valuations; the presidential election passed (as anticipated) without surprise; and the decision to weaken the tenge now makes the currency look good value to us, sufficient for us to recommend an overweight. Kazakhstan has outlined a positive reform agenda, including the potential privatisation of up to 60 companies, financial and legal reforms and the opening up of opportunities for foreign investors to co-invest alongside the $78bn Samruk-Kazyna SWF. We see the potential for 700 bpts of rate cuts over the course of 2016.

Morocco OW

Morocco’s equity market has de-rated down to a 15.1x 12M FWD P/E multiple, from 19x earlier this year. Admittedly, this is a premium valuation to the rest of FM, but in contrast to many frontier African countries, we see Morocco as providing pan-African investors with an opportunity to diversify Sub-Saharan African (SSA) exposure and gain exposure to a pick-up in eurozone growth, with the IMF expecting Morocco to grow 3.7% in 2016. Morocco has a currency that – according to our REER calculations – does not look overvalued, and where the C/A deficit for 2016 is expected to be sub-2%.

Vietnam OW

IMF forecasts suggest Vietnam will grow at 6% in 2015-2016 – around the top end of FM – which we attribute to strong export-orientated FDI flows helped by Vietnam’s numerous free-trade deals and plentiful electricity supply. We expect fiscal tightening and a slowdown in credit growth after the January party congress – to address the large budget deficit and rising public debt burden – will be offset by devaluation of the currency. We see Vietnam as a core holding for many funds, supported by its Asian Tiger characteristics, further privatisation and growth in the 6-9% range over most of 2015-2025.

Nigeria N

We still believe the naira needs to be adjusted weaker. Failing that, we can envisage a challenging time for the Nigerian economy, with capital controls making it harder to do business, constraints on banks keeping credit tight and international investors holding off from investing in equity and local debt. As the government (finally) gets appointed, currency policy and the reform agenda in Nigeria should become clearer: investors will be looking for clarity on recent regulatory actions against MTN, Stanbic and the banks. Frontier investors are very underweight, and valuations for the banks are more attractive than those in Kenya for those who wish to stay exposed.

Kenya N

Kenya has been a hiding spot for investors within SSA. Bank lending and investment in infrastructure have delivered strong growth. However, with liquidity tightening, the signs are that bank credit quality is coming under pressure, and the country’s twin deficits concern us (the IMF expects a C/A deficit of 9.6% of GDP in 2015 and a budget deficit of 8.1% – we are more optimistic on the former). Although external debt issuance may help somewhat, and yes, infrastructure and other growth-producting investments have boosted the current account deficit, but with a currency that appears expensive on our REER measure, we believe Kenya remains vulnerable. We see the risk to the monetary policy stance on the upside, given that US rate hikes are yet to commence, fiscal policy is expansionary, and a strong El Niño event is a real risk.

Saudi Arabia

UW

Although Saudi Arabia’s pegged currency provides shelter from any EM currency sell-off, June’s market opening to QFI investors failed to trigger a flood of new foreign capital entering the market, which in turn undermined domestic sentiment. Moreover, we believe positions in off-index, liquid Saudi Arabia could be used as a source of funding for FM investors facing redemptions. In contrast to 2015’s spending increases to smooth the political transition, we can envisage the government trimming expenditure in 2016, particularly on infrastructure, to reduce the budget deficit (estimated by the IMF at 22% of GDP in 2015, given an oil price fiscal breakeven of $106/bl for that year). We focus on specific names exposed to healthcare and education, which we believe can grow even in a low oil price/low spending environment.

Kuwait UW We find Kuwait disappointing in terms of GDP-adjusted scores on corruption and its legal system. Inconsistent delivery on reforms, combined with a lack of strong stock ideas, keeps us underweight (as indeed are most frontier investors we meet).

Off-index

Iran –

In the coming months, the expected removal and/or suspension of sanctions on Iran could open up this $400bn economy with its $95bn market capitalisation stock market to foreign investors. We expect Iran’s economy to contract in 2015 but rebound to 6% growth in 2016-2017. Key supports for this view include $29bn of frozen offshore cash and the likely addition of 0.5-1.0Mb/d of oil exports, combined with some portfolio inflows. We expect foreign investors will distinguish more between sectors than the locals do, who remained fixated on dividend yields of around 15-20%.

Note: OW=overweight, N=neutral, UW=underweight. Source: Bloomberg, Renaissance Capital


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Figure 3: Emergingα

Name Ticker Country CP* TP Rating Upside

potential Case

BHP Billiton BLT LN S Africa GBp942 GBp1,200 BUY 27%

We like: 1) BHP’s low-cost, long-life assets, which generate sector-leading margins; 2) a management team that delivers on productivity promises; 3) its low capital intensity, with capex/EBITDA below 50%, on our forecasts; 4) an attractive dividend yield of 8%; and 5) balance-sheet and cash-flow flexibility. We see the recent issues around the burst dam at Samarco iron ore as already having affected the price, and have incorporated this into our forecasts.

Sberbank SBER RX Russia RUB93 RUB96 BUY 3%

Our positive view on Sberbank is based on the assumption of asset quality turning the corner by YE15 and profitability doubling YoY to 17.4% in 2016, leaving Sberbank well positioned to capture any growth opportunities in the Russian market, as well as providing a positive dividend outlook, in our view. Trading on only 4.1x 2016E P/E, on our estimates, at a 40% discount to its five-year historical average, we think Sberbank is undervalued. Our ongoing caveat is that Sberbank often does not trade on its merits but rather as a proxy for the Russian market and economy.

X5 FIVE LI Russia $21.8 $30.0 BUY 38% From 3Q15 we expect X5 to start seeing faster top-line growth than Magnit (BUY, TP $51.0/GDR, CP $46.4/GDR), and as the market gets more comfort that this is sustainable the discount at which X5 trades relative to Magnit should narrow, in our view.

Yandex YNDX US Russia $16.1 $17.7 BUY 6%

Underperformance has been partially owing to declining market share, but the recent ruling of the Federal Antimonopoly Service (FAS) on anti-competitive practices by Google (not covered) is a major positive in this regard, in our view. We believe this, combined with some stabilisation in advertising, should help Yandex’s c. 25% valuation discount to Mail (BUY, TP $20.7/GDR, CP $18.4/GDR) to narrow.

Tiger Brands

TBS SJ S Africa ZAr32,741 ZAc35,000 BUY 7% We believe Tiger Brands, with its current portfolio of strong brands and market dominance, and with the correct management team in place at all levels of the organisation, is a formidable player in the fast-moving consumer goods (FMCG) space in SA.

Mr Price MPC SJ S Africa ZAr21,359 ZAc26,600 BUY 25%

We think the market has likely over-reacted to a weaker five-month sales update, with the share price down 17% since then. We still see 15% HEPS growth in FY16E and a three-year HEPS CAGR of 18.1%. We also see its RoE at 58.5% in three years’ time. We believe this will be the highest in SA retail.

NEPI NEPI LN S Africa EUR9.5 EUR10.4 BUY 9% NEPI offers exposure to the Romanian retail, office and industrial space. Blue-chip tenants, a significant development pipeline, low funding costs and high initial yields on developments will convert to high-teen growth in euro dividends, as well as NAV growth, in our view.

Turkish Airlines

THYAO TI Turkey TRY9.2 TRY10.6 BUY 16%

The bulk of Turkish Airlines’ revenue is in FX and driven by international traffic, providing a natural hedge against worsening macro. Turkish Airlines is short on the Turkish lira, which helps its margins in a weakening lira environment. More stable yields and low hedging of fuel purchases are the other positives we see.

AFK Sistema

SSA LI Russia $6.7 $10.0 BUY 49%

We believe Sistema offers the best exposure to the telecoms sector in Russia (it owns 53.5% of MTS [HOLD ADRs, TP $10.1/ADR, CP $6.8/ADR; HOLD commons, TP RUB249, CP RUB201]) and other fast-growing assets. The Detsky Mir stake transaction, pulp & paper export exposure, potential resolution of issues around its Sistema Shyam TeleServices (SSTL) subsidiary and an import substitution boost for technology subsidiary RTI are positive catalysts for the stock, in our view.

Bashneft BANE RX Russia RUB1,949 RUB2,600 BUY 33%

We see a significant disconnect between Bashneft's share-price performance (down -55% since the start of 2014 vs -47% sector average) and operational deliveries (fastest volume growth in the sector YtD in 2015, of over 10%, a 10% 2015E dividend yield and 20% 2015E FCF yield, on our estimates). We view market concerns over recent ownership changes as exaggerated and expect this to be addressed during the strategy update later this year.

Globaltrans GLTR LI Russia $5.0 $6.0 BUY 21%

We think Globaltrans’ valuation discounts the status quo in the Russian rail industry, while we think, finally, there are conditions leading to a large net reduction of railcars in the system, clearing the system of excess supply and leading to a slow restoration of prices. We view Globaltrans as the prime beneficiary of these changes.

InterRAO IRAO RX Russia RUB1.2 RUB2.3 BUY 89%

We think InterRAO is one of the highest profitability growth stories in Russia, transforming the company from RUB23bn EBITDA in 2014 to what we forecast to be RUB90bn EBITDA in 2016. Coupled with deteriorating capex (which should moderate to RUB12bn by 2017), the FCF yield in 2015 should stand at 40% and 70% in 2017, on our numbers. Even if shareholders receive only a 25% payout, we believe that would still translate into one of the highest dividend yields on the street.

IDH Corp IDHC LN Egypt $5.3 $6.9 BUY 31%

IDH Corp has high visibility of 20% EBITDA CAGR (2014-2018E), given that: 1) brand loyalty and market leadership drives footfall; 2) economies of scale defend its high margins; and 3) small-ticket ($5), high-volume (22mn/year) growth does not rely on rising per-capita spend. It trades at too steep a discount to the GCC healthcare sector, in our view.

Juhayna Food

JUFO EY Egypt EGP7.8 EGP10.6 BUY 36%

The recent operational turnaround has yielded improved margins and we think the JV with Arla will be a significant revenue driver going forward. In light of returning political stability, FDI is picking up and, given the valuation discount to GCC peers, we would not rule out the company becoming a potential acquisition target.

*As of market close on 9 November 2015.

Source: Bloomberg, Renaissance Capital estimates

Emergingα highlights our highest-conviction stock ideas in EM pan-EMEA. We monitor

the portfolio and update it on a two-monthly basis – the aim being for Emergingα to

outperform a benchmark of MSCI EMEA.

Emergingα


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Figure 4: Frontierα – investment case

Name Ticker Country CP* TP Rating Upside

potential Case

Zenith ZENITHBA NL Nigeria NGN17.7 NGN22.4 BUY 27% We believe the market is not currently pricing in the stronger-than-expected margins and asset quality improvements we saw in 1H15. The stock is currently trading at a 29% discount to its year highs, at a level we consider to be attractive.

NEPI NEPI LN Romania EUR9.5 EUR10.4 BUY 9%

NEPI offers exposure to the Romanian retail, office and industrial space. Blue-chip tenants, a significant development pipeline, low funding costs and high initial yields on developments will convert to high-teen growth in euro dividends, as well as NAV growth, in our view.

Banca Trans.

TLV RO Romania RON2.7 RON2.8 BUY 5% We see possible upside from the potential distribution of a dividend related to the significant bargaining gain realised on the back of the Volksbank acquisition, as well as from the ability to grow business and expand RoE to the mid-teens.

Bupa Arabia

BUPA AB Saudi Arabia SAR224.8 SAR328.0 BUY 46%

We think Bupa Arabia offers high-quality exposure to the secular theme of healthcare in Saudi Arabia, offers stronger growth and lower operational risk vs listed healthcare names. We think the investment case is divorced from macro drivers, as top-line growth is predicated on the enforcement of existing regulation.

EABL EABL KN Kenya KES276.0 KES331.0 BUY 20%

We think EABL offers exposure to spirits growth in East Africa – a higher-margin product, with demand rising at 5-6x GDP growth. It also offers exposure across the board to the East African consumer. We see a significant revenue boost into 2016 from a reversal of excise duty and the introduction of Orijin RTD.

Lucky Cement

LUCK PA Pakistan PKR523.1 PKR650.0 BUY 24% Lucky has Pakistan’s leading market share by capacity; coupled with the sector’s lowest costs, this supports above-average margins and RoE of >25%, in our view. We feel the company has good exposure to falling rates and infrastructure spend.

HUB Power

HUBC PK Pakistan PKR107.0 PKR123.0 BUY 15% We believe HUB Power is a conceptually misunderstood stock. In times of local currency weakness, dollar-based implied returns could offer protection; we also think it has a significantly overestimated WACC for a quasi-dollar company.

Packages PKGS PK Pakistan PKR590.0 PKR863.0 BUY 46%

We view the company as offering deep-value exposure to the fast-growing Pakistani consumer. Over 90% of its clients are in the FMCG business. It has similar margins to consumer businesses, but trades at half the valuations, on our numbers. It also has a large investment portfolio – valued on a SoTP basis, we estimate it is trading at a 70% discount to book value.

Seplat SEPL LN Nigeria GBp75.3 GBp150.0 BUY 99%

We think Seplat is on track to double earnings next year at flat oil prices owing to four key changes: lower downtime (c. 20% extra profits), rising gas sales (+40%), OML 53 & 55 could contribute more (+15%), and payback of money owed by Nigerian Petroleum Development Company (NPDC) should reduce interest expense (+25%).

Engro Fertilizers

EFERT PK Pakistan PKR85.5 PKR138.0 BUY 61%

We believe the company is the cheapest fertiliser name in Pakistan and in our global coverage universe. We see significant value to be unlocked over the course of the next two years, as Pakistani fertiliser companies will likely be raising prices to offset the recent 60% gas price hike.

*As of market close on 9 November 2015.

Source: Bloomberg, Renaissance Capital estimates

Frontierα highlights our highest-conviction stock ideas in FM. We monitor the portfolio

and update it on a two-monthly basis, the aim being for Frontierα to outperform a

composite benchmark of 75% MSCI FM + 25% MSCI Saudi Arabia.

Frontierα


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The narrative in recent months has been one of EM in crisis as currencies collapse,

governance scandals come to light, growth plunges and debt burdens become worrisome.

Figure 5: IMF GDP growth and forecasts

Source: IMF October 2015 WEO, Renaissance Capital

Figure 6: MSCI EM performance relative to MSCI DM, $

Source: Bloomberg, Renaissance Capital

EM growth has slowed from 7.5% in 2010 to just 4.0% in 2015 (according to the IMF’s

latest World Economic Outlook). Stripping out China, EM GDP growth this year barely

exceeds that of DM: 2.2% vs 2.0% (based on GDP-weighted growth of MSCI country

constituents), with currency declines taking GDP growth negative in dollar terms.

Global growth, which peaked in 2007 at 5.7% (causing commodities to boom) has

slumped to just 3.1% in 2015, with the IMF’s 3.6% expected growth rate for 2016, if

reached, representing only a modest pick-up: the IMF is not expecting global growth to

exceed 4% between now and 20201. We doubt that this will be sufficient to really buoy

commodity prices, particularly with a rebalancing China. The 2003-2007 commodity boom

coincided with five consecutive years of global growth exceeding of 4%.

As EM currencies have weakened, the focus has turned to external debt, with some

countries showing a surge, particularly in levels of corporate debt (we note that when debt

markets become illiquid, there is no IMF for the private sector). EM sovereigns have built

up higher reserve buffers, but we still think external debt is something to watch,

particularly for commodity producers where output prices have tumbled (see later in this

report). According to the Financial Times, EM hard currency debt maturities are due to

pick up from $350bn in 2015 to $550bn in 2016 (and to remain at close to $500bn levels

annually until 2019).

1 Yes, it irritates us, too, that the IMF ignores the inevitability of the US economic cycle turning down

at some point in its forecasts.

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Strategy overview


Facing the spectre

9

Figure 7: EM currencies have sold down already and are more competitive

Note: REER for the period June 2015-September 2015 is calculated by deflating the REER level for May 2015 by currency movements vs the dollar. Aggregate figures are compiled by taking a weighted average of REER changes using dollar GDP figures for the previous year as weights.

Source: Bruegel, MSCI, Bloomberg, Renaissance Capital

Meanwhile, the lack of obvious changes in governance across many of the larger EM

countries (Russia, South Africa, Turkey, Brazil2) as growth has slowed has unnerved

investors looking for long-term value in EM. This is not to say that governance will not

improve, but it is a reminder that governance cycles take a long time – but even with slow

political change, we note the improvement in World Bank Doing Business scores for 2016

across many of the countries we look at (see later in this report).

However, it is not just EM growth in isolation that has taken a hit; EM earnings too have

taken their share of the pain. Since peaking in August 2011, EM trailing EPS levels have

declined by 28% in dollar terms. What this means is that although EM equities have

declined 17% since then, the trailing P/E for EM has actually risen slightly (from 10.9x to

12.7x); admittedly, a strong DM performance has seen DM’s trailing P/E rise by much

more (from 13.1x to 18.5x) over the same period.

Figure 8: MSCI EM and DM 12M trailing EPS, $ (August 2011 = 100)


Figure 9: MSCI EM and DM, 12-month forward P/E, x


With pressure on EM currencies and fears over external debt adding to the pain, investors

have voted with their feet: EM equities are down 12% YtD; FM equities have performed

2 See Directional economics: The problem with political longevity, 12 August 2013.

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https://research.rencap.com/eng/download.asp?id=16797


Facing the spectre

10

broadly in line with this, and are down 13%; both have underperformed even DM’s

lacklustre flat return.

EM funds have seen outflows of $61bn YtD (or 7.2% of AuM), bringing the most recent

run of outflows to $83bn (or 10.4% of AuM) since September 2014. By comparison, the

2007-2008 financial crisis saw EM funds lose about 10.2% of AuM in outflows. FM funds

have also suffered, with outflows of $1.6bn YtD (or 7.5% of AuM).

Figure 10: Cumulative inflows to EM, $mn

Source: EPFR, Renaissance Capital

Figure 11: Cumulative inflows to EM, % of AuM


Figure 12: Cumulative inflows to FM, $mn


Figure 13: Cumulative inflows to FM, % of AuM


What could turn the tide for EM?

1. A synchronised global recovery, resulting in a commodity price rebound and an

EM-friendly pick-up in global trade and investment.

2. An EM governance revolution, with an overhaul of governance models across

major EM countries such as China, Brazil, South Africa, Turkey and Russia

(these countries alone account for 43% of the MSCI EM Index).

3. Postponement of US rate hikes and the eurozone extending or expanding QE,

together with continued easing from Japan and China.

4. EM currencies rebounding from overshooting on the cheap side.

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Facing the spectre

11

The first two would clearly represent a strong fundamental buying opportunity for EM, but

our sense is that they may be the least likely for now (2003-2007 saw five successive

years of global growth in excess of 4%; the IMF doesn’t see global growth exceeding 4%

in any year over 2015-2020). Moreover, overhauling governance models takes time (and

at least political cycles, if not crises, to accelerate). Which leaves us with easier monetary

conditions and cheap EM currencies as potential supports for the current EM rebound.

October’s EM relief rally has been largely premised on point 3, with markets at one stage

pushing expectations for the Fed’s first rate hike out as far as March 2016 (with an eye on

the European Central Bank [ECB] leaving the door opening to extending and/or

expanding eurozone QE in December, and the potential for Japan to announce further

monetary stimulus) combined with a reduction of hard-landing fears for China’s economy.

The disconnect between China’s slowly softening GDP data and highly volatile short-term

data points makes China’s growth hard to monitor (we assume a gradual slowdown

continues), but there have been seven months of MoM gains in new-build property prices,

a pick-up in lending and new car sales turning positive once more, as well as the lagged

impact of six interest rate cuts so far this year and ongoing reductions in banks’ reserve

requirements.

Much of the EM rebound for now appears to have been short-covering, with EM equity

funds having seen just three weeks of inflows ($2.5bn in total) followed most recently by

outflows of $1.1bn over the week from 28 October to 4 November, after 13 consecutive

weeks of outflows ($49bn in total). Since October 2014, EM outflows have reached

$84bn.

If EM equities were back at their 1987 or 1998 relative lows vs DM (see Figure 6) or EM

currencies at their 1998-2000 REER lows (see Figure 7), we would be more comfortable

in recommending investors to buy EM assets with confidence. As it is, we see relative

value, but think EM will need better growth for the gap to close sustainably. The MSCI EM

Index is trading on a 12-month forward P/E of 11.2x, a 30% discount to the 16.0x multiple

for the MSCI World Index (well above the five-year average discount of 19%) and above

its five-year average of 10.6x. For the MSCI FM Index, the 12-month forward P/E is just

9.0x, an 18% discount to EM (on a five-year average basis, the MSCI FM and MSCI EM

indices have traded in line in terms of 12-month forward P/E) and below the five-year

average of 9.9x (although we note that the average is biased upwards owing to the effect

of Qatar and UAE, which were part of FM until May 2014, with a large weighting and high

valuations compared with other constituents).

Figure 14: Valuations vs five-year average, EM


Figure 15: Valuations vs five-year average, FM


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Facing the spectre

12

For now, we believe sentiment and market performance are still vulnerable to sudden

reversal (the October non-farm payrolls number has already seen the market

expectations of the Fed’s first hike move to December 2015), and investors need to be

wary of the pitfalls, be they external debt, overvalued currencies that have yet to properly

adjust, or twin deficits that could cause funding issues (please see Figures 20 and 21 on

pages 16-17 and Figures 22 and 23 on page 18 for more details, as well as the following

sections on currency, external debt on pp. 20-30). Aside from getting EPS growth right (a

challenging task, as the past few years have shown), we think the next most important

top-down factor that equity investors can get right on a 12-month view is currencies

(rather than growth, valuation or dividends), as we showed in our report The Focal Point:

Hindsight is a wonderful thing, published 13 April 2015.

Figure 16: EM EPS growth forecasts have been consistently too high – MSCI EM EPS growth vs expectations, % YoY

Note: Local currency EPS growth = (% change in $ EPS) – (% change in EM Currency Index); EPS growth expectation = 12M FWD EPS growth estimate (12M FWD EPS / trailing 12M EPS) shifted forward by 12 months; actual EPS growth = YoY growth in trailing EPS.


Our key OW countries have either already previously adjusted to the new oil price

environment via currency depreciation (Russia); have C/A surpluses/non-worrying deficits

with secure funding via the eurozone (CE3, Romania) or have only small C/A deficits

(Pakistan and Vietnam) and/or non-overvalued currencies (Morocco, Kazakhstan).

In countries (outside of our OWs) where we still see currencies as vulnerable – either via

overvalued currencies (Nigeria, Kenya, Egypt) or still sizeable C/A deficits (South

Africa, Turkey, Georgia) – we would advise investors to consider focusing exposure on

FX-earners or exporters, or at least companies with manageable levels of FX debt.

For those who have strong views on direction for the dollar, EM bond spreads or

commodity prices, we provide the correlation tables below (based on an updated version

of the analysis in our report The Focal Point: What drives EMEA stocks, published 20

November 2013).

Recommendations:

OW – Russia, CE3, Pakistan, Romania, Kazakhstan, Morocco, Vietnam

N – Turkey, Greece, GCC, Nigeria, Kenya;

UW – South Africa, Egypt, Saudi Arabia, Kuwait

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Facing the spectre

13

Correlations

Figure 17: Correlation to selected factors – MSCI EM and FM countries

MSCI EM

MSCI World

MSCI EM FX

Trade weighted $

Commodities (ex. oil)

Brent crude, $

EMBI spread (inverted)

Frontier 42% 42% 36% -21% 22% 24% 41%

Argentina 49% 56% 39% -17% 27% 28% 50%

Bahrain 5% 5% 6% 5% 6% 15% 7%

Bangladesh -8% -7% -8% 5% -6% 3% -5%

Bulgaria 24% 28% 29% -46% 27% 14% 17%

Croatia 34% 38% 42% -53% 34% 25% 28%

Estonia 39% 46% 36% -36% 23% 22% 32%

Jordan -7% -9% -5% -3% -4% -1% -2%

Kazakhstan 46% 45% 39% -18% 19% 27% 41%

Kenya 18% 16% 14% -13% 9% 2% 13%

Kuwait 20% 18% 16% -7% 14% 12% 17%

Lebanon 13% 14% 9% -8% 12% 6% 6%

Lithuania 38% 44% 45% -58% 31% 19% 25%

Mauritius 19% 19% 24% -30% 15% 16% 14%

Morocco 19% 26% 26% -42% 23% 14% 9%

Nigeria 17% 11% 14% -5% -2% 6% 20%

Oman 19% 22% 16% 1% 2% 10% 24%

Pakistan 25% 21% 19% -7% 15% 13% 16%

Romania 52% 57% 58% -48% 34% 34% 47%

Saudi Arabia 14% 21% 14% -6% 6% 25% 16%

Slovenia 39% 41% 45% -54% 30% 20% 34%

Sri Lanka 14% 9% 11% -6% 11% 5% 7%

Serbia 35% 39% 39% -43% 26% 28% 34%

Tunisia 8% 11% 14% -29% 14% 4% 5%

Vietnam 24% 17% 23% -7% 11% 14% 13%

EM 100% 81% 87% -35% 48% 43% 70%

Brazil 84% 70% 79% -38% 44% 44% 61%

Chile 77% 66% 72% -32% 40% 38% 58%

China 86% 62% 66% -21% 36% 28% 54%

Colombia 62% 54% 61% -29% 32% 47% 53%

Czech 54% 56% 54% -55% 32% 32% 46%

Egypt 24% 16% 20% 3% 13% 16% 17%

Greece 44% 51% 42% -32% 23% 24% 48%

Hungary 64% 62% 67% -53% 36% 32% 51%

India 77% 60% 66% -21% 40% 28% 51%

Indonesia 62% 42% 58% -12% 23% 23% 46%

Korea 88% 68% 71% -27% 36% 34% 54%

Malaysia 72% 50% 71% -23% 30% 31% 55%

Mexico 81% 79% 74% -30% 41% 37% 68%

Peru 65% 60% 58% -29% 49% 39% 49%

Philippines 68% 48% 58% -16% 27% 19% 47%

Poland 71% 71% 70% -62% 45% 38% 59%

Qatar 11% 15% 6% 1% 0% 15% 19%

Russia 76% 68% 72% -31% 42% 46% 65%

S Africa 85% 72% 80% -33% 44% 40% 61%

Taiwan 81% 64% 65% -22% 38% 34% 51%

Thailand 66% 49% 57% -26% 35% 32% 48%

Turkey 64% 54% 63% -29% 29% 15% 53%

UAE 23% 22% 20% -9% 8% 12% 24%

Source: Bloomberg, MSCI, Renaissance Capital


Facing the spectre

14

Figure 18: Correlation to selected factors – MSCI EM sectors

Weight in MSCI EM

MSCI EM

MSCI World

MSCI EM FX

Trade weighted $


Brent crude, $


China Financials 10.0% 77% 53% 58% -19% 32% 22% 47%

Taiwan IT 7.0% 70% 57% 48% -11% 27% 27% 42%

Korea IT 5.7% 61% 48% 38% -5% 17% 23% 36%

China IT 3.3% 66% 50% 52% -14% 26% 21% 42%

South Africa Cons. Disc 2.6% 59% 52% 44% -1% 23% 23% 49%

China Telecoms 2.6% 50% 33% 36% -11% 18% 10% 30%

Korea Cons. Disc 2.4% 47% 37% 28% -8% 15% 15% 22%

South Africa Financials 2.4% 60% 54% 45% -3% 17% 23% 48%

Korea Financials 2.3% 68% 53% 53% -23% 28% 22% 41%

Taiwan Financials 2.2% 70% 56% 56% -22% 36% 29% 44%

Russia Energy 2.2% 72% 64% 68% -30% 40% 46% 60%

China Industrials 2.1% 76% 55% 57% -17% 31% 22% 46%

China Energy 2.0% 82% 62% 65% -22% 40% 43% 56%

Brazil Financials 1.9% 77% 64% 71% -33% 38% 36% 53%

India IT 1.8% 42% 39% 26% -7% 18% 17% 27%

Korea Industrials 1.8% 74% 62% 54% -22% 33% 37% 47%

Mexico Cons. Staples 1.5% 69% 66% 64% -23% 30% 30% 61%

India Financials 1.5% 63% 49% 49% -13% 27% 19% 41%

Korea Cons. Staples 1.3% 34% 22% 25% -7% 3% 7% 18%

Brazil Cons. Staples 1.3% 71% 59% 71% -32% 39% 36% 52%

Korea Materials 1.2% 75% 57% 57% -15% 28% 32% 50%

Taiwan Materials 1.2% 73% 60% 59% -23% 36% 39% 46%

India Healthcare 1.1% 34% 27% 23% 2% 14% 5% 19%

China Utilities 1.1% 57% 43% 45% -12% 22% 17% 41%

China Cons. Disc 1.1% 74% 52% 57% -16% 27% 24% 46%

Indonesia Financials 1.0% 54% 36% 48% -10% 21% 18% 38%

India Cons. Staples 1.0% 41% 32% 33% -11% 23% 14% 28%

Malaysia Financials 0.9% 52% 34% 46% -9% 16% 15% 40%

China Cons. Staples 0.9% 63% 46% 50% -11% 21% 21% 44%

India Energy 0.8% 57% 43% 45% -8% 28% 22% 43%

Mexico Financials 0.8% 71% 69% 68% -27% 41% 34% 58%

South Africa Telecoms 0.8% 48% 41% 37% -17% 20% 22% 38%

Mexico Telecoms 0.8% 63% 59% 57% -26% 29% 25% 47%

Qatar Financials 0.7% 12% 16% 6% 1% 0% 15% 20%

India Cons. Disc 0.7% 57% 46% 44% -12% 26% 13% 36%

Brazil Materials 0.7% 73% 66% 68% -36% 39% 43% 58%

Poland Financials 0.7% 60% 59% 48% -30% 29% 26% 48%

Turkey Financials 0.7% 50% 42% 46% -16% 19% 10% 46%

Philippines Financials 0.7% 55% 37% 41% -5% 16% 10% 38%

Russia Financials 0.7% 71% 64% 66% -27% 34% 41% 61%

Mexico Materials 0.7% 78% 77% 72% -33% 48% 43% 65%

Thailand Financials 0.6% 57% 44% 45% -19% 22% 21% 42%

Brazil Energy 0.6% 70% 57% 67% -33% 37% 42% 52%

UAE Financials 0.6% 18% 19% 16% -7% 6% 10% 21%

Taiwan Telecoms 0.6% 24% 13% 18% -5% 8% 7% 12%

Taiwan Cons. Disc 0.6% 67% 57% 49% -16% 34% 24% 46%

India Industrials 0.6% 50% 41% 40% -7% 25% 17% 37%

China Healthcare 0.5% 48% 38% 37% -15% 14% 18% 29%

Mexico Industrials 0.5% 66% 64% 63% -22% 32% 31% 55%

South Africa Energy 0.5% 44% 48% 32% -14% 25% 48% 37%



Facing the spectre

15

Figure 19: Correlation to selected factors – MSCI EMEA sectors

Weight in MSCI EMEA

MSCI EM

MSCI World

MSCI EM FX

Trade weighted $


Brent crude, $


EMEA Financials 36.1% 87% 78% 83% -41% 43% 39% 71%

EMEA Energy 18.1% 78% 71% 74% -36% 44% 51% 65%

EMEA Cons. Disc 16.8% 79% 68% 74% -25% 39% 33% 61%

South Africa Cons. Disc 14.9% 59% 52% 44% -1% 23% 23% 49%

South Africa Financials 14.0% 60% 54% 45% -3% 17% 23% 48%

Russia Energy 12.8% 72% 64% 68% -30% 40% 46% 60%

EMEA Telecoms 7.7% 80% 70% 78% -41% 43% 41% 64%

EMEA Cons. Staples 6.1% 77% 65% 76% -31% 34% 32% 63%

EMEA Materials 5.9% 81% 71% 79% -46% 56% 45% 59%

South Africa Telecoms 4.6% 48% 41% 37% -17% 20% 22% 38%

Qatar Financials 4.3% 12% 16% 6% 1% 0% 15% 20%

EMEA Industrials 4.3% 80% 65% 75% -32% 37% 31% 60%

Poland Financials 4.0% 60% 59% 48% -30% 29% 26% 48%

Turkey Financials 3.8% 50% 42% 46% -16% 19% 10% 46%

Russia Financials 3.8% 71% 64% 66% -27% 34% 41% 61%

UAE Financials 3.5% 18% 19% 16% -7% 6% 10% 21%

EMEA Healthcare 3.2% 70% 61% 65% -28% 31% 27% 51%

South Africa Energy 2.9% 44% 48% 32% -14% 25% 48% 37%

South Africa Healthcare 2.8% 46% 40% 32% 3% 12% 19% 37%

South Africa Cons. Staples 2.5% 44% 36% 34% -2% 9% 18% 35%

South Africa Materials 2.5% 40% 35% 32% -27% 35% 29% 22%

Russia Cons. Staples 2.1% 51% 46% 49% -20% 21% 24% 50%

Russia Materials 2.0% 72% 64% 69% -32% 46% 38% 59%

EMEA Utilities 1.8% 69% 66% 68% -46% 42% 44% 61%

South Africa Industrials 1.5% 59% 47% 41% -5% 22% 28% 42%

Poland Energy 1.5% 38% 35% 32% -19% 14% 17% 34%

Turkey Cons. Staples 1.3% 46% 37% 44% -19% 22% 13% 35%

Russia Telecoms 1.2% 63% 58% 61% -27% 37% 42% 58%

Turkey Industrials 1.2% 53% 47% 47% -21% 15% 8% 42%

Egypt Financials 1.0% 19% 15% 16% 5% 11% 15% 15%

Poland Utilities 0.9% 39% 34% 29% -14% 19% 20% 29%

Poland Materials 0.8% 67% 61% 60% -30% 42% 36% 58%

Qatar Industrials 0.8% 12% 14% 6% 1% 4% 10% 14%

Poland Cons. Disc 0.8% 42% 42% 34% -14% 17% 23% 34%

Turkey Telecoms 0.7% 38% 35% 35% -12% 22% 9% 31%

UAE Industrials 0.7% 32% 26% 27% -14% 15% 12% 24%

Hungary Financials 0.7% 55% 55% 51% -29% 25% 21% 44%

Greece Cons. Disc 0.6% 35% 40% 31% -15% 17% 19% 41%

Turkey Energy 0.5% 45% 39% 38% -17% 21% 17% 33%

Czech Financials 0.5% 43% 42% 32% -13% 15% 16% 36%

Czech Utilities 0.5% 35% 33% 25% -3% 10% 20% 32%

Qatar Telecoms 0.5% 8% 8% 3% 1% -3% 13% 10%

Turkey Cons. Disc 0.5% 44% 37% 39% -18% 18% 11% 33%

Turkey Materials 0.4% 47% 38% 43% -29% 26% 9% 33%

Greece Telecoms 0.4% 7% 7% 6% -4% 4% 4% 10%

Hungary Energy 0.3% 49% 42% 46% -20% 24% 31% 41%

Qatar Utilities 0.3% 6% 5% 3% -2% -5% 3% 11%

Russia Utilities 0.2% 58% 52% 56% -20% 30% 40% 56%

Poland Telecoms 0.2% 17% 20% 12% -10% 4% 15% 14%


16


Facing the spectre

Figure 20: MSCI EM key macro and market data

Vs avg 20Y FX REER

2016E C/A (% GDP)

2016E budget deficit (% GDP)

External debt (% GDP)*

2014 private sector credit (% GDP)

Change in credit to GDP (%) 2010-2014

GDP acceleration (deceleration)

P/E vs 5Y avg

P/E vs GEM vs 5Y avg

2016E earnings growth

2016E earnings upgrades (past 3M)

Investor positioning vs

benchmark

12M FWD P/E (x)

Sector neutral 12M FWD P/E

(x) Brazil -22.0 -3.8 -7.20 40% 81.0 21.6 2.0 6% -1% 20% -2% 1.06 11.1 11.4 Chile -7.1 -1.6 -2.26 61% 83.0 9.6 0.2 -5% -16% 19% -6% -0.16 14.7 15.7 China 32.2 2.8 -2.30 8% 141.6 16.4 -0.5 -1% -6% 6% -5% -3.76 9.4 10.7 Colombia -21.3 -5.3 -2.98 39% 44.8 12.9 0.3 -21% -38% 25% -8% -0.44 12.8 14.0 Czech Republic 13.0 1.2 -1.10 65% 54.6 5.0 -1.4 8% 2% -10% -1% -0.09 12.6 19.7 Egypt 22.2 -4.5 -9.37 15% 34.0 -8.8 0.1 74% 34% 27% 1% 0.04 9.6 13.2 Greece 0.0 0.0 -3.58 259% 124.4 27.8 1.0 -23% -37% 707% -16% -0.03 9.7 10.1 Hungary 4.4 4.3 -2.31 148% 47.0 -16.7 -0.5 17% 9% 26% -1% 0.27 10.8 13.2 India 20.7 -1.6 -6.96 22% 50.3 3.8 0.2 21% 19% 4% -4% 6.44 17.6 16.5 Indonesia 4.0 -2.1 -2.29 35% 37.6 8.1 0.4 1% -7% 12% -8% -0.10 13.9 13.8 Korea 5.6 6.7 0.35 30% 162.2 -6.1 0.5 14% 6% 15% -4% -5.86 10.4 10.5 Malaysia -13.5 2.1 -3.16 67% 136.0 13.2 -0.2 4% -4% 6% -4% -1.96 15.4 15.7 Mexico -14.0 -2.0 -3.50 37% 32.1 4.4 0.5 12% 8% 26% 1% -0.58 18.8 16.8 Peru 2.5 -3.8 -2.17 34% 33.9 8.8 0.9 -14% -28% 11% -21% -0.05 12.7 12.6 Philippines 25.8 4.5 -0.64 25% 46.8 10.0 0.3 5% -4% 12% -2% 0.12 17.7 20.1 Poland 1.1 -1.0 -2.50 71% 56.1 4.5 0.0 2% -5% -6% -4% -0.73 12.0 15.6 Qatar 13.2 -4.5 -1.54 43% 68.9 -6.9 0.3 10% 2% 12% -3% -0.99 12.3 14.9 Russia -5.0 5.4 -3.89 45% 64.4 14.1 3.2 0% -3% 10% 2% 0.02 5.7 8.6 South Africa -22.1 -4.5 -3.69 45% 83.2 -7.4 -0.1 22% 18% 7% -4% -0.66 15.9 14.8 Taiwan -9.9 11.8 -2.40 32% 140.8 0.6 0.4 -10% -20% 3% -7% -5.10 12.1 13.2 Thailand 7.6 5.4 -1.39 37% 135.0 28.1 0.7 10% 4% 12% -5% 0.69 13.2 13.9 Turkey -0.7 -4.7 -0.76 56% 72.0 33.6 -0.2 -4% -9% 17% -2% 1.07 9.5 9.8 UAE 11.4 3.1 -4.01 63% 68.0 -19.4 0.1 14% 7% 11% -4% -0.45 11.1 13.8

EM

8.9% -7.1%

11.5

Note: 2Q15 except: Chile, India, Qatar, Russia, Taiwan (1Q15); China, UAE (4Q14). Source: Bloomberg, MSCI, IMF, World Bank, Renaissance Capital Estimates

17


Facing the spectre

Figure 21: MSCI FM key macro and market data

Vs avg 20Y FX REER

2016E C/A (% GDP)

2016E budget deficit (% GDP)

External debt (% GDP)*

2014 private sector credit (% GDP)

Change in credit to GDP (%) 2010-2014

GDP acceleration (deceleration)

P/E vs 5Y avg

P/E vs GEM vs 5Y avg

2016 earnings growth

2016 earnings upgrades (past 3M)

Investor positioning

12M FWD P/E (x)

Argentina -45.3 -1.6 -4.83 26% 14.1 3.4 -1.2 -10% -1% 35% 12% -5.45 7.1 Bahrain 28.9 -5.9 -13.95 143% 63.0 -8.5 -0.2 -14% -5% -15% -2% -1.18 7.5 Bangladesh 27.5 -1.1 -3.80 17% 41.0 5.9 0.3 9% 33% na na 0.65 17.2 Bulgaria 27.2 0.2 -1.64 87% 63.0 -10.8 0.2 na na na na -0.12 na Croatia 12.8 1.5 -4.37 108% 75.0 2.7 0.2 -13% -3% -4% 0% -1.47 10.1 Estonia 28.4 0.3 -0.52 98% 76.3 -19.6 0.9 -13% -4% 6% 21% -0.47 8.6 Jordan 23.9 -6.5 -3.22 65% 71.0 -5.3 0.9 -9% 1% 20% -2% -0.75 8.5 Kazakhstan -22.0 -4.1 -0.23 80% 39.5 -15.3 0.9 0% 6% -6% 3% -0.32 5.6 Kenya 49.0 -9.2 -7.30 24% 37.3 9.4 0.3 -7% 3% 16% -1% -0.39 9.5 Kuwait 16.7 7.0 0.07 16% 64.0 -15.9 1.3 -7% 3% 15% -7% -9.86 11.3 Lebanon 33.0 -19.3 -8.02 49% 94.6 30.2 0.5 -20% -10% 1% -5% -2.42 7.6 Lithuania 26.1 -2.4 -1.38 76% 47.0 -15.8 0.9 6% 21% 21% 0% -0.12 na Mauritius 4.8 -4.8 -3.91 542% 103.7 17.5 0.6 -16% -5% 0% 0% -1.13 7.5 Morocco -4.0 -1.6 -3.55 42% 97.7 5.9 -1.2 10% 30% 9% -1% -6.39 15.1 Nigeria 43.2 -1.2 -3.15 5% 21.1 -23.9 0.3 -12% -1% 10% -5% -6.36 7.8 Oman 30.8 -24.3 -19.99 26% 58.9 -0.2 -1.5 -4% 6% 1% -3% -1.87 9.0 Pakistan 15.4 -0.5 -4.19 23% 19.5 -7.3 0.3 7% 13% 3% -5% 0.88 8.5 Romania 15.1 -1.5 -2.63 57% 33.5 -8.0 0.5 21% 28% 2% 1% 0.44 10.3 Serbia -4.7 -3.9 -3.81 47% 48.0 1.3 1.0 na na na na -0.20 na Slovenia 13.6 6.2 -5.29 118% 61.0 -28.3 -0.5 -12% -3% 2% 0% -1.82 10.6 Sri Lanka 17.7 -2.0 -6.36 53% 26.9 3.5 0.0 -11% -2% 7% -1% 2.76 12.6 Tunisia 0.0 -7.0 -4.04 62% 72.0 4.5 2.0 na na na na -0.72 na Vietnam 30.5 -0.9 -6.67 37% 100.1 -3.0 -0.1 19% 39% 16% -13% 1.83 14.7 Saudi Arabia 13.1 -4.7 -19.41 18% 44.5 -0.7 -1.2 0% 13% 17% -6% 7.13 12.4**

Frontier

10.2% -4.9%

9.0 *2Q15 except: Bangladesh, Croatia, Jordan, Nigeria, Oman, Pakistan, Serbia, Vietnam, Saudi Arabia (1Q15); Bahrain, Kuwait (4Q14). ** 12M fwd P/E for Saudi Arabia is calculated for Tadawul index

Source: Bloomberg, MSCI, IMF, World Bank, Renaissance Capital Estimates


Facing the spectre


Facing the spectre

18

EM and FM – key figures

Figure 22: C/A deficit/surplus vs fiscal deficit/surplus, % of GDP (2015E)

Source: IMF October WEO 2015, Renaissance Capital

Figure 23: Government debt/GDP (2014) vs private credit/GDP (2014), % %, x-axis, , y-axis

Source: IMF, Renaissance Capital

Argentina

Bangladesh BulgariaCroatia

UkraineEstonia

Jordan

Kazakhstan

Kenya

Kuwait

Lithuania

Mauritius

MoroccoNigeria

PakistanRomania

Serbia

Slovenia

Sri Lanka

Tunisia

Vietnam Iran

Ghana

Zambia

Georgia

Rwanda

Tanzania

Uganda

Brazil

Chile

China

Colombia

Czech RepublicGreece

Hungary

IndiaIndonesia

Korea

Malaysia

Mexico

Peru

Philippines

Poland

QatarRussia

South Africa

Taiwan

Thailand

Turkey

UAE

-15

-10

-5

0

5

10

15

-10 -8 -6 -4 -2 0 2 4 6

C/A

def

/Sur

p, %

GD

P

Fiscal def/surp, %GDP

C/A deficit/surplus, % GDP vs Fiscal deficit/surplus, % GDP

Saudi, Oman, Lebanon, Iraq, Zimbabwe

China

Korea

Taiwan

India

South Africa Brazil

Mexico

Russia

Malaysia

Thailand

Indonesia

PolandPhilippines

Turkey

Chile

QatarUAE

Colombia

Peru

Hungary

Czech Republic

Egypt

Argentina

Bahrain

Bangladesh

Bulgaria

Croatia

Ukraine

Estonia

Jordan

Kazakhstan Kenya

Kuwait

Lithuania

Mauritius

Morocco

Nigeria

Oman

Pakistan

Romania

Serbia

Slovenia

Sri Lanka

Tunisia

Vietnam

Saudi Arabia Iran

Ghana

Zambia

Georgia

RwandaTanzania

0

20

40

60

80

100

120

140

160

180

0 10 20 30 40 50 60 70 80 90 100

Govt debt to GDP vs Private credit to GDP

Lebanon,Greece


Facing the spectre


Facing the spectre

19

Figure 24: Investor positioning vs MSCI benchmarks, GEM and FM funds

Note: as of 30 September 2015. EM positioning calculated from universe of active GEM funds benchmarked to MSCI EM. FM positioning calculated from universe of active FM funds benchmarked to MSCI FM.

Source: MSCI, Bloomberg, EPFR, Renaissance Capital

Election timetable

Figure 25: Election timetable, selected EM and FM Country Date Type

2015 Argentina 22-Nov-15 Presidential - second round 2016 Vietnam Jan-16 National Congress Uganda Feb-16 Presidential and parliamentary Iran 26-Feb-16 Parliamentary Russia Sep-16 Parliamentary Bulgaria Oct-16 Presidential Romania Nov-16 Parliamentary DR Congo Dec-16 Presidential and parliamentary Ghana 07-Dec-16 Presidential and parliamentary Morocco 2016 General election Georgia 2016 Parliamentary

Source: National Democratic Institute

-10

-8

-6

-4

-2

0

2

4

6

8

Indi

aT

urke

yB

razi

lT

haila

ndH

unga

ryP

hilip

pine

sE

gypt

Rus

sia

Gre

ece

Per

uC

zech

Indo

nesi

aC

hile

Col

ombi

aU

AE

Mex

ico

S A

fric

aP

olan

dQ

atar

Mal

aysi

aC

hina

Tai

wan

Kor

ea

S A

rabi

aS

ri La

nka

Vie

tnam

Ukr

aine

Pak

ista

nB

angl

ades

hR

oman

iaB

ulga

riaLi

thua

nia

Ser

bia

Kaz

akhs

tan

Ken

yaE

ston

iaT

unis

iaJo

rdan

Mau

ritiu

sB

ahra

inC

roat

iaS

love

nia

Om

anLe

bano

nA

rgen

tina

Nig

eria

Mor

occo

Kuw

ait

Active fund over/underweights


Facing the spectre


Facing the spectre

20

Global capital has found the US to be more attractive than EM since around 2011, when

commodity prices stopped rising and when growth rates between the US (rising) and EM

(falling) began to converge. A weakening trend in EM FX was then fuelled by the Fed

tapering its quantitative easing (QE) policies and talking about interest rate hikes. The

result of weakening currencies is that EM GDP in dollar terms has shrunk and external

debt has begun to attract attention from the Bank for International Settlements (BIS),

ourselves and most recently the IMF. We are now seeing a negative feedback loop of

weaker currencies making EM look less creditworthy, and concerns about credit then

contributing to weaker currencies.

The four-year bear trend in many EM currencies accelerated sharply in 3Q15, when

China devalued its currency marginally and the US Fed delayed an expected rate hike

owing to global growth concerns. It has bounced a little since late September. We have

done a lot of work3 on real effective exchange rates (REER). We looked at what current

spot rates would be, if they were to align with the average REER rates of the past 20

years, or if they were to weaken to the weakest REER rates of the past 20 years. We

found that the rouble, for example, was at its weakest in 1999, at a spot rate that would be

RUB114/$ in today’s money, once we strip out the inflation differential since 1999.

Overall, this work showed that EM currencies on average have moved from overvalued in

2011 to fair value in 2015.

In a world where many assets are expensive, does this mean we should now buy EM, or

might EM FX test the lows we have seen previously?

Figure 26: EM and FM aggregate REER

Source: Bruegel, Renaissance Capital

Perhaps the best argument against EM testing the lows seen in 1998-2004 is that EM

countries are much more creditworthy than they were then. FX reserves have soared.

Sovereign ratings are higher. Most EM central banks have moved from exchange rate to

inflation rate targeting, so do not intervene in currency markets except in extreme

circumstances. For these reasons, we do not expect most EM currencies to test their

previous lows. However, for the reasons outlined below, we do expect further weakness.

So taking Brazil as a proxy for EM, the weakest the real has ever been since 1995 in

today’s terms is BRL5.85/$. We estimate its long-term fair value at BRL3.02/$, so we view

the late October 2015 spot rate of BRL3.9/$ as cheap. We are inclined to think it may

weaken to BRL5/$, but doubt it will test its BRL5.85/$ lows.

3 See Thoughts from a Renaissance Man: When will the EM FX sell-off be complete?, 28 September

2015.

80

85

90

95

100

105

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120

Jan-

95

Oct

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-00

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Jul-1

1

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-12

Jan-

13

Oct

-13

Jul-1

4

Apr

-15

EM ex-China aggregate REER EM aggregate REER FM Aggregate REER

When EM FX weakness feeds EM debt vulnerabilities

http://research.rencap.com/eng/download.asp?id=21101


Facing the spectre


Facing the spectre

21

Figure 27: FX reserves ($bn) of MSCI EM, MSCI EM ex. China and MSCI FM

Note: There are data gaps, particularly in older data, but we do not think this affects the graphs given this scale, FM data do not include SWF data from Kuwait.

Source: IMF

Why do we remain bearish?

First, because momentum is powerful, and even after the past month’s bounce in

currencies the weakening trend remains firmly in place.

Second, because optimism around the global economy is centred on the US, yet

US growth keeps disappointing and we are now past the point when the US is

cyclically due to record another recession. We believe the next US recession

could come within a year or so4 and that this would have a negative impact on

EM. EU growth is weak, and while we see reasons to assume it will get better

next year, this is said every year and rarely works out well. China’s GDP growth

is slowing and we believe it will continue to slow by 0.5 ppt each year until the

2020s. Meanwhile, a number of EM economies are in recession, which helps

neither the US nor the EU.

Third, we believe EM currency weakness will itself reflexively (to paraphrase

George Soros) weaken EM currencies. As currencies weaken, external debt

burdens become more problematic, especially in countries where commodity

exports are important and where commodity prices themselves have halved. As

outlined in the next section, we are concerned about debt problems in EM banks,

other financial institutions and corporates. Recent canaries in the coal-mine

include Petrobras and Glencore – weakness in their bonds in 3Q15 fed into

weakness in the Brazilian real and the South African rand, respectively – which

in turn made their debt burdens look more problematic. Neither canary actually

died, but we doubt it will be long before a dead canary will be hitting the front

pages.

Fourth, while we are optimistic that EM FX weakness will improve C/As – and by

more than consensus expects – we doubt this will show up strongly enough in

the next few quarters to convince markets that currency trends will reverse.

Within EM, 12 countries have currencies stronger than their long-term fair value. Of these,

eight have C/A surpluses, so we are not particularly concerned by that overvaluation. The

4 See Thoughts from a Renaissance Man – when is the next US recession?, 7 October 2013, and

Thoughts from a renaissance man: S&P500 at 1,100 by March 2016?, 13 January 2015.

6,831

3,046

370

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Jan-

80

Jan-

81

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12

Jan-

13

Jan-

14

EM reserve assets (excluding gold) EM ex-China reserve assets (excluding gold) Frontier reserve assets (excluding gold)

Latin American debt crisis

Asian crisis




Facing the spectre


Facing the spectre

22

remaining four are Egypt and Peru (both with 2015 C/A deficits that the IMF estimates at

nearly 4% of GDP), Indonesia and India. The most overvalued is the Egyptian pound,

which would need to have a spot rate of EGP9.8/$ today for the currency to be at fair

value. We expect the new governor of the central bank will march in that direction, but

slowly, and if it takes until 2017 to reach EGP9.8/$ then the target may have moved to

around EGP11.4/$ (assuming Egypt keeps running inflation above that of its trading

partners).

There are 11 EM countries with currencies cheaper than their long-term average. Of

these, four have C/A surpluses (on 2015 IMF estimates), so around fair value looks like a

reasonable target to us. For example, Russia’s rouble should trade at RUB59/$ to be in

line with fair value. To us the Taiwan dollar looks strongly supported by its double-digit

C/A surplus, but it (and the South Korean won) will both be strongly influenced by the yen,

which is also extremely weak. We like Central European currencies.

While seven EM countries with cheap currencies have C/A deficits (on 2015 IMF

estimates), the deficits are less than 1% of GDP in Poland and Chile, while Mexico’s is a

manageable 2% of GDP. The potentially bigger problems we see are in Brazil, South

Africa, Turkey and Colombia, with C/A deficits of 4-6% of GDP. Of these, the currency

that has weakened least is Turkey. It needs to depreciate by around 20% to match the

other three. We expect the other three should see a larger improvement in their C/A

position than Turkey. We see all four as vulnerable to further EM FX weakness but think

Turkey is most vulnerable, particularly given the possible controversy over a new central

bank governor in 2016.

Figure 28: How the spot FX rate compares to REER fair-value estimates and worst-case scenario values Current FX

rate vs $ FX rate implied by

long-term average REER FX rate if REER

falls to lows Date of

REER low Long-term average

divided by current rate 2015 C/A

(% of GDP)

China 6.35 8.41 11.0 Apr-95 1.32 3.1 Philippines 46.7 58.0 78.2 Feb-04 1.24 5.0 Egypt 8.02 9.81 14.9 Dec-03 1.22 -3.7 India 65.0 78.2 100.0 Feb-96 1.20 -1.4 Qatar 3.64 4.12 4.52 Aug-11 1.13 5.0 UAE 3.67 4.09 4.44 Aug-11 1.11 2.9 Czech Republic 24.5 27.0 40.3 Jan-95 1.10 1.7 Thailand 35.5 38.1 54.3 Jan-98 1.07 6.2 Korea 1,131 1,184 1,819 Jan-98 1.05 7.1 Indonesia 13,640 14,057 36,071 Jun-98 1.03 -2.2 Peru 3.27 3.33 3.71 Jul-07 1.02 -3.7 Hungary 282 285 384 Apr-95 1.01 5.0 Turkey 2.89 2.87 4.26 Oct-01 0.99 -4.5 Poland 3.87 3.78 4.58 Nov-97 0.98 -0.5 Greece 0.90 0.85 0.98 Sep-00 0.94 0.7 Russia 63.5 59.0 114 Jan-99 0.93 5.0 Chile 686 627 776 Jun-03 0.91 -0.7 Taiwan 32.5 29.2 34.6 Nov-09 0.90 12.4 Malaysia 4.26 3.64 5.59 Dec-98 0.85 2.2 Mexico 16.6 14.1 23.6 Mar-95 0.85 -2.4 Colombia 2,929 2,269 3,103 Mar-03 0.77 -6.2 Brazil 3.91 3.02 5.85 Oct-02 0.77 -4.0 South Africa 13.7 10.2 15.2 Dec-01 0.74 -4.3

Source: Bruegel, IMF October 2015, Renaissance Capital

It is notable that three-quarters of MSCI FM currencies are at least 10% stronger than

their long-term fair value, while only one ‘beyond frontier’ currency (the Saudi riyal) is.

According to the IMF, only six of the 23 MSCI FM countries are expected to run a C/A

surplus in 2015 (and we think Vietnam may run a deficit too). Iran is the only country with

a currency that is cheaper than fair value which also runs a C/A surplus, but we expect a

(roughly 10%) depreciation here too, as the authorities attempt to align the official rate

with the informal rate.


Facing the spectre


Facing the spectre

23

FM have also seen a rise in FX reserves, but total MSCI FM FX reserves at $370bn are

just 12% of MSCI EM (ex. China) FX reserves.

We are reasonably comfortable with the exchange rates in Kuwait, Morocco and

Romania, and now see the Kazakh tenge as offering very good value. At KZT279/$, the

tenge is actually cheaper than it has ever been over the past 20 years after adjusting for

inflation. Falling oil prices could drive it weaker in the short term, but this level looks good

value to us over the medium term.

We cannot say the same about the Argentine peso, as we do not trust that country’s

inflation data, which negatively affects our REER calculations. We think the Georgian lari

– now at fair value – needs watching because of Georgia’s C/A deficit, but we have

worried about this for nearly a decade already.

Our REER model shows overvaluation of 15-43% in Kenya, Nigeria, Vietnam,

Bangladesh, Sri Lanka and Pakistan. We assume depreciation will come in 2016. Of

these countries, the need for depreciation does not look acute to us for Vietnam, given its

high FDI inflows, but we think it would still be helpful. Of the Gulf currencies, Oman and

Bahrain look most vulnerable to a devaluation to us.

Figure 29: FX vs REER fair value and REER lows, and C/A balance as % of GDP – MSCI FM and beyond frontier

Current FM



falls to lows Long-term average


(% of GDP)

Kenya 102 152 266 Jul-95 1.49

-9.6 Nigeria 199 285 618 Apr-95 1.43

-1.8

Lebanon 1,514 2,014 2,413 Dec-93 1.33

-21.0 Vietnam 22,310 29,114 35,506 Jan-04 1.30

0.7

Bahrain 0.38 0.49 0.46 Jun-11 1.29

-4.8 Estonia 0.88 1.13 1.66 Jan-95 1.28

0.6

Bangladesh 77.8 99.2 117 Dec-06 1.28

-0.9 Bulgaria 1.73 2.20 5.24 Jan-97 1.27

1.0

Lithuania 0.88 1.11 1.90 Apr-95 1.26

-2.2 Jordan 0.71 0.88 1.02 Sep-95 1.24

-7.4

Sri Lanka 141 166 205 Jan-96 1.18

-2.0 Kuwait 0.30 0.35 0.42 Jun-95 1.17

9.3

Pakistan 104 120 135 Sep-01 1.15

-0.8 Romania 3.90 4.49 9.35 Feb-97 1.15

-0.7

Slovenia 0.88 1.00 0.97 Aug-97 1.14

6.7 Oman 0.39 0.44 0.49 Nov-07 1.13

-16.9

Croatia 6.73 7.59 8.02 Aug-97 1.13

1.7 Mauritius 36.0 37.0 43.9 Dec-06 1.03

-4.8

Tunisia 1.96 1.96 2.10 Dec-13 1.00

-8.5 Morocco 9.65 9.26 9.92 Aug-12 0.96

-2.3

Serbia 106 101 166 Feb-01 0.95

-4.0 Kazakhstan 277 216 272 Oct-99 0.78

-3.0

Argentina 9.49 5.19 10.8 Apr-14 0.55

-1.8 xxx

Saudi Arabia 3.75 4.24 5.05 Mar-08 1.13

-3.5

Georgia 2.38 2.37 3.92 Apr-95 1.00

-10.7 Tanzania 2,185 2,103 2,573 Dec-11 0.96

-8.2

Zambia 11.9 10.8 17.6 Dec-92 0.91

-1.4 Iran 29,956 26,224 60,389 Jun-95 0.88

0.4

Ghana 3.86 2.79 4.78 Aug-14 0.72

-8.3 Ukraine 21.6 14.3 31.6 Feb-15 0.66

-1.7

Note: We think Kenya's C/A deficit will be 7-8% of GDP in 2015 but Nigeria's deficit will be 3% of GDP. Source: Bruegel, IMF, Renaissance Capital

As we were so struck by the overvaluation of Egypt in EM and Nigeria and Kenya in FM,

we ran the same model for a number of other African currencies. We discovered this

overvaluation is not continent-wide. While all the economies we looked at are running C/A

deficits, at least five now have currencies cheaper than fair value.

Zambia has caught attention with its currency plunge in recent months, but the implied fair

value in our calculations is ZMW10.8/$, and the weakest point (in 1992) was ZMW17.6/$.


Facing the spectre


Facing the spectre

24

Ghana’s currency is cheap, but given the scale of that economy’s problems, we see a

very real chance that it could test its previous record lows (dating from 2014) of closer to

GHS5/$.

Interestingly, the currencies of Angola and Nigeria are both equally overvalued. The

Ethiopian birr – with that country now beset by stringent capital controls (like Nigeria and

Egypt) – is the most overvalued of all.

Once we consider C/As, our relative top picks would be Côte d’Ivoire and Morocco. The

IMF thinks Nigeria will also run a small deficit in 2015, but we think it will be closer to 3%

of GDP and that it is capital controls that are keeping it under control. Zambia’s currency

looks decent value taking into account its C/A deficit, but ahead of elections in 2016, we

are not convinced this currency is about to turn stronger.

Figure 30: Spot FX vs REER fair-value and REER-lows Current FX



falls to lows Date of

REER low Long-term average


(% of GDP)

Ethiopia 21.0 36.4 37.3 Jan-04 1.73 -12.5 Kenya 102 152 266 Jul-95 1.49 -9.6 Nigeria 199 285 618 Apr-95 1.43 -1.8 Angola 137 196 973 Jun-95 1.43 -7.6 Rwanda 764 1,041 938 Feb-04 1.36 -10.6 Egypt 8.02 9.81 14.9 Dec-03 1.22 -3.7 Ivory Coast (Cote D’Ivoire) 597 660 697 Aug-97 1.11 -1.0 Uganda 3,530 3,862 3,838 Aug-11 1.09 -10.5 Mozambique 42.7 45.7 50.6 Oct-10 1.07 -41.0 Gabon 593 632 657 Sep-00 1.07 -7.0 Tanzania 2,169 2,103 2,573 Dec-11 0.97 -8.2 Morocco 9.80 9.26 9.92 Aug-12 0.94 -2.3 Zambia 12.2 10.8 17.6 Dec-92 0.89 -1.4 South Africa 13.7 10.2 15.2 Dec-01 0.74 -4.3 Ghana 3.81 2.79 4.78 Aug-14 0.73 -8.3

Source: Bruegel, IMF, Renaissance Capital


Facing the spectre


Facing the spectre

25

Like the BIS, we have been concerned by data showing the rise of EM external debt in

recent years. We are not so worried by the absolute amount but we are concerned by the

shift in the type of borrowing (from syndicated lending to eurobond borrowing) and the

shift in type of borrower (from the sovereign to the financial and corporate sector). We

also see some echoes from the Latin American debt crisis of the early 1980s, which we

believe warrant attention. As in the preceding FX section, we see mitigating factors – we

are not forecasting a lost decade for EM – but we do expect EM and FM casualties to

extend beyond than Ukraine’s bondholders.

The greatest surprise to us from looking at the Latin American debt crisis of 1982 is that

Mexico defaulted when its 1981 external debt ratio was a mere 26% of GDP5. All except

four MSCI EM countries have a debt ratio above this today. How did the default happen

given such a low ratio? We see the key triggers being: 1) the sharp dollar rally of 1980-

1982; 2) the fall in global commodity prices; 3) the country’s C/A plunging into deficit; and

4) Mexico’s overconfidence in the late 1970s that led to an expansion of borrowing. This

was combined with poor debt management foresight, including a failure to build up FX

reserves and a lack of attention to debt servicing capacity.

Figure 31: $/EUR since 1975 – 2015 looks much like 1981

Source: Bloomberg

Today we again see a sharp dollar rally, a fall in global commodity prices and a

deterioration in C/A ratios – and all this after a period when Fed QE policies have

encouraged a rise in EM and FM borrowing. For those who argue that more QE is the

solution to any global problem, we advise paying more attention to the US shale gas

industry or EM external debt. We believe problems in both are a direct consequence of

cheap financing owing to QE. The positive contrast with the early 1980s is that FX

reserves tend to be higher and greater attention is paid to debt service ratios. The

negative contrast with previous periods is that today it is the private sector that is

borrowing.

During the worst months of 2008-2009, syndicated lending to EM private sector borrowers

slowed, but did not disappear. Turkish banks could roll over syndicated loans at rates that

only rose some 30-40 bpts compared with pre-crisis levels. However, eurobond markets

seized up as funds faced redemptions. There was an absolute decline in the stock of EM

eurobond issuance as bonds were repaid and roll-overs for some EM borrowers became

impossible. Thanks to increased regulation of banks, EM borrowers have become more

dependent today on eurobond markets and less dependent on (more reliable and steady)

syndicated lending.

5 See Thoughts from a Renaissance Man: About that 1982 debt default, 4 September 2015.

0.6

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Inflationary 1970s

Volcker'shigh interestrates

Plaza accord

German re-unification

Tech bubble deflates

40-year average is $1.19/EUR

Past 12 months similar to early 1980sfor $ and commodities

EM external debt



Facing the spectre


Facing the spectre

26

We have also seen a shift in borrowers – from sovereigns, who tend to have plenty of

experience in managing their external debt, to private sector borrowers, who do not. Also,

while the IMF stands ready to support sovereigns in trouble, there is no global institution

that does this for private sector players who run into financing problems.

In addition, private sector borrowers have historically been poorly covered by sell-side

research relative to sovereigns. A former colleague once joked that there were 10

economists for every sovereign, but 10 corporates that were covered by each corporate

analyst, meaning sovereigns should be 100 times better covered (this was the joke).

Again, banking regulation is a negative factor here, with sell-side research being cut back,

arguably making this situation worse.

We have often argued that official responses to a crisis create the seeds of the next crisis.

For example, low interest rates in the 1970s contributed to an inflation problem that blew

up around 1980. We believe that QE and banking regulation have probably contributed to

what will go wrong in the next year or two.

The graphs below show where some of the biggest increases in borrowing have come, by

sector and by country. Aside from China, it is often commodity exporters that have

borrowed the most. Since we collected these data, the BIS has released June 2015

figures that reclassify much of the “other financial institutions” debt as corporate debt

related to special purpose vehicles (SPV). So if a Russian company establishes an SPV

in the Netherlands, and then borrows via that SPV, it is classified in the chart below as

“other financial institutions” but now might be classified as corporate debt. This does not

change our conclusions much – the point is that it is private sector and not sovereign debt

that has increased dramatically over the past decade.

Figure 32: Stock of outstanding international debt securities issued by EM banks in $bn, 2005 vs 2015 – classified by nationality

Source: BIS

152

10495

83

39 39 38

17 16 12 9 9

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Stock of outstanding eurobonds issued by banks, in $bn

Mar-05 Mar-15


Facing the spectre


Facing the spectre

27

Figure 33: Stock of outstanding international debt securities issued by EM "other financial institutions", 2005 vs 2015 – classified by nationality (note with June 2015 data not listed here, the BIS has reclassified debt. “Other financial institutions” here is now often classified as “corporate” via an SPV in more recent data)

Source: BIS

The main positive we can take from the past year is that Russia has been a test case for

what happens when a currency halves in value, when commodities halve in value and

when external markets cut off roll-overs (in Russia’s case due to sanctions). Thanks to

wise hoarding of FX reserves and the decisions to maintain a C/A surplus by allowing

rouble depreciation and to offer FX support to local banks and corporates, Russia has

successful weathered these challenges. We think we may see more problems in

commodity exporters that have not built up hefty FX reserves, which may be one reason

why the rand has been so weak and why FM FX looks vulnerable.

Below we list MSCI EM and later MSCI FM countries by gross external debt as a

percentage of GDP in 2014-2015, using IMF data. Where available, we show the figure

once we strip out inter-company loans – in Hungary’s case, gross external debt of 148%

of GDP (2Q15 debt figures divided by IMF-assumed 2015 GDP) becomes 84% of GDP

once we exclude loans from foreign parent companies (such as Volkswagen) to

Hungarian subsidiaries. Brazil looks better than Colombia (or indeed Mexico) on this

measure. There are problems with the data – our Russia economist Oleg Kouzmin points

out that Russia’s external debt burden will be 40% of GDP this year, not 45% as implied

by these figures.

Figure 34: Gross external debt (% of GDP, capped at 100%, LHS) vs 2Q15 international debt securities ($bn, RHS) issued from this residency

Note: *** means 2014 data, * means 1Q15 data and no star means 2Q15 data.

Source: IMF, BIS

245

127

6450

37 27 25 19 17 19 17 12

0

50

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Mex

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Stock of outstsanding Eurobonds issued by "other financial institutions" in $bn

Mar-05 Mar-15

134

35

6344

28

93

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113 110

33 30

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External debt to GDP (%) Ext. Debt ex IC Lending Outstanding debt sec by residence (BIS June 2015)

Mexico ext debt in 1981 was 26% of GDP


Facing the spectre


Facing the spectre

28

Aside from the debt disaster that is Greece, Malaysia ranks highest once we account for

inter-company loans. We think it is no coincidence that Malaysia now also has the

weakest Asian currency in EM. Markets do not like the country’s high private sector

domestic indebtedness (at about 140% of GDP6) either. Chile and Turkey also rank poorly

on external debt metrics.

We also show the stock of outstanding international debt securities recorded by residence

of the issuer. The largest debt in absolute dollar amounts has been issued by Mexico,

Korea, Brazil, Greece and then Turkey, in that order. This does not correspond to the

sectoral figures shown above, which show the nationality of issuer, and will include debt

issued by offshore entities, such as SPVs in the Netherlands, Cyprus, the Cayman islands

and elsewhere.

Curiously, the four countries whose currencies we like the least – Egypt, Peru, Indonesia

and India – are among the eight EM countries with the least external debt. The data imply

that Egypt has little to fear from currency weakness worsening its external debt burden.

The resistance to currency weakness probably stems mainly from inflation fears related to

Egypt’s dependence on food imports.

That same external debt ratio suggests that in Central Europe, Hungary has most to lose

from currency weakness – which may help explain why it is running quite such a large

C/A surplus (in the long run this should improve its net external indebtedness, and reduce

the risk of an attack on its currency). Interest rate hikes to defend the currency would

appear to be more necessary than in Poland or the Czech Republic if sentiment soured

towards the region.

The external debt ratios in MSCI FM suggest some vulnerabilities, especially given

overvalued currencies and C/A deficits. These data are less reliable than the figures we

publish above for EM. For Kenya, we use IMF debt sustainability work that shows external

debt at around 50% of GDP, while the initial data search provided a figure of 24% of GDP,

which we believe only refers to public external debt.

Mauritius is off the scale with a debt ratio of 1,611% of GDP (542% once inter-company

loans are stripped out), while the latest IMF Article IV report suggests its external debt is

$94bn, or roughly 700% of GDP. Such numbers reflect Mauritius’ status as a financial

centre, and we learnt during 2008-2009 that it is usually a mistake to focus too much on

these data when looking at a financial centre’s debt vulnerability.

Among other high debt countries, Ukraine is re-profiling its external debt. Bahrain has a

high debt level of 143% of GDP, which is only partly offset by the $11bn SWF (2014

data), equivalent to 31% of GDP. Its ratios look worse than those of Oman, with external

debt of 26% of GDP and a SWF that was 30% of GDP in 2014. Investors do not ask

about Bahrain but both Bahrain and Oman look problematic to us.

6 See Figure 14 from Frontier and emerging markets: Reform awakens, 14 May 2015.



Facing the spectre


Facing the spectre

29

Figure 35: Gross external debt (% of GDP, capped at 100%, LHS) vs 2Q15 outstanding international debt securities ($bn, RHS)


Source: IMF, BIS

While Slovenia was seen by some as the “next Greece” back in 2012, generally we see

EU members such as Slovenia, Estonia, Bulgaria, Lithuania, Croatia and Romania as

having protection from EU membership – and in the case of Slovenia, Estonia and

Lithuania, from euro membership too. In addition, as noted above, four of these are

forecast to have a C/A surplus in 2015, on IMF data.

Kazakhstan’s poor headline external debt ratio is under 40% of GDP once inter-company

loans are excluded. Lebanon remains an aberration; its external debt tends to be held by

locals, similar to Turkey.

The headline figures suggest there is little reason for Nigeria to fear a devaluation, and

the same applies to Pakistan and Bangladesh as well.

For the sake of comparison, we include some of our beyond frontier countries too.

Georgia ranks highly, in part owing to its large financial sector. Ghana looks problematic

to us. Iran’s metrics appear stronger than Saudi Arabia’s – until we recall Saudi Arabia’s

SWF.

Figure 36: Gross external debt (% of GDP, LHS) vs 2Q15 outstanding international debt securities ($bn, RHS)


Source: IMF, BIS

2

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Facing the spectre


Facing the spectre

30

Figure 37: Gulf region SWF assets as a share of GDP, 2014-2015 SWF assets, $bn GDP, $bn (2015E) SWF assets/GDP, %

Kuwait 592 134 440% UAE 1215 364 334% Qatar 256 197 130% Saudi Arabia 677 649 104% Bahrain 11 31 34% Oman 19 63 30% Note: SWF assets data for Bahrain, Kuwait, Oman and Qatar have not been updated since 2014 – it would be wise to assume these are lower now.

Source: Sovereign Wealth Fund Institute, Renaissance Capital

Overall, in EM we fear the negative feedback loop between currencies and external debt

in Turkey, particularly given the concerns we laid out in May about the country’s private

sector domestic debt7. We may also see greater difficulty for some companies in Brazil

and South Africa if their currencies depreciate. We are less concerned but still wary about

Malaysia and Hungary too.

Today we see less reason to be concerned about Russia, Poland or the Czech Republic.

While we expect Egypt’s currency to depreciate, we doubt this would create a negative

feedback loop, given its low external debt.

In FM, currencies look expensive relative to EM and C/As look worse. FM may be more

similar than EM to Latin America in the 1980s. Some Gulf countries do look concerning to

us. Meanwhile, a negative feedback loop may be far more problematic for Kenya than

Nigeria, given their differing external debt burdens. However, as we noted in our currency

report in September8, the small absolute size of deficits and the depth of financial markets

means FM may be easier to support via the IMF, and FM external debt is less about the

private sector than in EM.

7 See Frontier and emerging markets: Reform awakens, 14 May 2015.

8 Thoughts from a Renaissance man: When will the EM FX sell-off be complete?, 28 September

2015.




Facing the spectre


Facing the spectre

31

Who’s really good and who’s just gaming the system?

The World Bank’s Ease of Doing Business rankings for 2016 have made some hefty

revisions to the methodology. Some suggest Russia’s high ranking is just because of

methodological changes. Is this fair, and does this also invalidate Kenya ‘great leap

forward’ or offset the deterioration in Georgia?

We are the first to admit that the World Bank survey can be gamed to some extent.

However, the survey itself has had flaws – it showed that it was harder to get electricity in

Russia in 2012 than in Nigeria – and these flaws are gradually being rectified. We think

the value of the survey is shown by China’s efforts to scrap it. They don’t like seeing

China – the world’s second-largest economy – coming 84th.

Our key takeaways from the rankings are as follows.

1. Kenya, Kenya, Kenya. Wow. Uganda too.

2. Russia shows the second best absolute improvement in EM – and ranks best

among the BRICS today. At least one of our long-term forecasts for Russia is

coming good.

3. New reformist leaders in EM have produced dividends. See the big ranking and

absolute improvements in India, Indonesia and Mexico.

4. Turkey is the only EM to show a significant absolute deterioration in the

business climate (the legal system).

5. Rwanda – which was once the darling of this survey – has slipped in both

ranking and absolute score, while Georgia has slipped back in ranking owing to

methodology changes. Both still have good scores relative to their per-capita

peers.

6. Some FM are improving their absolute scores faster than any EM countries. Roll

on frontier!

7. Kazakhstan comes out very well too – and we like it from a currency perspective

too.

In this section, first we focus on EM current rankings and how the World Bank’s

methodology has changed; second, we show the same for FM; and third, we show the

absolute scores, which most commentators tend to ignore.

If we first look at the 2015 and 2016 rankings based on the new methodology, we find that

Indonesia, India and Mexico – three of the main reform stories in EM due to new

leaders being elected over 2012-14 – are the countries that have improved the most

in the EODB rankings. Indonesia has improved by an impressive 11 places, while

Mexico and India have both improved by four places. Russia and Poland have moved

three places better. Russia is currently the best of the BRICS, in 51st place, compared

with SA in 73rd place, China in 84th, Brazil in 116th and India in 130th. Russia is trying to

offset negative demographics and the country’s dependence on hydrocarbons by

improving the micro-climate – Russia is now 41st in the world for setting up a new

business. In 2012, Russian President Vladimir Putin set a target for Russia to improve

from 120th to 20th place by 2018; as we wrote in 2012, we thought around 34th place

was easy to achieve by 2018 and 28th place was plausible. It remains on track.

The World Bank rankings on business

http://www.doingbusiness.org/methodology/methodology-expansion


Facing the spectre


Facing the spectre

32

Korea and Taiwan – widely considered by all except MSCI to be developed markets (DM)

– are the best places to run a business. Malaysia – currently beset by debt and currency

problems – is in an impressive 18th place and sets a target for Vietnam to emulate.

In our EEMEA region, the UAE is best – as anyone who’s arrived at Dubai immigration

can testify. Central Europe comes next, and we like these countries for their currency

valuations too (they show fair value in our REER work). Turkey is just marginally behind

Russia. Egypt, which we consider a reform story, is actually in last place in EM, and has

deteriorated by five places vs a year ago. This is on a par with Brazil and nearly as bad as

the Philippines. Egypt’s parliamentary elections may help to address this issue – there is

only so much President Abdel Fattah el-Sisi can do by decree. However, a weak legal

system – as we identified earlier this year – is a big obstacle.

Figure 38: Ease of Doing Business ranking 2015-2016 (RHS), and change (RHS)

Source: World Bank

The overall rankings have changed very significantly for some countries, owing to

changes in methodology. This is saddest for South Africa: its rank has worsened by 26

places due purely to methodology (and then it worsened by another four ranks in 2016, as

shown above). Thailand and Colombia also look much worse – as do Egypt and Qatar in

the EEMEA space.

The biggest beneficiaries in EM of the new methodology are Hungary and the Czech

Republic. Brazil and India both improved their rankings more than Russia owing to the

methodology change.

Figure 39: 2015 rankings under old and new methodology (LHS), ranked by the change in rank (RHS)

Source: World Bank

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Above the red line is worse ranking


Facing the spectre


Facing the spectre

33

Frontier markets

The refrain in FM is Kenya, Kenya, Kenya. This country improved 21 places in the 2016

rankings, which is the best performance in the MSCI DM, EM or FM, and is only equalled

in the rest of the world by Costa Rica and Brunei. This is a huge achievement, and is

supportive of the argument we made a few years ago that when you see a near neighbour

like Rwanda become the best improved reformer in the world in 2010, then this will likely

encourage some other countries to say “if they can do it, so can we”. It does surprise us,

but it shouldn’t. Kenya’s president was the former finance minister, he is pro-business and

Kenya is working hard to address the obstacles, such as electricity supply, that are

holding it back. This pro-growth drive has its costs – as seen in the large twin deficits that

have put the currency under pressure – but if they succeed, we think the Kenyan

economy could grow annually by 5-7% for the rest of the decade and show an

acceleration to double-digit growth in the 2020s.

Uganda deserves a mention too – improving by 13 places – as does Kazakhstan, which

we also like for its cheap currency. Kazakhstan is also on a big pro-reform drive, as Oleg

Kouzmin wrote a few months ago. The head of Russia’s Sberbank said that Kazakhstan’s

reform plans sounded like they had come out of Singapore (which took 1st place in the

EODB survey in 2014-2016).

Other countries we like for their reform range from Romania (unchanged in 37th place)

and Pakistan, which actually worsened by two places, to 138th. Morocco is a decent

candidate for investors to avoid currency problems among African equities, and it

improved its rank by five places, to 75th. Nigeria remains mired among the worst in the

world, at 169th (one rank better than in 2015), with Bangladesh in absolute worst place in

MSCI FM, at 174th. There is a lot for an incoming Nigerian government to try to do.

On the negative side, Argentina, which is flavour of the month for some investors,

worsened by four places to 121st, but investors are buying into Argentina in the hope of

positive change after the elections. Among MSCI FM and beyond frontier countries,

Rwanda has slipped the most, by seven places, to 62nd. We think this remains an

impressive ranking for such a low-income country; as ever, there is a strong linkage

between wealth and EODB rank.

Figure 40: Ease of Doing Business ranking 2015-2016 (LHS) and change (RHS), MSCI FM on the left, beyond frontier on the right

Source: World Bank

The methodology changes have produced even more dramatic shifts in MSCI FM and

beyond frontier countries than in EM. The biggest of all is in Ghana, which saw its rank

worsen by 42 places due to the methodology changes. Ghana previously looked like a

16 2029 32 37 38 40 41

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Facing the spectre


Facing the spectre

34

country where only the politics and macro were letting it down – now the data show the

micro is not that easy either. However, it remains far better than Nigeria – which again will

not surprise anyone who has been to both countries. On the positive side in Africa, both

Zambia and Zimbabwe now look considerably better than they used to. Tanzania, though,

has a lot of work to do if its companies are to avoid being swamped by more efficient

Kenyan, Ugandan or Rwandan companies within the East African Community.

Saudi Arabia also comes out as a much tougher place to do business than it previously

appeared before – worse by 35 places – and at 82nd place overall, this perhaps explains

why our MENA office is in Dubai (the UAE is in 31st place) and not Saudi Arabia.

Among countries that investors generally like, we find it curious that Vietnam has slipped

by a significant 15 places, and Vietnam has a long way to catch up to move its ranking

from 90th place to Thailand’s 45th of Thailand or Malaysia’s 18th. We think Vietnam is

good decade or two behind those ASEAN countries. Large FDI investor Samsung should

urge Vietnam to shift towards South Korea’s 4th place (Vietnam did improve by three

places in the latest survey). We will see whether Vietnam’s new party congress might lead

to this becoming a priority.

One of the biggest beneficiaries of the methodological changes is again Kazakhstan –

which improved its position by 24 places. Croatia did better, but at 1% of the MSCI EM

Index, vs 3% for Kazakhstan, Croatia is less significant for most investors.

Romania gets boosted too – and we do like that country.

The data show that most of Kenya’s improvement in ranking is coming from actual

improvements, not just a (7-rank) shift in methodology.

Figure 41: 2015 rankings under old and new methodology (LHS), ranked by change in rank (RHS), MSCI FM countries on the left, beyond frontier on the right

Source: World Bank

Nearly everyone is actually getting better

There is one big caveat that investors should be aware of – all of the charts above show

the relative ranking. The point we made in our 2012 report Directional economics –

Everyone’s a winner (9 May 2012) is that competition to improve the business climate can

be a good thing even if your rank does not improve at all.

Within EM, all but four countries improved their business climate in terms of absolute

score. The only country that saw a noticeable absolute deterioration was Turkey - and the

main sub-sector responsible for this is the legal system (which again is something we

-26 -24 -23-16

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Facing the spectre


Facing the spectre

35

wrote about earlier this year). Legal processes are getting longer and insolvency

procedures are becoming less effective.

The biggest absolute improvers were India, followed by Russia and then Mexico and

Indonesia and Poland.

Figure 42: Absolute World Bank score (LHS) in 2015-2016, and change (RHS)

Source: World Bank

In MSCI FM and beyond frontier countries, we can see that Uganda actually improved by

more than Kenya (this does not show up in ranking tables though – presumably because

lots of countries close to Uganda’s ranking improved too), and both improved their

business climate by more than double what any EM country achieved. Roll on frontier –

change is happening here faster than in any EM. For example, Vietnam’s score rose by

1.75 which is higher than any EM except for India.

Figure 43: Absolute World Bank score in 2015-2016 (LHS) and change (RHS)

Source: World Bank

Conclusions

It is popular to condemn EM for a lack of reform and attribute the asset price weakness of

recent years to this. The EOBD data show that at least half of EM and FM economies are

reforming in absolute terms, and stand-out improvers include Russia, Kenya and

Kazakhstan, in our space, as well as India, Mexico and Indonesia in wider EM. Pakistan

and Nigeria have disappointing scores and could both do much better if their governments

decided to address this issue.

2.01.7

1.61.4

1.10.8

0.6 0.50.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.0 0.0 0.0

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2015 Score 2016 Score Change


Facing the spectre


Facing the spectre

36

A visit to Vietnam has prompted us to look at the positives (education and electrification)

and the negative (corruption) legacies of communism. As regular readers will know, we

are firmly of the view that per-capita GDP is the primary determinant of a country’s

corruption rating from Transparency International. We believe equity investors should

prefer countries where a country’s corruption rating is better than its per-capita GDP

implies it should be, as the legal system should be less corrupt too. P/E ratios should

reflect this. External debt investors can sue eurobond issuers in the US or the UK, so they

can be more relaxed about local corruption. If post-communist countries want to attract

significant equity interest over the long term, we believe they should therefore aim to

address corruption.

Instead, what we find is that post-communist countries have worse corruption than they

should – unless they are members of the EU. As we noted in our report on legal

systems9, joining the EU has made a dramatic positive difference to Central Europe and

the Baltics. Even the prospect of joining the EU – and the legislative alignment required

during that process – may explain why Serbia, for example, is an FM with corruption

scores slightly better than they should be. Of course, per-capita GDP remains the

underlying driver – post-communist Bulgaria is no Germany when it comes to corruption

scores. However, our point is that without EU membership, what we find in post-

communist countries from Russia to China to Kazakhstan or Ukraine, and Angola to

Vietnam, are corruption scores that are worse than they should be.

It is not a complete coincidence that the worst P/E ratios in EM are in Russia and China.

There has been little effort to develop strong stock markets in Bulgaria, Serbia, Croatia or

Slovenia. There is not even a stock exchange in Angola or Ethiopia. It is also interesting

to note that Romania is now working hard to improve its stock exchange while being led

by a strongly anti-corruption president.

Why?

We would love your thoughts on this. This economist’s first thought was whether this

related to the old Soviet joke “they pretend to pay us, and we pretend to work”. Perhaps

the state was, and still is, seen as an entity from which it is justified to steal.

A more sophisticated (and I think better) explanation is offered by my colleague Dan

Salter, probably helped by spending over a decade in Russia and Belarus. His view is that

post-communist states tend to have an established bureaucracy that historically controlled

everything. This structure was effective enough to roll out universal education and

infrastructure projects – and to now enact effective reform of the business environment.

However, the bureaucrats also learnt that they had tremendous power, untrammelled by

either market or democratic forces. Rent-seeking behaviour is very easy when you have a

monopoly on power. The granting of favours, for personal or financial gain, became a key

part of the system. Indeed, communism proved so inefficient as an economic system that

it might be argued that it was only because of bureaucrats bending rules that anything got

done at all. Some see the current slowdown in China as related to the fact that

bureaucrats are now scared of taking bribes (rising per-capita GDP affects corruption

scores in all countries) and are reluctant to make decisions without this incentive.

One solution, therefore, would be to slash the scope for bureaucrats to extort bribes.

Interestingly, a number of post-communist governments have tried exactly that. Measured

by the Ease of Doing Business scores collected by the World Bank, it is remarkable how

9 See Thoughts from a Renaissance Man: Are you constrained by the law?, 31 March 2015.

The legacy of communism on corruption & the ease of doing business



Facing the spectre


Facing the spectre

37

post-communist China and Russia now easily beat Brazil and India – the latter two are

still among the worst in EM. Kazakhstan and (non-MSCI) Belarus have also taken the axe

to regulation. In general, post-communist countries are good at improving the business

environment, but are not as effective in improving corruption.

We would expect that EODB scores and corruption scores should be aligned, so 1st place

might be taken by the same country on both measures. However, almost across the

board we find that post-communist countries still report worse corruption scores than their

EODB scores. The figure below includes Brazil and India as comparison points in italics,

and post-communist governments are nearly all on the right. The only post-communist

countries that are left of the trend are three Sub-Saharan African (SSA) countries whose

affair with communism was relatively brief. We have no data for North Korea or Cuba. All

the post-communist countries with the least corruption are of course in the EU – with the

single exception of Georgia.

Figure 44: Corruption score (2014) vs Ease of Doing Business rank (2016) – post-communist countries are generally clustered below the line

Source: TI and World Bank

Legal scores update

We continue to see legal systems as one of the most important areas under-researched

by economists. As we showed earlier this year, legal systems are hard to change,

although EM countries are tending to improve their systems quicker than DM countries.

Below, we update our Renaissance Capital legal scoreboard in light of the most recent

World Bank EODB data, which are a component in our work.

Angola

Armenia

Azerbaijan

Belarus

Brazil

Bulgaria

Cambodia

China

Czech

Estonia

Ethiopia

Georgia

Hungary

India

Kazakhstan

Kyrgyzstan

Laos

LatviaLithuania

Moldova

Mozambique

Poland

Romania

RussiaSerbia

SlovakiaSlovenia

Tajikistan

UkraineUzbekistanVietnam

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Corruption Rank (2014)

High corruption& good business environment

Low corruption& poor business environment

High corruption& poor business environment


Facing the spectre


Facing the spectre

38

Figure 45: Renaissance Capital legal scoreboard

Source: World Justice Project, World Bank, Renaissance Capital

There are big changes to some of the scores owing to the change in World Bank

methodologies noted above. There are significant, 10-point or more declines in Botswana

(although it is the best in our African sample), Hungary (now well below Poland or the

Czech Republic), Lebanon and South Africa. Turkey’s decline is by a relative modest five

points, but its legal system is now little better than Vietnam’s.

We see double-digit improvements in Kazakhstan and the UAE, and fairly strong

improvements in China, Russia, Mexico and Slovenia, and decent five-to-six point

improvements in Kenya and India.

While we like the reform story in Pakistan, Egypt, India and Nigeria, we think each has a

mountain to climb to improve their legal systems.

Below we show the two components that make up our Renaissance Capital legal

scoreboard. India, Ghana or Botswana do relatively well owing to their decent legal

systems, which value human rights, but are let down by their business environments.

Russia, China, Kazakhstan and Mexico do relatively well because of judicial systems that

score well in the World Bank EODB, but are let down owing to human rights issues or, in

Mexico’s case, crime.

Figure 46: World Justice Project score vs World Bank legal system scores

Source: WJP, World Bank EODB

-20

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EM Score FM Score Beyond Frontier Score Change vs March 2015

Denmark Norway

Sweden Finland

Netherlands

New ZealandAustria

AustraliaGermany

Singapore

CanadaJapan

UK KoreaEstonia HK

BelgiumFrance US

ChilePoland Czech Rep

SpainBotswana

PortugalUAE

SloveniaItaly

Hungary

Georgia

Greece Romania

MalaysiaCroatia

GhanaJordan

South AfricaTunisia

BrazilBulgaria

Jamaica

IndonesiaThailand

Sri LankaLebanon

MongoliaMorocco

Serbia

Argentina

Turkey

Philippines

ColombiaPeru

VietnamIndia

UkraineTanzania

Zambia

Kazakhstan

Cote d'IvoireEgypt

China Mexico

Russia

IranKenya EthiopiaMyanmar

Uganda

Cambodia

BangladeshNigeria

PakistanZimbabwe

Venezuela

R² = 0.6945

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Average score in two chapters of WB EODB 2015 report

Businessfriendly

Unfriendly to business

Strong legal system

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Facing the spectre


Facing the spectre

39

Since our report Frontier and emerging markets: Reform awakens, published 14 May

2015, the MSCI Frontier Index has fallen 11% in dollar terms, comparing favourably with

MSCI EM, which has fallen by 18%, while DMs as measured by the MSCI World Index

have fallen by 5%, as a combination of continued commodity weakness, a precipitous

decline in EM currencies and a weaker global growth environment took their toll.

Figure 47: MSCI indices ($, rebased)


At the individual country level, Hungary Romania and Estonia have seen gains in both

dollar and local terms over the past 12 months, reflecting their exposure to an ongoing

eurozone recovery story, while Argentina’s rally over the last fortnight has pushed its

performance into positive territory over the last 12 months. When considered in local

currency terms, South Africa and Turkey were among the stronger performers.

Figure 48: MSCI country performance ($; last 12M)

Source: Bloomberg

Oil exporters fared poorly, as the performance of the Gulf countries, Kazakhstan and

Nigeria shows; however, their underperformance could also be attributed to their defence

of their exchange rates: unpegged Russia performed strongly in local currency terms to a

large degree because the rouble has already adjusted significantly to a lower oil price

environment, as we highlighted in our recent note Russian equities: Take a look inside,

published 24 September 2015.

60

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Frontier performance, 12M ($) EM performance, 12M ($) Local currency performance

Where are we now in Frontier




Facing the spectre


Facing the spectre

40

The good news for frontier investors is that the asset class is currently cheaper

both in absolute terms – the 12-month forward P/E ratio has fallen from 9.5x to 9.2x

over the past 12 months – and on a relative basis to EM, with FM moving from an

14% discount to an 18% discount on 12-month forward P/E (although EM itself is not

a particularly challenging valuation benchmark, having de-rated relative to DMs – on a 12-

month forward basis, MSCI EM is trading with a 30% discount to DM).

The relative de-rating of frontier was helped by the transition of the UAE and Qatar

from the MSCI FM to MSCI EM Index. The two countries were relatively expensive

within frontier (trading at 21x and 16x on a 12-month forward P/E, respectively, and

accounting for almost one-third of the MSCI FM Index at the time of transition in May

2014) – their removal reset the FM valuation back below that of EM.

Figure 49: MSCI indices, 12-month forward P/E, x


Figure 50: 12-month forward P/E premium (discount) for MSCI FM vs EM


Figure 51: 12-month forward P/E premium (discount) for MSCI EM vs DM


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Facing the spectre


Facing the spectre

41

Figure 52 shows the 12-month forward P/E of the individual markets in MSCI FM

(and Saudi Arabia). For some of the smaller markets, consensus data can be very

patchy, and for small markets with only a few stocks the index P/E can be skewed

significantly by outlying valuations and/or missing data. Ukraine, for example, is likely to

have forecasts that have not been updated for some time.

Figure 52: MSCI FM indices, 12-month forward P/E, x


Figure 53: MSCI EM indices, 12-month forward P/E, x


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Facing the spectre


Facing the spectre

42

MSCI FM’s trailing P/B has fallen from 1.6x to 1.4x over the past 12 months. This is

around a 1% discount to EM, but MSCI FM has a much higher trailing RoE: 13.7%, vs

11.1% for MSCI EM. FM mostly avoided the RoE decline seen by EM since late 2011 – a

key factor contributing to the underperformance of EM equities vs DM, we believe. RoE is

particularly high in Kenya, Bangladesh, Pakistan, Nigeria and Argentina.

Figure 54: MSCI EM, FM and DM indices – trailing P/B, x


Figure 55: MSCI EM, FM and DM indices – trailing RoE, %


Figure 56: MSCI indices – trailing RoE, %

Note: MSCI Kazakhstan saw negative RoE in November 2014.


0.5

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Facing the spectre


Facing the spectre

43

FM compares favourably with DM, in terms of both dividend yield and RoE

FM is supported by a relatively high dividend yield compared with both EM and DM. MSCI

FM’s trailing dividend yield is 3.9%, compared with 2.5% for EM. Trailing dividend yields

are particularly high in Kazakhstan, Croatia, Pakistan and Serbia (we have doubts about

the sustainability of dividends in Ukraine).

Figure 57: MSCI EM, FM and DM indices – trailing dividend yield, %


Figure 58: MSCI indices, trailing dividend yield, %


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Facing the spectre


Facing the spectre

44

Forecast EPS growth – recovery on the horizon

Bloomberg consensus suggests that FM EPS will grow by 5% in dollar terms over 2015,

somewhat better than MSCI EM’s 7% fall – EM earnings have been steadily revised

downwards following worries over a Chinese slowdown. Consensus estimates also

suggest that FM EPS will grow by 11% in dollar terms in 2016, compared with 9% for EM

in 2016.

Figure 59: Consensus 2015 and 2016 EPS growth forecasts, MSCI EM and FM

Note: Not all companies have earnings forecasts for both 2015 and 2016 in FM: we have excluded these from the calculation.


FM remains much less correlated with global equities than EM

One of the attractions for investors allocating to FM is a relatively low level of correlation

with other equity asset classes. The MSCI FM Index’s 52-week rolling correlation with the

MSCI World Index is just 32%, and its correlation with the MSCI EM Index is 40%;

however, correlations have been rising as of late. By contrast, the correlation of MSCI EM

with MSCI World is currently 70%, and has averaged over 80% over the past decade. We

attribute the low correlation of FM to the relative lack of passive investment (of the $20bn

in dedicated FM funds, only $1.9bn is invested in ETFs); we believe the lack of correlation

also reflects the longer time horizon of FM investors.

Figure 60: 52-week rolling correlation – lower correlation with EM and DM


On average, since 2003, the average difference in annual calendar year returns between

MSCI EM and FM has been 18%. However, in nine of the most recent 12 years, EM and

FM have risen (or fallen) together, with 2006, 2013 and 2014 being the only exceptions.

-8%

-6%

-4%

-2%

0%

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4%

6%

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2015E 2016E

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-40%

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2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

FM to EM FM to DM EM to DM


Facing the spectre


Facing the spectre

45

Figure 61: MSCI FM, EM and DM – annual returns


Alpha through stock selection remains high in FM

We believe the fact that there are fewer analyst forecasts per stock should offer greater

opportunities for relative outperformance to investors prepared to do their own due

diligence, management meetings and channel checks. In the smaller markets, some

stocks are barely covered.

On average, stocks in MSCI FM have eight analyst forecasts per stock – MSCI EM stocks

are almost three times as well covered, with on average 22 analyst forecasts per stock. In

MSCI FM, 37 of the 122 companies have four or fewer analysts contributing data to

Bloomberg consensus. A few have just one, or none.

Figure 62: Number of analyst forecasts per stock


-80%

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

FM EM DM

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Facing the spectre


Facing the spectre

46

Turning point in growth?

According to the IMF’s latest World Economic Outlook (WEO) forecasts, 2015 is the

year that the DM-EM growth differential reaches a relative inflexion, with EM growth

set to outpace DM growth over the next five years.

Figure 63: GDP growth EM and DM – EM vs DM relative inflexion in 2015

Note: EM refers to IMF emerging and developing economies, DM to IMF advanced economies.

Source: IMF October 2015 WEO

However, this is not the first time the IMF has made such a forecast: looking at the

October 2014 WEO, we see the same forecast made about a relative EM recovery in

2015.

Figure 64: GDP growth EM and DM – Oct 2014 WEO

Note: EM refers to IMF emerging and developing economies, DM to IMF advanced economies.


Examining the IMF growth forecasts by country, we find that for 2016, India leads the

pack in EM (with the IMF expecting 7.5% growth), followed by China (6.3%), the

Philippines and Indonesia. However, in general, the top of the table is dominated by

frontier countries: the IMF expects Iraq, Tanzania, Rwanda, Kenya, Bangladesh, Sri

Lanka and Vietnam to grow in excess of 6% YoY.

At the bottom of the table, the IMF sees Greece contracting again, Brazil remaining in

recession, Argentina showing negative growth, and Russian GDP still contracting (albeit

only slightly). Our Russia economist Oleg Kouzmin sees Russian growth as positive in

2016 at any oil price above $50/bl, and has +0.8% growth as our 2016 base case,

assuming a $60/bl oil price (or +0.2% at a $50/bl oil price, which is closer to the IMF’s

$53/bl Brent oil price assumption).

-4-3-2-10123456789

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Facing the spectre


Facing the spectre

47

Figure 65: IMF forecast GDP growth, %


Within Sub-Saharan Africa (SSA), the IMF expects Nigeria to grow more slowly than

peers, although its 4.3% growth forecast for 2016 is far from catastrophic (given the

current exchange rate pressures) and in line with with our SSA economist Yvonne

Mhango’s 4% growth forecast. We would highlight that 4% growth is not far above the

growth rate that the IMF expects for Romania (3.9%) and Poland (3.5%) in 2016. The IMF

is upbeat on growth outlook for Kenya, where it sees growth accelerating to 6.8% in 2016

– albeit at the cost of a C/A deficit of 9.2% of GDP and a budget deficit of 7.3% of GDP.

For EM as a whole, the IMF expects growth of 4.5% for 2016, roughly twice the 2.2% it

expects for DM.

The big accelerations in 2016 vs 2015, according to the IMF, are likely to be in

Ukraine (the IMF’s forecasts may be those used to support the IMF’s lending to the

country), Iraq, Iran, Russia, Ghana, Tunisia and Brazil (despite this, the IMF expects

Brazil to remain in recession). The IMF expects a deceleration in Oman, the Czech

Republic, Saudi Arabia, Morocco and Argentina (along with, to a lesser extent, China). It

expects growth in Turkey to remain stable, at 2.9%, while it sees the CIS as a whole has

having the biggest positive growth swing in 2016.

Figure 66: IMF forecast GDP acceleration – 2016 vs 2015 real GDP growth, ppts


-10

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2016 vs 2015 GDP growth


Facing the spectre


Facing the spectre

48

Looking at forecast changes since its April 2015 WEO report, the IMF has upgraded

Iran’s growth for 2016 substantially. Romania, Bahrain, Kuwait, Vietnam, Russia,

Bulgaria, Mauritius and Hungary all see their 2016 forecasts rise. On the flip side, the IMF

has cut its 2016 growth expectations for Greece significantly, along with those for Zambia,

Brazil, Peru, Qatar, Taiwan, Morocco, Colombia and to a lesser extent Argentina, Chile,

Tunisia, Kazakhstan, Thailand, South Africa and Turkey.

For EM as a whole, the IMF’s forecast has not changed substantially, at 4.5% for 2016 in

the October WEO, compared with 4.7% back in April. Despite the fears of a slowing China

that have spooked markets, the IMF has not changed its 2016 China GDP growth

forecast of 6.3%.

Figure 67: IMF 2016 GDP growth forecast revisions – October vs April WEO

Source: IMF April 2015 and October 2015 WEO

Although the IMF’s forecast declines in 2015 real GDP (for the worst countries) are

in single digits, we find it worth taking a look at how currency weakness has hit

dollar GDP across EM. Russia has lost one-third of its dollar GDP this year, according to

the IMF, while DM in the eurozone are typically on course to see declines of close to 15%

in dollar GDP in 2015. Iran, whose economy many associate investors associate closely

with oil, has not taken much of a hit according to the IMF (higher export volumes and a

diversified economy will have helped here), while the IMF expects countries with

currencies that have remained linked to the dollar to have maintained positive dollar GDP

growth in 2015, such as Bangladesh, China, Pakistan, Lebanon, Rwanda and Vietnam.

Figure 68: IMF change in nominal $ GDP, 2015 vs 2014


-6

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2015 vs 2014 $ GDP (%ch)


Facing the spectre


Facing the spectre

49

Frontier funds and flows

Since 2010, we have seen a near-doubling of FM fund assets under management (AuM)

to $18bn, fairly evenly split between regional and global funds. There is very little passive

investment in FM, with ETFs accounting for just $1.9bn, or a little under 10% of the total.

Figure 69: FM AuM, $mn


On top of the $18bn in dedicated FM funds, we estimate there is about $1.5bn in

crossover assets in mainstream GEM funds, bringing the total to $20bn – down a little

from a peak in April 2015 of $24bn. For completeness, we can add a further $1.8bn in

African regional funds, bringing us to a potential total of $22.8bn (with the caveat that

some African regional funds include South Africa and Egypt in their remit). This figure only

includes publicly available funds, so clearly it does not capture investments via

segregated mandates, pensions or direct investments by pension funds, insurance

companies, sovereign wealth funds (SWF), hedge funds and individuals.

Figure 70: $20bn of FM AuM, $mn (September 2015)


We find flows into FM funds impressive since taking off in mid-2012. Since then, FM funds

have seen inflows of over $4bn, which – together with strong markets – has seen AuM in

dedicated FM funds more than double from $8bn in mid-2012 to the current $20bn.

0

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20,000

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30,000

1999

2000

2001

2002

2003

2004

2005

2006

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2012

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Global Frontier Regional Frontier in mainstream GEM funds

Global Frontier46%

EMEA27%

Asia18%

Frontier in mainstream GEM

funds8%

LatAm1%


Facing the spectre


Facing the spectre

50

Liquidity – Gulf volumes under pressure

Figure 71: MSCI FM countries’ local exchange 3M ADTV, $bn

Source: Local exchanges, Bloomberg, Renaissance Capital

Figure 72: Saudi Arabia 3M ADTV, $bn

Source: Local exchanges, Bloomberg, Renaissance Capital

Liquidity in the main MSCI FM local exchanges has been relatively steady in recent

months, although still a long way off its peak in 2008. Using the current MSCI FM

constituents, we currently calculate $0.3bn of daily turnover.

In Saudi Arabia, liquidity has fallen significantly in recent months, after rising sharply over

1H14. Similarly, other Gulf countries have seen sharp falls in liquidity compared with May

2015 or April 2014 – Kuwait has seen daily liquidity evaporate from a peak of $106mn to

just $44mn. By contrast, liquidity has improved in Vietnam and Bangladesh, although in

Vietnam it remains below its level in May 2014.

Adding $1.3bn traded (primarily by domestic investors) in Saudi Arabia takes the total for

FM to $1.5bn, and if we add several other markets (see Figure 73) the total reaches

$1.8bn.

Figure 73: Local stock exchange index 3M ADTV, $mn

Note: MSCI FM countries local exchanges ranked left; non-MSCI FM countries ranked right; volume data excluding international listings locally.

Source: Bloomberg, local exchanges, Renaissance Capital

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1,302


Facing the spectre


Facing the spectre

51

Taking just the MSCI FM countries, we find 60% of the volume is concentrated in just

three markets: Pakistan, Vietnam and Bangladesh, which trade over $200mn daily. The

remaining markets between them trade about $142mn daily. Liquidity remains a key

consideration for the $21bn of dedicated FM funds, especially since the UAE and Qatar

moved to the mainstream EM Index. In addition to the highly liquid Saudi Arabian market,

some FM funds are able to invest in countries that are not ‘technically’ part of frontier,

such as Egypt, Indonesia and the Philippines. In addition, as sanctions could start to be

lifted on Iran, we note the local market there has a three-month ADTV of $70mn.

Figure 74: MSCI FM countries – local stock exchange index three-month ADTV

Note: Taking only MSCI FM local exchanges; volume data excluding international listings locally.

Source: Bloomberg, local exchanges, Renaissance Capital

Analyst upside

We also look at the average analyst upside potential for index constituents in each

country, to give us some idea of fundamental upside (or perhaps the optimism of analysts

in each country).

Figure 75: Average analyst upside per stock, MSCI indices


Consensus currently sees the most upside potential in Argentina and Kazakhstan, while

only Serbia is considered to have a negative outlook. However, as we noted earlier, FM

stocks are much less well covered than EM stocks, and these figures should be treated

with caution, especially for countries with very few index constituents.

Vietnam, $76mn Pakistan, $73mn

Bangladesh, $54mn Kuwait, $44mn

Argentina, $21mn Nigeria, $15mn

Jordan, $14mn Oman, $13mn

Romania, $8.3mn Kenya, $7.8mn

Sri Lanka, $7.1mn Morocco, $6.0mn

Bahrain, $1.7mn Tunisia, $1.5mn

Mauritius, $1.4mn Croatia, $1.1mn

Slovenia, $0.8mn Lebanon, $0.8mn

Estonia, $0.5mn Kazakhstan, $0.4mn

Lithuania, $0.3mn Bulgaria, $0.1mn

Serbia, $0.0mn

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Facing the spectre


Facing the spectre

52

Breaking down FM and EM

In terms of regional breakdown, EM is heavily skewed towards Asia, with over half of the

index concentrated in just four countries: China, South Korea, Taiwan and India. By

contrast, FM is more exposed to EMEA, which accounts for 70% of the index. FM is also

more exposed to the Gulf, with a total weight of 29% across three countries.

Figure 76:MSCI EM country weights, %


Figure 77: MSCI FM country weights, %


In terms of sectors, MSCI FM is dominated by banks – the financial sector (in which we

include real estate) accounts for over half of the MSCI FM Index: 53.9% in total, more

than 3x larger than the next sector, telecoms, which has a 13.5% weight.

Figure 78: MSCI EM sector weights (number of index stocks in parentheses)

Source: MSCI, Bloomberg, Renaissance Capital

Figure 79: MSCI FM sector weights (number of index stocks in parentheses)

Source: MSCI, Bloomberg, Renaissance Capital

Financials’ weight in MSCI FM is a little under 2x that in MSCI EM. Some country indices

are very concentrated: 15 of 23 MSCI country indices in FM have five constituents or

fewer, and seven have just two.

China, 22%South Korea, 15%Taiwan, 10%India, 9.3%South Africa, 7.0%Brazil, 5.6%Mexico, 5.2%Russia, 4.1%Malaysia, 3.6%Indonesia, 3.5%Thailand, 2.4%Turkey, 2.3%Poland, 2.0%Philippines, 1.9%Chile, 1.4%Qatar, 1.2%UAE, 1.2%Colombia, 0.8%Peru, 0.7%Greece, 0.5%Hungary, 0.2%Egypt, 0.2%Czech, 0.1%

Kuwait, 22%Nigeria, 15%Argentina, 10%Pakistan, 9.3%Morocco, 7.0%Oman, 5.6%Kenya, 5.2%Vietnam, 4.1%Romania, 3.6%Lebanon, 3.5%Bangladesh, 2.4%Slovenia, 2.3%Kazakhstan, 2.0%Sri Lanka, 1.9%Croatia, 1.4%Mauritius, 1.2%Bahrain, 1.2%Jordan, 0.8%Tunisia, 0.7%Estonia, 0.5%Serbia, 0.2%Lithuania, 0.2%Bulgaria, 0.1%

0%

10%

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(83

4)C

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E (

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Cons. Disc. Cons. Staples Energy Financials

Healthcare Industrials IT Materials

Telecoms Utilities

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

EM

(83

4)F

ront

ier

(122

)K

uwai

t (8)

Nig

eria

(17

)A

rgen

tina

(6)

Pak

ista

n (1

6)M

oroc

co (

9)O

man

(9)

Ken

ya (

5)V

ietn

am (

10)

Rom

ania

(5)

Leba

non

(4)

Ban

glad

esh

(4)

Slo

veni

a (3

)K

azak

hsta

n (3

)S

ri La

nka

(3)

Cro

atia

(2)

Mau

ritiu

s (2

)B

ahra

in (

3)Jo

rdan

(3)

Tun

isia

(2)

Est

onia

(2)

Ser

bia

(2)

Lith

uani

a (2

)B

ulga

ria (

2)

Cons. Disc. Cons. Staples Energy Financials

Healthcare Industrials IT Materials

Telecoms Utilities


Facing the spectre


Facing the spectre

53

Country profiles

Co

un

try p

rofi

les


Facing the spectre


Facing the spectre

54

Figure 80: Key data Local currency ARS

GDP/capita, $ (2014) 12,735 Population, mn (2014) 42.6 S&P/Moody's rating SD/Caa1 Weight in MSCI FM, % 10.3

MSCI Index MXAR

2015 P/E, x 9.0 2015 FY EPS growth -6.3% Trailing P/B, x 2.3 Beta to FM 1.6 MSCI full MktCap, $bn 22.0 MSCI free float MktCap, $bn 11.6 No. of companies 6 3M ADTV, $mn, MSCI cos 11.3

Local index IBG

MktCap, $bn 57 No. of companies 70 3M ADTV, $mn 20.3

Figure 81: Index performance

Figure 82: MSCI Index sector weights

Figure 83: Index and stock data

Ticker Name Sector MktCap FF MktCap 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI

($mn) ($mn) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXAR MSCI Argentina 22,037 11,615 11.3 45.5 19.1 0.6 7.1 2.3 20.9 35 10.3%

YPF UN YPF Energy 8,400 3,780 6.8 39.0 -6.2 -39.0 6.4 1.4 7.5 10 34% GGAL UR Grupo Galicia Financials 2,726 2,317 2.5 47.6 35.6 70.6 7.3 3.8 29.9 5 20% BMA UN Banco Macro Financials 3,601 2,341 2.1 61.5 43.2 46.8 7.4 3.6 30.7 5 19% TEO UN Telecom Argentina Telecoms 1,881 1,693 0.8 43.1 19.2 -14.2 9.2 3.4 25.9 9 14% BFR UN Banco Frances Financials 4,161 1,040 0.7 51.5 48.5 70.6 7.4 4.8 31.4 3 9% PZE UN Petrobras Arg. Energy 1,268 444 0.2 20.3 -4.5 -6.3 6.1 1.3 na 3 4%

GCLA AR Grupo Clarin-B Cons. Disc. 3,254 3,254 0.0 35.8 29.9 83.9 na 5.0 36.9 2 - ALUA AR Aluar Aluminio Materials 3,097 3,097 0.6 20.8 23.0 13.9 na 4.2 na 1 - ERAR AR Siderar-A Materials 3,807 1,487 0.7 41.7 28.1 2.2 14.1 1.9 10.6 2 - PAMP AR Pampa Energia Sa Utilities 1,764 1,394 1.5 48.6 53.7 85.8 na 4.3 19.9 1 - BHIP AR Banco Hipotecario Sa-D Shs Financials 980 980 0.1 41.3 11.2 37.9 na 2.0 na 1 - PATA AR Import Y Export Patagonia-B Cons. Staples 797 797 0.0 18.1 3.0 -26.1 na 3.9 na 0 - TGSU2 AR Transportadora De Gas Sur-B Energy 1,412 692 0.1 51.9 53.8 63.9 38.0 7.3 13.0 1 - CRES AR Cresud S.A.C.I.F.Y A. Financials 957 539 0.0 38.2 17.5 15.7 na 4.6 -0.4 3 - COME AR Sociedad Comercial Del Plata Energy 489 489 1.3 9.2 -1.5 54.1 na 0.4 na 1 - LEDE AR Ledesma S.A.A.I. Cons. Staples 452 452 0.0 41.4 30.9 8.3 na 2.8 na 0 - IRSA AR Irsa Sa Financials 1,486 452 0.0 19.1 4.8 14.1 na 5.7 9.7 4 - EDN AR Emp Distrib Y Comerc Norte Utilities 1,131 436 0.5 35.0 42.9 26.5 na 9.6 29.8 0 - MOLI AR Molinos Rio De La Plata Sa Cons. Staples 1,523 382 0.1 54.7 52.9 25.0 na 7.7 na 0 - BPAT AR Banco Patagonia Sa-B Sh Financials 2,013 340 0.0 29.8 23.5 48.5 na 3.0 na 0 -

Figure 84: 3M ADTV, $mn

Figure 85: Valuations vs FM

Note: all forward figures for valuations are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg

40

60

80

100

120

140

160

180

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Argentina, $

48%

38%

14%

Financials Energy Telecoms

0

5

10

15

20

25

30

Jan-

09

Jun-

09

Nov

-09

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-10

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Argentina MSCI Argentina

0

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MSCI Argentina, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Argentina


Facing the spectre


Facing the spectre

55

Figure 86: Population, ’000

Source: UN

Figure 87: Export destinations, total $69bn

Source: IMF

Figure 88: CPI avg %, C/A % of GDP

Source: IMF

Figure 89: Argentina – peso

Source: Bruegel, Bloomberg, Renaissance Capital Estimates (May 15-Oct 15)

Figure 90: Bank lending growth vs GDP


Figure 91: Real GDP % change, YoY

Source: IMF

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

0%

5%

10%

15%

20%

25%

Bra

zil

EU

Eur

o A

rea

Chi

na

US

A

Chi

le

Ven

ezue

la

Uru

guay

Indi

a

Net

herla

nds

% of total exports Value ($bn), 2014, RHS

-2

-1

0

1

2

30

5

10

15

20

25

30

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Current account balance (% of GDP) RHS CPI (average % YoY)0

50

100

150

200

250

3000

2

4

6

8

10

12

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

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03

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-03

Jul-0

4

Apr

-05

Jan-

06

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7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

ARS vs $ ARS vs EUR Argentina REER (Dec 07=100)

Weaker

Stronger

-2

0

2

4

6

8

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP (% YoY)9.0 9.2

8.48.0

3.1

0.1

9.5

8.4

0.8

2.9

0.5 0.4

-0.7

0.0 0.1

-2

0

2

4

6

8

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Argentina


Facing the spectre


Facing the spectre

56

Figure 92: Key data Local currency BHD

GDP/capita, $ (2014) 26,705 Population, mn (2014) 1.3 S&P/Moody's rating BBB-/Baa3 Weight in MSCI FM, % 1.2

MSCI Index MXBH

2015 P/E, x 6.8 2015 FY EPS growth 31.0% Trailing P/B, x 0.7 Beta to FM 0.5 MSCI full MktCap, $bn 3.7 MSCI free float MktCap, $bn 1.0 No. of companies 3 3M ADTV, $mn, MSCI cos 0.1

Local index BHSEASI



Figure 94: MSCI sector weights


Ticker Name Sector MktCap FF 3M ADTV $ performance (%) 12MF Trail 12MF # analyst MSCI

($mn) MktCap ($mn) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXBH MSCI Bahrain

3,681 1,000 0.1 -2.7 -15.5 -29.9 7.5 0.7 10.0 4 1.2%

SALAM BI Al-Salam Bank Financials 596 477 0.0 na -19.8 -42.2 na 0.6 na 0 49% BATELCO BI Batelco Telecoms 1,429 357 0.0 0.0 -5.3 -5.9 7.7 1.0 10.5 2 34% ALBH BI Alba Materials 1,657 166 0.1 -4.3 -10.6 -13.8 7.0 0.6 9.0 2 17%

AUB BI Ahli United Bank B.S.C Financials 4,532 2,885 0.2 2.2 -1.4 -9.7 9.0 1.2 na 2 - NBB BI National Bank Of Bahrain Bsc Financials 1,920 1,056 0.0 0.0 -4.9 -10.5 11.7 2.0 na 2 - BBK BI Bbk Bsc Financials 1,227 522 0.1 0.0 -0.5 -2.8 na 1.3 na 0 - GFH BI Gfh Financial Group Bsc Financials 372 352 0.0 6.5 -19.5 -65.3 na 0.2 na 0 - BARKA BI Albaraka Banking Group Financials 692 249 0.0 -3.9 -8.8 -23.8 na 0.5 na 0 - BMMI BI Bmmi Bsc Cons. Disc. 334 248 0.0 3.1 4.9 15.4 na 2.0 na 0 - CINEMA BI Bahrain Cinema Co Cons. Disc. 245 214 0.1 -4.1 -4.2 -9.2 na 2.3 na 0 - DUTYF BI Bahrain Duty Free Complex Cons. Disc. 265 213 0.0 2.5 2.4 10.0 na 2.1 na 0 - BHOTEL BI Gulf Hotel Group B.S.C Cons. Disc. 380 189 0.0 -0.5 0.6 -1.6 na 2.0 na 0 - ITHMR BI Ithmaar Bank Bsc Financials 455 182 0.0 3.4 11.1 -16.7 5.7 0.9 na 1 - ABC BI Arab Banking Corp Bsc-$Us Financials 1,555 170 0.0 -11.5 -19.4 -27.5 na 0.4 na 1 - BISB BI Bahrain Islamic Bank Financials 254 156 0.0 -25.2 -25.2 -36.5 na 1.1 na 0 - BCFC BI Bahrain Commercial Facilitie Financials 303 152 0.0 -2.8 -4.2 2.9 na 1.1 na 0 - INVCORP BI Investcorp Bank -$Us Financials 512 125 0.0 6.7 12.3 27.6 na 0.8 na 0 - SEEF BI Seef Properties Financials 244 116 0.0 0.1 -2.0 -5.7 9.2 0.7 na 1 - BNH BI Bahrain National Holding Financials 126 92 0.0 0.1 -4.5 -14.3 na 1.0 na 0 - KHCB BI Khaleeji Commercial Bank Financials 148 73 0.0 -5.1 -15.2 5.4 na 0.1 na 0 -


Figure 97: Valuations vs FM*

Note: all forward figures for valuations are taken from Bloomberg consensus estimates. *12M Fwd P/E is constructed by using broker estimates and filtering anomalous results. Source for all charts: Bloomberg

0

20

40

60

80

100

120

140

160

180

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

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-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Bahrain, $

49%

34%

17%

Financials Telecoms Materials

0

1

2

3

4

5

6

7

8

9

Jan-

09

Jun-

09

Nov

-09

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-10

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-10

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-11

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1

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-12

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-13

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14

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14

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-14

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-15

Bahrain MSCI Bahrain

5

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7

8

9

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13

14

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15

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Jul-1

5

Oct

-15

MSCI Bahrain, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Bahrain


Facing the spectre


Facing the spectre

57


Source: UN


Source: IMF


Source: IMF

Figure 101: Bahrain – dinar





Source: IMF

0

200

400

600

800

1,000

1,200

1,400

1990

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2025

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2045

2050

0-19 20-64 65+

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0%

1%

2%

3%

4%

Sau

di A

rabi

a

EU

US

A

UA

E

Eur

o A

rea

Kor

ea

Japa

n

Indi

a

Ken

ya

Tan

zani

a


-10

-5

0

5

10

15-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

125

130

135

1400.3

0.4

0.5

0.6

0.7

Jan-

00

Oct

-00

Jul-0

1

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-02

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03

Oct

-03

Jul-0

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Apr

-05

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06

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-06

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7

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-08

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09

Oct

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Jul-1

0

Apr

-11

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12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

BHD vs $ BHD vs EUR Bahrain REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP (% YoY)

7.0 6.86.5

8.3

6.2

2.5

4.3

2.1

3.6

5.3

4.5

3.4 3.22.8 2.9

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

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E

2016

E

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E

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E

Bahrain


Facing the spectre


Facing the spectre

58

Figure 104: Key data Local currency BDT

GDP/capita, $ (2014) 1,162 Population, mn (2014) 158.2 S&P/Moody's rating BB-/Ba3 Weight in MSCI FM, % 2.4

MSCI Index MXBD


Local index DSEX

MktCap, $bn 41.4 No. of companies 242 3M ADTV, $mn 59.0






MXBD MSCI Bangladesh

8,402 2,065 6.3 -8.8 -13.7 -18.5 17.2 4.4 25.6 3 2.4%

SQUARE BD Square Pharm. Healthcare 1,947 974 1.7 -0.2 3.8 1.1 21.2 5.0 21.3 2 46% LAFCEM BD Lafarge Surma Materials 1,246 436 1.9 -19.6 -31.4 -34.0 na 7.5 na 0 22% GRAM BD Grameenphone Telecoms 4,314 431 1.1 -12.3 -23.7 -32.0 15.6 10.7 69.3 1 21% TITASGAS BD Titas Gas Energy 895 224 0.5 -7.4 -8.4 -22.6 6.6 1.3 14.7 0 11%

OLYMPI BD Olympic Industries Ltd Cons. Staples 575 394 0.4 -6.6 -1.0 43.9 32.8 17.8 na 1 - BATBC BD British American Tobacco Ban Cons. Staples 2,266 346 0.0 -0.9 -3.0 7.2 na 15.5 na 2 - ISLAMI BD Islami Bank Bangladesh Ltd Financials 566 316 1.2 -7.3 -1.3 5.0 9.3 1.0 9.8 1 - BXPHAR BD Beximco Pharmaceuticals Ltd Healthcare 355 308 1.4 -0.7 0.0 19.9 na 1.3 na 0 - BRAC BD Brac Bank Ltd Financials 423 211 0.4 9.0 16.4 36.4 10.7 1.7 15.3 1 - ACI BD Aci Ltd Industrials 278 207 0.8 -5.3 -5.5 50.3 na 5.2 na 0 - BEXIMC BD Bangladesh Export Import Co Industrials 232 197 0.7 -13.1 -24.0 -22.7 na 0.4 na 0 - PUBALI BD Pubali Bank Ltd Financials 243 182 0.1 -15.0 -1.0 -23.4 na 0.8 na 0 - UCBL BD United Commercial Bank Ltd Financials 263 177 0.5 -7.3 -2.5 -14.0 6.6 0.9 11.4 1 - HEID BD Heidelberger Cement Banglade Materials 438 172 0.2 -5.8 -4.2 18.0 na 5.2 na 1 - NBL BD National Bank Ltd Financials 211 155 0.2 -6.4 -5.4 -12.2 na 0.6 na 0 - SUMITPOW BD Summit Power Ltd Utilities 366 154 0.3 -5.2 -14.8 -18.1 na 1.4 na 1 - RENATA BD Renata Ltd Healthcare 814 146 0.2 -3.7 -6.4 41.3 na 8.0 na 0 - PADMAO BD Padma Oil Company Ltd Energy 278 138 0.1 -10.0 -15.1 -32.5 na 3.0 na 0 - IDLC BD Idlc Finance Ltd Financials 190 117 0.5 -6.3 -3.8 -1.1 na 2.3 na 0 - BSRM BD Bsrm Steels Ltd Materials 398 116 0.9 -2.3 -0.2 -6.2 na 3.6 na 0 -




40

60

80

100

120

140

160

180

Jan-

10

Jun-

10

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-11

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2

Dec

-12

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Oct

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Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Bangladesh, $

46%

22%

21%

11%

Healthcare Materials Telecoms Energy

0

50

100

150

200

250

300

350

Jan-

09

Jun-

09

Nov

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Bangladesh MSCI Bangladesh

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11

13

15

17

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23

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DSEX Index 12M Fwd PE (x) Frontier

Bangladesh


Facing the spectre


Facing the spectre

59


Source: UN


Source: IMF


Source: IMF

Figure 113: Bangladesh – taka





Source: IMF

0

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Eur

o A

rea

US

A

Ger

man

y

UK

Net

herla

nds

Fra

nce

Spa

in

Italy

Can

ada


-2

-1

0

1

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30

2

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2004

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E


100

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15040

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Jan-

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Jul-1

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Jan-

15

Oct

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BDT vs $ BDT vs EUR Bangladesh REER (Dec 07=100)

Weaker

Stronger

0

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4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


6.16.3

6.9

6.5

5.55.3

6.0

6.56.3

6.06.3

6.56.8

7.0 7.0

4

5

6

7

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

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E

Bangladesh


Facing the spectre


Facing the spectre

60

Figure 116: Key data Local currency BGN

GDP/capita, $ (2014) 7,751 Population, mn (2014) 7.2 S&P/Moody's rating BB+/Baa2 Weight in MSCI FM, % 0.1

MSCI Index MXBU

2015 P/E, x na 2015 EPS growth na Trailing P/B, x 0.3 Beta to FM 0.6 MSCI full MktCap, $bn 0.3 MSCI free float MktCap, $bn 0.1 No. of companies 2 3M ADTV, $mn, MSCI cos 0.0

Local index SOFIX







MXBU MSCI Bulgaria 318 100 0.04 -3.0 -5.6 -38.5 na 0.3 na 2 0.1%

3JR BU Sopharma Healthcare 202 71 0.01 -3.3 -2.0 -41.9 na 0.9 na 2 71% 6C4 BU Chimimport Industrials 116 29 0.02 -2.7 -10.2 -34.0 na 0.1 na 0 29%

6A6 BU Advance Terrafund - Reit Financials 95 95 0.02 -6.1 -8.7 -29.0 na 0.8 na 2 - 5MB BU Monbat Ad Industrials 158 72 0.01 -4.9 -10.1 -23.3 na 1.6 na 2 - 6AB BU Albena Ad Cons. Disc. 115 20 0.01 4.9 -7.6 -20.2 na 0.5 na 0 - 5MH BU M+S Hidravlik Ad Industrials 111 111 0.01 1.3 -2.1 -12.6 na 3.2 na 1 - 5SR BU Stara Planina Hold Ad Industrials 42 42 0.00 1.1 -12.3 -24.4 na 0.9 na 1 - 5F4 BU Cb First Investment Bank Ad Financials 143 21 0.01 4.7 -1.1 -25.4 na 0.4 na 2 - 3NB BU Neochim Ad-Dimitrovgrad Materials 65 11 0.00 -4.7 -2.6 3.0 na 1.5 na 0 - 4ID BU Industrial Holding Bulgaria Industrials 38 38 0.00 -4.1 -9.2 -24.3 na 0.2 na 0 - 4CF BU Central Coop Bank Ad Financials 66 12 0.01 2.4 4.4 -15.4 na 0.3 na 0 - 5V2 BU Holding Varna Ad Financials 64 64 0.01 4.6 10.6 20.9 na 0.8 na 0 - 4I8 BU Industrialen Capital Holding Industrials 28 24 0.00 -3.6 -0.3 -26.1 na 1.3 na 0 - 5BU BU Bulgarian Real Estate Fd Inc Financials 17 17 0.01 6.1 6.7 -19.4 na 0.4 na 1 - T57 BU Trace Group Hold Ad-Sofia Industrials 83 83 0.02 -3.2 -10.3 -18.8 na 1.4 na 0 -



*Insufficient data and analyst forecasts for historical forward P/E calculation

Source for all charts: Bloomberg

0

20

40

60

80

100

120

140

160

180

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Bulgaria, $

71%

29%

Healthcare Industrials

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Bulgaria MSCI Bulgaria

0

2

4

6

8

10

12

14

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

N/A

Bulgaria


Facing the spectre


Facing the spectre

61


Source: UN


Source: IMF


Source: World Bank, Bloomberg:

Figure 125: Bulgaria – lev





Source: IMF

0

1,000

2,000

3,000

4,000

5,000

6,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

18

20

0%

10%

20%

30%

40%

50%

60%

70%

EU

Eur

o A

rea

Ger

man

y

Italy

Tur

key

Rom

ania

Gre

ece

Fra

nce

Bel

gium

Sin

gapo

re


-30

-25

-20

-15

-10

-5

0

5-4

-2

0

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

1201.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

BGN vs $ BGN vs EUR Bulgaria REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP (% YoY)6.6

6.06.5

6.9

5.8

-5.0

0.7

2.0

0.51.1

1.7 1.7 1.9 2.0 2.0

-6

-4

-2

0

2

4

6

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Bulgaria


Facing the spectre


Facing the spectre

62

Figure 128: Key data Local currency HRK

GDP/capita, $ (2014) 13,473 Population, mn (2014) 4.2 S&P/Moody's rating BB/Ba1 Weight in MSCI FM, % 1.4

MSCI Index MXCR

2015 P/E, x 4.9* 2015 FY EPS growth 267%* Trailing P/B, x 0.8 Beta to FM 0.6 MSCI full MktCap, $bn 2.1 MSCI free float MktCap, $bn 1.2 No. of companies 2 3M ADTV, $mn, MSCI cos 0.5

Local index CRO




*reflects sale of Adris Grupa’s Tobacco unit to BAT in September 2015




MXCR MSCI Croatia

2,124 1,242 0.5 0.8 -3.9 -12.0 10.1 0.8 8.5 6 1.4%

HTRA ZA Hrvatski Telekom Telecoms 1,764 882 0.2 -0.8 -7.5 -18.2 11.7 1.1 8.5 3 72% ADRSPA ZA Adris Grupa Cons. Staples 360 360 0.3 2.3 -8.7 -2.5 7.4 0.5 na 3 28%

INARA CZ Ina Industrija Nafte Dd Energy 4,542 276 0.0 -4.5 -10.1 -26.6 na 2.6 7.2 2 - PODRRA CZ Podravka Prehrambena Ind Dd Cons. Staples 354 276 0.1 2.3 6.1 0.0 11.2 0.8 7.7 3 - RIVPRA CZ Valamar Riviera Dd Cons. Disc. 435 199 0.2 5.6 6.6 6.9 17.7 1.8 8.2 4 - ATGRRA CZ Atlantic Grupa Dd Cons. Staples 412 157 0.1 1.2 -4.8 -24.4 13.4 1.6 10.7 4 - ERNTRA CZ Ericsson Nikola Tesla IT 192 98 0.0 -6.6 -13.1 -36.1 13.5 4.0 31.8 4 - TPNGRA CZ Tankerska Next Generation Dd Industrials 101 55 0.0 -2.3 -2.8 21.6 11.7 0.9 8.9 1 - KRASRA CZ Kras D.D. Cons. Staples 91 53 0.0 -1.8 0.4 18.3 na 1.0 na 0 - LKRIRA CZ Luka Rijeka Dd Industrials 84 53 0.0 -9.3 -20.1 -48.6 na 1.5 na 0 - ADPLRA CZ Ad Plastik Dd Cons. Disc. 59 38 0.0 -1.9 -11.1 -28.0 9.7 0.6 5.6 2 - MAISRA CZ Maistra Dd Cons. Disc. 377 37 0.0 -6.3 -4.3 40.4 na 2.3 na 0 - LKPCRA CZ Luka Ploce Dd Industrials 44 32 0.0 -3.1 -2.3 -7.5 na 0.7 na 0 - ARNTRA CZ Arenaturist D.D. Cons. Disc. 105 21 0.0 -0.6 -5.4 -11.9 na 0.9 na 0 - DLKVRA CZ Dalekovod Dd Industrials 54 21 0.0 -4.7 -12.4 -19.5 na 1.1 na 0 - ATPLRA CZ Atlantska Plovidba Dd Industrials 33 20 0.0 -14.8 -26.0 -60.4 na 0.3 -15.9 1 - OPTERA CZ Ot-Optima Telekom Dd Telecoms 15 14 0.0 -1.2 -3.1 -76.4 na na na 0 - BLJERA CZ Belje Dd Darda Cons. Staples 27 12 0.0 -4.2 -9.7 -47.4 na 0.5 na 0 - DDJHRA CZ Duro Dakovic Holding Dd Slav Industrials 24 7 0.0 -2.7 5.0 -45.0 na 4.2 na 0 - PTKMRA CZ Petrokemija D.D. Materials 29 6 0.0 -7.9 -3.8 -48.3 na 0.7 na 0 -




50

60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Croatia, $

72%

28%

Telecoms Cons. Staples

0

1

2

3

4

5

6

7

8

9

10

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Croatia MSCI Croatia

5

7

9

11

13

15

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Croatia, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Croatia


Facing the spectre


Facing the spectre

63


Source: UN


Source: IMF


Source: IMF

Figure 137: Croatia – kuna





Source: IMF

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

1

2

3

4

5

6

7

8

9

10

0%

10%

20%

30%

40%

50%

60%

70%

EU

Eur

o A

rea

Italy

Bos

nia

and

Her

z.

Slo

veni

a

Ger

man

y

Aus

tria

Ser

bia

Hun

gary

Rus

sia


-10

-8

-6

-4

-2

0

2

4-1

0

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


85

90

95

100

105

1104

5

6

7

8

9

10

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

HRK vs $ HRK vs EUR Croatia REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.1 4.24.8 5.2

2.1

-7.4

-1.7

-0.3

-2.2

-1.1-0.4

0.8 1.01.7 2.1

-10

-8

-6

-4

-2

0

2

4

6

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Croatia


Facing the spectre


Facing the spectre

64

Figure 140: Key data Local currency CZK

GDP/capita, $ (2014) 19,527 Population, mn (2014) 10.5 S&P/Moody's rating AA-/A1 Weight in MSCI EM, % 0.2

MSCI Index MXCZ

2015 P/E, x 12.2 2015 FY EPS growth 10.9% Trailing P/B, x 1.4 Beta to EM 0.6 MSCI full MktCap, $bn 19.0 MSCI free float MktCap, $bn 6.6 No. of companies 3 3M ADTV, $mn, MSCI cos 19.1

Local index PX





Figure 144: Valuations vs EM

Figure 145: Non-ETF allocations to Czech Republic in GEM funds relative to MSCI weight, %

Figure 146: Changes in consensus earnings, past 12 months (Oct 2014 = 100)

Note: all forward figures for valuations and earnings estimates are taken from Bloomberg consensus estimates. Source for all charts: Bloomberg, EPFR

0

20

40

60

80

100

120

140

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI EM, $ MSCI Czech, $

49%48%

3%

Utilities Financials Cons. Disc.

0

10

20

30

40

50

60

70

80

90

100

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Czech 3M ADTV ($mn) MSCI Czech 3M ADTV ($mn)

8

9

10

11

12

13

14

15

16

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Czech 12M Fwd PE ratio (x) EM

-0.8

-0.7

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0.0

0.1

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Czech Republic%

80

85

90

95

100

105

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Expected 2015 earnings Expected 2016 earnings

Czech Republic


Facing the spectre


Facing the spectre

65



($mn) (%) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXCZ MSCI Czech

18,972 6,561 19.1 -5.2 -13.9 -20.2 12.6 1.4 9.0 51 0.2

CEZ CK Cez Utilities 10,645 3,200 9.4 -2.1 -17.3 -27.5 11.2 1.0 8.8 26 49 KOMB CK Komercni Banka Financials 7,815 3,131 8.4 -7.4 -9.8 -2.7 14.7 2.0 12.3 21 48 PEGAS CK Pegas Nonwovens Sa Cons. Disc. 288 231 1.4 -13.6 -4.9 8.5 11.2 1.7 11.6 4 4

RBAG CP Erste Group Bank Ag Financials 12,537 9,495 2.6 2.1 -3.5 16.3 11.1 1.1 9.2 28 - VIG CP Vienna Insurance Group Ag Financials 4,139 1,242 0.6 7.7 -6.5 -32.8 9.6 0.8 8.0 16 - STOCK CP Stock Spirits Group Plc Cons. Staples 581 558 0.0 4.2 -1.9 -40.9 13.7 1.5 9.6 6 - TELEC CP O2 Czech Republic As Telecoms 2,857 431 1.5 4.9 55.9 159.9 14.8 4.2 27.7 6 - TABAK CP Philip Morris Cr As Cons. Staples 1,289 289 0.4 -1.7 8.3 6.7 14.3 4.8 28.7 4 - UNIPE CP Unipetrol As Materials 1,079 144 0.4 -6.1 -20.3 0.6 6.7 0.8 na 2 - CETV CP Central European Media Ent Cons. Disc. 285 132 0.1 0.0 -10.4 -11.4 na 2.8 -25.9 5 - FOREG CP Fortuna Entertainment Group Cons. Disc. 155 51 0.1 5.5 -5.8 -47.9 11.5 4.7 27.1 4 - NWR CP New World Resources Plc Materials 50 25 0.0 -8.0 -23.1 -69.6 na na 24.0 5 - PLG CP Pivovary Lobkowicz Group Cons. Staples 97 20 0.0 -2.3 5.6 7.8 19.7 1.9 8.5 3 -

Source: Bloomberg

.

Czech Republic


Facing the spectre


Facing the spectre

66


Source: UN

Figure 149: Export destinations, total $171.8bn

Source: IMF


Source: IMF

Figure 151: Czech Republic – koruna





Source: IMF

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

20

40

60

80

100

120

140

160

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

EU

Eur

o A

rea

Ger

man

y

Slo

vaki

a

Pol

and

UK

Fra

nce

Aus

tria

Italy

Hun

gary


-5

-4

-3

-2

-1

0

1

20

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

12010

15

20

25

30

35

40

45

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

CZK vs $ CZK vs EUR Czech REER (Dec 07=100)

Weaker

Stronger

-6

-4

-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.9

6.46.9

5.5

2.7

-4.8

2.3 2.0

-0.9 -0.5

2.0

3.9

2.6 2.62.2

-6

-4

-2

0

2

4

6

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Czech Republic


Facing the spectre


Facing the spectre

67


Facing the spectre


Facing the spectre

68

Figure 154: Key data Local currency EGP

GDP/capita, $ (2014) 3,304 Population, mn (2014) 86.7 S&P/Moody's rating B-/B3 Weight in MSCI EM, % 0.2

MSCI Index MXEG

2015 P/E, x 12.1 2015 EPS growth 29.9%* Trailing P/B, x 2.7 Beta to EM 0.3 MSCI full MktCap, $bn 8.9 MSCI free float MktCap, $bn 6.9 No. of companies 3 3M ADTV, $mn, MSCI cos 14.6

Local index EGX100




*Excludes negative to positive EPS changes



Figure 159: Non-ETF allocations to Egypt in GEM funds relative to MSCI weight, %

Figure 160: Changes in consensus earnings, past 12 months (October 2014 = 100)


50

60

70

80

90

100

110

120

130

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI EM, $ MSCI Egypt, $

91%

9%

Financials Telecoms

0

20

40

60

80

100

120

140

160

180

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Egypt 3M ADTV ($mn) MSCI Egypt 3M ADTV ($mn)

0

2

4

6

8

10

12

14

16

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Egypt 12M Fwd PE ratio (x) EM

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Egypt%

70

80

90

100

110

120

130

140

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Egypt


Facing the spectre


Facing the spectre

69




MXEG MSCI Egypt

8,935 6,878 14.6 -3.3 -12.8 -26.3 9.6 2.7 11.5 47 0.2%

COMI EC COMI Bank Financials 6,080 5,467 8.3 -1.9 -7.5 -7.2 8.8 3.3 29.6 22 80% TMGH EC TMG Holding Financials 1,668 835 3.1 -5.8 -25.0 -45.9 10.7 0.5 5.0 14 12% GTHE EC Global Telecom Telecoms 1,150 575 1.4 -8.2 -33.8 -65.5 32.5 4.6 2.5 11 8%

EFID EC Edita Food Industries Sae Cons. Staples 1,513 1,490 0.7 0.5 -8.0 48.1 25.6 12.8 40.1 8 - ORAS EC Orascom Construction Ltd Industrials 1,250 1,250 0.5 -3.1 -24.1 -25.0 na 1.4 na 1 - HRHO EC Efg-Hermes Holding Sae Financials 739 551 1.7 11.1 -17.3 -47.4 8.6 0.6 5.8 11 - SWDY EC Elswedy Electric Co Industrials 1,169 523 0.4 -4.7 -12.8 -20.5 8.5 1.7 16.8 12 - EAST EC Eastern Tobacco Cons. Staples 1,264 497 0.6 -5.7 -7.8 4.3 8.3 2.0 22.1 5 - JUFO EC Juhayna Food Industries Cons. Staples 938 459 0.5 -3.8 -5.8 -24.9 16.2 3.2 18.0 13 - PHDC EC Palm Hills Developments Financials 574 403 2.9 3.9 -17.7 -48.2 6.8 0.6 8.2 7 - PIOH EC Pioneers Holding Financials 647 388 0.7 2.7 -12.7 -47.3 na 1.2 na 0 - AUTO EC Gb Auto Cons. Disc. 398 373 0.4 -5.1 -24.8 -45.8 8.4 1.0 11.3 9 - CCAP EC Citadel Capital Sae Financials 635 373 2.0 10.8 -9.0 -60.3 na 0.7 na 2 - MNHD EC Medinet Nasr Housing Financials 751 358 1.3 8.6 -4.6 -19.5 21.5 7.6 30.7 6 - ORWE EC Oriental Weavers Cons. Disc. 597 317 0.3 4.0 -2.1 -8.6 9.2 0.2 13.6 8 - ETEL EC Telecom Egypt Telecoms 1,418 284 0.8 -6.0 -18.4 -58.5 5.8 0.4 6.8 14 - CIEB EC Credit Agricole Egypt Financials 876 260 0.5 3.6 -2.6 3.9 7.7 2.4 28.6 10 - OTMT EC Orascom Telecom Telecoms 516 249 4.6 11.6 -12.6 -45.5 5.0 0.6 9.9 5 - OCDI EC Six Of October Development Financials 371 241 0.9 -2.8 -20.3 -53.2 8.0 0.9 10.5 12 - SKPC EC Sidi Kerir Petrochemicals Co Materials 860 239 0.2 -0.5 -0.6 -36.7 8.0 3.2 31.9 12 - ESRS EC Ezz Steel Materials 657 233 1.4 5.2 7.4 -49.6 53.2 1.3 1.4 11 - EKHO EC Egypt Kuwait Holding Co Financials 566 163 0.3 3.6 -6.5 -35.6 9.6 0.9 7.3 4 - HELI EC Heliopolis Housing Financials 587 163 0.9 5.3 -17.0 -33.8 24.5 9.2 36.4 3 - ARCC EC Arabian Cement Co Materials 613 162 0.2 12.0 -22.3 -21.0 8.2 4.0 31.5 9 - SVCE EC South Valley Cement Materials 253 114 0.3 3.7 -15.9 -53.1 11.4 0.6 na 5 - UNIT EC United Housing & Dev Financials 146 104 0.1 -2.8 -12.3 -18.9 na 5.4 na 0 - AMER EC Amer Group Holding Financials 301 100 4.0 2.0 -28.3 -44.7 3.6 1.3 na 2 - AMOC EC Alexandria Mineral Oils Co Materials 322 99 0.3 -12.9 -21.9 -61.8 4.6 1.0 20.5 2 - AIND EC Arabia Invest & Dev Financials 117 92 1.2 -0.6 -23.9 -46.2 na na na 0 - ACGC EC Arab Cotton Ginning Cons. Disc. 99 86 1.7 5.6 -8.1 -43.2 na 0.5 na 1 - EGTS EC Egyptian Resorts Co Cons. Disc. 124 67 1.3 0.7 -17.4 -37.8 10.7 1.1 18.2 4 - ELKA EC El Kahera Housing Financials 135 65 0.0 -0.4 -1.2 -3.7 na 1.3 na 1 - MOIL EC Maridive & Oil Service Energy 135 65 0.1 6.5 -17.5 -65.6 na 0.5 0.9 2 - BTFH EC Beltone Financial Holding Financials 79 64 0.3 34.9 -10.2 -45.9 na 3.0 na 0 -

Source: Bloomberg

Egypt


Facing the spectre


Facing the spectre

70


Source: UN


Source: IMF


Source: IMF

Figure 165: Egypt – pound





Source: IMF

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

1

2

3

4

5

6

7

8

9

0%

5%

10%

15%

20%

25%

30%

35%

EU

Eur

o A

rea

Italy

Sau

di A

rabi

a

Indi

a

Tur

key

US

A

UK

Liby

a

UA

E


-5

-4

-3

-2

-1

0

1

2

3

4

50

2

4

6

8

10

12

14

16

18

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

2019

E

2020

E


80

100

120

140

160

1800

2

4

6

8

10

12

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

EGP vs $ EGP vs EUR Egypt REER (Dec 07=100)

Weaker

Stronger

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.14.5

6.87.1 7.2

4.75.1

1.82.2 2.1 2.2

4.2 4.3 4.5 4.7

0

1

2

3

4

5

6

7

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Egypt


Facing the spectre


Facing the spectre

71


Facing the spectre


Facing the spectre

72

Figure 168: Key data Local currency EUR

GDP/capita, $ (2014) 20,096 Population, mn (2014) 1.3 S&P/Moody's rating AA-/A1 Weight in MSCI FM, % 0.5

MSCI Index MXEST


Local index TALSE







MXEST MSCI Estonia

892 416 0.3 -1.5 1.5 2.0 8.6 0.9 8.1 6 0.5%

TAL1T ET Tallink Industrials 589 294 0.2 -1.8 4.0 9.5 8.4 0.7 7.7 3 72% OEG1T ET Olympic Ents. Cons. Disc. 303 121 0.1 -1.4 -6.0 -14.1 9.3 2.5 25.4 3 28%

TKM1T ET Tallinna Kaubamaja Grupp As Cons. Staples 282 86 0.0 0.1 4.5 10.5 11.7 1.5 11.9 2 - TVEAT ET As Tallinna Vesi-A Equity Utilities 299 76 0.1 -2.9 1.8 -8.3 11.6 3.3 22.8 2 - PKG1T ET As Pro Kapital Grupp Financials 141 45 0.0 -14.4 -7.7 -20.6 na 1.6 -2.1 1 - MRK1T ET As Merko Ehitus Industrials 150 41 0.0 -2.5 -10.0 -3.8 13.0 1.1 8.1 2 - SFG1T ET Silvano Fashion Group-A Shs Cons. Disc. 53 31 0.0 -2.1 -4.2 -40.2 8.7 1.2 8.7 2 - HAE1T ET As Harju Elekter Industrials 48 19 0.0 -9.7 -12.0 -14.7 17.9 0.7 na 0 - EEG1T ET Ekspress Grupp As Cons. Disc. 41 16 0.0 0.7 -6.0 2.7 7.7 0.8 8.9 1 - PRF1T ET Prfoods As Cons. Staples 16 13 0.0 -7.8 -48.8 -52.5 18.7 0.4 na 0 - NCN1T ET Nordecon As Industrials 35 8 0.0 -4.8 -7.8 -13.8 7.9 0.9 9.1 2 - BLT1T ET As Baltika Cons. Disc. 13 6 0.0 -2.9 -18.4 -49.3 10.4 1.7 na 0 - ARC1T ET Arco Vara As Financials 8 4 0.0 3.4 -6.2 9.3 4.0 0.7 na 0 -




80

100

120

140

160

180

200

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Estonia, $

72%

28%

Industrials Cons. Disc.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Estonia MSCI Estonia

5

7

9

11

13

15

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

Oct

-15

MSCI Estonia, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Estonia


Facing the spectre


Facing the spectre

73


Source: UN


Source: IMF


Source: IMF

Figure 177: Estonia – kroon/euro





Source: IMF

0

100

200

300

400

500

600

700

800

900

1,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

0%

10%

20%

30%

40%

50%

60%

70%

80%

EU

Eur

o A

rea

Sw

eden

Fin

land

Latv

ia

Rus

sia

Lith

uani

a

Ger

man

y

Nor

way

Net

herla

nds


-16

-14

-12

-10

-8

-6

-4

-2

0

2

40

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Current account balance (% of GDP) RHS CPI (average % YoY) 75

80

85

90

95

100

105

110

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Jan-

00

Nov

-00

Sep

-01

Jul-0

2

May

-03

Mar

-04

Jan-

05

Nov

-05

Sep

-06

Jul-0

7

May

-08

Mar

-09

Jan-

10

Nov

-10

Sep

-11

Jul-1

2

May

-13

Mar

-14

Jan-

15

EUR vs $ Estonia REER (Dec 07=100)

Weaker

Stronger

-20

-15

-10

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


6.3

9.4 10.3

7.7

-5.4

-14.7

2.5

7.6

5.2

1.62.9 2.0 2.9 3.0 3.2

-20

-15

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Estonia


Facing the spectre


Facing the spectre

74

Figure 180: Key data

GDP per capita, $ (2014) 4,433 Population, mn (2014) 3.7 S&P/Moody's rating BB-/Ba3 MktCap, $bn 1.7 3M ADTV, $mn na/2.6*

*GDR

Figure 181: Significant companies Name Ticker Sector MktCap, $mn 12M Fwd P/E (x) 12M ADTV, $mn

Bank of Georgia BGEO LN Financials 1,220 8.5 1.7 TBC Bank TBCB LI Financials 405 4.7 0.9 Liberty Bank BANK GG Financials 31 - Teliani Valley WINE GG Cons. Staples 30 - Liberty Consumer GTC GG Cons. Staples 2.6 -

. Source: Georgia Stock Exchange

Georgia


Facing the spectre


Facing the spectre

75


Source: UN


Source: IMF


Source: IMF

Figure 185: Georgia – lari





Source: IMF

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0%

5%

10%

15%

20%

25%

EU

Aze

rbai

jan

Eur

o A

rea

Arm

enia

Rus

sia

Tur

key

US

A

Bul

garia

Ukr

aine

Chi

na


-25

-20

-15

-10

-5

0-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

120

1301.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

GEL vs $ GEL vs EUR Georgia REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


5.9

9.6 9.4

12.6

2.6

-3.7

6.27.2

6.4

3.3

4.8

2.03.0

5.0 5.0

-6

-4

-2

0

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Georgia


Facing the spectre


Facing the spectre

76

Figure 188: Key data Local currency GHS

GDP/capita, $ (2014) 1,473 Population, mn (2014) 26.2 S&P/Moody's rating B-/B3 Weight in MSCI FM , % na*

MSCI Index MXGH

2015 P/E, x 4.1 2015 EPS growth -1.6% Trailing P/B, x 1.6 Beta to FM 0.1 MSCI full MktCap, $bn 0.8 MSCI free float MktCap, $bn 0.2 No. of companies 2 3M ADTV, $mn, MSCI cos 0.0

Local index GGSECI




MSCI Ghana is a standalone index and not part of the MSCI Frontier Index. We have excluded foreign companies with listings in Ghana from our calculations.




MXGH MSCI Ghana

824 185 0.0 -0.4 -9.8 -32.6 3.8 1.6 37.5 14 -

GCB GN Ghana Commercial Bank Financials 260 116 0.0 -1.9 -10.2 -40.3 3.3 1.3 37.2 8 63% EBG GN Ecobank Ghana Ltd Financials 577 69 0.0 3.5 -7.9 -11.8 5.4 2.9 38.3 6 37%

ETI GN Ecobank Transnational Inc Financials 1,896 736 0.0 -2.9 0.1 -18.7 3.4 0.9 13.9 6 - SCB GN Standard Chartered Bk Ghana Financials 495 422 0.0 -3.7 -14.9 -28.6 10.4 2.9 27.3 2 - FML GN Fan Milk Ltd Cons. Staples 224 89 0.1 -2.2 26.5 27.2 28.7 8.9 27.4 3 - TOTAL GN Total Petroleum Ghana Ltd Energy 156 156 0.0 -3.8 -0.4 -27.0 10.7 4.1 48.7 2 - UNIL GN Unilever Ghana Ltd Cons. Staples 129 129 0.0 0.2 7.9 -46.9 na 9.0 na 1 - CAL GN Cal Bank Ltd Financials 114 35 0.0 -8.0 -20.3 -33.3 2.5 1.0 32.7 5 - GGBL GN Guinness Ghana Breweries Cons. Staples 111 18 0.0 -1.2 -37.1 -46.2 na 4.4 -15.4 2 - GOIL GN Ghana Oil Co Ltd Energy 89 15 0.0 -0.7 -13.8 15.2 7.5 3.7 35.8 4 - EGL GN Enterprise Group Ltd Financials 76 35 0.0 -4.1 8.7 19.0 na 1.6 na 1 - SOGEGH GN Societe Generale Ghana Ltd Financials 76 9 0.0 -4.1 1.4 -14.3 6.8 1.3 17.2 2 - HFC GN Hfc Bank (Ghana) Ltd Financials 67 na 0.0 -14.8 -38.5 -44.1 na 1.0 na 0 - BOPP GN Benso Oil Palm Plantation Cons. Staples 35 5 0.0 -6.2 -9.3 -19.7 na 2.4 na 1 - TBL GN Trust Bank Ltd Gambia Financials 18 2 0.0 -1.7 9.7 -2.0 na 1.8 na 0 - PZC GN Pz Cussons Ghana Ltd Cons. Staples 15 1 0.0 -2.0 -4.6 -28.1 na 1.9 na 1 - PBC GN Produce Buying Company Ltd Cons. Staples 13 13 0.0 2.5 -16.4 -39.9 na 5.3 na 1 - UTB GN Ut Bank Ltd Financials 12 2 0.0 -2.9 -33.2 -67.7 4.4 0.4 5.9 3 -




50

70

90

110

130

150

170

190

210

230

250

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Ghana, $

100%

Financials

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Ghana 3M ADTV ($mn) MSCI Ghana 3M ADTV ($mn)

0

5

10

15

20

25

30

35

Jan-

11

Apr

-11

Jul-1

1

Oct

-11

Jan-

12

Apr

-12

Jul-1

2

Oct

-12

Jan-

13

Apr

-13

Jul-1

3

Oct

-13

Jan-

14

Apr

-14

Jul-1

4

Oct

-14

Jan-

15

Apr

-15

Jul-1

5

MSCI Ghana 12M Fwd PE (x) Frontier

Ghana


Facing the spectre


Facing the spectre

77


Source: UN


Source: IMF


Source: IMF

Figure 197: Ghana – cedi





Source: IMF

0

5,000

10,000

15,000

20,000

25,000

30,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0%

5%

10%

15%

20%

25%

30%

35%

40%

EU

Eur

o A

rea

Chi

na

Fra

nce

Tai

wan

Indi

a

Net

herla

nds

Italy

Sou

th A

fric

a

UK


-14

-12

-10

-8

-6

-4

-2

00

2

4

6

8

10

12

14

16

18

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


60

80

100

120

140

1600

1

2

3

4

5

6

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

GHS vs $ GHS vs EUR Ghana REER (Dec 07=100)

Weaker

Stronger

0

2

4

6

8

10

12

14

16

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


5.36.0 6.1

4.5

9.3

5.8

7.9

14.0

8.07.3

4.03.5

5.7

9.4

7.3

0

2

4

6

8

10

12

14

16

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Ghana


Facing the spectre


Facing the spectre

78


GDP/capita, $ (2014) 21,647 Population, mn (2014) 11.0 S&P/Moody's rating CCC+/Caa3 Weight in MSCI EM, % 0.4

MSCI Index MXGR

2015 P/E, x 17.2* 2015 FY EPS growth 7.9%** Trailing P/B, x 0.5 Beta to EM 1.1 MSCI full MktCap, $bn 16.2 MSCI free float MktCap, $bn 8.4 No. of companies 9 3M ADTV, $mn, MSCI cos 29.4

Local index ASE




*Excludes stocks with forecast negative earnings **Excludes negative-to-positve EPS changes



Figure 205: Non-ETF allocations to Greece in GEM funds relative to MSCI weight, %

Figure 206: Changes in consensus earnings, past 12 months (October 2014 = 100)


0

20

40

60

80

100

120

140

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI EM, $ MSCI Greece, $

39%

26%

24%

11%

Cons. Disc. Telecoms

Financials Materials

0

50

100

150

200

250

300

350

400

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Greece 3M ADTV ($mn) MSCI Greece 3M ADTV ($mn)

0

5

10

15

20

25

30

35

40

45

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Greece 12M Fwd PE ratio (x) EM

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Greece Weight in MSCI EM%

0

20

40

60

80

100

120

140

160

180

200

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Greece


Facing the spectre


Facing the spectre

79


Ticker Name Sector MktCap ($mn)

FF MktCap ($mn)

3M ADTV ($mn)

$ performance (%) 12MF P/E (x)

Trail PBV (x)

12MF RoE (%)

# analyst Recs

MSCI wgt (%) 1M 3M 12M

MXGR MSCI Greece

16,192 8,440 29.4 -7.8 -4.9 -59.1 9.6 0.5 3.0 97 0.3%

HTO GA Hellenic Telecomms Telecoms 4,684 2,330 6.6 -2.9 17.0 -15.2 12.9 2.0 13.5 19 26% OPAP GA OPAP Cons. Disc. 2,510 1,741 4.5 -18.2 -1.6 -34.1 11.1 2.1 17.5 15 21% ETE GA National Bk of Greece Financials 2,021 897 4.5 -6.9 -11.1 -74.7 3.7 0.3 5.9 7 11% TITK GA Titan Cement Materials 1,701 974 0.7 -7.5 -8.5 -9.1 21.5 1.0 5.1 12 11% BELA GA Jumbo Cons. Disc. 1,294 954 1.7 6.0 26.7 -17.7 11.1 1.5 12.4 10 11% FFGRP GA FF Group Cons. Disc. 1,300 647 1.3 -4.7 -15.6 -39.0 7.2 0.8 11.2 12 7% ALPHA GA Alpha Bank Financials 1,400 466 3.6 -12.4 -18.0 -83.0 6.1 0.2 4.2 7 7% EUROB GA Eurobank Financials 522 303 3.0 29.9 -42.2 -88.2 na 0.1 1.1 7 4% TPEIR GA Piraeus Bank Financials 354 128 2.7 -32.0 -63.2 -95.6 na 0.0 2.2 8 2%

EEE GA Coca-Cola Hbc Ag-Di Cons. Staples 8,816 4,627 0.7 15.2 17.7 11.0 23.9 na 11.2 18 - BOC GA Bank Of Cyprus Financials 1,735 1,316 0.6 -2.3 -8.6 -25.1 8.7 0.5 na 1 - MOH GA Motor Oil (Hellas) Sa Energy 1,389 823 1.6 3.5 32.4 65.2 7.3 2.3 28.5 11 - PPC GA Public Power Corp Utilities 1,272 622 2.2 7.6 30.5 -32.2 7.1 0.2 3.1 10 - ELPE GA Hellenic Petroleum Sa Energy 1,779 419 0.5 0.9 21.2 7.7 7.5 0.9 14.3 11 - MYTIL GA Mytilineos Holdings S.A. Materials 605 413 0.7 2.1 -9.5 -23.9 6.6 0.6 8.7 7 - EXAE GA Hellenic Exchanges Financials 383 360 1.1 14.2 37.6 -16.7 23.2 2.0 8.2 9 - GRIV GA Grivalia Properties Reic Financials 907 345 0.3 0.0 7.6 -18.9 18.1 1.0 na 2 - EYDAP GA Athens Water Supply Utilities 660 255 0.1 -4.5 7.4 -18.9 12.4 0.7 5.4 2 - METTK GA Metka Sa Industrials 499 250 0.5 16.8 12.7 -9.5 8.6 0.9 8.7 8 - ELLAKTOR GA Ellaktor Sa Industrials 354 246 0.3 15.4 36.1 -34.4 na 0.4 2.4 5 - AEGN GA Aegean Airlines Industrials 562 227 0.3 1.4 7.2 -9.4 7.3 2.6 31.1 7 - LAMDA GA Lamda Development Sa Financials 396 191 0.1 -1.8 16.2 12.2 na 1.0 na 0 - INLOT GA Intralot S.A.-Integrated Lot Cons. Disc. 262 160 0.1 -11.6 -1.0 9.6 na 1.2 -10.9 2 - VIO GA Viohalco Sa Materials 578 127 0.2 -2.4 3.3 -28.7 na na na 0 - TENERGY GA Terna Energy Sa Utilities 339 126 0.1 1.4 2.9 -2.7 14.5 0.9 6.2 4 - GEKTERNA GA Gek Terna Holding Industrials 211 123 0.2 10.1 35.0 -29.2 6.8 na 7.0 3 - SAR GA Sarantis Sa Cons. Staples 279 113 0.1 5.6 6.1 -8.6 12.0 1.6 12.0 4 - FOYRK GA Fourlis Sa Cons. Disc. 151 112 0.1 9.7 4.7 -32.6 67.2 0.9 2.7 6 - PPA GA Piraeus Port Authority Sa Industrials 429 75 0.1 3.2 20.5 3.7 32.2 2.3 na 3 - OLTH GA Thessaloniki Port Authority Industrials 286 74 0.0 9.8 33.0 10.7 12.6 2.2 na 0 - PLAKR GA Plastika Kritis S.A. Materials 172 73 0.0 -8.6 -7.9 5.0 na 0.9 na 0 - FRIGO GA Frigoglass Saic Industrials 121 67 0.1 9.7 17.9 -15.6 na 10.4 11.5 4 - ELBA GA Elval Holdings Sa Materials 218 59 0.0 -9.7 20.9 15.4 13.3 0.3 na 0 - MIG GA Marfin Investment Group Financials 90 52 0.1 23.9 13.9 -66.2 na 0.2 na 0 - OTOEL GA Autohellas Sa Industrials 150 39 0.0 0.1 8.6 18.9 8.3 0.8 8.8 1 - IASO GA Iaso S.A. Healthcare 39 35 0.0 -4.3 -5.1 -35.3 na 0.5 na 0 - INTRK GA Intracom Holdings Sa-Reg Industrials 51 34 0.0 2.5 9.1 -26.7 na 0.2 na 0 - EUPIC GA European Reliance Gen Financials 47 33 0.1 4.1 10.5 -3.5 na 0.6 na 0 - KORRES GA Korres Natural Products Cons. Staples 59 30 0.0 1.8 3.6 -0.3 na 2.9 na 0 - EYAPS GA Thessaloniki Water Utilities 128 27 0.0 3.6 26.2 -12.1 6.9 0.8 8.4 1 - PLAT GA Thrace Plastics Co Sa Materials 66 25 0.0 0.1 -3.9 25.7 na 0.5 na 0 - KYRM GA Fhl I Kiriakidis Marbles - G Materials 63 24 0.0 -2.0 5.0 0.7 na 1.2 na 0 - KRI GA Kri-Kri Milk Industry Sa Cons. Staples 63 23 0.0 -5.2 2.3 -19.1 na 1.4 na 0 - SOLK GA Corinth Pipeworks Sa Materials 144 20 0.0 3.0 36.6 -32.1 na 0.9 na 1 - MLS GA M.L.S. Multimedia S.A. IT 47 20 0.0 -10.3 -9.4 -29.5 na 2.0 na 0 - IATR GA Athens Medical Center Healthcare 64 18 0.0 -3.8 -12.1 -25.7 na 0.8 na 0 - OLYMP GA Technical Olympic S.A. Industrials 37 15 0.0 1.5 30.6 -42.0 na 0.1 na 0 - KLEM GA Kleemann Hellas S.A. Industrials 44 14 0.0 -3.7 10.4 -8.9 na 0.5 na 0 - HYGEIA GA Diagnostic & Therapeutic Healthcare 45 13 0.0 8.4 34.5 -37.1 na 0.3 na 0 - QUEST GA Quest Holdings Sa IT 50 13 0.0 -1.2 0.0 -34.7 na 0.3 na 0 - ANEMOS GA Eltech Anemos S.A Utilities 67 12 0.0 11.8 18.9 -40.9 7.0 0.5 na 3 - XAKO GA Halcor S.A. Industrials 37 12 0.0 2.1 9.2 -16.7 na 0.3 na 0 - AVAX GA J&P-Avax Sa Industrials 29 12 0.0 -1.4 -1.7 -66.0 na 0.1 na 0 - IKTIN GA Iktinos Hellas S.A.-Reg Materials 34 11 0.0 -6.3 13.7 -34.4 na 1.0 na 0 - EUROC GA Euroconsultants Sa IT 14 11 0.0 13.9 14.4 -14.0 na 3.7 na 0 - FGE GA Fg Europe Sa Cons. Disc. 37 9 0.0 -12.1 -10.2 -44.9 na 2.0 na 0 - PETRO GA Petros Petropoulos Industrials 27 8 0.0 -3.7 4.1 13.8 na 0.8 na 0 - CENTR GA Centric Multimedia Sa Cons. Disc. 17 7 0.0 9.1 25.6 -37.8 na 0.3 na 0 - KAMP GA Reds Sa Financials 20 5 0.0 -18.1 -26.8 -45.1 na 0.2 na 0 - LYK GA Inform P. Lykos S.A. Industrials 12 2 0.0 -15.6 30.0 -68.5 na 0.2 na 0 -

Source: Bloomberg

Greece


Facing the spectre


Facing the spectre

80


Source: UN


Source: IMF


Source: IMF

Figure 211: Greece – euro





Source: IMF

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

18

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

EU

Eur

o A

rea

Tur

key

Italy

Ger

man

y

Bul

garia

Cyp

rus

UK

Sau

di A

rabi

a

Egy

pt


-16

-14

-12

-10

-8

-6

-4

-2

0

2

4-2

-1

0

1

2

3

4

5

6

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


50

60

70

80

90

100

110

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

EUR vs $ Greece REER (Dec 07=100)

Weaker

Stronger

-15

-10

-5

0

5

10

15

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


5.0

0.9

5.8

3.5

-0.4

-4.4-5.4

-8.9

-6.6

-3.9

0.8

-2.3-1.3

2.7 3.1

-10

-8

-6

-4

-2

0

2

4

6

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Greece


Facing the spectre


Facing the spectre

81


Facing the spectre


Facing the spectre

82

Figure 214: Key data Local currency HUF

GDP/capita, $ (2014) 13,869 Population, mn (2014) 9.9 S&P/Moody's rating BB+/Ba1 Weight in MSCI EM, % 0.2

MSCI Index MXHU

2015 P/E, x 13.6 2015 FY EPS growth -15.9%* Trailing P/B, x 1.1 Beta to EM 1.1 MSCI full MktCap, $bn 13.2 MSCI free float MktCap, $bn 8.2 No. of companies 3 3M ADTV, $mn, MSCI cos 24.0

Local index BUX




*Excludes negative-to-positive EPS changes



Figure 219: Non-ETF allocations to Hungary in GEM funds relative to MSCI weight, %

Figure 220: Changes in consensus earnings, past 12 months (Nov 2014 = 100)


0

20

40

60

80

100

120

140

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Hungary, $

52%

28%

20%

Financials Healthcare Energy

0

20

40

60

80

100

120

140

160

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Hungary 3M ADTV ($mn) MSCI Hungary 3M ADTV ($mn)

5

6

7

8

9

10

11

12

13

14

15

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Hungary 12M Fwd PE ratio (x) EM

-0.1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Hungary%

40

50

60

70

80

90

100

110

120

130

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Hungary


Facing the spectre


Facing the spectre

83



FF MktCap ($mn)

3M ADTV ($mn)

$ performance (%) 12MF P/E (x)

Trail PBV (x)

12MF RoE (%)

# analyst Recs

MSCI wgt (%) 1M 3M 12M

MXHU MSCI Hungary

13,221 8,241 24.0 1.0 -5.2 10.2 10.5 1.1 10.0 45 0.2%

OTP HB OTP Bank Financials 5,413 4,305 12.1 1.4 -5.0 20.6 10.4 1.2 10.5 20 52% RICHT HB Richter Gedeon Healthcare 3,162 2,303 5.8 6.5 6.7 10.4 16.9 1.5 8.4 10 27% MOL HB MOL Magyar Energy 4,689 1,633 6.0 -0.1 -13.4 -4.3 7.5 0.7 9.6 15 20%

MTELEKOM HB Magyar Telekom Telecoms 1,430 583 1.1 -1.9 -5.3 -1.2 13.8 0.8 6.0 12 - GSPARK HB Graphisoft Park Se Financials 84 42 0.0 -3.0 -2.8 18.7 na 3.5 na 0 - FHB HB Fhb Mortgage Bank Plc Financials 160 39 0.0 -5.0 -10.0 -17.0 87.5 0.8 na 0 - ANY HB Any Security Printing Co Industrials 49 29 0.0 -4.0 -8.6 -7.5 13.1 2.5 na 1 - PANNONIA HB Cig Pannonia Life Financials 32 27 0.0 -10.5 -11.7 -46.4 11.2 3.3 na 1 - ZWACK HB Zwack Unicum Rt Cons. Staples 118 21 0.0 -2.3 -4.6 7.0 na 7.0 na 0 - EMASZ HB Emasz Utilities 241 22 0.0 -0.2 6.5 43.4 na 1.0 na 0 - ELMU HB Budapesti Elektromos Utilities 502 21 0.0 -0.2 4.7 51.1 na 1.0 na 0 - RABA HB Raba Automotive Holding Industrials 64 17 0.0 0.3 2.1 0.7 9.9 1.1 na 0 - PANNERGY HB Pannergy Plc Utilities 28 20 0.0 13.3 15.0 4.1 na 0.8 na 0 - APPENINN HB Appeninn Holding Financials 26 11 0.0 -6.8 -0.9 -7.7 na 1.2 na 0 -

Source: Bloomberg

Hungary


Facing the spectre


Facing the spectre

84


Source: UN


Source: IMF


Source: IMF

Figure 225: Hungary – forint





Source: IMF

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

10

20

30

40

50

60

70

80

90

100

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

EU

Eur

o A

rea

Ger

man

y

Aus

tria

Rom

ania

Slo

vaki

a

Italy

Fra

nce

Pol

and

Cze

ch R

epub

lic


-10

-8

-6

-4

-2

0

2

4

6-1

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

120100

150

200

250

300

350

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

HUF vs $ HUF vs EUR Hungary REER (Dec 07=100)

Weaker

Stronger

-15

-10

-5

0

5

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.3 4.0

0.5 0.9

-6.6

0.8

1.8

-1.5

1.5

3.63.0

2.5 2.3 2.1

-8

-6

-4

-2

0

2

4

6

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Hungary


Facing the spectre


Facing the spectre

85


Facing the spectre


Facing the spectre

86

Figure 228: Key data Local currency IDR

GDP/capita, $ (2014) 3,524 Population, mn (2014) 254 S&P/Moody's rating BB+/Baa3 Weight in MSCI EM, % 2.4

MSCI Index MXID

2015 P/E, x 11.9 2015 FY EPS growth -1.7% Trailing P/B, x 2.6 Beta to EM 0.9 MSCI full MktCap, $bn 201.2 MSCI free float MktCap, $bn 83.1 No. of companies 30 3M ADTV, $mn, MSCI cos 161.7

Local index JCI






Figure 233: Non-ETF allocations to Indonesia in GEM funds relative to MSCI weight, %



80

90

100

110

120

130

140

150

160

170

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Indonesia, $

40%

18%

14%

13%

5%

4% 3%

2%

1%

Financials Cons. Disc. TelecomsCons. Staples Materials IndustrialsUtilities Healthcare Energy

0

100

200

300

400

500

600

700

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Indonesia 3M ADTV ($mn) MSCI Indonesia 3M ADTV ($mn)

8

9

10

11

12

13

14

15

16

17

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Indonesia 12M Fwd PE ratio (x) EM

-0.8

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Indonesia

60

70

80

90

100

110

120

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Indonesia


Facing the spectre


Facing the spectre

87




MXID MSCI Indonesia

201,245 83,052 161.7 -4.1 -6.2 -19.7 13.4 2.6 18.6 758 2.4%

BBCA IJ Bank Central Asia Financials 23,414 11,856 14.2 -3.2 -7.4 -7.9 16.1 3.7 20.1 37 14% TLKM IJ Telekomunikasi Indonesia Telecoms 19,960 10,082 13.5 -1.4 -9.8 -8.4 14.8 3.7 22.5 35 12% ASII IJ Astra International Cons. Disc. 19,335 9,529 14.1 -4.1 -0.7 -13.6 14.0 2.6 17.0 26 12% BBRI IJ Bank Rakyat Indonesia Financials 18,941 8,602 21.7 -2.1 -1.9 -12.5 9.9 2.4 21.5 37 10% BMRI IJ Bank Mandiri Financials 14,401 5,950 16.0 -8.8 -12.5 -27.1 9.1 1.8 17.6 34 7.0% UNVR IJ Unilever Indonesia Cons. Staples 19,846 4,104 4.3 -10.4 -8.6 5.8 41.7 46.9 127.5 23 4.9% BBNI IJ Bank Negara Indonesia Financials 6,618 2,665 11.4 -5.0 -2.0 -23.9 8.4 1.5 15.6 31 3.2% LPPF IJ Matahari Department Store Cons. Disc. 3,275 2,617 4.9 -9.4 -17.6 -3.1 20.7 64.4 148.5 22 3.2% UNTR IJ United Tractors Industrials 4,824 2,202 4.2 -11.7 -12.7 -17.0 10.1 1.6 15.1 26 2.7% PGAS IJ Perusahaan Gas Negara Utilities 4,809 2,246 9.4 -11.1 -25.8 -58.6 10.0 1.7 15.6 25 2.7% SMGR IJ Semen Indonesia Materials 4,336 2,227 4.3 -6.8 1.8 -41.5 11.2 2.3 18.5 37 2.6% KLBF IJ Kalbe Farma Healthcare 4,719 2,226 4.9 -12.4 -17.6 -25.8 26.2 6.4 21.5 26 2.6% INTP IJ Indocement Tunggal Materials 4,896 1,993 3.2 -7.2 -9.3 -28.1 13.5 2.9 18.7 35 2.4% INDF IJ Indofood Sukses Cons. Staples 3,468 1,785 3.2 -8.4 -11.8 -25.2 11.7 1.8 14.3 26 2.1% LPKR IJ Lippo Karawaci Financials 1,958 1,667 5.9 -2.0 3.3 1.3 15.3 1.5 10.1 22 2.1% GGRM IJ Gudang Garam Cons. Staples 6,560 1,673 3.3 5.6 -2.2 -31.8 15.5 2.5 14.8 18 2.0% SCMA IJ Surya Citra Media Cons. Disc. 3,438 1,333 1.5 5.6 18.5 -9.0 27.6 13.1 40.2 16 1.7% CPIN IJ Charoen Pokphand Cons. Staples 2,952 1,422 1.1 -1.2 8.1 -42.2 15.9 3.4 19.4 12 1.6% ICBP IJ Indofood Cbp Sukses Cons. Staples 5,366 1,102 1.9 -5.3 -2.5 1.4 21.1 4.9 20.4 25 1.3% SMRA IJ Summarecon Agung Financials 1,452 1,021 3.3 -4.7 -24.5 -1.2 13.9 3.5 19.9 28 1.3% BSDE IJ Bumi Serpong Damai Financials 2,319 928 2.0 -6.6 -6.7 -3.8 11.0 1.7 14.8 30 1.1% TBIG IJ Tower Bersama Telecoms 2,308 952 1.7 -4.8 -13.0 -34.9 20.1 7.8 25.8 18 1.1% JSMR IJ Jasa Marga (Persero) Industrials 2,456 744 2.2 -12.5 -10.5 -30.8 19.8 3.5 14.7 25 0.9% EXCL IJ Xl Axiata Tbk Pt Telecoms 1,974 664 0.6 -3.6 21.0 -44.6 39.8 2.0 3.7 28 0.8% BDMN IJ Bank Danamon Indonesia Financials 1,975 705 0.5 -14.1 -31.7 -38.3 8.3 0.8 9.0 25 0.8% ADRO IJ Adaro Energy Energy 1,434 649 2.1 -11.4 7.2 -49.7 8.7 0.5 5.3 24 0.8% MNCN IJ Media Nusantara Citra Cons. Disc. 1,720 628 1.1 -14.5 -24.6 -42.8 12.3 2.7 18.7 15 0.8% AALI IJ Astra Agro Lestari Cons. Staples 2,164 557 2.2 -0.8 -6.0 -27.1 15.9 2.7 15.4 25 0.7% BMTR IJ Global Mediacom Cons. Disc. 897 479 0.6 -23.8 -34.8 -57.5 10.0 1.1 11.3 4 0.6% PTBA IJ Tambang Batubara Energy 1,240 443 1.5 12.2 21.2 -48.2 9.9 1.7 16.7 23 0.5%

SMMA IJ Sinar Mas Multiartha Financials 2,567 2,299 0.0 12.2 10.5 68.1 na 2.7 na 0 - TOWR IJ Sarana Menara Nusantara Telecoms 3,036 2,043 0.1 0.3 0.7 -12.9 25.3 8.0 25.1 16 - MYOR IJ Mayora Indah Pt Cons. Staples 1,764 1,181 0.1 1.3 -3.8 -8.7 23.2 5.1 19.7 11 - EMTK IJ Elang Mahkota Teknologi Cons. Disc. 4,134 1,090 0.0 -14.6 -15.5 53.2 na 4.0 na 0 - AMRT IJ Sumber Alfaria Trijay Cons. Staples 1,648 782 0.0 -3.0 -9.2 -8.0 31.5 5.0 16.6 6 - PWON IJ Pakuwon Jati Financials 1,539 736 2.3 3.3 6.9 -11.6 8.9 3.1 26.6 15 - AKRA IJ Akr Corporindo Industrials 1,741 711 3.3 1.3 3.6 14.5 19.2 4.0 17.7 14 - MEGA IJ Bank Mega Financials 1,535 647 0.0 -6.4 10.6 33.9 na 2.9 na 0 - PTPP IJ Pembangunan Perumahan Industrials 1,308 641 2.2 -4.6 -7.0 21.0 19.6 6.7 25.3 24 - SUGI IJ Sugih Energy Energy 700 615 2.2 -2.2 -1.8 -18.6 na 2.3 na 0 - BTPN IJ Bank Tabungan Financials 1,161 590 0.0 -9.4 -17.5 -42.1 7.0 1.2 14.9 14 - WSKT IJ Waskita Karya Persero Industrials 1,680 570 3.6 2.5 -8.1 62.7 22.4 2.7 12.0 23 - CTRA IJ Ciputra Development Financials 1,402 543 1.1 20.0 14.6 0.0 12.8 2.4 15.9 22 - MYRX IJ Hanson International Materials 700 537 6.0 -5.4 -6.3 -7.1 112.9 2.2 na 1 - MIKA IJ Mitra Keluarga Healthcare 2,881 519 5.4 -3.0 -4.0 51.3 59.2 21.4 21.6 8 - WTON IJ Wijaya Karya Beton Materials 589 511 1.4 -11.7 -13.9 -29.1 23.5 3.7 13.9 12 - KREN IJ Kresna Graha Sekurindo Pt Financials 658 460 4.5 -2.4 161.1 401.1 na 17.0 na 0 - ANTM IJ Aneka Tambang Persero Materials 604 448 2.9 -16.4 -30.9 -60.6 53.5 0.3 -0.6 12 - ULTJ IJ Ultrajaya Milk Ind & Trading Cons. Staples 849 447 0.0 1.1 7.3 -5.9 19.6 4.4 18.4 3 - WIKA IJ Wijaya Karya Persero Industrials 1,245 434 2.5 -9.7 3.2 -10.9 21.2 4.3 15.8 25 - ADHI IJ Adhi Karya Persero Industrials 582 432 5.3 2.7 17.5 -6.8 13.8 2.8 11.4 21 - KPIG IJ Mnc Land Financials 676 411 0.0 -10.3 -11.4 -7.5 28.3 1.0 3.9 0 - ISAT IJ Indosat Telecoms 1,914 396 0.2 15.6 9.5 23.2 23.8 2.1 6.5 25 - ACES IJ Ace Hardware Indonesia Cons. Disc. 958 383 0.5 8.8 24.7 -15.1 21.1 5.3 20.8 20 - MMLP IJ Mega Manunggal Property Financials 357 354 0.4 -5.6 4.8 41.9 20.4 na na 1 - BBTN IJ Bank Tabungan Negara Financials 871 347 1.7 1.1 -7.0 -8.5 6.5 0.9 13.3 18 - FREN IJ Smartfren Telecom Telecoms 378 324 0.0 -5.0 -8.1 -32.3 na 0.8 na 0 - INCO IJ Vale Indonesia Materials 1,559 319 2.1 -8.7 9.8 -48.8 14.6 0.8 6.1 19 - SSMS IJ Sawit Sumbermas Sarana Cons. Staples 1,214 304 7.9 -7.1 -10.8 39.8 17.9 5.8 24.7 4 - DILD IJ Intiland Development Financials 379 303 1.1 -13.8 -8.7 -24.0 10.4 1.2 9.2 6 - JRPT IJ Jaya Real Property Financials 808 294 0.0 -6.1 -18.0 -29.9 10.1 2.9 25.9 1 - LINK IJ Link Net Telecoms 892 292 0.6 -10.9 -29.0 -39.5 15.2 3.5 19.5 7 - MDLN IJ Modernland Realty Financials 447 286 0.5 -3.2 0.5 -11.3 5.6 1.1 16.0 4 - KIJA IJ Kawasan Industri Jababeka Financials 348 278 0.8 13.7 -6.9 -20.8 6.2 1.1 12.5 4 - LSIP IJ Pp London Sumatra Cons. Staples 684 276 2.0 0.3 7.9 -35.2 12.5 1.3 10.1 23 -

Source: Bloomberg

Indonesia


Facing the spectre


Facing the spectre

88


Source: UN


Source: IMF


Source: IMF

Figure 239: Indonesia - rupiah





Source: IMF

0

20,000

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1406,000

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IDR vs $ IDR vs EUR Indonesia REER (Dec 07=100)

Weaker

Stronger

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2004

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Change in lending as % of GDP Real GDP %YoY

5.0

5.75.5

6.3

7.4

4.7

6.46.2

6.0

5.6

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4.7

5.1

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2004

2005

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E

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E

Indonesia


Facing the spectre


Facing the spectre

89


Facing the spectre


Facing the spectre

90


GDP per capita, $ (2014) 5,353 Population, mn (2014) 77.8 MktCap, $bn 85 3M ADTV, $mn 32

Figure 243: Top 30 largest companies Name Sector MktCap ($mn) FFMktCap ($mn) 12M ADTV, $mn 12M Fwd P/E

Persian Gulf PetChem. Co. Chemicals 8,953 358 3.0 5.7 TCI Telecoms 3,421 171 1.0 4.4 TAPPICO Chemicals 3,153 189 2.9 4.1 Mobarakeh Steel Base metals 2,909 640 1.5 3.7 MCI Telecoms 3,945 355 0.7 4.8 Mellat Bank Banking 2,660 585 0.8 4.9 Parsian O&G Dev. Co. Chemicals 3,581 645 2.0 4.8 Ghadir Investment Co. Ind. Holding 2,786 446 0.7 3.6 NICIC Base Metals 1,963 452 1.4 4.6 Pasargad Bank Banking 2,174 1,130 1.3 5.2 MAPNA Group Engineering 2,435 268 0.9 15.7 IRI Marine Co. Logistics 3,055 153 0.2 42.9 Omid Investment Management Ind. Holding 1,768 106 0.4 2.2 Gol e Gohar Mining Metallic Ore 1,567 266 0.4 5.0 Chadormalu Mining Metallic Ore 1,445 159 0.4 2.1 Pardis PetChem Co. Chemicals 1,982 277 0.9 5.3 Saderat Bank Banking 1,769 389 0.8 7.2 Tejarat Bank Banking 1,429 329 0.5 9.2 Melli Dev. Invest. Co. Ind. Holding 803 129 0.2 2.8 Civil Pension Fund Invest. Co. Ind. Holding 1,363 164 0.3 4.6 Informatics Services Co. IT 1,336 67 0.1 9.8 M&M Dev. Co. Metallic Ore 798 183 0.4 3.5 Iran Khodro Auto 773 178 0.6 5.5 Kharg PetChem. Co. Chemicals 855 94 0.3 4.4 Parsian Bank Banking 966 193 0.5 10.0 Behran Oil Co. Oil Products 596 191 0.1 4.3 Eghtesad Novin Bank Banking 689 90 0.1 5.3 Saipa Auto 617 148 0.5 133.4 Ansar Bank Banking 645 168 0.5 6.6 Fanavaran PetChem Co. Chemicals 536 64 0.3 4.0 Average

2032 286 3.0 5.7

Source: Tehran Stock Exchange, local estimates

Figure 244: Iran market performance (lcl) (31/12/2009=100)

Source: Tehran Stock Exchange

Figure 245: Iran TEPIX Index sector weights

Source: Tehran Stock Exchange

80

130

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430

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TEPIX Index ($)

Materials40.7%

Financials14.8%

Industrials14.8%

Energy12.4%

Telecoms8.2%

Cons. Disc.3.5%

Healthcare2.8%

IT1.4%

Cons. Staples1.3%

Iran


Facing the spectre


Facing the spectre

91


Source: UN


Source: IMF


Source: IMF

Figure 249: Iran – rial





Source: World Bank:

0

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IRR vs $ IRR vs EUR Iran REER (Dec 07=100)

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Iran


Facing the spectre


Facing the spectre

92


GDP per capita, $ (2014) 6,520 Population, mn (2014) 34.3 MktCap, $bn 3.9 3M ADTV, $mn 1.7

Figure 253: Top 30 largest companies Sector MktCap, $mn 12M ADTV, $mn

Asiacell Communications Pjsc Telecoms 1,465 0.03 Bank Of Baghdad Financials 296 0.08 Kurdistan International Bank Financials 191 0.00 Baghdad Soft Drinks Cons. Staples 226 0.04 Commercial Bank Of Iraq Financials 129 0.01 United Bank Of Iraq Financials 124 0.44 Dar Es Salam Investment Bank Financials 68 1.27 Ashur International Bank Financials 105 0.05 Gulf Commercial Bank Financials 67 0.04 Investment Bank Of Iraq Financials 75 0.04 Babylon Hotel Cons. Disc. 52 0.02 Sumer Commercial Bank Financials 86 0.03 Elaf Islamic Bank Financials 60 0.00 Mosul Bank For Devt & Invest Financials 80 0.01 Al-Mansour Bank Financials 73 0.00 National For Tourist Invest Financials 61 0.00 National Bank Of Iraq Financials 50 0.00 Iraqi Islamic Bank Financials 55 0.00 Babylon Bank Financials 64 0.02 Mansour Hotel Cons. Disc. 52 0.00 Iraqi Middle East Investment Financials 45 0.03 Palestine Hotel Cons. Disc. 42 0.02 Al-Mamoura Co For Real Estat Financials 59 0.03 Union Bank Of Iraq Financials 42 0.00 Dijlah And Furat Bank For De Financials 28 0.00 Baghdad Hotel Cons. Disc. 24 0.03 Ishtar Hotels Cons. Disc. 26 0.01 Iraqi For Seed Production Industrials 25 0.02 Iraq Date Processing Industrials 19 0.01 Iraqi Land Transport Industrials 16 0.01

Source: Bloomberg

Figure 254: Iraq market performance (lcl) (31/12/2009=100)

Source: Bloomberg

Figure 255: Iraq 3M ADTV, $mn

Source: Bloomberg

0

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ISXGI Index

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Iraq


Facing the spectre


Facing the spectre

93


Source: UN


Source: IMF


Source: IMF

Figure 259: Iraq – dinar





Source: IMF

0

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IQD vs $ IQD vs EUR Iraq REER (Dec 07=100)

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0.0

1.7

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7.18.1 7.6

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E

Iraq


Facing the spectre


Facing the spectre

94

Figure 262: Key data Local currency JOD

GDP/capita, $ (2014) 5,375 Population, mn (2014) 6.7 S&P/Moody's rating BB-/B1 Weight in MSCI FM, % 0.8

MSCI Index MXJO


Local index JOSMGNFF






($mn) ($mn)* ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXJO MSCI Jordan

6,948 684 1.2 -2.0 -1.7 -7.3 8.5 0.7 8.3 5 0.8%

ARBK JR Arab Bank Financials 5,646 565 1.1 -1.5 3.0 -3.6 8.7 0.7 8.3 4 82% JOPH JR Jordan Phosphate Materials 572 69 0.1 4.4 -4.4 -2.0 7.7 0.6 6.8 1 10% JTEL JR Jordan Telecom Telecoms 730 51 0.0 -3.4 -27.5 -32.4 na 1.6 na 0 7%

JOPT JR Jordan Petroleum Refinery Co Energy 423 297 0.5 -6.2 -16.6 22.5 na 2.0 na 1 - JOIB JR Jordan Islamic Bank Financials 704 175 0.2 -4.1 -8.9 -7.2 8.9 1.8 na 1 - JOEP JR Jordanian Electric Power Utilities 272 169 0.1 24.9 1.0 -9.1 na 2.3 na 0 - CABK JR Cairo Amman Bank Financials 483 143 0.3 -5.0 -6.3 0.2 7.5 1.2 14.5 1 - BOJX JR Bank Of Jordan Financials 529 134 0.1 -1.3 -3.4 -6.3 8.2 1.2 14.1 1 - AHLI JR Jordan Ahli Bank Financials 298 129 0.1 0.8 4.1 -7.4 na 0.7 na 0 - EICO JR Al Eqbal Co For Investment P Cons. Staples 521 112 0.1 1.6 4.1 27.5 na 5.5 na 0 - JOKB JR Jordan Kuwait Bank Financials 516 99 0.0 1.9 -6.8 0.6 na 0.8 na 0 - AJIB JR Arab Jordan Investment Bank Financials 419 81 0.0 15.1 11.1 -0.5 na 1.6 na 0 - AIEI JR Arab International Co For In Cons. Disc. 235 78 0.0 -0.1 -3.2 -9.1 na 2.1 na 0 - MSKN JR Jordan Masaken For Land & In Financials 139 63 0.7 62.5 610.6 765.4 na 5.9 na 0 - APOT JR Arab Potash/The Materials 2,513 52 0.0 -2.5 -8.1 -1.0 14.0 2.2 14.3 1 - EXFB JR Capital Bank Of Jordan Financials 263 47 0.1 -8.1 -15.0 -30.3 na 0.8 na 0 - DADI JR Dar Al Dawa Development &Inv Healthcare 88 39 0.1 -1.3 -14.0 -22.6 na 1.2 na 1 - INVB JR Invest Bank Co Financials 180 30 0.0 2.4 -0.9 -2.0 na 0.9 na 0 - JDPC JR Jordan Decapolis Properties Financials 74 28 0.0 82.8 70.2 8.1 na 1.1 na 0 -

*Reflects accessibility issues in Jordanian market




50

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MSCI Frontier, $ MSCI Jordan, $

83%

10%7%

Financials Materials Telecoms

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Jordan MSCI Jordan

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6

7

8

9

10

11

12

13

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Jordan, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Jordan


Facing the spectre


Facing the spectre

95


Source: UN


Source: IMF


Source: IMF

Figure 271: Jordan – dinar





Source: IMF

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

US

A

Iraq

Sau

di A

rabi

a

Indi

a

EU

UA

E

Eur

o A

rea

Syr

ia

Chi

na

Kuw

ait


-20

-15

-10

-5

0

5-2

0

2

4

6

8

10

12

14

16

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


90

100

110

120

130

1400.6

0.7

0.8

0.9

1.0

1.1

1.2

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

JOD vs $ JOD vs EUR Jordan REER (Dec 07=100)

Weaker

Stronger

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP (% YoY) 8.68.1 8.1 8.2

7.2

5.5

2.32.6 2.7 2.8

3.1 2.9

3.7

4.5 4.5

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Jordan


Facing the spectre


Facing the spectre

96

Figure 274: Key data Local currency KZT

GDP/capita, $ (2014) 12,400 Population, mn (2014) 17.4 S&P/Moody's rating BBB/Baa2 Weight in MSCI FM, % 2.0

MSCI Index MXKA


Local index KZKAK







MXKA MSCI Kazakhstan

5,530 1,739 2.6 4.3 -19.1 -54.1 5.6 0.7 18.0 25 2.0%

KMG LI KMG E&P Energy 2,949 1,180 1.9 9.5 -13.5 -55.3 6.0 0.6 na 14 66% HSBK LI Halyk Savings Bank Financials 1,711 342 0.7 -0.8 -20.7 -36.7 4.9 1.0 na 11 19% KCEL LI Kcell Telecoms 870 218 0.4 -3.4 -27.5 -32.4 na 1.6 na 0 14%

GB_KZMS KZ Kaz Minerals Plc Materials 864 52 0.0 22.0 -25.2 -51.5 44.6 0.4 -1.1 21 - KKGB KZ Kazkommertsbank Financials 692 31 0.0 0.8 -34.9 -47.0 na 0.6 na 1 - KZTO KZ Kaztransoil Jsc Energy 1,142 10 0.1 11.1 -29.1 -46.3 na 0.7 na 3 - KZTK KZ Kazakhtelecom Telecoms 389 23 0.0 -10.4 -47.4 -45.4 na 0.4 na 1 - KEGC KZ Kazakhstan Electricity Grid Utilities 618 10 0.2 11.6 -11.4 -14.4 na 0.5 na 3 - CCBN KZ Bank Centercredit Financials 86 27 0.0 -8.1 -39.8 -37.2 na 0.3 na 0 -

Figure 278: 3M ADTV, $mn*


*Reflects higher liquidity in DR lines Note: all forward figures for valuations are taken from Bloomberg consensus estimates.


20

40

60

80

100

120

140

160

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Kazakhstan, $

66%

20%

14%

Energy Financials Telecoms

0

5

10

15

20

25

30

35

40

45

50

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Kazakhstan MSCI Kazakhstan (RHS)

2

4

6

8

10

12

14

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Kazakhstan, 12M Fwd P/E (x)

MSCI Frontier, 12M Fwd P/E (x)

Kazakhstan


Facing the spectre


Facing the spectre

97


Source: UN


Source: IMF


Source: IMF

Figure 283: Kazakhstan – tenge





Source: UN

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

30

0%

10%

20%

30%

40%

50%

60%

EU

Eur

o A

rea

Chi

na

Rus

sia

Ger

man

y

Fra

nce

Italy

Gre

ece

Rom

ania

Spa

in


-10

-8

-6

-4

-2

0

2

4

6

80

2

4

6

8

10

12

14

16

18

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

120100

150

200

250

300

350

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

KZT vs $ KZT vs EUR Kazakhstan REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


9.6 9.7

10.7

8.9

3.3

1.2

7.3 7.5

5.0

6.0

4.3

1.5

2.4

3.8 4.0

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Kazakhstan


Facing the spectre


Facing the spectre

98

Figure 286: Key data Local currency KES

GDP/capita, $ (2014) 1,420 Population, mn (2014) 42.9 S&P/Moody's rating B+/B1 Weight in MSCI FM, % 5.1

MSCI Index MXKE


Local index NSEASI







MXKE MSCI Kenya

11,275 4,478 5.2 -2.0 -5.1 -19.5 9.5 3.0 31.6 66 5.1%

SAFCOM KN Safaricom Telecoms 5,634 1,408 1.4 -0.2 -0.1 1.5 15.2 5.4 34.2 18 32% EABL KN East African Brew. Cons. Staples 2,131 1,065 0.6 1.5 -8.9 -16.5 20.1 15.7 49.1 8 22% KNCB KN Kenya Comm. Bk. Financials 1,177 883 1.1 -8.8 -16.2 -37.7 5.4 1.4 23.8 14 21% EQBNK KN Equity Bank Financials 1,524 838 2.4 -5.2 4.5 -27.1 7.3 2.2 26.8 13 19% COOP KN Co-operative Bank Financials 810 283 0.1 -3.7 -14.5 -29.7 6.1 1.8 24.1 13 6%

BATK KN British American Tobacco-Ken Cons. Staples 756 756 1.0 -3.0 4.4 -30.9 16.7 9.5 54.7 5 - DTKL KN Diamond Trust Bank Kenya Ltd Financials 452 304 0.1 -2.2 -8.0 -36.7 5.8 1.5 21.3 9 - BMBC KN Bamburi Cement Ltd Materials 599 218 0.1 3.0 9.7 -3.3 13.0 2.1 16.1 7 - BCBL KN Barclays Bank Ltd Financials 667 207 0.1 -1.9 -12.7 -34.9 6.8 1.9 24.6 8 - CFCB KN Cfc Stanbic Holdings Ltd Financials 318 174 0.1 -6.7 -16.1 -41.8 5.4 0.9 16.5 6 - SCBL KN Standard Chartered Bank Ltd Financials 637 166 0.0 -5.3 -21.4 -44.3 6.4 1.6 22.7 7 - CIC KN Cic Insurance Group Financials 168 157 0.0 -4.9 -14.5 -40.9 6.0 2.4 na 2 - JBIC KN Jubilee Holdings Ltd Financials 274 149 0.0 -14.9 -25.0 -6.0 7.4 1.8 20.9 4 - NICB KN Nic Bank Ltd Financials 245 148 0.0 -6.0 -19.8 -47.2 4.6 1.1 20.3 6 - CENTUM KN Centum Investment Co Ltd Financials 274 143 0.1 -14.0 -16.7 -39.9 na 0.7 na 2 - KPLL KN Kenya Power & Lighting Ltd Utilities 249 112 0.1 -14.1 -18.4 -30.6 2.5 0.3 15.6 6 - NMG KN Nation Media Group Cons. Disc. 250 100 0.0 -4.0 -28.4 -60.0 9.2 2.6 25.5 3 - IM KN I&M Holdings Ltd Financials 379 95 0.0 -3.0 -7.8 -32.3 5.3 1.5 21.8 5 - ARML KN Arm Cement Ltd Materials 175 86 0.1 -13.8 -42.4 -64.6 7.5 2.0 15.5 6 - BRIT KN British-American Investments Financials 290 79 0.1 -5.1 -12.0 -47.4 6.2 1.4 na 2 - CFCI KN Liberty Kenya Holding Ltd Financials 103 69 0.0 -0.2 -7.9 -24.6 8.1 1.8 na 1 -




60

80

100

120

140

160

180

200

220

240

260

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Kenya, $

46%

32%

22%

Financials Telecoms Cons. Staples

0

2

4

6

8

10

12

14

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Kenya MSCI Kenya

5

6

7

8

9

10

11

12

13

14

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Kenya, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Kenya


Facing the spectre


Facing the spectre

99


Source: UN


Source: IMF


Source: IMF

Figure 295: Kenya – shilling





Source: IMF

0

10,000

20,000

30,000

40,000

50,000

60,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

0%

5%

10%

15%

20%

25%

EU

Eur

o A

rea

Uga

nda

US

A

Net

herla

nds

Tan

zani

a

Zam

bia

UK

Egy

pt

Pak

ista

n


-12

-10

-8

-6

-4

-2

00

2

4

6

8

10

12

14

16

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

120

130

140

15060

70

80

90

100

110

120

130

140

150

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

KES vs $ KES vs EUR Kenya REER (Dec 07=100)

Weaker

Stronger

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.6

5.7 5.9

6.9

0.2

3.3

8.4

6.1

4.6

5.75.3

6.56.8 7.0 7.0

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Kenya


Facing the spectre


Facing the spectre

100

Figure 298: Key data Local currency KWD

GDP/capita, $ (2014) 43,163 Population, mn (2014) 4.0 S&P/Moody's rating AA/Aa2 Weight in MSCI FM, % 21.8

MSCI Index MXKW


Local index KWSEIDX







MXKW MSCI Kuwait

40,770 18,994 14.6 0.3 -7.4 -26.1 11.3 1.3 12.0 36 21.8%

NBK KK Ntl Bk Kuwait Financials 13,637 6,682 3.4 3.5 -3.4 -15.7 11.5 1.4 13.5 10 34% KFIN KK Kuwait Finance Hse Financials 8,805 4,315 3.1 -0.3 -11.0 -24.3 13.2 1.5 10.9 8 23% ZAIN KK Zain Telecoms 5,354 2,945 2.7 -7.8 -9.7 -45.3 7.4 0.9 11.4 9 16% MABANEE KK Mabanee Financials 2,411 1,206 1.1 2.1 -10.1 -6.7 15.8 2.3 14.5 6 6% AGLTY KK Agility Industrials 2,159 1,188 2.0 -9.2 -21.4 -41.6 13.4 0.7 5.1 1 6% KPROJ KK Kipco Financials 2,772 970 0.9 -0.3 -13.3 -20.5 12.0 1.3 na 2 5% BOUBYAN KK Boubyan Bank Financials 2,960 888 0.9 4.5 5.0 -14.1 21.8 2.9 na 1 5% BURG KK Burgan Bank Financials 2,671 801 0.5 2.3 -3.5 -23.3 9.2 1.0 12.7 7 4%

AUB KK Ahli United Bank B.S.C Financials 4,497 2,863 0.4 0.7 -1.8 -8.9 8.9 1.2 na 2 - CBK KK Commercial Bank Of Kuwait Financials 2,423 1,852 1.5 -9.0 -13.3 -26.7 11.3 1.3 11.9 3 - ABK KK Al Ahli Bank Of Kuwait Financials 1,977 1,530 0.4 6.9 1.3 -19.5 na 1.1 na 0 - FOOD KK Kuwait Food Co (Americana) Cons. Disc. 2,998 995 0.6 -5.3 -20.4 -30.6 13.1 2.6 na 3 - BPCC KK Boubyan Petrochemicals Co Materials 953 828 0.3 5.6 -0.5 -26.6 na 1.0 na 1 - ALMUTAHE KK Ahli United Bank (Almutahed) Financials 2,807 637 0.2 1.6 -1.8 -12.5 13.5 2.3 na 1 - ALTIJARI KK Commercial Real Estate Co Financials 490 394 0.2 2.2 -8.8 -13.0 na 0.6 na 2 - ALQURAIN KK Qurain Petrochemical Industr Materials 683 382 0.1 5.3 -2.1 -17.4 na 0.6 na 0 - FACIL KK Commercial Facilities Co Financials 337 337 0.1 1.9 -8.6 -33.8 na 0.6 na 0 - AINS KK Al Ahleia Insurance Co Sak Financials 271 203 0.0 1.0 -6.8 -16.7 na 0.8 na 0 - ALAFCO KK Aviation Lease And Finance C Industrials 605 184 0.1 5.4 -0.9 -9.9 8.1 0.9 9.9 0 - ALIMTIAZ KK Alimtiaz Investment Co Kscc Financials 277 180 0.4 3.9 1.4 1.3 na 0.4 na 0 - EKHOLDIN KK Egypt Kuwait Holding Co Sae Financials 612 176 0.0 -0.3 -5.1 -30.3 10.4 0.9 7.3 4 -




60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Kuwait, $

78%

16%

6%

Financials Telecoms Industrials

0

100

200

300

400

500

600

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Kuwait MSCI Kuwait

5

7

9

11

13

15

17

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Kuwait, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Kuwait


Facing the spectre


Facing the spectre

101


Source: UN


Source: IMF


Source: IMF

Figure 307: Kuwait – dinar





Source: IMF

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

18

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Kor

ea

Indi

a

Japa

n

US

A

Chi

na

Tai

wan EU

Eur

o A

rea

Egy

pt

Sin

gapo

re


0

5

10

15

20

25

30

35

40

45

500

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

1250.20

0.25

0.30

0.35

0.40

0.45

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

KWD vs $ KWD vs EUR Kuwait REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP (% YoY) 10.810.1

7.5

6.0

2.5

-7.1

-2.4

10.6

7.7

0.80.1

1.2

2.5 2.7 2.7

-8

-6

-4

-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Kuwait


Facing the spectre


Facing the spectre

102

Figure 310: Key data Local currency LBP

GDP/capita, $ (2014) 11,093 Population, mn (2014) 4.5 S&P/Moody's rating B-/B2 Weight in MSCI FM, % 3.5

MSCI Index MXLB


Local index BLOM







MXLB MSCI Lebanon

5,317 3,014 1.9 -3.7 -8.3 -8.5 7.6 0.8 na 9 3.5%

BLOM LB Blom Bank Financials 2,032 1,219 2.6 0.0 -0.6 7.4 5.6 0.8 na 3 39% SOLA LB Solidere A Financials 978 978 0.2 -8.6 -16.4 -17.7 16.5 0.8 na 2 33% AUDI LB Bank Audi Financials 1,684 505 0.2 -0.7 1.7 -8.1 6.5 0.9 na 3 17% SOLB LB Solidere B Financials 623 311 0.1 -9.1 -17.2 -18.1 na 0.8 na 1 11%

BOB LB Bank Of Beirut Financials 929 929 3.1 0.0 0.0 0.1 7.3 0.7 na 1 - BYB LB Byblos Bank Financials 916 916 0.0 1.3 1.3 1.3 6.7 0.6 12.7 3 - HOLC LB Holcim (Liban) Sal Materials 296 296 0.1 1.0 0.1 1.0 na na na 0 - RYM LB Rasamny-Younis Motor Co. Cons. Disc. 88 88 na 0.0 0.0 -2.7 na 1.8 na 0 - BEMO LB Banque Bemo Sal Financials 138 29 0.0 0.0 0.0 9.8 na 0.9 na 0 - CBN LB Ciments Blancs Nominal Materials 33 11 0.0 0.0 12.7 12.7 na 1.6 na 0 - BLC LB Blc Bank Sal Financials 260 5 na 0.0 0.0 0.0 na 0.7 na 0 -



Note: all forward figures for valuations are taken from Bloomberg consensus estimates.


50

60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Lebanon, $

100%

Financials

0

2

4

6

8

10

12

14

16

18

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

MSCI Lebanon

5

7

9

11

13

15

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Lebanon, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Lebanon


Facing the spectre


Facing the spectre

103


Source: UN


Source: IMF


Source: IMF

Figure 319: Lebanon – pound





Source: IMF

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0%

2%

4%

6%

8%

10%

12%

Sau

di A

rabi

a

EU

UA

E

Syr

ia

Eur

o A

rea

Iraq

Sou

th A

fric

a

Sw

itzer

land

Tur

key

Jord

an


-30

-25

-20

-15

-10

-5

0-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

125

130

1351,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

2,600

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

LBP vs $ LBP vs EUR Lebanon REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


5.1

2.7

1.6

9.4 9.1

10.3

8.0

0.9

2.8 2.52.0 2.0

2.53.0 3.0

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Lebanon


Facing the spectre


Facing the spectre

104


GDP/capita, $ (2014) 16,469 Population, mn (2014) 2.9 S&P/Moody's rating A-/A3 Weight in MSCI FM, % 0.2

MSCI Index MXLT


Local index VILSE







MXLT MSCI Lithuania

802 133 0.1 -4.9 -3.6 -11.0 na 2.8 na 2 0.2%

TEO1L LH Teo LT Telecoms 644 77 0.0 -3.5 -2.1 -9.3 na 2.6 na 0 58% APG1L LH Apranga Cons. Disc. 158 55 0.1 -6.1 -5.0 -13.2 11.6 3.2 24.9 2 42%

SAB1L LH Siauliu Bankas Financials 105 49 0.1 5.6 3.5 1.6 5.9 0.6 na 0 - KNF1L LH Klaipedos Nafta Ab Energy 149 41 0.0 -4.1 -8.4 7.9 na 2.6 na 0 - LNA1L LH Linas Agro Group Ab Cons. Staples 116 38 0.0 -4.7 -3.9 -17.3 8.1 0.7 8.3 2 - PZV1L LH Pieno Zvaigzdes Cons. Staples 73 32 0.0 -5.2 -12.1 -26.1 na 1.9 na 0 - GRG1L LH Grigiskes Materials 75 25 0.0 -5.4 -9.8 8.7 na 1.5 na 0 - CTS1L LH City Service As Industrials 56 19 0.0 1.7 1.3 -16.5 7.9 0.8 9.0 1 - INC1L LH Invl Technology Ab na 28 15 0.0 -5.4 4.8 23.0 na 1.1 na 0 - RSU1L LH Rokiskio Suris Financials 53 15 0.0 -7.1 -5.8 -19.3 na 0.5 na 0 - INR1L LH Invl Baltic Real Estate Ab Financials 16 14 0.0 63.8 -82.2 -84.0 na 0.1 na 0 - ZMP1L LH Zemaitijos Pienas Ors Cons. Staples 34 14 0.0 -0.5 -3.1 -25.1 na 0.6 na 0 - PTR1L LH Panevezio Statybos Trestas Industrials 16 8 0.0 -5.1 -8.0 -14.9 9.3 0.4 na 0 - VLP1L LH Vilkyskiu Pienine Cons. Staples 22 7 0.0 -3.5 -9.8 -19.0 na 0.9 na 0 - IVL1L LH Invalda Lt Ab Financials 45 5 0.0 -1.6 1.1 -2.5 na 0.9 na 0 - AVG1L LH Agrowill Group Ab Cons. Staples 48 4 0.0 -8.6 -8.8 -8.9 na 0.8 na 0 - UTR1L LH Utenos Trikotazas Financials 4 3 0.0 -24.1 -10.0 -38.5 na 0.6 na 0 - INL1L LH Invl Baltic Farmland Ab na 11 1 0.0 0.7 -6.2 -11.0 na na na 0 - VDG1L LH Vilniaus Degtine Cons. Staples 9 1 0.0 0.2 -7.7 1.1 na 0.6 na 0 - LNS1L LH Linas Cons. Disc. 2 1 0.0 -10.9 -25.4 -34.9 na 0.3 na 0 - LJL1L LH Lietuvos Juru Laivininkyste Industrials 1 0 0.0 16.7 8.8 -52.5 na 0.1 na 0 -



*Insufficient data and analyst forecasts for historical forward P/E calculation Note: all forward figures for valuations are taken from Bloomberg consensus estimates.


60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Lithuania, $

58%

42%

Telecoms Cons. Disc.

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Lithuania MSCI Lithuania

6

7

8

9

10

11

12

13

14

15

16

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

N/A

Lithuania


Facing the spectre


Facing the spectre

105


Source: UN


Source: IMF


Source: IMF

Figure 331: Lithuania – litas





Source: IMF

0

500

1,000

1,500

2,000

2,500

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

18

20

0%

10%

20%

30%

40%

50%

60%

EU

Eur

o A

rea

Rus

sia

Latv

ia

Pol

and

Ger

man

y

Bel

arus

Net

herla

nds

Est

onia

UK


-16

-14

-12

-10

-8

-6

-4

-2

0

2

4-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


85

90

95

100

105

110

115

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

EUR vs $ Lithuania REER (Dec 07=100)

Weaker

Stronger

-20

-15

-10

-5

0

5

10

15

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


7.4 7.8 7.4

11.1

2.6

-14.8

1.6

6.13.8 3.3 3.0

1.8 2.6 3.0 3.3

-20

-15

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Lithuania


Facing the spectre


Facing the spectre

106

Figure 334: Key data Local currency MUR

GDP/capita, $ (2014) 9,998 Population, mn (2014) 1.3 S&P/Moody's rating NR/Baa1 Weight in MSCI FM, % 1.2

MSCI Index MXMR


Local index SEMDEX






($mn) MktCap (%) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXMR MSCI Mauritius

2,069 1,055 0.9 -2.1 -9.2 -19.7 7.5 1.2 na 8 1.2%

MCBG MP MCB Group Financials 1,401 714 0.7 2.0 -5.8 -10.0 8.2 1.4 na 5 67% SBMH MP SBM Holdings Financials 668 341 0.2 -7.6 -13.2 -33.4 6.4 1.0 11.8 3 33%

ALT MP Alteo Ltd Cons. Staples 306 306 0.0 -0.5 9.9 -12.7 na 0.6 na 1 - SAVA MP Enl Land Ltd Cons. Staples 305 35 0.0 -1.5 -6.2 -16.0 na 0.5 na 2 - CIEL MP Ciel Ltd Financials 299 299 0.0 -0.2 -2.7 -23.5 na 0.8 na 0 - NMH MP New Mauritius Hotels Ltd Cons. Disc. 243 178 0.1 -0.5 -5.9 -46.0 9.9 0.6 6.9 2 - NRL MP Lux Island Resorts Ltd Cons. Disc. 223 134 0.1 -6.9 -7.6 -10.2 na 1.4 na 2 - IBL MP Ireland Blyth Ltd Financials 216 87 0.0 -5.9 -6.8 -17.4 na 1.4 na 1 - ROGERS MP Rogers And Co Ltd Industrials 211 140 0.0 3.1 -2.4 3.8 na 0.8 na 1 - PBL MP Phoenix Beverages Ltd Cons. Staples 183 60 0.1 -0.5 -1.4 62.7 14.8 2.0 na 1 - TERA MP Terra Mauricia Ltd Financials 181 47 0.0 -3.9 -6.2 -28.4 na 0.4 na 1 - SUN MP Sun Limited-Cl A Cons. Disc. 147 147 0.0 -4.0 -11.1 -28.8 16.8 1.0 3.0 1 - CIM MP Cim Financial Services Ltd Financials 148 148 0.0 -5.8 -10.4 -20.6 na 1.7 na 0 - MTMD MP Omnicane Ltd Utilities 125 125 0.0 -0.5 -4.2 -30.4 na 0.5 na 2 - BBCL MP Bramer Banking Corp Ltd Financials na na na na na -43.4 na na na 1 - PADFP MP Promotion & Development - Fp Financials 102 102 0.0 -2.7 -2.8 -17.2 na 0.5 na 0 - SWAN MP Swan General Ltd Financials 99 24 0.0 -8.1 6.2 16.0 na 1.8 na 1 - SHELL MP Vivo Energy Mauritius Ltd Energy 90 90 0.0 -6.0 -10.3 -29.0 na 4.9 na 1 - GML MP Gamma Civic Ltd Cons. Disc. 93 59 0.0 -5.9 -10.2 -54.7 na 1.5 na 0 - MUA MP Mauritius Union Assurance Co Financials 83 41 0.0 -2.0 -6.1 -22.2 na 1.4 na 1 - MDIT MP Mauritius Dev Invest Trust Financials 59 59 0.0 -0.9 -3.9 -25.8 na 1.3 na 0 -




50

60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Mauritius, $

100%

Financials

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

May

-11

Aug

-11

Nov

-11

Feb

-12

May

-12

Aug

-12

Nov

-12

Feb

-13

May

-13

Aug

-13

Nov

-13

Feb

-14

May

-14

Aug

-14

Nov

-14

Feb

-15

May

-15

Aug

-15

Nov

-15

Mauritius MSCI Mauritius

5

6

7

8

9

10

11

12

13

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Mauritius, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Mauritius


Facing the spectre


Facing the spectre

107


Source: UN


Source: IMF


Source: IMF

Figure 343: Mauritius – rupee





Source: IMF

0

100

200

300

400

500

600

700

800

900

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

0%

10%

20%

30%

40%

50%

60%

EU

Eur

o A

rea

Fra

nce

UK

UA

E

US

A

Sou

th A

fric

a

Italy

Mad

agas

car

Spa

in


-16

-14

-12

-10

-8

-6

-4

-2

00

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

12520

25

30

35

40

45

50

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

MUR vs $ MUR vs EUR Mauritius REER (Dec 07=100)

Weaker

Stronger

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.3

1.5

4.5

5.95.5

3.0

4.13.9

3.2 3.23.6

3.2

3.83.6 3.6

0

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Mauritius


Facing the spectre


Facing the spectre

108

Figure 346: Key data Local currency MAD

GDP/capita, $ (2014) 3,316 Population, mn (2014) 33.2 S&P/Moody's rating BBB-/Ba1 Weight in MSCI FM, % 7.0

MSCI Index MXMA


Local index MOSEMDX






($mn) MktCap($mn) ($mn) 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXMA MSCI Morocco

32,111 6,150 4.5 -1.7 -8.4 -22.9 14.8 2.5 19.0 40 7.0%

IAM MC Maroc Telecom Telecoms 9,851 1,970 1.0 -1.4 -7.1 -16.7 15.5 7.8 32.4 11 32% ATW MC Attijariwafa Bank Financials 6,768 1,354 1.0 -4.1 -7.8 -15.9 13.3 1.8 12.4 8 22% LAC MC Lafarge Ciments Materials 2,960 740 0.2 -1.6 -11.9 -16.9 19.5 6.2 27.9 5 12% BCE MC BMCE Bank Financials 3,936 590 0.2 0.2 -2.8 -13.4 17.4 2.4 na 4 10% BCP MC Bque Ctrl Pop. Financials 3,766 414 1.5 -5.0 -8.6 -18.2 15.0 1.1 9.5 6 7% CMA MC Ciments du Maroc Materials 1,708 342 0.1 -10.0 -14.7 0.4 18.4 2.8 15.8 6 5% ADH MC Addoha Group Financials 888 355 0.4 7.5 -5.5 -49.9 7.8 0.8 9.0 4 5% WAA MC Wafa Assure. Financials 1,345 269 0.1 -2.3 -6.8 -14.6 14.1 2.8 16.4 3 4% MNG MC Managem Materials 888 116 0.2 1.1 10.4 -29.3 23.7 2.5 9.2 5 2%

HOL MC Holcim Maroc Sa Materials 908 445 0.1 -17.1 -19.3 -32.8 14.5 2.3 28.6 5 - TMA MC Total Maroc Sa Energy 518 233 0.1 0.4 -9.1 6.5 14.1 na 38.6 1 - CSR MC Cosumar Cons. Staples 735 205 0.4 1.3 -1.6 -14.3 9.1 2.0 18.2 5 - BCI MC B Marocaine Pr Le Commerce Financials 781 199 0.0 2.9 -8.5 -31.9 13.9 0.9 na 2 - TQM MC Taqa Morocco Utilities 1,399 199 0.4 3.0 4.3 21.8 16.2 na 16.9 3 - LBV MC Label Vie Cons. Staples 308 134 0.2 -9.6 -7.2 -19.8 32.1 2.2 na 4 - LES MC Lesieur Cristal Cons. Staples 309 125 0.1 0.6 3.9 -3.5 14.1 2.1 13.0 5 - ATH MC Auto Hall Cons. Disc. 468 123 0.0 -9.6 0.1 -4.9 13.9 2.7 na 4 - CIH MC Credit Immobilier Et Hotelie Financials 750 114 0.0 -5.7 -11.5 -30.2 14.8 1.6 9.9 5 - RDS MC Residences Dar Saada Financials 412 82 0.2 27.5 -8.5 -35.1 8.4 1.2 na 3 - SAH MC Saham Assurance Financials 426 80 0.0 -3.8 -3.6 -17.3 10.3 1.4 10.9 3 - CMT MC Compagnie Miniere De Touissi Materials 188 76 0.1 0.3 -2.0 -26.3 9.2 2.2 na 5 -




50

60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Morocco, $

49%

31%

20%


0

10

20

30

40

50

60

70

80

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Morocco MSCI Morocco

5

7

9

11

13

15

17

19

21

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Morocco, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Morocco


Facing the spectre


Facing the spectre

109


Source: UN


Source: IMF


Source: IMF

Figure 355: Morocco –dirham





Source: IMF

0

5,000

10,000

15,000

20,000

25,000

30,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

0%

10%

20%

30%

40%

50%

60%

70%

EU

Eur

o A

rea

Spa

in

Fra

nce

Bra

zil

Italy

US

A

Indi

a

UK

Ger

man

y


-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

00.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

1155

6

7

8

9

10

11

12

13

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

MAD vs $ MAD vs EUR Morocco REER (Dec 07=100)

Weaker

Stronger

0

2

4

6

8

10

12

14

16

18

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.8

3.3

7.6

3.5

5.9

4.23.8

5.2

3.0

4.7

2.4

4.9

3.7

4.85.0

0

1

2

3

4

5

6

7

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Morocco


Facing the spectre


Facing the spectre

110

Figure 358: Key data Local currency NGN

GDP/capita, $ (2014) 3,300 Population, mn (2014) 173.9 S&P/Moody's rating B+/Ba3 Weight in MSCI FM, % 14.8

MSCI Index MXNI


Local index NGSEINDX







MXNI MSCI Nigeria

41,574 12,753 12.9 -3.9 -0.7 -31.9 7.8 1.5 16.8 109 14.8%

NB NL Nigerian Breweries Cons. Staples 5,451 2,726 1.1 -1.7 8.1 -28.9 23.5 6.4 24.6 19 20% GUARANTY NL Guaranty Trust Financials 3,414 1,707 2.4 -3.4 -7.4 -23.1 6.4 1.7 24.0 23 13% ZENITHBA NL Zenith Bank Financials 2,776 1,388 3.2 8.4 2.9 -33.1 5.1 1.0 18.3 22 11% NESTLE NL Nestle Nigeria Cons. Staples 3,285 1,314 1.0 -0.3 -2.8 -29.6 27.8 16.2 51.9 16 10% DANGCEM NL Dangote Cement Materials 13,957 977 0.6 -3.9 -9.1 -35.5 11.8 4.4 32.8 16 7% WAPCO NL Lafarge Africa Materials 2,197 659 1.0 -1.8 -6.2 -22.8 9.1 2.3 19.3 13 5% ETI NL ETI Financials 2,249 675 0.3 -4.0 -11.1 -14.1 4.0 0.9 13.9 6 5% GUINNESS NL Guinness Nigeria Cons. Staples 946 473 0.2 -13.8 -4.5 -32.4 21.6 4.0 19.5 16 4% FO NL Forte Oil Energy 1,898 569 0.3 12.5 43.8 38.0 30.1 28.7 16.6 3 4% FBNH NL First Bank of Nigeria Financials 920 460 0.6 -19.0 -27.4 -59.2 2.5 0.3 11.6 20 4% STANBIC NL Stanbic IBTC Financials 1,026 410 0.2 -16.2 -13.4 -46.2 6.5 1.7 20.3 12 4% UNILEVER NL Unilever Nigeria Cons. Staples 735 368 0.1 -22.0 -7.1 -14.4 54.3 18.2 26.4 15 3% UBA NL United Bk Africa Financials 580 290 0.6 -18.0 -16.9 -42.0 2.3 0.4 16.8 19 3% ACCESS NL Access Bank Financials 529 264 1.0 -11.2 -5.0 -54.0 2.8 0.4 14.0 17 2% SEPLAT NL Seplat Energy 639 256 0.1 -7.2 -22.9 -64.5 4.0 0.5 10.5 13 2% PZ NL PZ Cussons Cons. Staples 479 144 0.0 -3.7 -18.7 -5.3 22.4 2.3 10.9 12 1% UBN NL Union Bk Nigeria Financials 493 74 0.0 -9.4 -27.9 -41.3 na 0.4 na 0 1%

7UP NL 7-Up Bottling Co Plc Cons. Staples 615 615 0.1 -2.5 0.2 2.8 13.6 5.1 29.4 1 - DANGSUGA NL Dangote Sugar Refinery Plc Cons. Staples 386 338 0.1 -3.8 6.1 -19.7 6.5 1.4 20.5 12 - DIAMONDB NL Diamond Bank Plc Financials 297 256 0.1 -22.5 -31.8 -61.8 2.2 0.3 11.3 16 - FIDELITY NL Fidelity Bank/Nigeria Financials 201 192 0.0 -9.3 -12.4 -39.4 2.9 0.2 7.6 9 -




50

70

90

110

130

150

170

190

210

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Nigeria, $

42%

39%

13%6%

Financials Cons. Staples Materials Energy

0

5

10

15

20

25

30

35

40

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Nigeria MSCI Nigeria

5

6

7

8

9

10

11

12

13

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Nigeria, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Nigeria


Facing the spectre


Facing the spectre

111


Source UN


Source: IMF


Source: IMF

Figure 367: Nigeria –naira





Source: IMF

0

50,000

100,000

150,000

200,000

250,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

30

35

40

0%

5%

10%

15%

20%

25%

30%

35%

40%

EU

Eur

o A

rea

Indi

a

Bra

zil

Net

herla

nds

Spa

in

Fra

nce

Sou

th A

fric

a

Ger

man

y

Japa

n


-5

0

5

10

15

20

250

2

4

6

8

10

12

14

16

18

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

90

110

130

150

17050

70

90

110

130

150

170

190

210

230

250

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

NGN vs $ NGN vs EUR Nigeria REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


8.8 8.78.3

9.1

8.0

9.0

10.0

4.94.3

5.4

6.3

4.0 4.3 4.5 4.7

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Nigeria


Facing the spectre


Facing the spectre

112

Figure 370: Key data Local currency OMR

GDP/capita, $ (2014) 20,925 Population, mn (2014) 3.7 S&P/Moody's rating A-/A1 Weight in MSCI FM, % 5.6

MSCI Index MXOM


Local index MSM30







MXOM MSCI Oman

12,307 4,910 8.1 1.2 -7.2 -15.8 9.0 1.2 13.6 45 5.6%

OTEL OM Omantel Telecoms 3,175 1,429 0.9 0.3 -6.0 -2.7 10.2 2.1 19.3 9 29% BKMB OM BankMuscat Financials 3,191 1,276 1.4 -0.7 1.1 -21.0 7.4 0.9 12.2 9 26% ORDS OM Ooredoo Telecoms 1,292 517 0.6 1.0 -2.0 14.3 11.1 2.4 20.4 11 10% BKDB OM Bank Dhofar Financials 979 441 0.1 3.8 -13.2 -21.6 9.1 0.8 13.7 5 9% BKSB OM Bank Sohar Financials 655 393 0.3 6.7 -11.1 -14.1 7.0 1.1 14.5 6 8% HBMO OM HSBC Bank Oman Financials 629 314 5.9 6.4 -11.4 -29.1 14.1 0.8 na 5 6% RCCI OM Raysut Cement Materials 587 205 0.1 -2.2 -23.7 -46.4 10.4 1.6 14.5 2 4% ABOB OM Ahli Bank Financials 755 189 0.2 2.0 -5.1 2.9 na 1.3 na 4 4% NBOB OM Ntl Bk Oman Financials 1,045 146 0.2 9.1 -5.9 -3.8 7.8 1.1 13.8 8 3%

SSPW OM Sembcorp Salalah Power & Wat Utilities 669 669 0.8 3.1 10.2 18.7 na 3.1 na 2 - OMVS OM Ominvest Financials 727 657 1.3 1.2 4.6 28.9 na 1.4 na 1 - BKNZ OM Bank Nizwa Financials 300 238 0.4 24.2 4.1 -11.5 7.7 0.9 na 1 - GECS OM Galfar Engineering&Contract Industrials 194 194 0.2 -6.4 -26.3 -41.6 na 0.4 5.6 1 - OCAI OM Oman Cables Industry Industrials 452 183 0.2 4.0 -14.5 -20.6 10.2 2.1 18.2 3 - AACT OM Al-Anwar Ceramic Tiles Co Industrials 263 152 0.3 4.3 -13.6 -25.1 11.4 2.6 19.5 4 - SOMS OM Shell Oman Marketing Energy 507 151 0.1 0.0 0.0 -1.2 14.3 5.6 35.2 3 - MHAS OM Al Maha Petroleum Products M Energy 351 140 0.2 -1.0 -6.6 -19.3 na 2.9 na 2 - OCOI OM Oman Cement Materials 387 126 0.1 2.3 -12.4 -37.1 11.7 1.0 7.6 3 - RNSS OM Renaissance Services Saog Energy 124 105 0.3 5.0 -39.2 -71.4 31.9 0.3 0.7 2 - SUWP OM Al Suwadi Power Utilities 399 94 0.1 0.5 -6.5 19.5 17.2 2.0 na 0 - BATP OM Al Batinah Power Utilities 377 80 0.1 0.0 -5.3 19.5 na 2.1 na 0 -




60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Oman, $

57%39%

4%


0

5

10

15

20

25

30

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Oman MSCI Oman

5

6

7

8

9

10

11

12

13

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Oman, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Oman


Facing the spectre


Facing the spectre

113


Source: UN


Source: IMF


Source: IMF

Figure 379: Oman –rial





Source: IMF

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Chi

na

UA

E

Kor

ea

Japa

n

Tai

wan

Sau

di A

rabi

a

Indi

a

Tha

iland

Pak

ista

n

US

A


-30

-25

-20

-15

-10

-5

0

5

10

15

200

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

125

130

1350.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

OMR vs $ OMR vs EUR Oman REER (Dec 07=100)

Weaker

Stronger

0

2

4

6

8

10

12

14

16

18

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


1.3

2.5

5.4

4.5

8.2

6.1

4.8

4.1

5.8

4.7

2.9

4.4

2.8

2.0

1.4

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Oman


Facing the spectre


Facing the spectre

114

Figure 382: Key data Local currency PKR

GDP/capita, $ (2014) 1,326 Population, mn (2014) 186.2 S&P/Moody's rating B-/B3 Weight in MSCI FM, % 9.2

MSCI Index MXPK


Local index KSE







MXPK MSCI Pakistan

28,354 8,163 26.9 3.3 -13.0 -8.3 8.5 1.8 19.1 89 9.2%

MCB PK MCB Bank Financials 2,583 1,292 0.5 3.6 -16.2 -15.0 10.0 1.9 19.0 17 16% HBL PK Habib Bank Financials 2,915 1,166 0.9 4.7 -13.2 -4.9 9.0 1.7 19.0 16 14% OGDC PK Oil & Gas Dvp. Energy 5,623 843 1.5 5.4 -19.0 -41.4 7.1 1.3 16.0 16 10% LUCK PK Lucky Cement Materials 1,641 820 2.3 -1.4 -9.6 25.1 10.9 2.8 23.7 16 10% ENGRO PK Engro Materials 1,517 683 7.8 -2.1 -12.8 76.7 8.2 2.3 21.8 10 8% FFC PK Fauji Fertilizer Materials 1,513 681 1.4 -3.0 -16.8 3.9 8.6 3.7 65.7 14 8% UBL PK United Bk Ltd Financials 1,904 571 1.7 7.3 -14.3 -18.4 7.6 1.4 19.7 17 7% PSO PK Pak. State Oil Energy 869 434 2.2 14.6 -10.2 -3.6 6.2 1.1 15.5 14 5% HUBC PK Hub Co Utilities 1,143 400 1.0 5.0 2.8 56.0 10.2 3.5 33.6 15 5% NBP PK Ntl Bk Pakistan Financials 1,125 281 0.2 7.2 -5.2 -8.6 7.9 0.7 9.6 12 3% PPL PK Pak. Petroleum Energy 2,375 238 1.9 1.7 -21.2 -39.9 7.0 1.3 16.3 14 3% POL PK Pak. Oilfields Energy 715 215 1.4 5.2 -16.0 -38.2 8.3 2.2 26.6 17 3% FATIMA PK Fatima Fertilizer Materials 928 186 0.4 0.8 -7.3 50.6 8.3 2.6 27.8 13 2% INDU PK Indus Motor Cons. Disc. 890 178 0.3 14.3 -11.0 40.1 10.9 3.8 28.7 8 2% KEL PK K-Electric Utilities 1,981 99 1.2 5.4 -8.0 -4.1 7.2 1.7 24.1 10 1% PTC PK Pak. Telecom Telecoms 630 76 0.5 -3.9 -21.0 -17.6 8.4 0.9 7.9 5 1%

NESTLE PA Nestle Pakistan Ltd Cons. Staples 4,002 4,002 0.0 -9.9 -16.0 12.0 27.5 28.6 104.1 1 - COLG PA Colgate Palmolive Pakistan Cons. Staples 675 440 0.0 9.0 -1.2 -14.1 na 7.9 na 0 - KAPCO PA Kot Addu Power Company Ltd Utilities 718 389 0.5 -12.1 -7.2 22.2 na 2.5 na 12 - BAHL PA Bank Al Habib Ltd Financials 456 382 0.1 3.8 -6.8 -14.2 7.3 1.4 18.4 9 - SSGC PA Sui Southern Gas Co Ltd Utilities 325 325 2.2 3.0 -28.2 36.9 na 1.2 na 0 -




50

70

90

110

130

150

170

190

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI Frontier, $ MSCI Pakistan, $

40%

29%

22%

6%

2% 1%

Financials Materials Energy

Utilities Cons. Disc. Telecoms

0

20

40

60

80

100

120

140

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Pakistan MSCI Pakistan

5

6

7

8

9

10

11

12

13

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Pakistan, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Pakistan


Facing the spectre


Facing the spectre

115


Source UN

Figure 389: Export destinations, total $27b

Source: IMF


Source: IMF

Figure 391: Pakistan – rupee





Source: IMF

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

1

2

3

4

5

6

7

0%

5%

10%

15%

20%

25%

30%

EU

Eur

o A

rea

US

A

Chi

na

UA

E

Afg

hani

stan UK

Ger

man

y

Spa

in

Sau

di A

rabi

a


-10

-8

-6

-4

-2

0

2

40

2

4

6

8

10

12

14

16

18

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

12540

60

80

100

120

140

160

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

PKR vs $ PKR vs EUR Pakistan REER (Dec 07=100)

Weaker

Stronger

-2

0

2

4

6

8

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


7.5

9.0

5.85.5

5.0

0.4

2.6

3.6 3.8 3.74.0 4.2 4.5 4.5

5.2

0

1

2

3

4

5

6

7

8

9

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Pakistan


Facing the spectre


Facing the spectre

116

Figure 394: Key data Local currency PHP

GDP/capita, $ (2014) 2,862 Population, mn (2014) 99 S&P/Moody's rating BBB/Baa2 Weight in MSCI EM, % 1.3

MSCI Index MXPH


Local index PCOMP






Figure 399: Non-ETF allocations to Indonesia in GEM funds relative to MSCI weight, %



60

80

100

120

140

160

180

200

220

240

260

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Philippines, $

47%

24%

12%

8%

5%

4%

Financials Industrials Telecoms

Cons. Staples Utilities Cons. Disc.

0

20

40

60

80

100

120

140

160

180

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Philippines 3M ADTV ($mn) MSCI Philippines 3M ADTV ($mn)

8

10

12

14

16

18

20

22

24

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Philippines 12M Fwd PE ratio (x) EM

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Philippines

80

85

90

95

100

105

110

115

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Philippines


Facing the spectre


Facing the spectre

117




MXPH MSCI Philippines

151,731 48,933 95.9 -4.4 -8.6 -5.2 17.7 2.8 11.9 292 1.3%

ALI PM Ayala Land Inc Financials 10,923 5,579 8.9 -9.7 -10.9 -2.8 25.6 4.1 14.5 17 11% TEL PM Philippine Tel Telecoms 9,092 4,117 8.0 -14.9 -28.8 -36.0 12.4 3.9 24.9 21 8.5% JGS PM JGSummit Holdings Industrials 10,921 3,918 3.0 -1.2 -4.5 8.6 19.6 2.3 11.1 8 7.9% SMPH PM SM Prime Holdings Financials 13,130 3,815 7.0 -4.0 -5.3 17.2 24.9 3.0 11.2 15 7.8% URC PM Universal Robina Cons. Staples 9,272 3,815 8.8 -0.4 -1.1 2.5 27.9 7.1 23.8 14 7.7% AC PM Ayala Corporation Financials 10,050 3,531 5.2 -4.4 -3.7 2.9 20.4 2.5 11.4 12 7.3% BDO PM BDO Unibank Financials 7,747 3,485 7.0 -10.5 -6.2 -5.6 13.2 2.0 13.6 21 7.1% SM PM SM Investments Industrials 14,519 2,954 5.6 -6.0 -8.2 1.6 20.1 2.5 11.7 10 6.0% AEV PM Aboitiz Equity Ventures Industrials 6,636 2,337 1.9 -5.1 -5.9 6.0 15.2 2.9 16.3 7 4.8% GTCAP PM GT Capital Holdings Financials 4,902 2,204 6.4 -6.3 -7.3 20.2 16.7 2.7 14.6 8 4.6% JFC PM Jollibee Foods Cons. Disc. 4,655 1,871 2.4 0.7 3.7 -0.9 33.5 7.1 20.9 12 3.8% GLO PM Globe Telecom Telecoms 6,001 1,527 4.3 -7.9 -22.0 22.8 15.8 4.9 30.9 20 3.1% MPI PM Metro Pacific Investments Financials 3,125 1,489 3.2 -1.7 1.9 0.0 14.8 1.3 8.0 11 3.1% BPI PM Bank of the Philippines Financials 7,029 1,416 3.4 -2.1 -11.8 -16.4 14.3 2.2 13.9 17 2.9% AP PM Aboitiz Power Utilities 6,357 1,295 2.1 -9.3 -8.0 -4.8 16.2 3.4 18.0 15 2.6% EDC PM Energy Development Corp. Utilities 2,462 1,244 2.5 -1.6 -15.8 -24.4 11.2 2.6 20.8 14 2.5% DMC PM DMCI Holdings Industrials 3,734 1,108 1.7 2.0 8.6 -19.3 12.5 3.1 20.3 9 2.3% MEG PM Megaworld Financials 3,081 1,084 2.9 -8.1 -8.0 -9.7 12.2 1.3 9.4 16 2.2% AGI PM Alliance Global Group Industrials 3,983 809 3.4 -4.0 -20.1 -31.8 11.9 1.4 10.7 8 1.6% ICT PM Intl Container Terminal Industrials 2,926 755 3.0 -15.4 -39.4 -43.4 16.6 3.1 13.5 17 1.5% MBT PM Metropolitan Bank & Trust Financials 5,716 580 4.5 -2.0 -5.6 -0.4 12.7 1.5 10.3 20 1.2%

MER PM Manila Electric Company Utilities 8,032 1,503 3.6 8.1 6.5 22.5 21.1 4.7 22.0 17 - RLC PM Robinsons Land Co Financials 2,506 967 2.5 -3.5 -4.1 10.3 17.6 2.1 11.2 15 - SCC PM Semirara Mining And Power Energy 3,089 836 2.5 -5.5 12.0 9.0 13.8 6.3 35.8 10 - LTG PM Lt Group Inc Industrials 2,837 728 1.8 3.5 -19.4 -16.4 18.8 1.1 5.4 8 - FGEN PM First Gen Corporation Utilities 1,835 599 1.2 -2.1 -11.2 -12.9 10.1 1.1 11.1 9 - SMC PM San Miguel Corp Industrials 2,439 420 0.4 -6.2 -15.7 -37.4 na 0.4 na 0 - BLOOM PM Bloomberry Resorts Corp Cons. Disc. 1,277 394 1.8 -11.0 -43.6 -63.3 39.1 2.5 4.8 18 - PCOR PM Petron Corp Energy 1,606 384 0.4 10.2 -3.3 -33.8 11.0 0.9 6.9 6 - EMP PM Emperador Inc Cons. Staples 3,034 350 0.4 14.7 -9.4 -23.2 19.9 3.1 14.5 10 -

Source: Bloomberg

Philippines


Facing the spectre


Facing the spectre

118


Source: UN


Source: IMF


Source: IMF

Figure 405: Philippines – peso





Source: IMF

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

14

16

0%

5%

10%

15%

20%

25%

Japa

n

US

A

Chi

na EU

Eur

o A

rea

Hon

g K

ong

Sin

gapo

re

Ger

man

y

Kor

ea

Tai

wan


0

1

2

3

4

5

60

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

120

13030

40

50

60

70

80

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

PHP vs $ PHP vs EUR Philippines REER (Dec 07=100)

Weaker

Stronger

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP %YoY

6.7

4.85.2

6.6

4.2

1.1

7.6

3.7

6.77.1

6.1 6.06.3 6.5 6.5

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Philippines


Facing the spectre


Facing the spectre

119


Facing the spectre


Facing the spectre

120

Figure 408: Key data Local currency PLN

GDP/capita, $ (2014) 14,411 Population, mn (2014) 38.0 S&P/Moody's rating A-/A2 Weight in MSCI EM, % 1.5

MSCI Index MXPL

2015 P/E, x 11.2 2015 FY EPS growth -6.9%* Trailing P/B, x 1.2 Beta to EM 1.0 MSCI full MktCap, $bn 98.9 MSCI free float MktCap, $bn 50.2 No. of companies 23 3M ADTV, $mn, MSCI cos 181.5

Local index WIG




*Excludes negative to positive EPS changes



Figure 413: Non-ETF allocations to Poland in GEM funds relative to MSCI weight, %



60

70

80

90

100

110

120

130

140

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Poland, $

47%

18%

11%

10%

9%3%

2%

Financials Energy

Utilities Materials

Cons. Disc. Telecoms

Cons. Staples

100

150

200

250

300

350

400

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Poland 3M ADTV ($mn) MSCI Poland 3M ADTV ($mn)

6

7

8

9

10

11

12

13

14

15

16

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Poland 12M Fwd PE ratio (x) EM

-1.2

-1.0

-0.8

-0.6

-0.4

-0.2

0.0

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Poland%

40

50

60

70

80

90

100

110

120

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Poland


Facing the spectre


Facing the spectre

121



FF MktCap ($mn)

3M ADTV ($mn)

$ performance (%) 12MF Trail 12MF # analyst MSCI

1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXPL MSCI Poland

98,908 50,194 181.5 -1.1 -9.4 -26.5 12.0 1.2 7.9 390 1.5%

PKO PW PKO Bank Financials 9,175 6,433 23.1 -4.5 -4.4 -33.8 12.0 1.2 9.4 27 13% PZU PW PZU Financials 8,490 5,448 22.6 -2.8 -13.3 -35.2 12.2 2.8 21.0 17 11% PKN PW PKN Energy 7,107 5,210 28.9 -5.8 -17.9 33.3 7.6 1.2 15.2 22 11% PEO PW Pekao Financials 10,113 5,049 13.6 -3.6 -8.9 -27.3 15.4 1.8 11.0 28 10% KGH PW KGHM Materials 4,921 3,331 23.6 18.1 0.4 -34.9 12.1 0.7 6.9 19 7% PGE PW PGE Utilities 7,089 3,165 11.5 9.2 -17.4 -42.2 9.1 0.7 6.1 16 6% PGN PW PGN Energy 10,387 3,126 7.5 -0.6 3.2 16.8 13.9 1.3 8.7 16 6% BZW PW Bank BZ WBK Financials 7,891 2,758 5.2 4.0 -0.5 -29.4 14.3 1.6 11.0 22 5% LPP PW LPP Cons. Disc. 3,395 2,363 3.4 0.1 -6.6 -37.6 24.2 7.6 24.2 19 5% MBK PW Mbank Financials 3,972 1,390 3.2 0.3 -4.6 -34.8 13.0 1.3 9.9 18 3% CPS PW Cyfrowy Polsat Cons. Disc. 4,252 1,251 2.7 7.7 10.7 -13.8 14.7 1.7 10.6 15 3% OPL PW Orange Polska Telecoms 2,415 1,216 4.8 -1.0 -14.0 -37.9 48.6 0.8 1.8 21 2% ATT PW Azoty Materials 2,376 1,059 0.9 -0.6 3.3 33.4 16.8 1.5 8.3 9 2% ALR PW Alior Bank Financials 1,508 1,056 2.6 2.4 -7.3 -7.8 12.7 1.8 12.6 20 2% EUR PW Eurocash Cons. Staples 1,749 1,067 6.6 4.8 11.5 31.9 25.5 7.3 22.0 17 2% CCC PW CCC Cons. Disc. 1,670 1,004 2.2 3.8 -11.8 13.2 21.1 6.8 26.0 15 2% MIL PW Bank Milennium Financials 1,908 954 2.3 3.8 -1.9 -34.8 11.5 1.2 10.1 15 2% TPE PW Tauron Utilities 1,434 857 3.7 -3.0 -18.9 -47.9 6.8 0.3 4.5 13 2% ENG PW Energa Utilities 1,703 832 3.8 -10.0 -22.1 -44.3 9.5 0.8 8.2 11 2% ENA PW Enea Utilities 1,477 754 1.9 -3.6 -16.8 -29.1 8.3 0.5 5.4 10 1% BHW PW Bank Handlowy Financials 2,756 678 1.0 -0.3 -13.4 -37.1 14.8 1.6 10.8 16 1% LTS PW Lotos Energy 1,361 678 2.1 -3.0 -11.5 7.5 8.9 0.6 6.2 13 1% SNS PW Synthos Materials 1,294 518 0.8 -1.6 -20.7 -23.0 11.6 2.4 18.0 11 1%

CEZ PW Polski Koncern Naftowy Utilities 10,801 10,722 0.1 -0.4 -15.4 -25.8 11.4 1.0 8.8 26 - IIA PW Immofinanz Ag Financials 2,823 2,526 0.0 13.4 13.7 -12.5 23.6 0.6 2.6 11 - MOL PW Mol Hungarian Oil And Gas Energy 4,729 2,268 0.1 -0.3 -13.5 -4.3 7.4 0.7 9.6 15 - TNX PW Talanx Ag Financials 7,944 1,665 0.0 7.0 3.9 1.4 9.2 0.9 9.5 19 - KRK PW Krka Healthcare 2,237 1,443 0.0 1.9 -4.7 -6.1 10.7 1.5 12.0 8 - IPF PW IPF Financials 1,446 1,379 0.0 -3.8 8.2 -16.4 11.2 2.5 22.8 10 - ACP PW Asseco Poland Sa IT 1,204 1,086 1.7 -0.6 -3.1 -2.0 12.8 0.9 7.0 7 - ING PW Ing Bank Slaski Sa Financials 4,209 1,052 0.7 2.4 -4.6 -21.9 15.2 1.6 10.0 13 - BWO PW Buwog Ag Financials 2,025 1,033 0.0 na 4.3 15.1 17.0 1.2 8.4 8 - KRU PW Kruk Sa Financials 828 719 0.9 5.3 2.6 43.2 15.9 4.3 24.9 6 - KTY PW Grupa Kety Sa Materials 685 677 0.4 -5.5 -13.5 -14.0 13.1 2.1 15.1 9 - KER PW Kernel Holding Sa Cons. Staples 1,097 667 1.8 16.0 21.1 83.4 5.1 1.2 12.7 9 - EAT PW Amrest Holdings Se Cons. Disc. 980 627 0.5 4.9 -0.2 76.8 25.5 3.9 13.4 6 - BDX PW Budimex Industrials 1,381 565 0.4 0.7 3.9 35.3 21.5 10.2 41.5 12 - CAR PW Inter Cars Sa Cons. Disc. 915 541 0.3 5.8 -1.7 5.1 15.9 3.1 16.5 9 - GTC PW Globe Trade Centre Sa Financials 792 534 0.3 5.2 12.7 2.6 13.7 1.2 6.2 8 - CIE PW Ciech Sa Materials 1,028 498 0.7 0.1 0.7 60.4 13.4 3.5 22.1 11 - PKP PW Pkp Cargo Sa Industrials 696 466 0.7 -9.1 -26.2 -33.8 10.0 0.8 8.3 10 - GPW PW Warsaw Stock Exchange Financials 448 448 0.5 2.4 -16.5 -19.2 13.1 2.6 17.8 8 - CDR PW Cd Projekt Red Sa IT 655 442 2.0 -1.9 -3.9 38.0 14.1 6.3 37.0 9 - ECH PW Echo Investment S.A. Financials 722 389 0.0 2.9 -0.4 -8.9 16.9 0.9 5.3 4 - NET PW Netia Sa Telecoms 495 380 0.3 -1.4 -8.3 -13.8 46.1 0.9 2.2 10 - AMC PW Amica Wronki Sa Cons. Disc. 355 354 0.2 10.1 0.3 33.2 14.6 2.5 13.8 5 - BVD PW Marie Brizard Wine Cons. Staples 580 350 0.0 7.6 -5.3 63.6 37.7 2.9 7.5 1 - ORB PW Orbis Sa Cons. Disc. 723 342 0.2 4.8 -7.9 44.1 20.3 1.6 na 2 - SNK PW Stomil Sanok S.A. Cons. Disc. 393 330 0.1 7.6 -13.0 0.5 15.1 4.3 na 4 - FTE PW Fabryki Mebli Forte Sa Cons. Disc. 348 235 0.4 8.9 -6.3 -14.1 13.8 3.3 19.7 6 - GNB PW Getin Noble Financials 525 231 2.5 -13.8 -32.1 -73.0 7.0 0.4 5.2 12 - PGS PW Pegas Nonwovens Sa Cons. Disc. 283 225 0.0 -15.9 -6.0 6.1 11.0 1.6 11.6 4 - 1AT PW Atal Sa Cons. Disc. 224 224 0.0 1.7 3.2 -1.5 10.8 na 12.4 1 -

Source: Bloomberg

Poland


Facing the spectre


Facing the spectre

122


Source: UN


Source: IMF


Source: IMF

Figure 419: Poland – zloty





Source: IMF

0

5,000

10,000

15,000

20,000

25,000

30,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

20

40

60

80

100

120

140

160

180

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

EU

Eur

o A

rea

Ger

man

y

UK

Cze

ch R

epub

lic

Fra

nce

Italy

Net

herla

nds

Rus

sia

Sw

eden


-7

-6

-5

-4

-3

-2

-1

0-2

-1

0

1

2

3

4

5

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


75

80

85

90

95

100

105

110

1152.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

PLN vs $ PLN vs EUR Poland REER (Dec 07=100)

Weaker

Stronger

0

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


5.1

3.5

6.2

7.2

3.9

2.6

3.7

4.8

1.8 1.7

3.4 3.5 3.5 3.6 3.6

0

1

2

3

4

5

6

7

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Poland


Facing the spectre


Facing the spectre

123


Facing the spectre


Facing the spectre

124

Figure 422: Key data Local currency QAR

GDP/capita, $ (2014) 94,009 Population, mn (2014) 2.2 S&P/Moody's rating AA/Aa2 Weight in MSCI EM, % 1.1

MSCI Index MXQA


Local index DSM






Figure 427: Non-ETF allocations to UAE and Qatar in GEM funds relative to MSCI weight, %



60

80

100

120

140

160

180

200

220

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Qatar, $

72%

14%

8%

4%2%

Financials Industrials Telecoms Utilities Energy

0

50

100

150

200

250


Qatar 3M ADTV ($mn) MSCI Qatar 3M ADTV ($mn)

6

8

10

12

14

16

18

20

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Qatar 12M Fwd PE ratio (x) EM

0.0

0.5

1.0

1.5

2.0

2.5

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

UAE + Qatar Weight in MSCI EM%

80

85

90

95

100

105

110

115

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Qatar


Facing the spectre


Facing the spectre

125




MXQA MSCI Qatar

123,567 37,212 60.2 -0.5 -3.8 -22.7 12.3 1.4 17.4 114 1.1%

QNBK QD Qatar National Bank Financials 34,988 8,771 7.3 -1.6 -1.6 -18.7 10.6 2.3 19.2 15 24% IQCD QD Industries Qatar Industrials 20,096 5,007 5.5 -0.4 -12.0 -38.1 13.7 2.2 15.4 13 14% MARK QD Masraf Al Rayan Financials 8,809 4,281 6.7 -1.1 -1.5 -17.0 14.2 0.5 20.1 7 12% ERES QD Ezdan Holding Group Financials 13,992 4,184 4.9 -0.3 8.8 -3.4 na 1.7 na 0 11% QATI QD Qatar Insurance Co Financials 4,753 2,336 1.7 -1.3 -11.5 10.0 15.2 3.1 na 2 6% CBQK QD Comm. Bk. of Qatar Financials 4,738 2,330 5.8 -5.5 -3.8 -21.5 8.5 1.0 13.1 15 6% QIBK QD Qatar Islamic Bank Financials 7,816 1,946 3.3 5.5 10.1 7.6 13.9 1.9 15.8 11 5% DHBK QD Doha Bank Financials 3,549 1,739 2.1 0.5 -6.5 -15.4 9.4 1.0 14.3 15 5% ORDS QD Ooredoo Qatar Telecoms 6,697 1,687 2.9 -1.4 -5.5 -38.1 12.9 1.1 8.4 14 5% QEWS QD Qatar Electricity Utilities 6,425 1,638 2.1 3.3 -2.3 12.5 14.1 3.3 21.5 6 4% VFQS QD Vodafone Qatar Telecoms 3,275 1,310 3.7 4.9 -7.5 -32.2 na 2.3 -3.1 11 4% BRES QD Barwa RE Financials 4,768 1,197 6.2 2.6 -7.2 1.4 na 1.0 na 1 3% GISS QD Gulf International Energy 3,120 785 7.1 -4.2 -13.9 -51.9 8.1 2.9 29.0 4 2%

QNNS QD Qatar Navigation Industrials 3,096 3,096 1.1 -0.4 -0.1 -1.6 8.9 0.8 9.1 3 - QIIK QD Qatar International Islamic Financials 3,090 3,090 0.5 -0.9 -4.0 -13.8 16.4 2.3 na 2 - AHCS QD Aamal Co Industrials 2,418 2,418 0.4 1.7 -4.6 -0.6 na 1.2 na 0 - UDCD QD United Development Co Financials 2,359 2,359 1.2 0.9 -4.5 -7.8 na 0.8 na 0 - QGTS QD Qatar Gas Transport(Nakilat) Energy 3,825 1,874 3.5 7.9 13.0 1.3 12.9 3.8 23.8 2 - MERS QD Al Meera Consumer Goods Co Cons. Staples 1,285 1,285 0.8 -6.8 -14.0 24.5 19.0 3.5 21.5 3 - MRDS QD Mazaya Qatar Real Estate Dev Financials 470 470 3.5 -0.3 -7.4 -29.6 na 1.3 na 0 -

Source: Bloomberg

Qatar


Facing the spectre


Facing the spectre

126


Source: UN


Source: IMF


Source: IMF

Figure 433: Qatar – riyal





Source: IMF

0

500

1,000

1,500

2,000

2,500

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

30

35

0%

5%

10%

15%

20%

25%

30%

Japa

n

Kor

ea

Indi

a

EU

Chi

na

Sin

gapo

re

UA

E

Eur

o A

rea

Tai

wan

Tha

iland


-10

-5

0

5

10

15

20

25

30

35-10

-5

0

5

10

15

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


95

100

105

110

115

120

125

1303.0

3.5

4.0

4.5

5.0

5.5

6.0

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

QAR vs $ QAR vs EUR Qatar REER (Dec 07=100)

Weaker

Stronger

0

5

10

15

20

25

30

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


19.2

7.5

26.2

18.0 17.7

12.0

19.6

13.4

4.9 4.6 4.0 4.7 4.9 4.2 3.6

0

5

10

15

20

25

30

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Qatar


Facing the spectre


Facing the spectre

127


Facing the spectre


Facing the spectre

128

Figure 436: Key data Local currency RON

GDP/capita, $ (2014) 9,981 Population, mn (2014) 19.9 S&P/Moody's rating BBB-/Baa3 Weight in MSCI FM, % 3.7

MSCI Index MXRO


Local index BET







MXRO MSCI Romania

12,330 3,226 6.0 1.2 -4.0 2.5 10.3 1.3 8.3 53 3.7%

TLV RE Banca Transilvania Financials 1,910 1,337 1.3 7.3 7.0 48.5 11.3 1.8 13.8 11 40% SNG RE Romgaz Energy 2,802 560 2.7 -5.9 -14.1 -25.3 7.6 1.2 14.8 11 18% BRD RE BRD Soc Gen Financials 2,030 507 1.0 9.4 5.7 30.9 13.2 1.5 10.5 12 15% EL RE Electrica Utilities 1,013 456 0.7 -1.1 -5.8 -12.7 11.9 na 5.6 9 15% SNP RE OMV Petrom Energy 4,576 366 0.2 -5.5 -15.9 -34.8 8.0 0.7 7.9 10 12%

FP RE Fondul Proprietatea Financials 2,172 1,737 1.7 3.3 2.9 -22.2 na na na 8 - TGN RE Transgaz Energy 759 315 0.3 -2.1 -2.8 -2.8 7.2 0.9 11.5 7 - TEL RE Transelectrica Utilities 493 204 0.2 -0.5 0.0 -10.3 7.0 1.2 9.9 8 - SNN RE Sct National Nuclear Utilities 502 88 0.1 -5.6 -8.4 -24.3 10.5 0.3 2.3 5 - BVB RE Bursa De Valori Financials 57 54 0.0 -6.0 -9.8 -10.2 17.4 2.4 12.0 4 -




60

70

80

90

100

110

120

130

140

150

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI Frontier, $ MSCI Romania, $

55%30%

15%

Financials Energy Utilities

0

2

4

6

8

10

12

14

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Romania MSCI Romania

5

6

7

8

9

10

11

12

13

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Romania, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Romania


Facing the spectre


Facing the spectre

129


Source: UN


Source: IMF


Source: IMF

Figure 445: Romania –leu

Source: Bruegel, Bloomberg




Source: IMF

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

10

20

30

40

50

60

0%

10%

20%

30%

40%

50%

60%

70%

80%

EU

Eur

o A

rea

Ger

man

y

Italy

Fra

nce

Hun

gary

Tur

key

UK

Bul

garia

Rus

sia


-16

-14

-12

-10

-8

-6

-4

-2

0-2

0

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


70

80

90

100

110

1201.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

RON vs $ RON vs EUR Romania REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.2

8.16.9

8.5

-7.1

-0.8

1.1 0.6

3.42.8

3.43.9 3.4 3.2

-8

-6

-4

-2

0

2

4

6

8

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Romania


Facing the spectre


Facing the spectre

130

Figure 448: Key data Local currency RUB

GDP/capita, $ (2014) 12,718 Population, mn (2014) 146.3 S&P/Moody's rating BB+/Ba1 Weight in MSCI EM, % 3.8

MSCI Index MXRU

2015 P/E, x 5.7 2015 FY EPS growth 18% Trailing P/B, x 0.8 Beta to EM 1.5 MSCI full MktCap, $bn 347.0 MSCI free float MktCap, $bn 138.8 No. of companies 20 3M ADTV, $mn, MSCI cos 484.3

Local index INDEXCF






Note: MSCI Russia Index includes DRs where these exist.

Figure 453: Non-ETF allocations to Russia in GEM funds relative to MSCI weight, %

Figure 454: Changes in consensus earnings, past 12 months (Oct 2014 = 100)


40

60

80

100

120

140

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Russia, $

58%18%

9%

9%5%

1%

Energy Financials Cons. Staples

Materials Telecoms Utilities

0

500

1,000

1,500

2,000

2,500

3,000

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Russia - DRs Russia - Local Index MSCI Russia

0

2

4

6

8

10

12

14

16

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Russia 12M Fwd P/E (x) EM

-10

-8

-6

-4

-2

0

2

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Russia%

60

70

80

90

100

110

120

130

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Expected 2015 Earnings Expected 2016 Earnings

Russia


Facing the spectre


Facing the spectre

131




MXRU Index MSCI Russia

346,998 138,759 484 9.5 5.3 -19.4 5.7 0.8 4.4 296 4%

GAZP RX Gazprom Energy 53,668 26,764 68.4 8.7 -6.8 -34.3 2.7 0.3 10.1 14 19% LKOH RX Lukoil Energy 33,789 20,215 47.9 16.9 -8.4 -23.3 6.0 0.4 6.1 16 15% SBER RX Sberbank Financials 32,936 16,424 141.2 31.6 24.9 -17.2 6.5 1.0 14.0 21 12% MGNT LI Magnit Cons. Staples 23,541 12,425 29.8 2.7 -11.1 -26.6 20.0 na 36.0 16 9% NVTK LI Novatek Energy 29,270 8,640 25.2 6.5 -3.6 -11.3 10.2 na 30.6 22 6% GMKN RX Norlisk Nickel Materials 24,159 8,433 38.9 5.0 -2.0 -19.5 8.1 5.0 61.0 5 6% TATN RX Tatneft Energy 11,993 7,745 8.7 15.9 7.4 -12.7 6.5 1.2 15.4 16 6% VTBR RX VTB Financials 15,333 6,109 17.8 12.3 -2.9 22.4 60.7 1.0 4.2 6 4% ROSN RX Rosneft Energy 45,874 5,052 18.4 15.9 6.8 -26.3 6.1 0.9 13.2 13 4% SNGSP RX Surgutneft-P Energy 5,452 4,887 14.6 15.4 11.1 -0.6 7.1 na 6.9 19 4% SNGS RX Surguneft Energy 20,541 4,080 11.2 11.1 1.1 -16.5 5.7 na 7.2 16 3% TRNFP RX Transneft Energy 3,740 3,744 5.4 5.4 3.8 6.7 6.2 0.6 11.2 9 3% MBT UN MTS Telecoms 7,367 3,683 5.1 0.1 -10.3 -50.2 7.0 na 36.0 20 3% CHMF RX Severstal Materials 9,904 2,465 9.9 12.2 5.1 10.6 9.2 3.8 26.4 5 2% MOEX RX MOEX Financials 3,334 1,668 7.4 23.0 25.8 7.0 10.5 2.2 18.8 13 1% ALRS RX Alrosa Materials 6,247 1,562 7.6 -7.2 -30.4 -10.0 4.8 2.3 36.7 20 1% HYDR RX RusHydro Utilities 4,157 1,242 3.9 16.5 17.9 -36.4 5.9 0.4 6.4 13 1% MFON LI Megafon Telecoms 8,370 1,242 6.1 12.7 7.7 -43.6 10.5 na 31.6 20 1% RTKM RX Rostelecom Telecoms 3,897 1,208 3.1 15.3 6.7 -40.8 12.2 1.0 8.5 18 1% SSA LI Sistema Telecoms 3,426 1,172 3.3 6.3 -15.9 -9.9 7.4 na 11.4 14 1%

YNDX RM Yandex IT 5,215 4,882 51.7 44.3 19.9 -41.2 23.8 5.0 18.2 22 URKA RM Uralkali Materials 7,316 2,623 11.2 -11.2 -7.0 -31.5 6.6 2.4 37.4 5 PHOR RM Phosagro Materials 5,358 2,460 0.4 -1.0 4.1 29.1 6.4 5.5 59.2 4 LNTA RM Lenta Cons. Staples 3,601 1,872 5.8 2.5 -0.7 -24.2 14.4 1.4 37.2 15 PGIL RM Polyus Materials 9,001 1,782 3.1 -0.3 11.4 -1.4 13.3 4.8 26.8 9 SBERP RM Sberbank-Pref Financials 1,119 1,119 12.0 25.8 30.3 -17.7 4.7 na 15.6 11 NLMK RM NLMK Materials 7,453 1,078 3.0 15.5 -5.3 -4.7 9.3 1.1 11.1 5 PIKK RM PIK Cons. Disc. 2,546 855 0.2 19.1 23.4 -0.6 20.7 6.4 23.0 1 POLY RM Polymetal Materials 3,780 854 2.5 1.2 31.6 5.1 12.5 4.0 24.1 18 BANEP RM Bashneft-Pref Energy 778 778 0.6 15.3 15.7 18.4 3.8 na 27.7 12 BANE RM Bashneft Energy 4,634 651 0.6 17.2 -1.5 -1.2 4.4 1.3 24.5 17 IRAO RM InterRao Utilities 2,103 622 0.8 22.3 7.2 -11.4 4.0 0.3 8.3 11 RUAL RM Rusal Materials 5,783 595 0.5 -5.5 -18.0 -30.7 5.0 1.7 24.7 17 MAGN RM MMK Materials 4,105 583 8.1 23.2 21.2 70.1 7.7 1.0 10.1 4 EONR RM E.ON Russia Utilities 3,127 509 0.7 11.6 14.5 -16.9 8.4 1.9 19.7 11 LSRG RM LSR Financials 984 412 0.1 13.3 -2.6 -33.4 6.1 0.9 16.8 2 AFLT RM Aeroflot Industrials 933 381 5.0 31.8 20.8 -13.0 7.3 na 22.9 13 AKRN RM Acron Materials 1,964 301 0.3 7.5 17.2 56.0 5.0 1.7 15.6 12 DIXY RM Dixy Cons. Staples 666 299 0.5 6.5 -4.8 -46.3 10.8 1.3 11.1 18 MVID RM Mvideo Cons. Disc. 700 296 0.5 13.5 13.0 -27.3 10.5 3.9 30.1 8 TRMK RM TMK Energy 838 270 0.3 9.6 -6.8 -56.7 5.5 0.7 5.6 3 VSMO RM VSMPO Materials 2,154 209 0.1 -4.0 21.8 15.7 na 3.0 na 1 RTKMP RM Rostelecom Pref Telecoms 208 208 0.3 10.2 7.0 -39.8 8.0 na 8.5 9 RSTI RM Rosseti Utilities 1,220 167 0.9 15.5 -5.0 -39.4 1.6 0.1 4.6 6 MTLR RM Mechel Materials 428 139 1.4 11.4 4.2 106.1 na na na 1 SVAV RM Sollers Cons. Disc. 243 111 0.1 6.6 17.9 -26.7 4.3 1.2 18.8 6 PHST RM Pharmstandard Healthcare 641 108 0.0 3.6 3.4 -40.5 na na na 0

Source: Bloomberg

Russia


Facing the spectre


Facing the spectre

132


Source: UN


Source: IMF


Source: IMF

Figure 459: Russia – rouble





Source: IMF

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

50

100

150

200

250

300

0%

10%

20%

30%

40%

50%

60%

EU

Eur

o A

rea

Net

herla

nds

Chi

na

Ger

man

y

Italy

Tur

key

Bel

arus

Japa

n

Kor

ea


0

2

4

6

8

10

120

2

4

6

8

10

12

14

16

18

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


50

60

70

80

90

100

110

12020

30

40

50

60

70

80

90

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

RUB vs $ RUB vs EUR Russia REER (Dec 07=100)

Weaker

Stronger

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


7.26.4

8.2 8.5

5.2

-7.8

4.5 4.33.4

1.30.6

-3.8

-0.6

1.0 1.5

-10

-8

-6

-4

-2

0

2

4

6

8

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Russia


Facing the spectre


Facing the spectre

133


Facing the spectre


Facing the spectre

134


GDP per capita, $ (2014) 712 Population, mn (2014) 11.1 MktCap, $bn 0.6 3M ADTV, $mn 0.1

Figure 463: Top 30 largest companies Sector MktCap, $mn 12M ADTV, $mn

Bralirwa Cons. Staples 335 0.01 Bank of Kigali Financials 254 0.08 Crystal Telecom Telecoms 39 na

Source: Bloomberg

Figure 464: Rwanda market performance (LC)

Source: Bloomberg

Figure 465: Rwanda 3M ADTV, $mn

Source: Bloomberg

0

50

100

150

200

Jan-

13

Mar

-13

May

-13

Jul-1

3

Sep

-13

Nov

-13

Jan-

14

Mar

-14

May

-14

Jul-1

4

Sep

-14

Nov

-14

Jan-

15

Mar

-15

May

-15

Jul-1

5

Sep

-15

RSEASI Index

RSEASI Index

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Jan-11 Jan-12 Jan-13 Jan-14 Jan-15

Rwanda 3MADTV, $mn

Rwanda


Facing the spectre


Facing the spectre

135


Source: UN


Source: IMF


Source: IMF

Figure 469: Rwanda – franc





Source: IMF

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.00

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Chi

na

DR

Con

go EU

Mal

aysi

a

Eur

o A

rea

Tha

iland

US

A

Sw

azila

nd

Ger

man

y

Pak

ista

n


-14

-12

-10

-8

-6

-4

-2

00

2

4

6

8

10

12

14

16

18

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


90

100

110

120

130

140

150

160200

300

400

500

600

700

800

900

1,000

Jan-

00O

ct-0

0Ju

l-01

Apr

-02

Jan-

03O

ct-0

3Ju

l-04

Apr

-05

Jan-

06O

ct-0

6Ju

l-07

Apr

-08

Jan-

09O

ct-0

9Ju

l-10

Apr

-11

Jan-

12O

ct-1

2Ju

l-13

Apr

-14

Jan-

15O

ct-1

5

RWF vs $ RWF vs EUR Rwanda REER (Dec 07=100)

Weaker

Stronger

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


7.4

9.4 9.2

7.6

11.2

6.2 6.3

7.5

8.8

4.7

6.96.5

7.07.5 7.5

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Rwanda


Facing the spectre


Facing the spectre

136

Figure 472: Key data Local currency SAR

GDP/capita, $ (2014) 24,252 Population, mn (2014) 30.8 S&P/Moody's rating AA-/Aa3 Weight in MSCI FM, % n/a

MSCI Index MXSAD


Local index SASEIDX




MSCI Saudi Arabia is a standalone index, and not part of the MSCI Frontier Index.



MSCI halted the index from September 2010 to June 2012.

Figure 477: Allocations to Saudi Arabia in EMEA and GEM funds relative to MSCI weight, %



80

100

120

140

160

180

200

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI Frontier, $ MSCI Saudi Arabia, $

46%

31%

7%

6%

4%

3%

2%

1%

Financials Materials TelecomsCons. Staples Cons. Disc. UtilitiesIndustrials Energy

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Saudi Arabia 3M ADTV ($mn) MSCI Saudi Arabia 3M ADTV ($mn)

0

2

4

6

8

10

12

14

16

18

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

SASEIDX Index 12M Fwd PE (x) Frontier

0

0.05

0.1

0.15

0.2

0.25

0.3

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Saudi Arabia%

60

70

80

90

100

110

120

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


Saudi Arabia


Facing the spectre


Facing the spectre

137




MXSAD MSCI Saudi Arabia

353,560 133,384 766.0 -5.2 -20.1 -27.8 11.2 1.5 12.0 481 -

RJHI AB Al Rajhi Bank Financials 22,363 16,772 41.8 -2.7 -18.2 -20.4 11.3 1.9 15.7 15 12% SABIC AB Saudi Basic Industries Corp Materials 65,652 16,413 152.7 5.3 -11.3 -22.3 12.0 1.6 12.1 18 12% NCB AB National Commercial Bank Financials 28,206 11,283 10.3 0.3 -15.5 17.6 10.9 2.1 18.8 10 8% SAMBA AB Samba Financial Group Financials 11,951 6,573 5.6 -2.8 -14.3 -17.8 8.3 1.1 12.5 17 5% STC AB Saudi Telecom Co Telecoms 32,073 6,415 11.0 -2.6 -10.2 -16.3 10.1 2.0 18.0 18 5% BSFR AB Banque Saudi Fransi Financials 8,906 4,453 1.8 -5.9 -14.2 -23.6 8.3 1.2 13.7 13 3% SAVOLA AB Savola Cons. Staples 7,332 4,399 5.5 -12.7 -23.0 -37.7 13.5 2.7 18.4 13 3% ALINMA AB Alinma Bank Financials 5,900 4,130 190.1 -11.2 -32.6 -36.3 12.8 1.2 9.8 9 3% EEC AB Etihad Etisalat Co Telecoms 5,839 3,796 35.7 2.2 -5.8 -60.5 20.1 1.4 7.3 14 3% SECO AB Saudi Electricity Co Utilities 18,176 3,635 8.0 -1.2 -9.6 -2.1 20.4 1.1 5.3 4 3% SAFCO AB Saudi Arabian Fertilizer Co Materials 8,994 3,598 4.2 -14.5 -28.6 -35.6 11.4 4.6 34.0 17 3% ALMARAI AB Almarai Co Cons. Staples 11,969 3,591 4.6 -11.4 -18.0 -3.7 19.7 3.8 19.0 20 3% RIBL AB Riyad Bank Financials 10,191 3,567 3.7 -8.9 -20.4 -34.3 8.5 1.1 11.8 16 3% MAADEN AB Saudi Arabian Mining Co Materials 9,207 3,222 43.1 6.2 -26.9 -12.6 16.9 1.3 6.5 9 2% SABB AB Saudi British Bank Financials 10,479 3,144 2.0 -4.4 -19.1 -29.8 8.5 1.4 15.8 14 2% YANSAB AB Yanbu Petrochemical Materials 6,294 2,517 4.5 -4.4 -14.8 -32.2 12.5 1.6 11.5 16 2% ARNB AB Arab National Bank Financials 6,880 2,408 1.6 -5.1 -21.0 -17.6 7.6 1.2 14.2 14 2% KAYAN AB Saudi Kayan Petrochemical Materials 3,412 2,218 19.0 3.9 -16.2 -40.0 28.0 1.0 1.7 10 2% ALTAYYAR AB Al Tayyar Travel Group Cons. Disc. 3,601 2,161 15.3 -14.6 -30.5 -33.0 9.4 4.8 37.5 5 2% SACCO AB Saudi Cement Materials 2,643 2,115 2.6 -10.4 -25.7 -40.3 9.6 3.2 31.1 13 2% JARIR AB Jarir Marketing Co Cons. Disc. 3,787 2,083 4.8 -11.3 -23.1 -16.5 14.4 9.6 60.5 19 2% APPC AB Advanced Petrochemicals Materials 2,091 1,882 7.4 7.7 -1.5 -9.0 12.4 3.2 24.6 13 1% ALARKAN AB Dar Al Arkan Real Estate Financials 1,883 1,789 50.9 -4.9 -24.0 -47.3 10.4 0.4 3.4 10 1% SIIG AB Saudi Ind Investment Group Materials 2,051 1,641 5.7 -1.2 -30.7 -51.2 7.2 1.1 13.6 9 1% BJAZ AB Bank Al-Jazira Financials 1,878 1,597 9.2 -14.2 -31.6 -42.6 9.1 1.0 9.8 5 1% YACCO AB Yamama Cement Co Materials 1,895 1,516 1.7 -10.2 -21.5 -41.6 10.4 1.9 17.6 12 1% ALBI AB Bank Albilad Financials 2,968 1,484 8.8 -7.4 -28.4 -48.7 11.5 1.8 13.8 5 1% AAAL AB Saudi Hollandi Bank Financials 4,542 1,362 1.4 -10.9 -32.8 -27.1 8.0 1.5 16.8 9 1% SOCCO AB Southern Province Cement Materials 2,718 1,359 0.7 -9.3 -25.5 -33.8 10.5 3.5 30.4 9 1% SPC AB Sahara Petrochemical Co Materials 1,396 1,256 8.4 5.2 -9.1 -38.8 12.1 0.9 6.6 9 1% SIBC AB Saudi Investment Bank/The Financials 3,137 1,255 0.8 -10.5 -19.4 -31.2 8.4 1.0 11.3 3 1% NIC AB National Industrialization C Industrials 2,183 1,201 7.0 -7.5 -30.4 -59.0 10.5 0.9 6.7 11 1% SIPCHEM AB Saudi International Petchem Materials 1,673 1,171 4.9 -12.1 -34.9 -47.0 9.1 1.1 10.6 11 1% ALHOKAIR AB Fawaz Abdulaziz Alhokair Cons. Disc. 3,878 1,164 5.8 -1.9 -22.4 -39.0 13.3 5.6 35.0 13 1% YNCCO AB Yanbu Cement Co Materials 1,891 1,134 1.8 -14.6 -27.4 -34.8 9.2 2.0 20.6 13 1% ARCCO AB Arabian Cement Materials 1,274 1,083 4.6 -14.7 -30.7 -41.0 7.3 1.6 18.7 6 1% EMAAR AB Emaar Economic City Financials 2,108 1,054 27.4 -13.2 -21.1 -43.8 9.1 0.9 9.3 2 1% QACCO AB Qassim Cement/The Materials 1,746 960 1.3 -10.6 -21.6 -23.6 11.9 3.5 27.4 10 1% SGS AB Saudi Ground Services Co Industrials 2,903 871 15.8 -6.3 -17.3 15.8 14.8 na 26.2 1 1% PETROR AB Rabigh Refining Energy 3,380 845 6.6 -10.9 -34.8 -45.7 12.5 1.4 9.4 3 1% KINGDOM AB Kingdom Holding Co Financials 16,779 839 1.9 -4.1 -15.2 -13.9 57.5 2.2 na 1 1% CATERING AB Saudi Airlines Catering Co Industrials 2,581 774 7.9 -13.5 -24.1 -36.5 13.1 7.6 55.2 9 1% ZAINKSA AB Mobile Telecommunications Telecoms 1,401 770 16.1 -0.3 -23.7 -49.1 na 1.1 -20.4 8 1%

Source: Bloomberg

Saudi Arabia


Facing the spectre


Facing the spectre

138


Source: UN


Source: IMF


Source: IMF

Figure 483: Saudi Arabia –riyal





Source: IMF

0

5,000

10,000

15,000

20,000

25,000

30,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

30

35

40

45

50

0%

2%

4%

6%

8%

10%

12%

14%

Chi

na

Japa

n

US

A

EU

Kor

ea

Eur

o A

rea

Indi

a

Sin

gapo

re

Tai

wan

Fra

nce


-10

-5

0

5

10

15

20

25

300

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


90

100

110

120

130

1402.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

Jan-

00

Oct

-00

Jul-0

1

Apr

-02

Jan-

03

Oct

-03

Jul-0

4

Apr

-05

Jan-

06

Oct

-06

Jul-0

7

Apr

-08

Jan-

09

Oct

-09

Jul-1

0

Apr

-11

Jan-

12

Oct

-12

Jul-1

3

Apr

-14

Jan-

15

Oct

-15

SAR vs $ SAR vs EUR Saudi Arabia REER (Dec 07=100)

Weaker

Stronger

-2

0

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


8.6

7.3

5.66.0

8.4

1.8

4.8

10.0

5.4

2.73.5 3.4

2.22.9 3.0

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Saudi Arabia


Facing the spectre


Facing the spectre

139


Facing the spectre


Facing the spectre

140

Figure 486: Key data Local currency RSD


MSCI Index MXRS

2015 P/E, x na 2015 FY EPS growth na Trailing P/B, x 0.8 Beta to FM 0.8 MSCI full MktCap, $bn 1.4 MSCI free float MktCap, $bn 0.2 No. of companies 2 3M ADTV, $mn, MSCI cos 0.0

Local index BELEX







MXRS MSCI Serbia

1,326 208 0.05 -2.0 -4.5 -34.5 na 0.8 3.7 3 0.2%

NIIS SG NIS Energy 950 133 0.03 -0.3 -2.4 -36.4 na 0.6 na 3 64% AERO SG N. Tesla Airport Industrials 376 75 0.02 -6.3 -6.7 24.5 na 1.6 na 0 36%

KMBN SG Komercijalna Banka Ad Beogra Financials 228 72 0.0 -19.7 -21.8 -50.8 5.2 0.4 6.5 1 - ENHL SG Energoprojekt Holding Ad Beo Industrials 93 43 0.0 -9.7 -19.3 -13.3 na 1.2 na 0 - FITO SG Galenika Fitofarmacija Ad Materials 51 37 0.0 -6.7 2.9 4.6 na 1.2 na 0 - AIKB SG AIK Banka Financials 147 24 0.1 0.5 2.5 -16.4 7.4 0.3 4.5 0 - SJPT SG Sojaprotein Ad Cons. Staples 78 15 0.0 -3.1 -6.9 -29.9 na 0.8 na 1 - IMLK SG Imlek Ad Cons. Staples 370 13 0.0 4.8 23.2 -7.6 na 3.9 na 0 - TGAS SG Messer Tehnogas Ad Materials 73 13 0.0 7.2 11.2 18.2 na 0.7 na 0 - ALFA SG Alfa Plam Ad Vranje Cons. Disc. 44 12 0.1 -2.0 4.5 41.3 na 0.8 na 0 - MTLC SG Metalac Ad Gornji Milanovac Cons. Disc. 20 11 0.1 -6.2 4.6 -15.8 na 0.8 na 0 - JESV SG Jedinstvo Sevojno Ad Industrials 14 6 0.0 -3.6 -13.1 -27.2 na 0.7 na 0 - GMON SG Gosa Montaza Ad Velika Plana Industrials 4 3 0.0 -8.9 -11.5 -38.5 na 0.3 na 0 -





50

70

90

110

130

150

170

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Serbia, $

64%

36%

Energy Industrials

0.0

0.2

0.4

0.6

0.8

1.0

1.2

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

MSCI Serbia

0

1

2

3

4

5

6

7

8


N/A

Serbia


Facing the spectre


Facing the spectre

141


Source: UN


Source: IMF


Source: IMF

Figure 495: Serbia –dinar





Source: IMF

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

0%

10%

20%

30%

40%

50%

60%

70%

EU

Eur

o A

rea

Italy

Ger

man

y

Bos

nia

and

Her

z.

Rus

sia

Rom

ania

Mon

tene

gro

Mac

edon

ia, F

YR

Slo

veni

a


-25

-20

-15

-10

-5

00

2

4

6

8

10

12

14

16

18

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


50

100

150

200

250

300

3500

20

40

60

80

100

120

140

Jan-

00O

ct-0

0Ju

l-01

Apr

-02

Jan-

03O

ct-0

3Ju

l-04

Apr

-05

Jan-

06O

ct-0

6Ju

l-07

Apr

-08

Jan-

09O

ct-0

9Ju

l-10

Apr

-11

Jan-

12O

ct-1

2Ju

l-13

Apr

-14

Jan-

15O

ct-1

5

RSD vs $ RSD vs EUR Serbia REER (Dec 07=100)

Weaker

Stronger

-4

-2

0

2

4

6

8

10

12

14

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

Change in lending as % of GDP Real GDP (% YoY) 9.0

5.54.9

5.95.4

-3.1

0.61.4

-1.0

2.6

-1.8

0.5

1.52.0

3.5

-4

-2

0

2

4

6

8

10

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Serbia


Facing the spectre


Facing the spectre

142

Figure 498: Key data Local urrency EUR

GDP/capita, $ (2014) 24,051 Population, mn (2014) 2.1 S&P/Moody's rating A-/Baa3 Weight in MSCI FM, % 2.3

MSCI Index MXSL


Local index SBITOP







MXSL MSCI Slovenia

3,486 2,101 0.6 5.0 0.3 -13.3 10.6 1.3 11.7 13 2.3%

KRKG SV Krka Healthcare 2,355 1,766 0.5 5.9 3.6 -6.1 11.2 1.5 12.0 8 84% ZVTG SV Triglav Insur. Financials 545 218 0.1 -4.7 -13.0 -21.8 7.1 0.7 10.8 3 11% TLSG SV Telekom Sloven. Telecoms 586 117 0.0 7.6 -6.6 -51.0 10.4 0.8 6.0 2 6%

PETG SV Petrol DD Cons. Disc. 579 382 0.1 2.9 0.5 -24.0 8.6 1.0 10.7 2 - POSR SV Pozavarovalnica Sava Financials 244 106 0.0 -1.6 -7.7 -31.6 6.5 0.8 11.5 1 - LKPG SV Luka Koper Industrials 351 101 0.1 -3.5 -10.4 -17.0 9.5 1.0 10.8 3 - GRVG SV Gorenje Velenje Cons. Disc. 120 61 0.0 -15.7 -26.7 -41.3 19.0 0.3 1.4 3 -




40

60

80

100

120

140

160

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Slovenia, $

84%

11%5%

Healthcare Financials Telecoms

0

1

2

3

4

5

6

7

8

9

10

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Slovenia MSCI Slovenia

5

7

9

11

13

15

17

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Slovenia, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Slovenia


Facing the spectre


Facing the spectre

143


Source: UN


Source: IMF


Source: IMF

Figure 507: Slovenia –euro





Source: IMF

0

200

400

600

800

1,000

1,200

1,400

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

30

0%

10%

20%

30%

40%

50%

60%

70%

80%

EU

Eur

o A

rea

Ger

man

y

Italy

Aus

tria

Cro

atia

Hun

gary

Fra

nce

Rus

sia

Slo

vaki

a


-6

-4

-2

0

2

4

6

8-1

0

1

2

3

4

5

6

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Current account balance (% of GDP) RHS CPI (average % YoY) 80

85

90

95

100

105

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Jan-

00

Nov

-00

Sep

-01

Jul-0

2

May

-03

Mar

-04

Jan-

05

Nov

-05

Sep

-06

Jul-0

7

May

-08

Mar

-09

Jan-

10

Nov

-10

Sep

-11

Jul-1

2

May

-13

Mar

-14

Jan-

15

EUR vs $ Slovenia REER (Dec 07=100)

Weaker

Stronger

-20

-15

-10

-5

0

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.4 4.0

5.7

6.9

3.3

-7.8

1.20.6

-2.7

-1.1

3.02.3

1.8 2.0 2.0

-10

-8

-6

-4

-2

0

2

4

6

8

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Slovenia


Facing the spectre


Facing the spectre

144

Figure 510: Key data Local currency ZAR

GDP/capita, $ (2014) 6,483 Population, mn (2014) 54.0 S&P/Moody's rating BBB-/Baa2 Weight in MSCI EM, % 8.0

MSCI Index MXZA

2015 P/E, x 17.3 2015 FY EPS growth -8.8% Trailing P/B, x 2.6 Beta to EM 1.1 MSCI full MktCap, $bn 379.8 MSCI free float MktCap, $bn 276.9 No. of companies 54 3M ADTV, $mn, MSCI cos 1,054

Local index JALSH

MktCap, $bn 793.7 No. of companies 170 3M ADTV, $mn 1,519





Figure 515: Non-ETF allocations to South Africa in GEM funds relative to MSCI weight, %



60

70

80

90

100

110

120

130

140

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI South Africa, $

33%

31%

9%

7%

6%6%

5%3%

Cons. Disc. Financials Telecoms

Energy Healthcare Cons. Staples

Materials Industrials

500

700

900

1,100

1,300

1,500

1,700

1,900

2,100

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

South Africa 3M ADTV ($mn) MSCI South Africa 3M ADTV ($mn)

6

8

10

12

14

16

18

20

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI South Africa 12M Fwd PE ratio (x) EM

-2.0

-1.5

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

South Africa

40

50

60

70

80

90

100

110

120

Nov

-14

Dec

-14

Jan-

15

Feb

-15

Mar

-15

Apr

-15

May

-15

Jun-

15

Jul-1

5

Aug

-15

Sep

-15

Oct

-15

Nov

-15


South Africa


Facing the spectre


Facing the spectre

145




MXZA MSCI South Africa 379,817 276,928 1053.5 4.3 -8.6 -15.7 15.9 2.6 15.5 621 8%

NPN SJ Naspers Cons. Disc. 62,288 58,758 177.8 11.0 4.0 19.2 37.7 10.7 22.9 17 21% MTN SJ MTN Telecoms 21,687 18,677 108.0 -9.4 -28.6 -46.9 11.3 2.4 20.7 17 7% SOL SJ Sasol Energy 21,851 18,382 59.8 15.3 -0.7 -31.8 11.6 1.6 11.6 15 7% SHF SJ Steinhoff Intl Cons. Disc. 23,301 14,164 50.2 -1.2 0.0 18.9 16.7 1.8 10.4 8 5% FSR SJ Firstrand Financials 21,003 12,533 49.2 2.9 -16.0 -12.4 12.0 3.2 24.0 17 5% SBK SJ Standard Bank Financials 16,751 12,354 45.9 2.1 -16.2 -15.8 9.8 1.6 15.5 17 5% REM SJ Remgro Financials 10,354 9,702 19.2 7.1 -4.4 -13.1 15.1 2.0 10.5 6 3% BVT SJ Bidvest Industrials 8,509 8,114 21.6 6.6 1.7 -6.7 16.2 3.1 17.9 13 3% SLM SJ Sanlam Financials 9,923 7,861 25.2 2.6 -15.9 -29.1 13.0 3.0 14.2 7 3% APN SJ Aspen Healthcare 10,541 7,836 32.6 10.0 -21.4 -34.9 21.4 4.3 17.4 15 3% WHL SJ Woolworths Cons. Disc. 7,291 7,244 30.9 7.0 -5.6 5.3 20.7 6.9 29.6 17 3% SHP SJ Shoprite Cons. Staples 6,033 4,816 21.6 -5.9 -22.6 -27.6 16.6 4.1 22.4 17 2% BGA SJ Barclays Africa Financials 11,053 4,332 16.6 3.6 -13.0 -16.6 9.8 1.8 17.0 16 2% MDC SJ Mediclinic Healthcare 8,561 4,289 15.2 6.4 2.2 -0.2 22.0 3.3 12.7 12 2% GRT SJ Growthpoint Financials 4,990 4,252 13.4 -1.7 -17.5 -23.6 13.3 1.1 12.2 8 2% VOD SJ Vodacom Telecoms 16,116 4,003 18.3 7.8 -5.0 -12.4 15.9 10.0 60.1 18 1% DSY SJ Discovery Financials 7,174 3,914 11.4 10.3 2.0 24.8 19.3 3.6 18.0 5 1% BAT SJ Brait Financials 6,063 3,909 19.3 14.0 -7.6 61.2 335.3 2.1 na 2 1% TBS SJ Tiger Brands Cons. Staples 4,530 3,775 17.5 4.5 -0.1 -21.0 16.0 4.4 21.9 12 1% MRP SJ Mr Price Group Ltd Cons. Disc. 4,178 3,717 23.7 10.6 -24.3 -25.1 20.3 10.9 47.4 16 1% RMH SJ RMB Holdings Financials 6,909 3,429 11.5 -0.4 -12.3 -10.8 11.7 2.7 21.4 5 1% RDF SJ Redefine Financials 3,948 3,468 10.0 -1.0 -10.0 -7.6 12.5 1.2 9.7 7 1% ANG SJ AngloGold Ashanti Materials 3,414 3,394 14.7 -0.5 43.5 -11.9 13.9 1.3 6.7 15 1% NED SJ Nedbank Financials 8,118 3,254 15.1 0.3 -23.3 -23.5 9.3 1.6 15.8 17 1% TRU SJ Truworths Cons. Disc. 2,988 2,872 18.4 10.5 0.2 2.5 14.1 5.4 34.1 15 1% MND SJ Mondi Ltd Materials 11,179 2,746 11.6 9.7 -5.9 36.5 14.8 3.6 21.7 4 1% NTC SJ Netcare Healthcare 4,101 2,775 12.8 7.4 -13.8 -7.7 17.1 5.8 27.6 12 1% LHC SJ Life Healthcare Healthcare 2,952 2,645 6.7 8.3 -5.0 -26.0 18.6 8.6 38.3 12 1% RES SJ Resilient Property Financials 3,322 2,500 5.6 3.0 8.0 23.6 25.7 1.8 10.3 7 1% SPP SJ Spar Cons. Staples 2,554 2,402 7.5 9.4 -7.7 26.2 20.1 11.2 45.9 17 1% IPL SJ Imperial Cons. Disc. 2,557 2,364 11.5 0.8 -6.9 -26.6 10.2 2.0 17.3 12 1% TFG SJ Foschini Cons. Disc. 2,292 2,140 10.9 0.4 -9.0 -4.3 13.3 3.8 25.4 16 1% HYP SJ Hyprop Investments Ltd-Uts Financials 2,172 2,173 6.1 0.3 -13.2 3.5 19.9 1.4 7.3 6 1% RMI SJ RMI Holdings Financials 4,721 2,112 5.5 3.5 -9.9 -12.0 16.6 3.8 20.0 5 1% GFI SJ Gold Fields Materials 2,119 2,118 7.3 -0.7 8.3 -18.5 18.9 0.7 3.3 14 1% SAP SJ Sappi Materials 2,018 2,145 5.9 16.7 16.1 -2.6 10.0 1.8 14.9 6 1% MMI SJ MMI Holdings Financials 2,902 2,036 9.0 4.2 -21.9 -27.8 10.2 1.6 13.1 7 1% INL SJ Investec Financials 7,585 2,031 6.7 5.8 -9.8 -9.3 11.2 1.4 12.5 3 1% IMP SJ Impala Materials 2,171 1,768 14.2 5.7 -13.9 -59.7 20.5 0.5 3.2 18 1% PFG SJ Pioneer Foods Group Ltd Cons. Staples 3,293 1,846 9.9 0.6 -13.8 25.0 21.5 7.2 25.8 11 1% PSG SJ Psg Group Ltd Financials 4,259 1,653 5.0 14.7 16.4 88.0 30.2 5.0 na 3 1% CPI SJ Capitec Bank Holdings Ltd Financials 5,067 1,517 9.2 14.2 13.6 64.6 19.8 5.8 25.5 12 1% BAW SJ Barloworld Industrials 1,302 1,313 6.0 6.4 -13.8 -30.2 8.5 1.1 11.1 13 0.5% CML SJ Coronation Financials 1,928 1,251 6.2 13.6 -11.0 -36.1 13.8 13.0 86.7 6 0.4% PIK SJ Pick N Pay Cons. Staples 2,407 1,210 6.6 10.4 4.8 2.9 27.1 11.0 32.5 17 0.4% LBH SJ Liberty Financials 2,845 1,116 5.6 6.3 -12.2 -13.9 8.9 1.9 15.3 7 0.4% TKG SJ Telkom SA Telecoms 2,553 1,149 6.3 -0.2 -4.8 -9.1 11.7 1.3 11.8 17 0.4% NPK SJ Nampak Materials 1,196 992 5.6 -1.8 -32.4 -57.7 9.8 2.1 17.8 12 0.4% AMS SJ Amplats Materials 4,838 954 10.6 1.9 -12.3 -45.3 21.4 1.3 6.7 18 0.3% MSM SJ Massmart Cons. Staples 1,925 941 3.4 7.6 -14.8 -23.0 18.1 5.3 27.0 14 0.3% EXX SJ Exxaro Energy 1,619 619 3.0 18.1 -17.8 -56.9 9.0 0.7 8.6 10 0.2% TSH SJ Tsogo Sun Cons. Disc. 1,847 644 2.5 0.6 -5.9 -29.9 10.7 3.3 26.3 4 0.2% ARI SJ African Rainbow Materials 919 441 3.3 4.0 -19.0 -66.3 18.1 0.5 2.0 9 0.2% KIO SJ Kumba Iron Ore Materials 1,426 279 6.7 -21.6 -43.1 -82.6 7.6 0.9 13.4 15 0.1%

BTI SJ British American Tobacco Cons. Staples 110,726 110,660 36.5 7.6 -0.4 4.3 17.6 12.0 64.8 28 - BIL SJ Bhp Billiton Plc Materials 89,211 86,509 44.8 5.8 -7.8 -30.7 24.2 1.4 6.5 31 - SAB SJ Sabmiller Plc Cons. Staples 99,563 53,301 110.6 8.4 15.7 9.3 26.2 4.3 14.1 23 - OML SJ Old Mutual Plc Financials 16,258 14,476 27.1 12.0 -3.6 6.8 10.5 1.5 12.9 11 - MNP SJ Mondi Plc Materials 11,179 9,970 18.0 9.5 -6.7 35.5 14.7 2.7 21.7 12 - AGL SJ Anglo American Plc Materials 11,761 9,880 40.4 8.4 -23.6 -57.0 14.7 0.6 4.1 29 - INP SJ Investec Plc Financials 7,585 6,464 10.7 6.5 -9.6 -7.9 11.3 1.4 12.5 10 - CCO SJ Capital & Counties Financials 5,743 4,334 5.5 3.4 -5.6 23.7 443.5 1.3 3.7 18 - ITU SJ Intu Properties Plc Financials 6,980 4,150 6.2 3.7 1.9 -5.3 24.0 1.0 5.1 22 - REI SJ Reinet Investments Sa-Dr Financials 4,515 na 7.6 6.2 -0.7 -1.2 9.7 0.8 na 3 - NEP SJ New Europe Property Financials 3,176 2,296 4.6 3.7 -8.5 4.1 15.4 2.2 7.9 5 -

Source: Bloomberg

South Africa


Facing the spectre


Facing the spectre

146


Source: UN


Source: IMF


Source: IMF

Figure 521: South Africa – rand





Source: IMF

0

5,000

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1990

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0-19 20-64 65+

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EU

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Bot

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a

Ger

man

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Indi

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UK


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00

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2004

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70

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1404

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ct-1

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ct-1

5

ZAR vs $ ZAR vs EUR South Africa REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

2004

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4.6

5.35.6

5.4

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2.2 2.2

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2.12.5

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-1

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South Africa


Facing the spectre


Facing the spectre

147


Facing the spectre


Facing the spectre

148

Figure 524: Key data Local currency LKR

GDP/capita, $ (2014) 3,574 Population, mn (2014) 21.0 S&P/Moody's rating B+/B1 Weight in MSCI FM, % 1.9

MSCI Index MXLK

2015 P/E, x 13.8 2015 EPS growth 7.4% Trailing P/B, x 1.8 Beta to FM 0.5 MSCI full MktCap, $bn 3.6 MSCI free float MktCap, $bn 1.7 No. of companies 3 3M ADTV, $mn, MSCI cos 1.9

Local index CSEALL







MXLK MSCI Sri Lanka

3,617 1,693 1.9 2.0 -12.2 -22.5 12.6 1.8 11.1 21 1.9%

JKH SL John Keells Industrials 1,411 1,058 1.1 4.3 -11.7 -27.0 14.4 1.7 9.2 10 62% COMB SL Comm Bk of Ceylon Financials 907 544 0.7 -1.2 -12.7 -12.8 9.9 2.0 16.7 8 33% CTC SL Ceylon Tobacco Cons. Staples 1,299 91 0.1 1.5 -3.0 -20.4 18.0 21.3 301.8 3 5%

HNB SL Hatton National Bank Plc Financials 589 198 0.2 -0.7 -8.3 1.0 7.1 1.2 15.7 9 - DFCC SL Dfcc Bank Plc Financials 327 173 0.0 -4.0 -16.6 -29.4 12.9 1.0 7.2 2 - SAMP SL Sampath Bank Plc Financials 310 155 0.2 -2.2 -8.1 1.9 6.2 1.2 17.2 10 - DIST SL Distilleries Co Of Sri Lanka Cons. Staples 583 136 0.3 -0.2 -10.4 21.2 9.8 1.3 11.8 2 - LLUB SL Chevron Lubricants Lanka Plc Materials 319 134 0.1 1.6 -12.6 1.0 13.8 7.4 61.1 4 - NDB SL National Development Bank Pl Financials 258 124 0.0 -1.0 -22.7 -16.4 7.8 1.3 15.1 6 - HEMS SL Hemas Holdings Plc Industrials 336 110 0.1 -4.7 -17.5 6.0 16.1 2.4 12.2 5 - CINS SL Ceylinco Insurance Co Plc Financials 227 95 0.0 -7.2 -18.7 -5.6 na 1.8 na 0 - SPEN SL Aitken Spence Plc Industrials 265 84 0.1 -3.0 -12.6 -18.5 11.0 1.1 7.9 2 - DIAL SL Dialog Axiata Plc Telecoms 656 76 0.2 2.5 -1.1 -12.9 12.5 1.9 15.1 4 - SEYB SL Seylan Bank Plc Financials 216 68 0.0 -1.2 -11.4 2.5 8.2 1.3 14.5 5 - NTB SL Nations Trust Bank Plc Financials 155 68 0.2 -3.0 -15.0 -6.0 6.5 1.5 19.3 7 - NEST SL Nestle Lanka Plc Cons. Staples 771 54 0.1 -3.4 -4.1 -9.9 21.9 31.1 115.9 0 - CFIN SL Central Finance Co Plc Financials 178 54 0.1 -5.0 -15.3 -9.4 6.0 1.0 15.1 2 - BUKI SL Bukit Darah Plc Cons. Staples 397 49 0.0 -14.0 -19.9 -26.9 na 2.0 na 0 - AEL SL Access Engineering Plc Industrials 165 40 0.1 -4.7 -18.1 -32.7 10.8 1.4 9.2 4 - PLC SL People's Leasing & Finance P Financials 233 40 0.1 -6.5 -19.4 -13.3 6.9 1.5 19.2 3 - ASIR SL Asiri Hospitals Holdings Plc Healthcare 181 35 0.0 7.2 2.4 -9.8 20.3 4.0 18.9 1 -




60

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MSCI Frontier, $ MSCI Sri Lanka, $

62%

33%

5%

Industrials Financials Cons. Staples

0

5

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35

Jan-

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Sri Lanka MSCI Sri Lanka

0

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35

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MSCI Sri Lanka, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Sri Lanka


Facing the spectre


Facing the spectre

149


Source: UN


Source: IMF


Source: IMF

Figure 533: Sri Lanka – rupee





Source: IMF

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0-19 20-64 65+

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LKR vs $ LKR vs EUR Sri Lanka REER (Dec 07=100)

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Sri Lanka


Facing the spectre


Facing the spectre

150

Figure 536: Key data Local currency TZS

GDP/capita, $ (2014) 1,029 Population, mn (2014) 46.7 S&P/Moody's rating NR/NR

Local index DARSDSEI

2015 P/E, x 8.8 2015 FY EPS growth 39.9% Trailing P/B, x 1.5 Beta to FM 0.2 Full MktCap, $bn 9.4 Free float MktCap, $bn 6.9 No. of companies 17 3M ADTV, $mn, 2.3


Figure 538: Local index sector weights




DARSDSEI Index Tanzania 9,432 6,893 2.3 -3.3 -7.3 -27.3 6.6 1.5 21.3 69

TBL TZ Tanzania Breweries Ltd Cons. Staples 2,035 2,035 0.4 -0.6 -1.5 -26.3 16.1 7.4 41.2 4 - EABL TZ East African Breweries Ltd Cons. Staples 2,133 1,066 0.6 3.8 -6.1 -13.2 20.5 na 49.1 8 - KCBL TZ Kenya Commercial Bank Ltd Financials 1,180 868 1.1 -11.6 -21.4 -38.9 5.2 1.5 23.8 14 - TCC TZ Tanzania Cigarette Co Ltd Cons. Disc. 750 750 0.1 -0.6 -3.1 -20.8 na 9.0 na 0 - NMB TZ National Microfinance Bank Financials 676 676 0.0 3.3 -0.4 -49.7 7.9 2.5 27.0 2 - ABG TZ Acacia Mining Plc Materials 1,164 420 2.5 na na 11.6 na na 5.9 26 - CRDB TZ Crdb Bank Plc Financials 406 308 0.1 8.8 -0.3 -38.8 7.1 1.8 24.0 3 - TWIGA TZ Tanzania Portland Cement Co Materials 248 248 0.0 -12.0 -14.8 -47.8 7.9 2.3 na 2 - JHL TZ Jubilee Holdings Ltd Financials 274 149 0.0 na na -4.2 na na 20.9 4 - SWISSPOR TZ Swissport Tanzania Ltd Cons. Disc. 122 122 0.0 -1.4 -2.8 14.7 na 13.4 na 0 - NMG TZ Nation Media Group Cons. Disc. 248 100 0.0 -4.2 -27.5 -59.6 9.2 na 25.5 3 - SIMBA TZ Tanga Cement Co Ltd Materials 82 82 0.0 -25.0 -28.2 -59.5 5.2 0.9 15.1 1 -




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MSCI Frontier, $ Tanzania, $

61%

29%

4%

3%

3%

Cons. Staples Financials Materials

Cons. Disc. Industrials

0.0

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1.0

1.5

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Tanzania 3M ADTV ($mn)

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14

Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15

DARSDSEI Index 12M Fwd PE (x) Frontier

Tanzania


Facing the spectre


Facing the spectre

151


Source: UN


Source: IMF


Source: IMF

Figure 545: Tanzania –shilling





Source: IMF

0

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1990

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0-19 20-64 65+

0.0

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Zam

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170500

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TZS vs $ TZS vs EUR Tanzania REER (Dec 07=100)

Weaker

Stronger

0

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7

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2004

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7.2

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2004

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E

Tanzania


Facing the spectre


Facing the spectre

152

Figure 548: Key data Local currency TND

GDP/capita, $ (2014) 4,422 Population, mn (2014) 11.0 S&P/Moody's rating NR/Ba3 Weight in MSCI FM, % 0.7

MSCI Index MXTN


Local index TUSISE






$mn $mn $mn 1M 3M 12M P/E (x) PBV (x) RoE (%) Recs wgt (%)

MXTN MSCI Tunisia 1,364 582 0.1 -7.1 -10.6 -13.9 na 2.1 na 2 0.7%

BT TU Banque de Tunisie Financials 697 349 0.1 -10.0 -14.2 -21.9 na 2.2 na 1 61% BIAT TU BIAT Financials 666 233 0.1 -3.4 -6.2 0.4 8.5 2.0 na 1 39%

SFBT TU Soc Frigorifique Et Brasseri Cons. Staples 1,141 1,141 0.4 -5.3 -15.3 7.7 14.2 6.1 na 1 - TJARI TU Attijari Bank Financials 489 489 0.1 -9.0 -6.7 7.4 na 2.5 na 1 - PGH TU Poulina Group Holding Financials 449 449 0.0 -5.0 -9.7 -15.9 11.3 1.6 na 1 - STB TU Societe Tunisienne De Banque Financials 443 416 0.0 -6.1 -7.6 37.8 8.4 na na 1 - AB TU Amen Bank Financials 301 301 0.0 -7.2 -11.3 -16.2 na 0.9 na 1 - UIB TU Union Internationale De Banq Financials 254 254 0.0 -7.4 -13.0 -8.2 na 0.9 na 1 - STAR TU Soc Tunisienne D'Assur Reass Financials 183 183 0.0 -5.1 -11.6 -0.4 21.9 1.2 na 1 - BH TU Banque De L'Habitat Financials 155 155 0.0 -5.7 -24.0 4.4 na 0.6 na 1 - MAG TU Societe Magasin General Cons. Disc. 140 140 0.0 -5.4 -17.1 -29.0 na 78.2 na 1 - CC TU Carthage Cement Materials 130 130 0.1 19.3 -2.8 -48.8 na 1.0 na 1 - MNP TU Soc Nouvelle Maison De La Vi Cons. Disc. 127 127 0.0 0.3 -13.4 -39.6 na 3.7 na 1 - UBCI TU Union Banc. Com. & Industrie Financials 248 122 0.0 -3.0 -3.5 -9.5 na 1.7 na 1 - ARTES TU Artes Cons. Disc. 116 116 0.0 -4.0 -10.6 -23.1 8.7 2.1 na 1 - BNA TU Banque Nationale Agricole Financials 197 99 0.1 -9.1 -16.2 59.8 na 0.7 na 1 - TRE TU Tunis Re Financials 86 86 0.0 4.4 3.4 -15.1 10.6 1.4 na 1 - AST TU Cie D'Assurances Rea-Astree Financials 82 82 0.0 -5.4 -22.1 -27.1 na 1.7 na 0 - TLS TU Tunisie Leasing Financials 87 81 0.0 -4.2 -5.5 -7.4 14.0 1.2 na 1 - ATB TU Arab Tunisian Bank Financials 213 76 0.0 -3.4 -8.9 -11.2 na 0.8 na 1 - TPR TU Tunisie Profiles Aluminium Industrials 75 75 0.0 -6.6 -16.6 -31.0 na 1.6 na 1 -





60

70

80

90

100

110

120

130

140

150

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ MSCI Tunisia, $

100%

Financials

0

1

2

3

4

5

6

7

Jan-

09

Jun-

09

Nov

-09

Apr

-10

Sep

-10

Feb

-11

Jul-1

1

Dec

-11

May

-12

Oct

-12

Mar

-13

Aug

-13

Jan-

14

Jun-

14

Nov

-14

Apr

-15

Sep

-15

Tunisia MSCI Tunisia

0

5

10

15

20

25


N/A

Tunisia


Facing the spectre


Facing the spectre

153


Source: UN


Source: IMF


Source: IMF

Figure 557: Tunisia – dinar





Source: IMF

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

2

4

6

8

10

12

0%

10%

20%

30%

40%

50%

60%

70%

80%

EU

Eur

o A

rea

Fra

nce

Italy

Ger

man

y

Liby

a

US

A

Alg

eria

Spa

in

UK


-10

-9

-8

-7

-6

-5

-4

-3

-2

-1

00

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


85

90

95

100

105

110

115

120

125

1301.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

Jan-

00O

ct-0

0Ju

l-01

Apr

-02

Jan-

03O

ct-0

3Ju

l-04

Apr

-05

Jan-

06O

ct-0

6Ju

l-07

Apr

-08

Jan-

09O

ct-0

9Ju

l-10

Apr

-11

Jan-

12O

ct-1

2Ju

l-13

Apr

-14

Jan-

15O

ct-1

5

TND vs $ TND vs EUR Tunisia REER (Dec 07=100)

Weaker

Stronger

-4

-2

0

2

4

6

8

10

12

14

16

18

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


4.0

5.76.3

4.5

3.12.6

-1.9

3.7

2.3 2.3

1.0

3.0

4.04.6

-3

-2

-1

0

1

2

3

4

5

6

7

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Tunisia


Facing the spectre


Facing the spectre

154

Figure 560: Key data Local currency TRY

GDP/capita, $ (2014) 10,381 Population, mn (2014) 76.9 S&P/Moody's rating BB+/Baa3 Weight in MSCI EM, % 1.6

MSCI Index MXTR


Local index XU100






Figure 565: Non-ETF allocations to Turkey in GEM funds relative to MSCI weight, %



60

70

80

90

100

110

120

130

140

150

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI Turkey, $

47%

15%

14%

8%

6%5%5%

Financials Cons. Staples Industrials

Telecoms Energy Cons. Disc.

Materials

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

Turkey 3M ADTV ($mn) MSCI Turkey 3M ADTV ($mn)

0

2

4

6

8

10

12

14

16

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Turkey 12M Fwd PE ratio (x) EM

0.0

0.5

1.0

1.5

2.0

2.5

Jun-

05

Dec

-05

Jun-

06

Dec

-06

Jun-

07

Dec

-07

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

Turkey%

40

50

60

70

80

90

100

110

120

130

Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15


Turkey


Facing the spectre


Facing the spectre

155




MXTR MSCI Turkey

148,739 56,133 820.3 18.6 5.3 -18.4 9.5 1.5 13.2 648 1.6%

GARAN TI Garanti Financials 12,177 6,658 287.8 22.7 1.7 -24.8 8.0 1.2 15.2 30 12% AKBNK TI Akbank Financials 11,247 6,163 64.7 24.9 8.3 -20.7 8.2 1.2 13.6 29 11% BIMAS TI Bim Cons. Staples 6,386 4,499 13.3 14.6 23.9 -5.6 27.8 14.6 40.9 30 8% TCELL TI Turkcell Telecoms 9,371 3,679 21.2 20.3 -5.1 -26.3 12.3 2.0 13.2 30 7% TUPRS TI Tupras Energy 6,760 3,381 30.9 6.7 7.7 25.5 9.5 2.8 25.7 32 6% KCHOL TI Koc Holding Industrials 12,180 3,053 16.9 22.3 10.6 -6.0 11.4 1.7 12.7 21 5% SAHOL TI Sabanci Holding Financials 6,753 3,026 14.3 12.4 -1.3 -26.5 7.1 1.0 12.0 23 5% ISCTR TI Is Bank Financials 8,361 2,917 62.8 18.3 -1.8 -25.2 6.4 0.9 12.2 30 5% HALKB TI Halk Bank Financials 5,522 2,723 80.6 32.2 5.2 -33.0 6.0 0.9 13.9 31 5% EKGYO TI Emlak Konut Financials 4,290 2,111 22.1 33.5 24.3 0.3 8.7 1.4 13.6 22 4% EREGL TI Erdemir Materials 5,239 2,065 16.4 20.4 -0.4 -28.9 11.3 1.4 11.1 23 4% THYAO TI Turkish Airlines Industrials 4,451 1,766 82.8 19.5 -0.6 -5.9 8.3 1.1 11.4 25 3% AEFES TI Anadolu Efes Cons. Staples 4,806 1,689 1.5 10.4 4.7 -30.5 23.7 1.7 6.7 22 3% TAVHL TI TAV Holding Industrials 3,006 1,381 8.2 6.7 5.1 -0.3 9.9 3.9 27.2 21 2% ARCLK TI Arcelik Cons. Disc. 3,850 1,364 8.5 16.4 9.0 -5.9 13.6 2.3 16.3 25 2% VAKBN TI Vakifbank Financials 4,093 1,222 53.4 27.9 11.6 -22.8 6.6 0.8 11.1 30 2% YKBNK TI Yapi Kredi Financials 5,944 1,193 16.4 21.1 3.6 -36.4 6.7 0.8 11.1 31 2% ULKER TI Ulker Biskuvi Cons. Staples 2,344 1,075 9.3 7.7 27.2 -10.7 21.2 5.8 23.3 20 2% TTKOM TI Turk Telekom Telecoms 7,767 1,029 5.9 10.9 -8.5 -23.2 10.6 5.6 34.1 30 2% CCOLA TI Coca-Cola Icecek Cons. Staples 3,358 1,016 4.9 14.5 -5.9 -43.1 18.1 2.9 14.2 26 2% ENKAI TI Enka Industrials 7,390 959 4.1 6.3 4.4 -14.6 11.8 1.5 11.0 25 2% TOASO TI Tofas Cons. Disc. 3,444 878 7.9 18.2 5.9 10.5 13.5 4.6 26.1 27 2% FROTO TI Ford Otomotiv Cons. Disc. 4,226 847 3.8 12.3 3.0 -3.4 13.5 4.2 28.3 28 2% SISE TI Sisecam Industrials 2,251 795 3.7 25.3 7.1 -10.8 10.4 1.2 8.5 19 1% PETKM TI Petkim Materials 1,627 642 7.2 22.3 11.4 -2.6 17.4 2.0 9.7 18 1%

KRDMD TI Kardemir Karabuk Materials 625 625 11.7 22.8 -2.1 -54.6 8.5 1.2 10.2 17 - MGROS TI Migros Ticaret A.S Cons. Staples 1,217 609 3.3 18.3 -6.6 -29.3 27.4 4.2 15.3 27 - DOCO TI Do & Co Ag Cons. Disc. 909 533 1.0 10.3 -11.5 58.2 22.4 4.1 15.5 9 - TSKB TI Turkiye Sinai Kalkinma Financials 1,018 461 1.9 21.8 -5.0 -23.4 6.5 1.1 16.0 19 - ASELS TI Aselsan Elektronik Sanayi Industrials 2,586 399 2.5 10.5 -1.7 9.4 13.8 3.4 20.5 15 - TKFEN TI Tekfen Holding Industrials 586 383 4.2 12.9 5.9 -35.9 7.1 0.8 10.6 23 - TTRAK TI Turk Traktor Industrials 1,399 350 1.6 5.5 -3.8 -17.1 12.6 3.7 41.4 17 - AYGAZ TI Aygaz As Utilities 1,157 341 1.4 14.8 3.4 -11.4 9.9 1.4 12.9 18 - AKSA TI Aksa Akrilik Kimya Sanayii Cons. Disc. 743 310 1.1 25.9 5.6 18.5 10.8 1.8 14.4 6 - CIMSA TI Cimsa Cimento Sanayi Materials 786 287 0.9 18.1 4.5 -19.2 10.1 2.1 19.0 20 - PGSUS TI Pegasus Industrials 701 260 12.3 16.9 -20.6 -48.8 10.6 1.6 12.4 21 - ISGYO TI Is Gayrimenkul Yatirim Financials 439 254 1.5 25.9 7.5 9.5 10.2 0.5 9.2 15 - KOZAL TI Koza Altin Isletmeleri As Materials 821 246 4.1 -23.1 -35.9 -13.0 na 1.2 na 9 - AFYON TI Afyon Cimento Materials 245 241 26.7 46.4 3.6 168.8 na 4.4 na 0 - AKSEN TI Aksa Enerji Uretim As Utilities 617 230 2.3 7.5 -3.4 -21.0 15.1 1.8 13.1 13 - YAZIC TI Yazicilar Holding As-A Industrials 976 225 1.1 13.4 -14.1 -37.2 17.1 0.7 3.9 4 - DOAS TI Dogus Otomotiv Cons. Disc. 879 218 11.8 23.4 -30.0 -8.1 8.3 1.9 21.7 19 - OTKAR TI Otokar Otomotiv Industrials 688 210 3.7 9.2 -3.3 3.3 23.0 10.9 30.9 10 - TRKCM TI Trakya Cam Sanayii As Industrials 675 207 3.1 20.6 3.5 -31.0 9.5 0.9 7.1 20 - ALBRK TI Albaraka Financials 473 205 0.8 18.3 6.5 -26.5 4.0 0.7 10.6 14 - GUBRF TI Gubre Fabrikalari Tas Materials 842 202 9.8 20.1 -9.6 25.0 11.0 2.6 18.1 13 - NTHOL TI Net Holding As Cons. Disc. 444 189 0.3 15.3 8.6 -9.5 78.8 1.0 na 2 - DOHOL TI Dogan Sirketler Grubu Industrials 477 176 2.8 2.9 -6.3 -39.5 79.7 0.5 na 9 - TATGD TI Tat Gida Sanayi As Cons. Staples 278 157 1.4 -5.4 -17.2 35.4 11.3 1.9 17.3 9 - VESTL TI Vestel Elektronik Sanayi Cons. Disc. 692 155 22.6 56.6 30.0 -38.8 11.2 1.6 -0.8 3 -

Source: Bloomberg

Turkey


Facing the spectre


Facing the spectre

156


Source: UN


Source: IMF


Source: IMF

Figure 571: Turkey – lira





Source: IMF

0

10,000

20,000

30,000

40,000

50,000

60,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

10

20

30

40

50

60

70

80

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

EU

Eur

o A

rea

Ger

man

y

Iraq UK

Italy

Fra

nce

US

A

Rus

sia

Spa

in


-12

-10

-8

-6

-4

-2

00

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


60

70

80

90

100

1100.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Jan-

00O

ct-0

0Ju

l-01

Apr

-02

Jan-

03O

ct-0

3Ju

l-04

Apr

-05

Jan-

06O

ct-0

6Ju

l-07

Apr

-08

Jan-

09O

ct-0

9Ju

l-10

Apr

-11

Jan-

12O

ct-1

2Ju

l-13

Apr

-14

Jan-

15O

ct-1

5

TRY vs $ TRY vs EUR Turkey REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

5

10

15

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


9.48.4

6.9

4.7

0.7

-4.8

9.2 8.8

2.1

4.2

2.9 3.0 2.93.7 3.5

-6

-4

-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Turkey


Facing the spectre


Facing the spectre

157


Facing the spectre


Facing the spectre

158

Figure 574: Key data Local currency AED

GDP/capita, $ (2014) 42,942 Population, mn (2014) 9.3 S&P/Moody's rating AA/Aa2 Weight in MSCI EM, % 0.7

MSCI Index MXAE


Local index ADSMI/ DFMGI






Note: UAE includes both Abu Dhabi and Dubai exchanges

Figure 579: Non-ETF allocations to UAE and Qatar in GEM funds relative to MSCI weight, %



50

100

150

200

250

300

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

MSCI EM, $ MSCI UAE, $

83%

17%

Financials Industrials

0

100

200

300

400

500

600

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

UAE 3M ADTV ($mn) MSCI UAE 3M ADTV ($mn)

0

5

10

15

20

25

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI UAE 12M Fwd PE ratio (x) EM

0.0

0.5

1.0

1.5

2.0

2.5

Jun-

08

Dec

-08

Jun-

09

Dec

-09

Jun-

10

Dec

-10

Jun-

11

Dec

-11

Jun-

12

Dec

-12

Jun-

13

Dec

-13

Jun-

14

Dec

-14

Jun-

15

UAE + Qatar Weight in MSCI EM%

80

85

90

95

100

105

110

115

120

125

130

Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15


UAE


Facing the spectre


Facing the spectre

159




MXAE MSCI UAE

95,545 25,364 78.8 -4.1 -15.3 -25.6 11.1 1.4 12.9 113 0.7%

EMAAR DB Emaar Financials 12,281 6,333 19.0 -2.6 -20.3 -39.4 11.4 1.2 11.2 12 24% ADCB DH Abu Dhabi Comm. Bank Financials 10,512 3,850 5.9 -9.9 -14.2 -13.8 7.8 1.4 17.8 16 15% DPW DU DP World Industrials 16,351 3,287 4.9 -6.2 -15.6 -1.5 16.9 1.9 10.4 10 13% FGB DH First Gulf Bank Financials 14,886 3,002 8.1 -13.5 -21.6 -26.0 8.8 1.6 19.2 17 12% ALDAR DH Aldar Properties Financials 5,138 2,124 9.4 1.3 -8.7 -26.8 10.4 1.0 9.3 12 8% EMAARMLS DB Emaar Malls Group Pjsc Financials 11,161 1,711 2.9 5.4 -4.0 -1.6 20.2 2.8 13.0 11 7% DIB DB Dubai Islamic Bank Financials 6,652 1,736 8.0 -8.4 -18.9 -18.7 7.9 1.2 22.9 10 7% NBAD DH Nat. Bk of Abu Dhabi Financials 12,340 1,595 1.6 -7.6 -17.9 -31.6 7.8 1.1 14.4 14 7% ARTC DB Arabtec Industrials 1,872 954 11.3 -21.2 -34.4 -61.4 19.8 1.5 2.7 7 4% DFM DB Dubai Fin Market Financials 2,940 773 2.8 -19.6 -28.9 -51.4 29.3 1.3 4.9 4 3%

ETISALAT DH Emirates Telecom Group Telecoms 35,990 14,396 14.9 5.2 7.8 44.8 13.9 3.2 18.8 11 - EMIRATES DB Emirates Nbd Pjsc Financials 13,013 5,079 1.4 -1.6 -15.7 -9.6 7.2 1.0 16.4 11 - CBD DB Commercial Bank Of Dubai Financials 4,769 2,166 0.6 -2.6 -5.3 20.2 13.8 2.2 16.2 2 - DIC DB Dubai Investments Pjsc Financials 2,470 1,909 3.2 -6.7 -20.3 -22.9 12.6 0.9 na 2 - ADIB DH Abu Dhabi Islamic Bank Financials 3,605 1,874 0.5 -3.2 -17.9 -34.7 7.4 0.9 18.5 6 - UNB DH Union National Bank Financials 4,045 1,618 1.7 -11.0 -22.9 -21.7 6.8 0.8 13.9 10 - AIRARABI DB Air Arabia Pjsc Industrials 1,703 1,611 2.2 -4.3 -17.8 -0.7 9.0 1.3 13.2 15 - ORDS DH Ooredoo Qsc Telecoms 6,453 1,561 0.6 -5.1 -12.6 -43.1 12.5 1.1 8.4 14 - DAMAC DB Damac Properties Dubai Co Financials 4,941 1,373 15.2 0.3 3.1 27.8 3.4 2.1 46.2 6 - DU DB Emirates Integrated Tel. Telecoms 6,298 1,338 0.5 0.2 -4.7 -4.7 11.7 3.1 22.6 10 - RAKBANK DH RAK Bank Financials 2,998 1,327 0.5 -7.5 -13.6 -25.3 7.5 1.5 18.9 5 - ARMX DB Aramex Pjsc Industrials 1,256 1,131 0.8 -2.5 -7.1 1.3 11.6 2.1 16.2 9 - MASQ DB Mashreqbank Financials 5,075 886 0.6 0.0 -6.2 -12.6 6.6 1.1 na 1 - WAHA DH Waha Capital Pjsc Financials 1,138 826 0.9 -3.2 -14.0 -21.5 5.0 1.2 na 3 - UAB DH United Arab Bank Pjsc Financials 2,014 821 0.7 -3.9 -3.9 -7.8 6.8 2.6 na 1 - UPP DB Union Properties Pjsc Financials 859 772 4.1 -9.7 -26.1 -48.7 na 0.6 -0.2 2 - DUBAIPAR DB Dubai Parks & Resorts Pjsc Cons. Disc. 2,117 734 3.4 0.8 -5.4 23.0 na 1.2 -5.4 2 - DANA DH Dana Gas Energy 873 707 4.1 -14.8 -14.8 -25.8 7.9 0.3 5.2 4 - NBQ DH Umm Al Qai. Bank Financials 1,560 652 0.1 4.7 3.0 1.8 na 1.4 na 0 - INVESTB DH Invest Bank Financials 973 607 0.5 -11.8 -15.4 -10.6 8.5 1.2 na 1 - BOS DH Bank Of Sharjah Financials 886 587 0.2 -6.6 -6.1 -9.8 7.7 0.7 na 1 - ADNH DH Abu Dhabi National Hotels Cons. Disc. 749 570 0.2 5.8 -5.2 -21.4 na 0.3 na 0 - DEYAAR DB Deyaar Development Pjsc Financials 928 548 1.8 -10.1 -26.2 -44.3 20.0 0.7 3.7 1 - AGTHIA DH Agthia Group Pjsc Cons. Staples 1,274 535 0.8 -1.5 -0.5 18.2 16.8 3.1 18.0 10 - NBF DH National Bank Of Fujairah Financials 982 492 0.1 -42.6 -34.5 -22.9 na 0.9 na 0 - NBS DH Sharjah Islamic Bank Financials 1,004 489 0.1 -4.4 -10.6 -16.9 8.3 0.8 na 1 - RAKCEC DH Ras Al Khaimah Ceramics Industrials 788 488 0.8 4.1 5.0 5.7 9.6 1.1 10.2 6 - JULPHAR DH Gulf Pharmaceutical Healthcare 718 448 0.0 -3.1 -6.7 -14.4 na 1.2 na 1 - AMLAK DB Amlak Finance na 711 391 11.1 -13.4 -17.1 70.6 43.5 1.6 na 1 - AMANAT DB Amanat Holdings Pjsc Financials 517 362 1.9 0.0 -9.5 -24.0 na 0.8 na 0 - CBI DH Commercial Bank Financials 733 358 0.1 0.0 3.3 -7.0 12.3 1.2 na 1 - TAQA DH Abu Dhabi National Energy Utilities 776 349 0.1 -9.6 -29.8 -53.0 na 0.6 na 0 - NCTH DH National Corp Tourism Cons. Disc. 662 329 0.1 12.5 -8.3 -15.6 na 3.6 na 0 - ESHRAQ DH Eshraq Properties Co Pjsc Financials 386 318 2.7 -9.0 -21.8 -42.5 na 0.7 na 1 - RAKPROP DH Rak Properties Financials 294 294 1.0 -12.9 -16.9 -32.5 10.6 0.3 2.7 1 - AJMANBAN DB Ajman Bank Pjsc Financials 515 281 0.5 0.0 -6.7 -21.3 10.6 1.6 na 1 - ADAVIATI DH Abu Dhabi Aviation Industrials 379 265 0.8 5.0 9.8 -10.6 na 0.6 na 0 - DSI DB Drake & Scull International Industrials 336 222 2.7 -14.4 -28.0 -51.4 9.1 0.4 3.8 10 - GCEM DH Gulf Cement Co Materials 250 215 0.0 14.3 12.0 -14.5 na 0.8 na 0 - TABREED DB Tabreed Industrials 227 197 0.7 -6.6 -19.9 -23.6 9.1 0.2 7.9 3 -

Source: Bloomberg

UAE


Facing the spectre


Facing the spectre

160


Source: UN


Source: IMF


Source: IMF

Figure 585: UAE – dirham





Source: IMF

0

2,000

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Japa

n

Iran

Indi

a

Kor

ea

Chi

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Sin

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re

Tha

iland

Om

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Eur

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6

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E


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105

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115

1203.0

3.5

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6.0

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ct-0

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ct-1

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l-13

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ct-1

5

AED vs $ AED vs EUR UAE REER (Dec 07=100)

Weaker

Stronger

-10

-5

0

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2004

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9.6

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-5.2

1.6

4.9

7.2

4.3 4.6

3.0 3.1 3.3 3.5

-6

-4

-2

0

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4

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8

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12

2004

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E

2016

E

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E

2018

E

UAE


Facing the spectre


Facing the spectre

161


Facing the spectre


Facing the spectre

162

Figure 588: Key data Local currency UGX

GDP/capita, $ (2014) 713 Population, mn (2014) 38.7 S&P/Moody's rating B/B1

Local index UGSINDX

2015 P/E, x 9.7 2015 EPS growth -12.8% Trailing P/B, x 3.6 Beta to FM 0.4 Full MktCap, $bn 1.2 Free float MktCap, $bn 1.0 No. of companies 8 3M ADTV, $mn, cos 0.2






UGSINDX Uganda 1,225 954 0.2 -1.6 -5.4 -25.7 9.7 3.6 27.5 17

SBU UG Stanbic Bank Uganda Ltd Financials 472 472 0.0 2.9 -3.0 -26.8 9.0 3.5 32.1 3 - BATU UG British American Tobacco Uga Cons. Staples 180 180 0.0 51.1 40.4 30.1 34.3 na 39.8 2 - DFCU UG Development Finance Company Financials 140 121 0.0 6.1 5.5 9.7 6.7 2.5 na 3 - BOBU UG Bank Of Baroda Uganda Ltd Financials 112 112 0.0 3.1 7.0 0.1 na 2.0 na 1 - UMEM UG Umeme Ltd Utilities 299 48 0.1 9.5 7.3 -2.8 6.3 3.3 31.3 5 - NVL UG New Vision Printing & Publis Cons. Disc. 13 13 0.0 4.3 -6.5 -21.2 na na na 1 - NIC UG Nic Holdings Ltd Financials 5 5 0.0 6.3 -17.9 -49.5 na 0.6 na 1 - UCL UG Uganda Clays Ltd Materials 4 4 0.0 -0.1 -13.6 -48.5 na na -0.2 1 -




80

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5

MSCI Frontier, $ Uganda, $

74%

19%

5% 2%

0.4%

Financials Cons. Staples Utilities

Cons. Disc. Materials

0.0

0.2

0.4

0.6

0.8

1.0

1.2

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1.6

Jan-

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Uganda

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UGSINDX Index 12M Fwd PE (x) Frontier

Uganda


Facing the spectre


Facing the spectre

163


Source: UN


Source: IMF


Source: IMF

Figure 597: Uganda – shilling





Source: IMF

0

10,000

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1990

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0-19 20-64 65+

0.0

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EU

Eur

o A

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Rw

anda

UA

E

DR

Con

go

Ken

ya

Net

herla

nds

Ger

man

y

Italy

Chi

na


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-8

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-2

00

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6

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12

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2004

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2018

E


85

90

95

100

105

110

115

120

125

1301,000

1,500

2,000

2,500

3,000

3,500

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4,500

Jan-

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ct-0

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ct-1

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l-13

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UGX vs $ UGX vs EUR Uganda REER (Dec 07=100)

Weaker

Stronger

0

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4

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2004

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E

2016

E


5.8

10.0

7.0

8.1

10.4

8.17.7

6.8

2.6

3.9

4.85.2 5.5

5.8 6.1

0

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4

6

8

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2004

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E

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E

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E

Uganda


Facing the spectre


Facing the spectre

164

Figure 600: Key data Local currency UAH

GDP/capita, $ (2014) 3,051 Population, mn (2014) 42.8 S&P/Moody's rating B-/Ca Weight in MSCI FM, % -

MSCI Index MXUK

2015 P/E, x na 2015 FY EPS growth na Trailing P/B, x 0.4 Beta to FM 0.7 MSCI full MktCap, $bn 0.8 MSCI free float MktCap, $bn 0.4 No. of companies 2 3M ADTV, $mn, MSCI cos 0.0

Local index PFTS




*As of September 2015, MSCI Ukraine is a standalone index and not included in the MSCI Frontier Index




MXUK MSCI Ukraine 693 369 0 -20.4 -27.4 -52.9 na 0.4 na 2 *

UNAF UK Ukrnafta Energy 510 315 0.0 -17.5 -24.9 -54.5 na 0.7 na 1 51% MSICH UK Motor Sich Industrials 183 54 0.0 -21.9 -28.4 -49.2 na 0.3 na 1 49%

PGOK UZ Ferrexpo Poltava Mining Ojsc Materials 330 127 na na na -17.0 na na na 0 - SGOK UZ North Ore Mining And Process Materials 404 77 0.0 -34.0 -39.9 -71.1 na 0.4 na 0 - DNEN OU Dtek Dniproenergo Utilities 98 31 0.0 -12.8 -18.1 -66.1 na 0.4 na 0 - CEEN UK Centrenergo Pat Utilities 86 19 0.0 -12.9 -32.3 -59.6 na 0.9 na 1 - UTLM UK Ukrtelecom Telecoms 106 8 0.0 -24.0 -32.4 -59.2 na 0.5 na 0 - AZST UK Azovstal Materials 103 4 0.0 -32.0 -31.1 -59.0 na 0.1 na 0 - BAVL UK Raiffeisen Bank Aval Financials 103 4 0.0 -5.1 -14.4 -64.0 na 0.6 na 2 - KVBZ UZ Krukivsky Carriage Works Industrials 47 3 0.0 -9.1 -9.0 -60.8 na 0.4 na 0 - DOEN UZ Donbasenergo Pjsc Utilities 19 3 0.0 -10.6 -10.9 -67.7 na 0.4 na 0 - ZAEN UK Dtek Zakhidenergo Pjsc Utilities 50 1 0.0 -36.5 -50.5 -66.8 na 0.5 na 0 - AVDK UK Avdievsky Koksochim Z-D Materials 9 1 0.0 -12.6 6.3 -74.8 na 0.0 na 0 - ENMZ UZ Enakiyvckiy Metalyrginiy Zav Materials 7 1 0.0 -13.3 -10.7 -65.1 na 0.2 na 0 - SVGZ UK Stakhanov Railway Car Buildi Industrials 1 1 0.0 -37.6 -57.6 -94.8 na na na 0 - USCB UK Jscb Ukrsotsbank Financials 96 1 0.0 -13.1 -6.5 -65.7 na 0.4 na 0 - ALMK UZ Alchevskiy Metalurgiyniy Kom Materials 13 0 0.0 -21.1 -14.8 -72.2 na na na 0 -



Note: all forward figures for valuations are taken from Bloomberg consensus estimates. From 1 September 2015, insufficient estimates for forward P/E calculation Source for all charts: Bloomberg

20

40

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MSCI Frontier, $ MSCI Ukraine, $

51%49%

Energy Industrials

0

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Ukraine 3M ADTV ($mn) MSCI Ukraine, 3M ADTV, $mn

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MSCI Ukraine 12M Fwd PE (x) Frontier

Ukraine


Facing the spectre


Facing the spectre

165


Source: UN


Source: IMF


Source: IMF

Figure 609: Ukraine – hryvnia





Source: IMF

0

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1990

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EU

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Chi

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Pol

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Italy

Indi

a

Bel

arus


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1400

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UAH vs $ UAH vs EUR Ukraine REER (Dec 07=100)

Weaker

Stronger

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-5

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3.1

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0.2

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-6.8-9.0

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Ukraine


Facing the spectre


Facing the spectre

166

Figure 612: Key data Local currency VND


MSCI Index MXVI


Local index VNINDEX







MXVI MSCI Vietnam 14,365 3,103 14.9 6.3 -5.8 -10.2 14.7 2.2 13.8 51 4.1%

VIC VM Vingroup Financials 3,738 1,084 2.2 11.4 4.1 12.1 16.4 3.6 17.8 10 28% MSN VM Masan Group Cons. Staples 2,438 853 1.0 0.0 -15.9 -14.1 20.1 3.5 21.2 10 24% VCB VM Vietcombank Financials 5,691 455 2.0 12.9 2.2 62.8 24.1 2.8 12.7 7 12% STB VM Sacombank Financials 965 290 0.4 5.4 -13.9 -14.4 35.9 1.0 4.0 10 9% HAG VM HAGL Financials 499 214 1.5 -6.1 -21.4 -47.0 6.0 0.8 12.6 5 6% HPG VM Hoa Phat Group Materials 1,034 207 2.1 2.7 -8.3 -20.3 6.7 1.8 23.2 9 6% BVH VM Bao Viet Holdings Financials 1,858 149 1.0 37.9 28.4 54.3 32.6 3.5 10.0 5 4% BID VM BIDV Financials 3,294 132 1.7 4.2 1.9 81.3 16.1 2.2 12.8 5 4% PVD VM PetViet Dril. Energy 574 132 1.4 6.6 -18.5 -58.8 6.6 1.0 14.0 8 4% GAS VM PetroVietnam Gas Utilities 3,971 119 1.1 3.4 -21.9 -57.6 11.0 2.2 21.1 7 3%

VNM VM Vinamilk Cons. Staples 6,615 3,397 2.5 23.9 23.4 33.9 18.8 7.8 38.1 14 - FPT VM FPT Corp IT 926 633 1.7 17.4 8.2 11.7 8.9 2.4 26.6 10 - EIB VM Eximbank Financials 639 480 0.3 -1.8 -17.2 -8.7 22.2 1.0 5.1 6 - MBB VM Military Bank Financials 1,018 382 1.8 -5.3 -8.3 5.5 7.5 1.0 13.2 9 - SSI VM Saigon Securities Financials 506 355 3.8 4.2 -2.6 -2.0 11.1 1.8 14.4 3 - HT1 VM Hatien 1 Materials 365 302 0.1 17.2 12.3 41.8 10.7 2.0 17.5 3 - CTG VM VietinBank Financials 3,487 271 1.9 8.0 -6.2 36.4 14.7 1.4 10.5 6 - MWG VM Mobile World Cons. Disc. 457 228 0.3 18.6 0.5 -15.6 8.7 5.3 42.2 7 - HNG VM HAGL Agriculture Cons. Staples 993 203 0.3 9.9 4.1 -9.0 na 1.8 na 0 -




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-14

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Jan-

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Jun-

15

MSCI Frontier, $ MSCI Vietnam, $

63%

24%

6%

4%

3%

Financials Cons. Staples Materials

Energy Utilities

0

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Vietnam MSCI Vietnam

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-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Vietnam, 12M Fwd P/E (x) MSCI Frontier, 12M Fwd P/E (x)

Vietnam


Facing the spectre


Facing the spectre

167


Source: UN


Source: IMF


Source: IMF

Figure 621: Vietnam – dong





Source: IMF

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

1,99

0

1,99

5

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0

5

10

15

20

25

30

0%

5%

10%

15%

20%

25%

US

A

EU

Eur

o A

rea

Chi

na

Japa

n

Kor

ea

Ger

man

y

Hon

g K

ong

Aus

tral

ia

Mal

aysi

a


-12

-10

-8

-6

-4

-2

0

2

4

6

80

5

10

15

20

25

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


90

100

110

120

130

140

15010,000

15,000

20,000

25,000

30,000

35,000

Jan-

00O

ct-0

0Ju

l-01

Apr

-02

Jan-

03O

ct-0

3Ju

l-04

Apr

-05

Jan-

06O

ct-0

6Ju

l-07

Apr

-08

Jan-

09O

ct-0

9Ju

l-10

Apr

-11

Jan-

12O

ct-1

2Ju

l-13

Apr

-14

Jan-

15O

ct-1

5

VND vs $ VND vs EUR Vietnam REER (Dec 07=100)

Weaker

Stronger

0

5

10

15

20

25

30

35

40

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


7.8 7.57.0 7.1

5.75.4

6.4 6.2

5.2 5.46.0

6.5 6.46.0 6.0

0

1

2

3

4

5

6

7

8

9

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Vietnam


Facing the spectre


Facing the spectre

168

Figure 624: Key data Local currency ZMW

GDP/capita, $ (2014) 1,772 Population, mn (2014) 15.0 S&P/Moody's rating B/B2

Local index LUSEIDX

2015 P/E, x na 2015 FY EPS growth na Trailing P/B 1.7 Beta to FM 0.2 Full MktCap, $bn 4.9 Free float MktCap, $bn 1.5 No. of companies 20 3M ADTV, $mn 0.5






LUSEIDX Zambia 4,942 1,454 0.5 -17.8 -37.4 -51.0 na 1.7 na 25

ZMSG ZL Zambia Sugar Plc Cons. Staples 131 24 0.0 -19.3 -36.4 -62.6 na 1.6 na 1 - ZANACO ZL Zambia National Coml Bank Financials 153 134 0.0 -20.1 -39.1 -62.6 na 1.8 na 1 - LAFA ZL Lafarge Cement Zambia Plc Materials 390 390 0.1 -16.9 -36.9 -51.6 na 4.1 na 1 - ATEL ZL Airtel Networks Zambia Plc Telecoms 283 283 0.0 -22.4 -35.9 -48.4 na 3.5 na 1 - ZABR ZL Zambian Breweries Cons. Staples 279 100 0.0 -16.0 -31.7 -41.2 na 3.4 na 0 - SCBL ZL Standard Chartered Bk-Zambia Financials 270 270 0.0 -16.2 -36.4 -47.5 na 4.7 na 1 - BAT ZL British American Tobacco Zam Cons. Staples 100 22 0.0 -34.2 -37.4 -46.9 na 39.0 na 1 - BATA ZL Zambia Bata Shoe Cons. Disc. 77 77 0.0 -17.2 -36.5 -20.0 na 11.1 na 0 - NABR ZL National Breweries Plc Cons. Staples 68 18 0.0 -6.7 -29.8 -32.1 na 6.1 na 0 - ZAMBEEF ZL Zambeef Products Plc Cons. Staples 63 43 0.0 -19.4 -36.9 -44.3 na 0.6 na 2 - CEC ZL Copperbelt Energy Corp Plc Utilities 82 23 0.0 -18.8 -41.5 -52.1 na 0.4 na 0 - PUMA ZL Puma Energy Zambia Plc Energy 42 42 0.0 -16.6 -39.1 -57.2 na 1.2 na 0 - REIZ ZL Real Estate Investments Zamb Financials 16 12 0.0 -15.1 -35.7 -51.1 na 0.4 na 0 - AELZ ZL African Explosives Ltd Materials 12 12 0.0 -35.9 -35.5 -41.5 na 1.7 na 0 - CCHZ ZL Cavmont Capital Holdings Financials 1 0 0.0 na -25.3 -38.0 na 0.1 na 0 -





40

60

80

100

120

140

160

180

Jan-

10

Jun-

10

Nov

-10

Apr

-11

Sep

-11

Feb

-12

Jul-1

2

Dec

-12

May

-13

Oct

-13

Mar

-14

Aug

-14

Jan-

15

Jun-

15

MSCI Frontier, $ Zambia, $

71%

14%

8%

3%

2%

1% 1%

Cons. Staples FinancialsMaterials TelecomsCons. Disc. IndustrialsEnergy

0

2

4

6

8

10

12

14

Sep-11 Apr-12 Nov-12 Jun-13 Jan-14 Aug-14 Mar-15 Oct-15

Zambia

0

2

4

6

8

10

12

14

16

Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15

N/A

Zambia


Facing the spectre


Facing the spectre

169


Source: UN


Source: IMF


Source: IMF

Figure 633: Zambia – kwacha





Source: IMF

0

5,000

10,000

15,000

20,000

25,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.5

1.0

1.5

2.0

2.5

0%

5%

10%

15%

20%

25%

Sw

itzer

land

Chi

na

DR

Con

go

Sou

th A

fric

a

UA

E

EU

Zim

babw

e

Eur

o A

rea

Nam

ibia

Kor

ea


-4

-2

0

2

4

6

8

100

2

4

6

8

10

12

14

16

18

20

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E


60

70

80

90

100

110

120

1300

2

4

6

8

10

12

14

16

Jan-

00O

ct-0

0Ju

l-01

Apr

-02

Jan-

03O

ct-0

3Ju

l-04

Apr

-05

Jan-

06O

ct-0

6Ju

l-07

Apr

-08

Jan-

09O

ct-0

9Ju

l-10

Apr

-11

Jan-

12O

ct-1

2Ju

l-13

Apr

-14

Jan-

15O

ct-1

5

ZMW vs $ ZMW vs EUR Zambia REER (Dec 07=100)

Weaker

Stronger

-2

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


7.0 7.27.9

8.47.8

9.2

10.3

6.46.8 6.7

5.6

4.3 4.0

5.8

6.8

0

2

4

6

8

10

12

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Zambia


Facing the spectre


Facing the spectre

170

Figure 636: Key data Local currency ZWL

GDP/capita, $ (2014) 1,043 Population, mn (2014) 13.3 S&P/Moody's rating NR/NR Weight in MSCI FM, % Na*

MSCI Index MXZW

2015 P/E, x 9.2 2015 FY EPS growth -14.8% Trailing P/B, x 1.5 Beta to FM 0.3 MSCI full MktCap, $bn 1.3 MSCI free float MktCap, $bn 0.5 No. of companies 2.0 3M ADTV, $mn, MSCI cos 0.5

Local index ZHINDUSD

MktCap, $bn 15.3 No. of companies 20 3M ADTV, $mn na



*MSCI Zimbabwe is a standalone index and not included in the MSCI Frontier Index




MXZW MSCI Zimbabwe 1,268 40 0.5 -2.3 -15.4 -43.4 8.7 1.5 15.4 16 *

DLTA ZH Delta Corporation Ltd Cons. Staples 1,027 40 0.3 -2.9 -14.7 -34.0 10.0 2.2 20.1 7 81% ECO ZH Econet Wireless Zimbabwe Ltd Telecoms 443 22 0.2 -1.8 -18.2 -64.5 5.7 0.7 11.0 9 19%





50

70

90

110

130

150

170

190

210

230

Dec

-10

May

-11

Oct

-11

Mar

-12

Aug

-12

Jan-

13

Jun-

13

Nov

-13

Apr

-14

Sep

-14

Feb

-15

Jul-1

5

MSCI Frontier, $ MSCI Zimbabwe, $

81%

19%

Cons. Staples Telecoms

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

Jan-

10

May

-10

Sep

-10

Jan-

11

May

-11

Sep

-11

Jan-

12

May

-12

Sep

-12

Jan-

13

May

-13

Sep

-13

Jan-

14

May

-14

Sep

-14

Jan-

15

May

-15

Sep

-15

MSCI Zimbabwe 3M ADTV ($mn)


N/A

Zimbabwe


Facing the spectre


Facing the spectre

171


Source: UN


Source: IMF


Source: IMF

Figure 645: Zimbabwe ($ or ZAR)





Source: IMF

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

1990

1995

2000

2005

2010

2015

2020

2025

2030

2035

2040

2045

2050

0-19 20-64 65+

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0%

5%

10%

15%

20%

25%

30%

Chi

na EU

Eur

o A

rea

DR

Con

go

Bot

swan

a

Sou

th A

fric

a

Bel

gium

Zam

bia

Italy

Net

herla

nds


-50

-45

-40

-35

-30

-25

-20

-15

-10

-5

0-100

-50

0

50

100

150

200

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Current account balance (% of GDP) RHS CPI (average % YoY)

70

80

90

100

110

120

130

140

Jan-

00

Nov

-00

Sep

-01

Jul-0

2

May

-03

Mar

-04

Jan-

05

Nov

-05

Sep

-06

Jul-0

7

May

-08

Mar

-09

Jan-

10

Nov

-10

Sep

-11

Jul-1

2

May

-13

Mar

-14

Jan-

15

Zimbabwe REER (Dec 07=100)

Weaker

Stronger

-20

-15

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E


-6.5-7.7

-3.6 -3.4

-16.6

7.5

11.4 11.910.6

4.53.3

1.42.4 3.0 3.3

-20

-15

-10

-5

0

5

10

15

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

E

2016

E

2017

E

2018

E

Zimbabwe


Facing the spectre


Facing the spectre

172


Facing the spectre


Facing the spectre

173

Key economic indicators

Key e

co

no

mic

in

dic

ato

rs

Argentina 648

Figure 648: Argentina key economic indicators

Ratings (M/S&P/F) Caa1/SD/RD

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 9.2 8.4 8.0 3.1 0.1 9.5 8.4 0.8 2.9 0.5 0.4 -0.7 0.0

Investment (% GDP) 19.1 20.9 22.2 21.0 16.1 19.1 19.7 17.0 18.6 19.9 17.4 16.4 15.5

Unemployment rate year-end (%) 11.6 10.2 8.5 7.9 8.7 7.8 7.2 7.2 7.1 7.3 6.9 8.4 8.7

Nominal GDP (lcl bn) 647 809 1,027 1,284 1,412 1,811 2,312 2,766 3,406 4,412 5,236 6,463 8,032

Nominal GDP ($bn) 220.9 262.8 329.3 403.7 376.8 461.7 558.7 607.6 622.1 543.1 578.7 578.7 589.6

Population (mn) 38.6 39.0 39.4 39.7 40.1 40.8 41.3 41.7 42.2 42.6 43.1 43.6 44.0

GDP per capita ($) 5,724 6,744 8,367 10,158 9,389 11,318 13,540 14,559 14,740 12,735 13,428 13,284 13,386

Stock of bank credit (lcl, bn) 61 83 113 136 150 204 295 387 508 617 731 804 na

Lending/GDP (%) 9.4 10.2 11.0 10.6 10.6 11.3 12.8 14.0 14.9 14.0 14.0 12.4 na

Gross domestic saving (% of GDP) 21.1 23.5 24.2 22.5 18.1 18.7 19.0 16.7 17.8 18.8 15.6 14.8 14.3

Prices

CPI (average % YoY) 9.6 10.9 8.8 8.6 6.3 10.5 9.8 10.0 10.6 n/a 16.8 25.6 25.0

CPI (year-end, % YoY) 12.3 9.8 8.5 7.2 7.7 10.9 9.5 10.8 10.9 23.9 19.3 26.4 25.2

Fiscal balance (% of GDP)

Consolidated government balance 2.0 1.8 0.3 0.8 -1.6 0.0 -1.9 -2.4 -2.0 -2.7 -4.9 -4.8 -5.3

Total public debt (% of GDP) 71.2 61.8 53.2 47.0 47.6 39.2 35.8 37.3 40.2 45.3 52.1 55.1 56.5

External indicators

Exports ($bn) 40.4 46.5 56.0 70.0 55.7 67.4 82.1 78.6 74.3 67.4 na na na

Imports ($bn) 28.7 34.2 44.7 57.5 38.8 56.2 73.4 68.5 74.0 65.2 na na na

Trade balance ($bn) 11.7 12.4 11.3 12.6 16.9 11.2 8.7 10.1 0.3 2.2 na na na

Trade balance (% of GDP) 5.3 4.7 3.4 3.1 4.5 2.4 1.6 1.7 0.0 0.4 na na na

Current account balance ($bn) 4.5 7.0 6.6 5.9 7.4 -1.9 -4.0 -1.6 -4.8 -5.6 -10.2 -9.1 -7.2

Current account balance (% of GDP) 2.0 2.7 2.0 1.5 2.0 -0.4 -0.7 -0.3 -0.8 -1.0 -1.8 -1.6 -1.2

Net FDI ($bn) 4.0 3.1 5.0 8.3 3.3 6.9 9.2 14.3 10.4 2.8 na na na

Net FDI (% of GDP) 1.8 1.2 1.5 2.1 0.9 1.5 1.7 2.3 1.7 0.5 na na na

C/A balance plus FDI (% of GDP) 3.8 3.8 3.5 3.5 2.8 1.1 0.9 2.1 0.9 -0.5 na na na

Exports (% YoY, value) 16.8 15.3 20.3 25.1 -20.5 21.1 21.8 -4.3 -5.5 -9.3 na na na

Imports (% YoY, value) 27.8 19.1 30.9 28.5 -32.5 44.9 30.7 -6.7 8.0 -11.8 na na na

FX reserves (ex gold, US$bn) 27.2 30.9 44.7 44.9 46.1 49.7 43.2 39.9 28.1 29.0 na na na

Import cover (months of imports) 11.4 10.9 12.0 9.4 14.3 10.6 7.1 7.0 4.6 5.3 na na na

Currency and monetary policy

Key policy rate (% YE) 6.7 8.0 9.2 14.0 9.0 9.7 10.0 70.7 19.7 21.8 na na na

Broad money growth (%YoY) na na 28.1 19.5 15.0 38.4 24.7 32.0 25.0 23.1 na na na

Exchange rate (EUR) annual average 3.65 3.86 4.28 4.68 5.22 5.20 5.76 5.85 7.27 10.8 10.1 12.5 15.4

Exchange rate ($) annual average 2.93 3.08 3.12 3.18 3.75 3.92 4.14 4.55 5.48 8.13 9.05 11.2 13.6

Note: 2016-17E exchange rate forecasts are the IMF implied exchange rates

Source: IMF, UNCTAD, Bloomberg


Facing the spectre

174

Bahrain 649

Figure 649: Bahrain key economic indicators

Ratings (M/S&P/F) Baa3/BBB-/BBB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 6.8 6.5 8.3 6.2 2.5 4.3 2.1 3.6 5.3 4.5 3.4 3.2 2.8

Investment (% GDP) 26.7 30.4 34.7 35.2 26.1 27.3 16.3 20.1 16.9 16.3 17.6 19.1 21.5

Unemployment rate year-end (%) na na 5.6 3.7 4.0 3.6 4.0 3.9 4.4 4.1 4.2 4.2 4.3

Nominal GDP (lcl bn) 6.0 7.0 8.2 9.7 8.6 9.7 10.9 11.6 12.4 12.7 11.6 12.2 12.9

Nominal GDP ($bn) 16.0 18.5 21.7 25.7 22.9 25.7 29.0 30.8 32.9 33.9 30.9 32.3 34.3

Population (mn) 0.9 1.0 1.0 1.1 1.2 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.3

GDP per capita ($) 17,958 19,272 20,910 23,220 19,468 20,816 24,300 25,226 26,461 26,705 23,890 24,515 25,496

Stock of bank credit (lcl, bn) 2.6 3.1 4.3 6.2 6.2 6.5 7.5 8.0 8.5 8.1 8.1 8.5 na

Lending/GDP (%) 43.7 44.9 53.1 64.2 71.4 67.7 68.9 69.1 68.9 63.3 69.3 69.6 na


Prices

CPI (average % YoY) 2.6 2.0 3.3 3.5 2.8 2.0 -0.4 2.8 3.3 2.7 2.0 2.1 2.3

CPI (year-end, % YoY) 2.3 1.1 4.0 5.1 1.6 1.0 0.2 2.6 4.0 2.5 1.6 2.6 1.9


Consolidated government balance 2.9 2.3 1.6 4.3 -5.6 -5.8 -1.5 -3.2 -4.3 -5.7 -14.2 -13.9 -12.6


External indicators





Current account balance ($bn) 1.5 2.2 2.9 2.3 0.6 0.8 3.2 2.2 2.6 1.1 -1.5 -1.9 -1.9

Current account balance (% of GDP) 9.2 11.8 13.4 8.8 2.4 3.0 11.2 7.2 7.8 3.3 -4.8 -5.9 -5.4

Net FDI ($bn) -0.1 1.9 0.1 0.2 2.0 -0.2 -0.1 0.0 -0.1 1.0 na na na

Net FDI (% of GDP) -0.5 10.5 0.4 0.7 8.9 -0.7 -0.4 -0.1 -0.2 3.1 na na na

C/A balance plus FDI (% of GDP) 8.7 22.3 13.8 9.5 11.4 2.3 10.8 7.1 7.6 6.4 na na na

Exports (% YoY, value) 18.6 24.3 21.8 19.8 -20.9 29.3 13.7 5.4 1.7 3.2 na na na

Imports (% YoY, value) 19.4 14.8 20.9 40.1 -22.8 26.1 9.3 9.7 -1.6 6.8 na na na




Key policy rate (% YE) na na 4.0 0.8 0.5 0.5 0.5 0.5 0.5 0.5 na na na

Broad money growth (%YoY) na 17.4 34.8 22.0 4.5 13.0 5.3 4.4 7.5 3.7 na na na




Source: IMF, UNCTAD, Bloomberg Source: IMF, UNCTAD, Bloomberg


Facing the spectre

175

Bangladesh 650

Figure 650: Bangladesh key economic indicators

Ratings (M/S&P/F) Ba3/BB-/BB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 6.3 6.9 6.5 5.5 5.3 6.0 6.5 6.3 6.0 6.3 6.5 6.8 7.0

Investment (% GDP) 26.1 26.2 26.2 26.2 26.2 26.9 27.9 28.3 28.5 28.8 29.5 30.8 32.2

Unemployment rate year-end (%) na na na na na na na na na na na na na

Nominal GDP (lcl bn) 4,562 5,161 5,892 6,669 7,513 8,567 9,855 11,271 12,713 14,286 16,174 18,478 21,187

Nominal GDP ($bn) 70.9 75.8 85.6 97.1 108.9 122.0 131.1 141.7 161.3 183.8 202.3 219.0 238.7

Population (mn) 143.1 144.9 146.5 148.0 149.5 151.1 152.9 154.7 156.6 158.2 159.9 161.5 163.2

GDP per capita ($) 495 523 584 656 728 808 857 916 1,030 1,162 1,266 1,356 1,463

Stock of bank credit (lcl, bn) 1,414 1,665 1,892 2,284 2,712 3,473 4,114 4,790 5,189 5,937 6,649 7,314 na

Lending/GDP (%) 31.0 32.3 32.1 34.2 36.1 40.5 41.7 42.5 40.8 41.6 41.1 39.6 na


Prices

CPI (average % YoY) 7.0 6.8 9.1 8.9 4.9 9.4 11.5 6.2 7.5 7.0 6.4 6.6 6.8

CPI (year-end, % YoY) 7.1 6.1 11.6 6.7 7.7 11.6 7.6 7.1 7.3 6.1 6.5 6.8 6.8


Consolidated government balance -2.9 -2.6 -2.2 -4.0 -3.2 -2.7 -3.6 -3.0 -3.4 -3.1 -3.2 -3.8 -3.6


External indicators



Trade balance ($bn) -5.4 -4.4 -5.8 -10.2 -7.5 -11.3 -13.1 -11.9 -11.6 -13.2 na na na

Trade balance (% of GDP) -7.6 -5.9 -6.8 -10.5 -6.9 -9.3 -10.0 -8.4 -7.2 -7.2 na na na

Current account balance ($bn) 0.0 0.8 0.6 1.2 2.7 0.5 -1.3 1.0 1.9 -0.2 -1.9 -2.4 -2.9

Current account balance (% of GDP) 0.0 1.0 0.7 1.2 2.4 0.4 -1.0 0.7 1.2 -0.1 -0.9 -1.1 -1.2

Net FDI ($bn) 0.8 0.7 0.7 1.0 0.8 0.9 1.1 1.3 1.6 1.6 na na na


C/A balance plus FDI (% of GDP) 1.1 2.0 1.5 2.3 3.2 1.1 -0.2 1.6 2.1 0.8 na na na

Exports (% YoY, value) 12.0 37.2 8.9 7.4 5.5 14.7 40.0 -3.7 16.5 9.7 na na na

Imports (% YoY, value) 19.5 16.2 14.8 29.0 -8.3 27.3 30.1 -5.6 9.9 10.9 na na na




Key policy rate (% YE) na na na 8.8 4.5 5.5 7.3 7.8 7.3 7.3 na na na

Broad money growth (%YoY) 15.8 20.2 13.5 16.4 20.2 21.1 16.9 17.0 14.8 15.4 na na na






Facing the spectre

176

Bulgaria 651

Figure 651: Bulgaria key economic indicators

Ratings (M/S&P/F) Baa2/BB+/BBB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 6.0 6.5 6.9 5.8 -5.0 0.7 2.0 0.5 1.1 1.7 1.7 1.9 2.0

Investment (% GDP) 28.1 32.6 34.0 37.5 29.5 23.2 21.8 22.2 21.5 21.6 21.7 22.2 22.6



Nominal GDP ($bn) 29.4 33.7 43.7 53.6 50.2 48.8 55.8 52.6 54.5 55.8 47.2 48.6 50.7

Population (mn) 7.7 7.7 7.6 7.6 7.6 7.5 7.3 7.3 7.2 7.2 7.2 7.1 7.1

GDP per capita ($) 3,806 4,387 5,720 7,052 6,643 6,500 7,616 7,225 7,532 7,751 6,582 6,815 7,150


Lending/GDP (%) 40.5 44.3 60.6 69.7 73.1 72.7 69.2 69.7 69.6 62.8 65.4 66.9 na


Prices

CPI (average % YoY) 6.0 7.4 7.6 12.0 2.5 3.0 3.4 2.4 0.4 -1.6 -0.8 0.6 1.2

CPI (year-end, % YoY) 7.4 6.1 11.6 7.2 1.6 4.4 2.0 2.8 -0.9 -2.0 0.3 0.9 1.5


Consolidated government balance 2.2 3.3 3.1 2.8 -0.9 -3.9 -1.9 -0.4 -1.8 -3.7 -2.0 -1.6 -1.2


External indicators





Current account balance ($bn) -3.4 -5.8 -10.6 -12.0 -4.3 -0.7 0.0 -0.6 1.2 0.0 0.5 0.1 -0.2

Current account balance (% of GDP) -11.5 -17.3 -24.3 -22.4 -8.6 -1.5 0.1 -1.1 2.3 0.0 1.0 0.2 -0.3

Net FDI ($bn) 4.0 7.6 12.9 9.2 3.5 1.3 1.6 1.0 1.3 1.2 na na na


C/A balance plus FDI (% of GDP) 2.2 5.2 5.2 -5.3 -1.6 1.2 3.0 0.8 4.6 2.2 na na na

Exports (% YoY, value) 19.0 29.0 22.7 21.1 -27.2 22.5 38.0 -5.3 11.0 -1.0 na na na

Imports (% YoY, value) 26.4 7.5 53.8 23.1 -36.4 7.1 27.8 0.5 5.1 0.5 na na na











Facing the spectre

177

Croatia 652

Figure 652: Croatia key economic indicators

Ratings (M/S&P/F) Ba1/BB/BB

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.2 4.8 5.2 2.1 -7.4 -1.7 -0.3 -2.2 -1.1 -0.4 0.8 1.0 1.7

Investment (% GDP) 27.9 29.8 29.7 31.4 25.0 21.4 20.6 19.3 19.1 18.2 17.7 17.7 17.7



Nominal GDP ($bn) 45.4 50.4 60.1 70.5 62.7 59.6 62.2 56.5 57.8 57.1 48.9 50.0 52.2

Population (mn) 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.3 4.2 4.2 4.2 4.2

GDP per capita ($) 10,524 11,694 13,944 16,346 14,562 13,895 14,523 13,234 13,569 13,473 11,551 11,813 12,322


Lending/GDP (%) 55.0 62.1 65.3 67.0 70.0 78.0 80.8 78.1 76.8 75.6 74.0 75.0 na


Prices

CPI (average % YoY) 3.3 3.2 2.9 6.1 2.4 1.0 2.3 3.4 2.2 -0.2 -0.4 1.1 1.4

CPI (year-end, % YoY) 3.7 2.1 5.8 2.8 1.9 1.9 2.0 4.7 0.3 -0.5 0.4 1.3 1.7




External indicators





Current account balance ($bn) -2.4 -3.3 -4.3 -6.2 -3.2 -0.7 -0.5 -0.1 0.5 0.4 0.8 0.8 0.6

Current account balance (% of GDP) -5.2 -6.5 -7.1 -8.8 -5.1 -1.1 -0.8 -0.1 0.8 0.7 1.7 1.5 1.2

Net FDI ($bn) 1.6 3.0 4.6 4.5 2.0 0.7 1.5 1.5 1.1 1.6 na na na


C/A balance plus FDI (% of GDP) -1.8 -0.6 0.5 -2.5 -1.9 0.0 1.6 2.5 2.7 3.4 na na na

Exports (% YoY, value) 9.3 16.1 21.4 13.4 -25.9 11.0 16.1 -10.8 -1.1 16.0 na na na

Imports (% YoY, value) 11.9 15.4 20.6 19.0 -31.4 -5.2 13.6 -8.7 0.6 8.0 na na na





Broad money growth (%YoY) 10.6 18.1 18.3 4.4 -0.6 12.6 1.5 3.2 -13.7 -0.1 na na na






Facing the spectre

178

Czech Republic653

Figure 653: Czech Republic key economic indicators

Ratings (M/S&P/F) A1/AA-/A+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 6.4 6.9 5.5 2.7 -4.8 2.3 2.0 -0.9 -0.5 2.0 3.9 2.6 2.6

Investment (% GDP) 29.2 30.1 32.1 31.1 26.5 27.2 27.0 26.3 24.8 25.3 26.3 26.3 26.6



Nominal GDP ($bn) 136.0 155.2 188.6 235.5 205.9 207.0 227.3 206.4 208.3 205.3 182.5 190.0 197.0

Population (mn) 10.2 10.2 10.3 10.3 10.4 10.5 10.5 10.5 10.5 10.5 10.5 10.5 10.6

GDP per capita ($) 13,334 15,181 18,394 22,770 19,744 19,787 21,676 19,652 19,811 19,527 17,329 18,020 18,663


Lending/GDP (%) 33.8 37.7 44.2 48.5 49.9 50.9 52.9 53.9 55.5 54.7 53.9 54.7 na


Prices

CPI (average % YoY) 1.8 2.5 2.9 6.3 1.0 1.5 1.9 3.3 1.4 0.4 0.4 1.5 2.0

CPI (year-end, % YoY) 2.2 1.7 5.5 3.6 1.0 2.3 2.4 2.4 1.4 0.1 0.5 1.9 2.0




External indicators





Current account balance ($bn) -1.3 -3.4 -8.2 -4.4 -4.9 -7.6 -4.8 -3.2 -1.1 1.3 3.1 2.3 1.4

Current account balance (% of GDP) -1.0 -2.2 -4.3 -1.9 -2.4 -3.7 -2.1 -1.6 -0.5 0.6 1.7 1.2 0.7

Net FDI ($bn) 11.6 4.0 9.0 2.3 2.0 4.9 2.6 6.2 -0.4 6.6 na na na

Net FDI (% of GDP) 8.6 2.6 4.8 1.0 0.9 2.4 1.1 3.0 -0.2 3.2 na na na

C/A balance plus FDI (% of GDP) 7.6 0.4 0.4 -0.9 -1.4 -1.3 -1.0 1.4 -0.7 3.8 na na na

Exports (% YoY, value) 16.4 21.6 29.2 20.0 -23.1 16.9 22.2 -3.9 3.2 7.2 na na na












Facing the spectre

179

Egypt 654

Figure 654: Egypt key economic indicators

Ratings (M/S&P/F) B3/B-/B

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.5 6.8 7.1 7.2 4.7 5.1 1.8 2.2 2.1 2.2 4.2 4.3 4.5

Investment (% GDP) 18.0 18.7 20.9 22.4 19.2 19.5 17.1 16.4 14.2 14.0 14.8 15.3 15.2


Nominal GDP (lcl bn) 539 618 745 896 1,042 1,207 1,371 1,576 1,753 1,998 2,310 2,625 3,026

Nominal GDP ($bn) 89.5 107.4 130.3 162.4 188.6 218.8 235.6 262.3 271.4 286.4 314.3 324.0 347.9

Population (mn) 70.7 72.2 73.6 75.2 76.9 78.7 80.4 82.4 84.7 86.7 88.4 90.2 92.0

GDP per capita ($) 1,265 1,487 1,770 2,159 2,452 2,779 2,930 3,183 3,205 3,304 3,555 3,592 3,781

Stock of bank credit (lcl, bn) 349 383 431 467 471 504 521 560 599 682 846 1,091 na

Lending/GDP (%) 64.8 62.0 57.8 52.1 45.2 41.8 38.0 35.5 34.1 34.1 36.6 41.6 na


Prices

CPI (average % YoY) 8.8 4.2 11.0 11.7 16.2 11.7 11.1 8.7 6.9 10.1 11.0 8.8 10.3

CPI (year-end, % YoY) 4.7 7.3 8.6 19.9 9.9 10.6 11.8 7.3 9.8 8.2 11.4 10.4 10.4




External indicators





Current account balance ($bn) 2.9 1.8 2.7 0.9 -4.4 -4.3 -6.1 -10.1 -6.4 -2.4 n/a n/a n/a

Current account balance (% of GDP) 3.3 1.6 2.1 0.5 -2.3 -2.0 -2.6 -3.9 -2.4 -0.8 -3.7 -4.5 -4.5

Net FDI ($bn) 5.3 9.9 10.9 7.6 6.1 5.2 -1.1 2.6 3.9 4.5 na na na

Net FDI (% of GDP) 5.9 9.2 8.4 4.7 3.3 2.4 -0.5 1.0 1.4 1.6 na na na

C/A balance plus FDI (% of GDP) 9.2 10.8 10.4 5.2 0.9 0.4 -3.1 -2.9 -0.9 0.8 na na na








Exchange rate (EGP/€) end-Jun 6.93 7.36 7.71 8.36 7.82 7.14 8.66 7.67 9.13 9.72 8.51 8.99 9.81


Exchange rate (EGP/US$) end-Jun 5.79 5.76 5.69 5.33 5.59 5.68 5.97 6.06 7.02 7.15 7.63 8.40 9.00


Note: 2016-17E average annual exchange rate forecasts are IMF implied exchange rates

Source: IMF, UNCTAD, Bloomberg, Renaissance Capital estimates


Facing the spectre

180

Estonia 655

Figure 655: Estonia key economic indicators

Ratings (M/S&P/F) A1/AA-/A+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 9.4 10.3 7.7 -5.4 -14.7 2.5 7.6 5.2 1.6 2.9 2.0 2.9 3.0

Investment (% GDP) 33.2 39.3 39.3 30.7 20.7 21.3 25.1 28.1 27.6 28.0 25.6 25.7 26.0



Nominal GDP ($bn) 14.0 17.0 22.3 24.3 19.7 19.5 23.2 23.2 25.3 26.5 22.9 24.2 25.9

Population (mn) 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3

GDP per capita ($) 10,404 12,630 16,591 18,110 14,710 14,584 17,307 17,897 19,638 20,096 17,427 18,449 19,762


Lending/GDP (%) 69.2 82.0 90.3 94.8 105.1 95.8 81.1 77.0 74.8 74.6 76.6 77.2 na


Prices

CPI (average % YoY) 4.1 4.4 6.7 10.6 0.2 2.7 5.1 4.2 3.2 0.5 0.2 1.6 2.0

CPI (year-end, % YoY) 3.6 5.1 9.7 7.5 -1.9 5.4 4.1 3.6 2.0 0.0 0.4 2.1 2.0


Consolidated government balance 1.6 2.4 2.4 -2.9 -1.9 0.2 1.0 -0.3 -0.5 0.6 -0.7 -0.5 -0.5


External indicators





Current account balance ($bn) -1.2 -2.5 -3.3 -2.1 0.5 0.4 0.3 -0.6 -0.3 0.0 0.1 0.1 0.0

Current account balance (% of GDP) -8.7 -15.0 -15.0 -8.7 2.5 1.8 1.3 -2.4 -1.1 0.1 0.6 0.3 -0.1

Net FDI ($bn) 2.3 0.7 1.0 0.6 0.3 1.5 1.8 0.3 0.2 0.8 na na na


C/A balance plus FDI (% of GDP) 7.3 -11.0 -10.6 -6.1 4.2 9.3 9.1 -1.1 -0.4 2.9 na na na


Imports (% YoY, value) 22.1 31.9 16.5 2.4 -36.8 14.6 37.7 5.7 5.6 -1.5 na na na





Broad money growth (%YoY) 7.3 10.1 11.6 7.7 -0.3 1.1 1.6 3.5 1.0 3.7 na na na







Facing the spectre

181

Georgia 656

Figure 656: Georgia key economic indicators

Ratings (M/S&P/F) Ba3/BB-/BB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 9.6 9.4 12.3 2.3 -3.8 6.3 7.2 6.1 3.3 4.8 2.2 4.3 4.5

Industrial production (%YoY) 39.2 38.8 7.4 -7.6 -11.6 17.9 23.5 7.2 2.7 3.8 1.4 3.5 na

Unemployment rate year-end (%) 13.8 13.6 13.3 16.5 16.9 16.3 15.1 15.0 14.6 12.4 13.5 13.1 na


Nominal GDP (US$bn) 6.4 7.8 12.4 12.8 10.8 11.6 14.4 15.8 16.1 16.5 13.5 14.4 16.4

Population (m) 4.4 4.4 4.4 4.4 4.4 4.5 4.5 4.5 3.8 3.7 3.7 3.7 3.7

GDP per capita (US$) 1,484 1,765 2,316 2,921 2,456 2,620 3,217 3,530 3,600 4,412 3,653 3,922 4,455

Gross national saving (% of GDP) 23 15 14 5 3 12 14 18 20 21 21 22 na

Loans to non-banking sector (lcl bn) 2 3 4 6 5 6 8 8 10 12 14 17 na

Lending/GDP (%) 15 19 26 30 28 29 31 32 37 41 46 49 na

Deposits (lcl bn) 1 2 4 4 4 6 7 8 10 12 14 16 na

Loan to deposit ratio (%) 123 124 125 151 120 104 102 102 97 102 104 105 na

Prices

CPI (average %YoY) 8.2 9.2 9.2 10.0 1.7 7.1 8.5 -0.9 -0.6 3.1 4.1 5.8 5.0

CPI (end-year %YoY) 6.2 8.8 11.0 5.5 3.0 11.2 2.0 -1.4 2.4 2.0 6.3 5.6 5.1

Nominal wages, GEL 204 278 368 535 557 598 636 712 749 793 831 871 na

Wage Rate (%YoY nominal) 30.0 36.0 32.0 45.0 4.0 7.0 6.0 12.0 5.2 5.9 4.8 4.8 na


Consolidated government balance 1.4 2.7 0.3 -2.0 -6.5 -4.5 -0.9 -2.0 -2.7 -3.7 -3.0 -2.8 na

Consolidated primary balance 2.4 3.4 0.9 -1.4 -5.6 -3.5 0.3 -1.0 -1.0 -1.2 -0.9 -0.7 na

Total public debt (central govt) 35.0 23.0 19.0 24.0 31.0 34.0 30.0 31.0 34.5 38.0 42.1 45.0 na

External balance

Exports (US$bn) 1.5 1.7 2.1 2.4 1.9 2.5 3.3 3.5 4.2 4.3 3.8 4.1 na

Imports (US$bn) 2.7 3.7 5.0 6.3 4.3 5.1 6.7 7.7 7.7 8.3 7.9 7.6 na

Trade balance (US$mn) -1.2 -2.0 -2.9 -3.8 -2.4 -2.6 -3.5 -4.2 -3.5 -4.0 -4.1 -3.5 na

Trade balance (% of GDP) -19.0 -26.0 -23.0 -30.0 -22.0 -22.0 -24.0 -27.0 -21.6 -24.3 -30.4 -24.3 na

Current account balance (US$bn) -0.8 -1.3 -2.1 -3.1 -1.2 -1.3 -2.0 -1.9 -1.0 -1.4 -1.7 -1.8 na

Current account balance (% of GDP) -12.0 -16.2 -17.1 -24.5 -11.5 -11.4 -13.6 -12.1 -5.9 -8.3 -12.6 -12.5 na

Net FDI (US$bn) 0.5 1.2 1.7 1.4 0.7 0.7 0.9 0.6 0.8 1.0 0.8 1.1 na

Net FDI (% of GDP) 8.0 15.0 14.0 11.0 6.0 6.0 6.0 4.0 5.1 6.1 5.9 7.6 na

C/A balance plus FDI (% of GDP) -4.0 -1.0 -4.0 -13.0 -5.0 -6.0 -7.0 -8.0 -0.7 -2.2 -6.7 -4.9 na

Exports (%YoY, value) 35.0 13.0 25.0 16.0 -22.0 30.0 32.0 8.0 21.2 1.3 -11.6 7.9 na

Imports (%YoY, value) 34.0 37.0 35.0 26.0 -31.0 18.0 34.0 14.0 0.2 7.4 -4.8 -3.8 na

FX reserves (ex gold, US$bn) 0.5 0.9 1.4 1.5 2.1 2.3 2.8 2.9 2.8 2.7 2.5 2.5 na

Import cover (months of imports) 2.0 3.0 3.0 3.0 6.0 5.0 5.0 4.0 4.4 3.9 3.8 3.9 na

Debt indicators

Gross external debt (US$mn) 3.2 3.8 5.8 7.7 8.8 10.1 11.6 13.2 13.2 13.2 13.3 13.5 na

Gross external debt (% of GDP) 50 49 47 60 82 87 80 83 82 80 98 94 na

Gross external debt (% of exports) 218 228 277 316 466 410 355 377 311 307 350 329 na

Interest & exchange rates

Broad money supply (%YoY) year-end 28.9 33.4 53.6 -11.7 16.6 27.0 27.8 7.6 33.2 10.1 8.5 12.5 na

Key policy rate (%) year-end 0.0 0.0 0.0 8.0 5.0 7.5 6.8 5.3 3.8 4.0 7.5 6.5 na

Exchange rate (GEL/€) year-end 2.1 2.3 2.3 2.4 2.4 2.4 2.2 2.2 2.4 2.3 2.6 2.4 2.5

Exchange rate (GEL/€) annual average 2.3 2.2 2.3 2.2 2.3 2.4 2.4 2.1 2.2 2.4 2.5 2.5 2.5

Exchange rate (GEL/US$) year-end 1.8 1.7 1.6 1.7 1.7 1.8 1.7 1.7 1.7 1.9 2.5 2.3 2.3

Exchange rate (GEL/US$) annual average 1.8 1.8 1.4 1.5 1.7 1.8 1.7 1.7 1.7 1.8 2.3 2.4 2.3

Source: IMF, UNCTAD, National Bank of Georgia, Bloomberg, Renaissance Capital estimates


Facing the spectre

182

Ghana 657

Figure 657: Ghana key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 6.0 6.1 6.5 8.4 3.5 7.9 14.0 9.3 7.3 4.0 3.4 5.0 6.5

Private consumption (%YoY) na na 5.1 10.8 -2.0 9.6 12.9 -6.7 7.7 4.3 1.5 4.5 5.0

Government consumption (%YoY) na na 1.5 13.0 20.0 14.0 49.8 12.9 -4.3 4.5 -3.0 4.0 5.0

Investment (%YoY) na na 18.3 30.1 -21.4 24.4 37.6 27.5 -4.7 5.5 4.0 4.2 4.5

Industry, value added (%YoY) na na 6.1 15.1 4.5 6.9 41.6 7.0 6.6 3.1 3.0 4.1 4.3

Nominal GDP (GHSbn) 15.8 18.7 23.2 30.2 36.6 46.0 59.8 75.0 93.4 113.3 134.1 154.5 183.2

Nominal GDP (€bn) 13.9 16.2 18.2 19.0 18.4 24.3 27.7 31.5 33.6 28.0 31.6 29.7 30.3

Nominal GDP (US$bn) 17.3 20.3 24.9 27.9 25.6 32.2 38.6 40.5 44.7 36.9 35.3 31.8 33.2

Population (m) 20.9 21.4 22.0 22.5 23.1 23.7 24.3 24.9 25.6 26.2 26.9 27.6 28.3

GDP per capita (US$) 830 949 1,133 1,240 1,108 1,359 1,588 1,626 1,748 1,408 1,312 1,152 1,174

Gross national saving (% of GDP) 16.8 13.4 14.2 11.0 18.4 19.6 19.0 16.8 13.5 15.2 15.4 18.0 20.3

Loans to non-banking sector (lcl bn) 1.5 2.0 3.4 4.8 5.7 6.8 8.6 11.5 13.7 18.5 22.0 25.7 30.3

Lending/GDP (%) 9.2 11.0 14.5 16.0 15.5 14.8 14.4 15.4 14.7 16.3 16.4 16.6 16.6

Loan to deposit ratio 77.8 77.6 87.4 89.0 81.3 69.6 62.5 69.1 71.8 69.0 70.0 72.0 72.0

Prices

CPI (average %YoY) 15.1 10.2 10.7 16.5 19.3 10.8 8.7 9.6 10.7 15.5 16.5 11.0 9.9

CPI (end-year %YoY) 14.8 10.9 12.7 18.1 16.0 8.6 8.6 8.8 13.5 17.0 14.6 10.7 9.0

PPI (average %YoY) na na na 32.4 15.4 18.8 18.7 17.2 9.4 35.8 17.6 14.0 11.0

Fiscal balance (% of GDP) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

General government budget balance -2.8 -4.7 -5.6 -8.5 -5.8 -7.2 -4.1 -12.1 -10.2 -9.5 -7.3 -6.8 -5.7

Total public debt 48.2 26.1 31.0 33.6 36.2 46.3 43.7 51.2 60.1 0.0 72.8 70.5 66.3

External balance

Exports (US$bn) 2.8 3.7 4.2 5.3 5.9 7.9 12.8 13.6 13.8 13.2 12.7 13.9 15.1

Imports (US$bn) 5.3 6.8 8.1 10.3 8.0 10.9 16.0 16.7 17.6 14.6 12.9 13.6 14.5

Trade balance (US$bn) -2.5 -3.0 -3.9 -5.0 -2.1 -3.0 -3.2 -3.2 -3.8 -1.3 -0.2 0.4 0.6

Trade balance (% of GDP) -14.7 -14.9 -15.6 -17.9 -8.4 -9.4 -8.2 -7.9 -8.6 -3.7 -0.5 1.1 1.9

Current account balance (US$bn) -0.9 -1.3 -2.0 -3.1 -1.7 -2.8 -3.7 -3.9 -5.7 -3.3 -2.8 -2.2 -1.9

Current account balance (% of GDP) -5.1 -6.2 -7.9 -11.0 -6.6 -8.6 -9.5 -9.6 -12.8 -9.0 -7.8 -7.0 -5.7

Net FDI (US$bn) 0.1 0.6 1.0 2.7 2.9 2.5 3.2 3.1 3.2 3.4 3.1 3.2 3.7

Net FDI (% of GDP) 0.8 3.1 3.9 9.7 11.3 7.8 8.3 7.7 7.2 9.1 8.8 10.1 11.1

C/A balance plus FDI (% of GDP) -4.3 -3.1 -4.0 -1.3 4.7 -0.8 -1.2 -1.9 -5.5 0.1 1.0 3.1 5.4

Exports (%YoY, value) 3.6 33.0 12.0 26.3 12.0 33.9 61.8 6.0 1.5 -3.9 -3.7 9.5 8.3

Imports (%YoY, value) 24.4 26.3 19.4 27.3 -21.6 35.7 46.2 4.9 5.1 -17.2 -11.3 5.2 6.5

FX reserves (ex gold, US$bn) 1.8 2.1 2.8 2.0 3.2 4.2 5.4 5.2 5.6 5.5 5.0 4.5 4.8

Import cover (months of imports) 3.9 3.7 4.2 2.3 4.8 4.6 4.0 3.7 3.8 4.5 4.6 4.0 4.0

Debt indicators

Gross external debt (US$bn) 7.2 3.7 5.1 5.7 7.2 9.3 11.3 14.3 16.8 18.4 20.3 22.8 24.4

Gross external debt (% of GDP) 41.3 18.1 20.5 20.4 28.1 28.9 29.2 35.3 37.6 49.8 57.5 71.6 73.3

Gross external debt (% of exports) 255.8 98.7 122.6 108.0 121.9 117.9 88.2 105.5 122.4 139.1 159.2 163.2 161.3

Total debt service (US$bn) 0.0 0.7 0.4 0.6 0.7 0.6 0.8 1.2 1.4 1.9 2.3 2.3 2.8

Total debt service (% of GDP) 0.0 3.3 1.6 2.3 2.6 2.0 2.0 2.9 3.0 5.2 6.6 7.4 8.4

Total debt service (% of exports) 0.0 17.8 9.8 12.2 11.1 8.1 6.1 8.6 9.9 14.5 18.4 16.8 18.4


Monetary policy rate, %YE 15.5 12.5 13.5 17.0 18.0 13.5 12.5 15.0 16.0 21.0 25.0 20.0 15.0

Broad money supply (%YoY) 14.1 38.8 36.3 40.2 26.9 30.4 40.0 25.0 22.0 20.0 15.0 17.0 19.0

Credit to the private sector (%YoY) 30.0 40.8 64.0 43.7 17.6 19.9 26.5 34.1 23.5 29.0 19.0 17.0 18.0

3M interest rate (t-bill avg %) 15.2 10.1 9.8 17.8 25.2 13.8 10.3 18.7 21.9 23.9 25.2 20.0 14.5

3M interest rate spread over $Libor (ppt) 10.6 4.8 3.8 15.0 24.6 13.0 9.2 18.2 21.4 23.3 24.4 18.6 13.1

2Y yield (%YE) 17.0 13.5 12.8 21.0 23.5 12.7 12.2 23.0 16.8 23.0 22.5 21.0 20.0

Exchange rate (GHS/EUR) year-end 1.1 1.2 1.4 1.8 2.0 2.0 2.1 2.5 3.3 3.9 4.9 5.7 6.4

Exchange rate (GHS/EUR) annual average 1.1 1.2 1.3 1.6 2.0 1.9 2.2 2.4 2.8 4.1 4.2 5.2 6.0

Exchange rate (GHS/$) year-end 0.9 0.9 1.0 1.3 1.4 1.5 1.6 1.9 2.4 3.2 4.4 5.3 5.7

Exchange rate (GHS/$) annual average 0.9 0.9 0.9 1.1 1.4 1.4 1.6 1.9 2.1 3.1 3.8 4.9 5.5

Source: IMF, UNCTAD, Bank of Ghana, Bloomberg, Renaissance Capital estimates


Facing the spectre

183

Greece 658

Figure 658: Greece key economic indicators

Ratings (M/S&P/F) Caa3/CCC+/CCC

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 0.9 5.8 3.5 -0.4 -4.4 -5.4 -8.9 -6.6 -3.9 0.8 -2.3 -1.3 2.7

Investment (% GDP) 20.9 25.3 26.6 24.7 18.3 16.9 15.8 14.0 11.8 10.6 9.0 8.3 9.4



Nominal GDP ($bn) 248.1 273.5 319.1 356.3 330.7 300.2 289.1 249.7 242.3 238.0 193.0 192.5 201.3

Population (mn) 11.1 11.1 11.1 11.2 11.2 11.2 11.1 11.1 11.1 11.0 10.9 10.9 10.8

GDP per capita ($) 22,403 24,615 28,637 31,863 29,550 26,838 25,988 22,446 21,902 21,647 17,658 17,703 18,608


Lending/GDP (%) 81.4 85.5 93.8 98.4 95.4 118.9 125.1 123.1 124.9 124.4 125.8 130.6 na


Prices

CPI (average % YoY) 3.5 3.2 2.9 4.2 1.2 4.7 3.3 1.5 -1.2 -1.5 -0.4 0.0 0.2

CPI (year-end, % YoY) 3.6 2.9 3.9 2.0 2.6 5.2 2.4 0.8 -1.7 -2.6 1.5 0.6 7.0




External indicators





Current account balance ($bn) -18.3 -29.6 -44.7 -51.6 -36.0 -30.3 -28.6 -6.2 1.4 2.2 1.4 3.0 2.3

Current account balance (% of GDP) -7.4 -10.8 -14.0 -14.5 -10.9 -10.1 -9.9 -2.5 0.6 0.9 0.7 1.5 1.2

Net FDI ($bn) -0.8 1.2 -3.3 2.5 0.3 -1.2 -0.7 1.0 3.6 1.3 na na na

Net FDI (% of GDP) -0.3 0.4 -1.0 0.7 0.1 -0.4 -0.3 0.4 1.5 0.6 na na na

C/A balance plus FDI (% of GDP) -7.7 -10.4 -15.0 -13.8 -10.8 -10.5 -10.1 -2.1 2.1 1.5 na na na

Exports (% YoY, value) 20.9 17.1 22.8 17.8 -21.5 11.3 21.0 4.3 3.3 -1.7 na na na

Imports (% YoY, value) 9.8 14.9 24.3 15.9 -24.1 -8.3 0.5 -6.3 -1.7 2.1 na na na











Facing the spectre

184

Hungary 659

Figure 659: Hungary key economic indicators

Ratings (M/S&P/F) Ba1/BB+/BB+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.3 4.0 0.5 0.9 -6.6 0.8 1.8 -1.5 1.5 3.6 3.0 2.5 2.3

Investment (% GDP) 25.4 25.7 24.2 24.7 20.3 20.6 20.4 19.2 19.8 21.9 21.5 22.5 22.7



Nominal GDP ($bn) 111.9 114.2 138.6 156.6 129.4 129.6 139.4 126.8 133.4 137.0 118.5 124.0 130.6

Population (mn) 10.1 10.1 10.1 10.0 10.0 10.0 10.0 9.9 9.9 9.9 9.9 9.8 9.8

GDP per capita ($) 11,080 11,337 13,767 15,588 12,896 12,940 13,964 12,769 13,465 13,869 12,021 12,605 13,306


Lending/GDP (%) 50.5 54.8 61.4 68.8 68.0 68.3 65.3 55.8 50.8 47.1 46.7 46.6 na


Prices

CPI (average % YoY) 3.6 3.9 7.9 6.1 4.2 4.9 3.9 5.7 1.7 -0.2 0.3 2.3 2.9

CPI (year-end, % YoY) 3.3 6.5 7.4 3.5 5.6 4.7 4.1 5.0 0.4 -0.9 2.0 2.4 3.0




External indicators



Trade balance ($bn) -3.6 -3.0 -0.1 -0.9 5.3 6.3 8.6 6.6 6.4 4.8 na na na

Trade balance (% of GDP) -3.2 -2.6 -0.1 -0.6 4.1 4.9 6.2 5.2 4.8 3.5 na na na

Current account balance ($bn) -7.9 -8.1 -9.9 -11.1 -1.1 0.4 1.0 2.3 5.4 5.5 5.9 5.4 4.8

Current account balance (% of GDP) -7.0 -7.0 -7.1 -7.1 -0.8 0.3 0.7 1.8 4.0 4.0 5.0 4.3 3.7

Net FDI ($bn) 5.4 0.5 2.5 1.4 0.8 3.8 1.9 2.8 -0.1 0.5 na na na

Net FDI (% of GDP) 4.8 0.4 1.8 0.9 0.6 3.0 1.3 2.2 -0.1 0.4 na na na

C/A balance plus FDI (% of GDP) -2.2 -6.7 -5.3 -6.2 -0.2 3.2 2.1 4.0 4.0 4.4 na na na







Broad money growth (%YoY) 14.7 13.8 11.0 8.7 3.6 4.3 6.7 -4.6 7.8 19.5 na na na

Exchange rate (EUR) annual average 249 264 252 253 282 276 280 289 297 309 316 320 323

Exchange rate ($) annual average 200 210 184 172 202 208 201 225 224 233 284 286 285




Facing the spectre

185

Indonesia 660

Figure 660: Indonesia key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 5.7 5.5 6.3 7.4 4.7 6.4 6.2 6.0 5.6 5.0 4.7 5.1 5.5

Investment (% GDP) 28.6 29.0 28.7 33.0 31.2 32.9 33.0 35.1 34.0 34.7 34.0 34.5 35.0


Nominal GDP (lcl tn) 3,017 3,632 4,297 5,415 6,011 6,864 7,832 8,616 9,525 10,543 11,786 13,060 14,419

Nominal GDP ($bn) 310.8 396.3 470.1 558.6 577.5 755.3 892.6 919.0 912.5 888.6 872.6 875.8 950.4

Population (mn) 221 225 228 231 234 238 242 245 249 252 255 259 262

GDP per capita ($) 1,404 1,765 2,064 2,418 2,465 3,178 3,689 3,745 3,667 3,524 3,416 3,384 3,625

Stock of bank credit (lcl, tn) 25.7 24.1 25.1 26.1 25.7 27.8 30.4 33.9 37.0 37.6 37.6 37.4 na

Lending/GDP (%) 776 875 1,081 1,413 1,544 1,910 2,382 2,917 3,527 3,962 4,437 4,881 na


Prices

CPI (average % YoY) 10.5 13.1 6.7 9.8 5.0 5.1 5.3 4.0 6.4 6.4 6.8 5.4 4.7

CPI (year-end, % YoY) 17.1 6.6 6.0 11.1 3.0 7.0 3.8 3.7 8.1 8.4 4.6 4.7 4.6


Consolidated government balance 0.4 0.4 -0.9 0.1 -1.6 -1.2 -0.6 -1.6 -2.0 -2.1 -2.3 -2.3 -2.2


External indicators



Trade balance ($bn) 28.0 39.7 39.6 7.8 19.7 22.1 26.1 -1.7 -4.1 -1.9 na na na

Trade balance (% of GDP) 9.0 10.0 8.4 1.4 3.4 2.9 2.9 -0.2 -0.4 -0.2 na na na

Current account balance ($bn) 1.6 9.5 6.8 0.1 10.6 5.3 1.7 -24.4 -29.1 -26.2 -19.6 -18.8 -19.5

Current account balance (% of GDP) 0.5 2.4 1.4 0.0 1.8 0.7 0.2 -2.7 -3.2 -3.0 -2.2 -2.1 -2.0

Net FDI ($bn) 5.3 2.2 2.3 3.4 2.6 11.1 11.5 13.7 12.2 16.0 na na na


C/A balance plus FDI (% of GDP) 2.2 3.0 1.9 0.6 2.3 2.2 1.5 -1.2 -1.9 -1.2 na na na


Imports (% YoY, value) 24.0 5.8 22.0 73.5 -25.1 40.1 30.8 8.0 -2.6 -4.5 na na na






Exchange rate (EUR) annual average 12,094 11,507 12,528 14,267 14,497 12,059 12,208 12,052 13,863 15,765 15,027 16,671 17,147

Exchange rate ($) annual average 9,708 9,165 9,140 9,694 10,409 9,088 8,774 9,375 10,438 11,864 13,506 14,913 15,171




Facing the spectre

186

Iran 661

Figure 661: Iran key economic indicators

Ratings (M/S&P/F) NR/NR/NR

Iranian years 1384 1385 1386 1387 1388 1389 1390 1391 1392 1393 1394 1395 1396

Fiscal yr Apr to Mar 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 6.9 5.7 6.4 1.5 2.3 6.6 3.7 -6.6 -1.9 4.3 -2.5 6.1 6.5

Private consumption (%YoY) 10.0 6.1 6.8 -4.5 -1.1 4.2 4.2 -1.7 -1.0 3.1 2.5 4.0 na

Government consumption (%YoY) 6.0 5.8 -8.5 4.1 2.3 -3.8 -3.4 -7.2 -1.6 2.7 3.5 3.0 na

Investment (%YoY) 8.7 3.0 6.6 10.9 -0.9 3.8 3.5 -23.8 -6.9 3.5 -8.0 12.0 na

Industrial production (%YoY) 14.6 6.2 3.2 5.5 -2.8 10.9 6.5 -8.5 -4.8 6.7 1.0 5.0 na

Unemployment rate (%) 12.1 12.1 10.5 10.4 11.9 13.5 12.3 12.2 10.4 10.6 11.7 12.3 12.3

Nominal GDP (inr tn) 1,971 2,372 3,132 3,745 3,936 4,797 6,285 7,150 9,421 11,034 12,254 14,187 16,528

Nominal GDP (€bn) 179.1 201.0 238.0 275.0 281.1 355.9 415.9 451.7 332.4 331.4 376.2 411.1 na

Nominal GDP (US$bn) 218.3 257.9 337.5 389.8 396.7 464.0 573.3 581.6 447.0 416.2 411.9 439.9 541.9

Population (m) 69.4 70.5 71.3 72.2 73.2 74.3 75.2 76.0 77.0 77.8 78.6 79.5 80.3

GDP per capita (US$) 3,146 3,658 4,735 5,401 5,420 6,241 7,628 7,652 5,807 5,350 5,239 5,536 6,747

Gross national savings (% of GDP) 43.3 44.1 46.9 45.0 40.4 43.0 45.6 43.8 39.1 34.8 31.2 32.1 na

Stock of bank credit (lcl, tn) 687 990 1,664 1,867 2,137 2,929 3,517 4,139 5,408 6,309 na na na

Lending/GDP (%) na na 53.1 49.8 54.3 61.1 56.0 57.9 57.4 57.2 na na na

Loan to deposit ratio na na na na na na na na 0.9 na na na na

Prices

CPI (avg %YoY) from 2013 = Mar/Mar 12.1 13.3 18.4 25.4 10.8 12.4 21.5 30.5 34.7 15.6 13.6 9.7 10.0

CPI (end-yr %YoY) from 2012 = Mar/Mar 10.4 15.3 22.5 17.8 10.4 19.9 25.2 42.2 17.4 16.2 9.9 9.5 na

PPI (avg %YoY) from 2012 = Mar/Mar na na na 20.9 7.4 16.6 34.2 32.4 34.5 14.8 13.5 10.0 na

Wage rates (%YoY, nominal) na na na na na na na na na 18.0 na na na

Fiscal balance (% of GDP) na na na na na na na na na na na na na

Consolidated government balance 2.8 2.0 6.7 0.6 0.8 2.8 0.2 -0.3 -0.9 -1.1 -2.9 -1.6 na

Consolidated primary balance na na na na na na na na na na na na na

Total public debt (% of GDP) 13.6 12.5 12.0 9.3 10.4 12.2 8.9 16.8 15.4 15.8 16.4 15.3 na

External balance

Exports (US$bn) - fiscal year 64.5 76.2 97.7 101.3 88.3 112.8 145.8 97.3 93.1 86.5 70.5 95.0 na

Imports (US$bn) - fiscal year 43.4 50.0 58.2 70.2 69.2 75.5 78.0 68.7 61.2 65.1 58.0 80.0 na

Trade balance (US$bn) - fiscal year 21.1 26.2 39.4 31.1 19.1 37.3 67.8 28.6 32.0 21.4 12.5 15.0 na

Trade balance (% of GDP) - fiscal year 9.7 10.2 11.7 8.0 4.8 8.0 11.8 4.9 7.2 5.1 3.0 3.4 na

Current account balance (US$bn) 15.4 20.6 32.6 22.8 9.5 27.3 58.5 23.4 26.4 15.9 6.0 5.0 na

Current account balance (% of GDP) 7.1 8.0 9.7 5.9 2.4 5.9 10.2 4.0 5.9 3.8 1.5 1.1 na

Net FDI (US$bn) 2.5 2.1 1.7 1.8 2.9 3.5 4.0 3.2 2.9 1.5 na na na



Exports (%YoY, value) 47.2 18.1 28.2 3.7 -12.8 27.7 29.3 -33.3 -4.3 -7.1 -18.5 34.8 na

Imports (%YoY, value) 11.9 15.2 16.5 20.5 -1.3 9.0 3.4 -11.9 -11.0 6.4 -10.9 37.9 na

FX (ex gold, US$bn) 43.9 59.0 82.9 79.6 78.0 78.9 95.5 84.8 81.5 84.6 na na na


Debt indicators

Gross external debt (US$bn) 24.3 23.5 28.6 21.5 21.5 22.8 19.2 7.7 6.7 5.1 10.0 20.0 na

Gross external debt (% of GDP) 11.1 9.1 8.5 5.5 5.4 4.9 3.3 1.3 1.5 1.2 2.4 4.5 na

Gross external debt (% of exports) 37.6 30.9 29.3 21.2 24.4 20.2 13.2 7.9 7.1 5.9 14.2 21.1 na

Total debt service (US$bn) 3.7 3.8 4.4 4.1 3.9 4.2 4.3 2.1 2.0 0.9 1.3 1.6 na

Total debt service (% of GDP) 1.7 1.5 1.3 1.1 1.0 0.9 0.7 0.4 0.4 0.2 0.3 0.4 na

Total debt service (% of exports) 5.7 5.0 4.5 4.1 4.4 3.7 2.9 2.2 2.1 1.1 1.9 1.7 na


Broad money supply (M2, %YoY) 145.3 39.4 27.7 15.9 23.9 25.2 20.1 30.0 29.1 22.3 11.1 15.8 na

3M interest rate (end-yr %) na na na na na na na na na na na na na

3M interest rate spread over $-Libor (ppt) na na na na na na na na na na na na na

1-year term deposit rate - private banks na na na na 14.5 14.0 17.0 17.0 na na 20.0 na na

5-year term deposit rate - private banks na na na na 17.5 17.0 20.0 20.0 na na na na na

Exchange rate (IRR/€) year-end - March 10,984 12,240 14,176 12,787 13,423 14,491 16,245 15,904 34,260 29,960 33,390 35,640 34,720

Exchange rate (IRR/€) annual average 11,001 11,803 13,158 13,620 14,000 13,477 15,113 15,829 28,341 33,298 32,576 34,508 33,550

Exchange rate (IRR/$) year-end - March 9,131 9,242 9,135 9,801 9,891 10,337 12,308 12,277 24,774 27,700 31,500 33,000 31,000

Exchange rate (IRR/$) annual average 9,027 9,198 9,280 9,607 9,920 10,339 10,964 12,294 21,076 26,509 29,750 32,250 30,500

Source: IMF, CBI, Bloomberg, Renaissance Capital


Facing the spectre

187

Iraq 662

Figure 662: Iraq key economic indicators

Ratings (M/S&P/F) Caa1/B-/B-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 1.7 5.6 1.9 8.2 3.4 6.4 7.5 13.9 6.6 -2.1 0.0 7.1 8.1

Investment (% GDP) na na na na na na na na na na na na na


Nominal GDP (lcl tn) 73.5 95.6 111.5 157.0 130.6 162.1 217.3 254.2 271.1 260.6 192.5 205.7 233.6

Nominal GDP ($bn) 50.1 65.1 88.8 131.6 111.7 138.5 185.8 218.0 232.5 223.5 165.1 176.4 200.4

Population (mn) 27.4 28.1 28.7 29.4 30.2 31.0 31.8 32.6 33.4 34.3 35.2 36.1 37.0

GDP per capita ($) 1,829 2,321 3,091 4,472 3,702 4,474 5,849 6,693 6,957 6,520 4,694 4,891 5,416


Lending/GDP (%) 2.3 3.0 2.6 2.8 3.9 5.5 5.8 8.0 8.6 9.8 14.6 15.6 na


Prices

CPI (average % YoY) 37.0 53.2 30.8 2.7 -2.2 2.4 5.6 6.1 1.9 2.2 1.9 3.0 3.0

CPI (year-end, % YoY) 31.6 64.8 4.7 6.8 -4.4 3.3 6.0 3.6 3.1 1.6 3.0 3.0 3.0


Consolidated government balance 4.1 10.7 7.8 -0.9 -12.7 -4.2 4.7 4.1 -5.8 -5.3 -23.1 -17.7 -9.9


External indicators





Current account balance ($bn) 6.2 3.9 0.7 20.9 -7.6 4.1 22.3 14.5 3.0 -6.2 -20.9 -19.4 -2.9

Current account balance (% of GDP) 12.3 5.9 0.8 15.9 -6.8 3.0 12.0 6.7 1.3 -2.8 -12.7 -11.0 -1.4

Net FDI ($bn) 0.4 0.1 1.0 1.8 1.5 1.3 1.7 2.9 na na na na na

Net FDI (% of GDP) 0.9 0.1 1.1 1.4 1.4 0.9 0.9 1.3 na na na na na

C/A balance plus FDI (% of GDP) 13.2 6.0 1.9 17.3 -5.4 3.9 12.9 8.0 na na na na na

Exports (% YoY, value) 9.8 56.0 28.2 61.4 -36.2 28.6 51.8 19.1 -2.2 -3.7 na na na

Imports (% YoY, value) 24.2 3.6 14.7 43.8 17.0 15.0 25.7 23.5 13.7 -3.4 na na na






Exchange rate (EUR) annual average 848 856 1,092 1,234 1,190 1,134 1,189 1,103 1,139 1,140 954 959 969





Facing the spectre

188

Jordan 663

Figure 663: Jordan key economic indicators

Ratings (M/S&P/F) B1/BB-/NR

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 8.1 8.1 8.2 7.2 5.5 2.3 2.6 2.7 2.8 3.1 2.9 3.7 4.5

Investment (% GDP) 34.1 28.3 30.3 29.9 26.3 25.5 23.2 21.7 20.7 21.3 20.3 21.6 22.2

Unemployment rate year-end (%) 14.8 14.1 13.1 12.7 12.9 12.5 12.9 12.2 12.6 na na na na


Nominal GDP ($bn) 12.6 15.1 17.1 22.0 23.8 26.4 28.8 31.0 33.6 35.9 38.2 40.9 43.8

Population (mn) 5.5 5.6 5.7 5.9 6.0 6.1 6.2 6.4 6.5 6.7 6.8 7.0 7.1

GDP per capita ($) 2,300 2,689 2,990 3,754 3,983 4,323 4,615 4,850 5,152 5,375 5,599 5,862 6,145


Lending/GDP (%) 88.1 91.8 91.6 80.9 75.5 73.2 73.5 72.9 72.3 71.2 70.2 68.9 na


Prices

CPI (average % YoY) 3.5 6.3 4.7 14.0 -0.7 4.8 4.2 4.5 4.8 2.9 0.2 3.1 2.4

CPI (year-end, % YoY) 4.2 7.5 5.1 9.0 2.7 5.7 2.9 6.0 3.1 1.7 1.9 2.5 2.3




External indicators





Current account balance ($bn) -2.3 -1.7 -2.9 -2.1 -1.2 -1.9 -3.0 -4.7 -3.5 -2.5 -2.8 -2.6 -2.7


Net FDI ($bn) 1.8 3.7 2.6 2.8 2.3 1.6 1.4 1.5 1.7 1.7 na na na


C/A balance plus FDI (% of GDP) -3.6 13.0 -1.8 3.5 4.6 -1.0 -5.3 -10.4 -5.1 -2.2 na na na

Exports (% YoY, value) 21.8 21.0 6.3 12.8 -19.3 17.8 13.4 20.1 -2.2 5.9 na na na












Facing the spectre

189

Kazakhstan 664

Figure 664: Kazakhstan key economic indicators

Ratings (M/S&P/F) Baa2/BBB/BBB+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 9.7 10.6 8.9 3.3 1.2 7.3 7.5 5.0 6.0 4.4 0.7 2.8 3.9

Private consumption (%YoY) 11.1 12.7 10.9 6.3 0.6 11.8 10.9 11.0 10.1 -3.3 -1.2 4.2 na

Government consumption (%YoY) 10.8 7.3 14.0 4.3 1.0 2.7 11.3 13.2 1.0 10.3 6.8 7.0 na

Investment (%YoY) 34.7 20.3 17.3 1.0 -0.8 3.8 3.9 9.1 9.9 0.2 1.9 5.2 na

Industrial production (%YoY) 3.1 7.1 6.2 2.6 2.7 9.6 3.8 0.7 2.3 0.2 0.0 1.7 na

Unemployment rate year-end (%) 8.1 7.8 7.3 6.6 6.6 5.8 5.4 5.3 5.2 5.0 5.5 5.3 na


Nominal GDP (€bn) 46.0 64.7 76.5 90.7 82.7 111.6 134.5 157.4 174.4 163.7 181.2 171.2 189.8

Nominal GDP (US$bn) 57.1 81.0 104.9 133.4 115.3 148.1 188.1 203.5 220.3 217.6 197.5 180.6 208.8

Population (m) 15.2 15.4 15.6 15.8 16.2 16.4 16.7 16.9 17.2 17.4 17.7 17.9 18.2

GDP per capita (US$) 3,771 5,292 6,772 8,514 7,165 9,070 11,357 12,119 12,933 12,507 11,159 10,088 11,470

Gross domestic saving (% of GDP) 28.3 30.9 28.2 31.7 27.0 27.4 28.6 25.9 24.3 26.6 27.7 25.4 na


Loan to deposit ratio % 156.8 152.4 186.6 137.9 118.1 102.7 104.7 110.7 111.9 103.0 105.0 106.0 na

Prices

CPI (average %YoY) 7.5 8.6 10.7 17.3 7.3 7.1 8.4 5.1 5.8 6.7 5.5 8.0 6.9

CPI (end-year %YoY) 7.6 8.4 18.8 9.5 6.2 7.8 7.4 6.0 4.8 7.4 7.1 7.7 6.5

PPI (average %YoY) 23.7 18.8 12.1 38.4 -20.1 27.0 27.3 3.8 -0.3 9.6 -17.5 19.2 na

Wage rates (%YoY, nominal) 20.2 21.0 28.2 16.4 10.9 14.7 15.8 13.9 6.8 10.6 10.1 12.4 na

Fiscal balance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 na

Consolidated government balance 0.6 0.8 -1.7 -2.1 -3.1 -2.5 -2.1 -2.9 -2.1 -2.2 -2.5 -2.2 na


External balance

Exports (US$bn) 28.3 34.8 47.8 72.0 43.9 61.4 85.2 86.9 83.4 79.1 46.2 48.5 na

Imports (US$bn) 18.0 21.3 32.8 38.4 28.9 32.9 40.3 49.1 49.7 43.4 31.0 26.7 na

Trade balance (US$bn) 10.3 13.5 15.0 33.6 15.0 28.5 44.8 37.9 33.7 35.7 15.2 21.8 na

Trade balance (% of GDP) 18.1 16.7 14.3 25.2 13.0 19.2 23.8 18.6 15.3 16.4 7.7 12.1 na

Current account balance (US$bn) -1.1 -2.0 -2.0 6.3 -4.1 1.4 10.2 1.0 1.1 4.6 -7.6 0.5 na

Current account balance (% of GDP) -1.8 -2.5 -1.9 4.7 -3.6 0.9 5.4 0.5 0.5 2.1 -3.8 0.3 na

Net FDI (US$bn) 2.5 7.6 12.0 16.8 14.3 7.5 13.8 13.6 10.0 7.6 8.8 12.0 na

Net FDI (% of GDP) 4.4 9.4 11.4 12.6 12.4 5.1 7.3 6.7 4.5 3.5 4.5 6.6 na

C/A balance plus FDI (% of GDP) 2.5 6.9 9.5 17.3 8.8 6.0 12.8 7.2 5.0 5.6 0.6 6.9 na

Exports (%YoY, value) 37.4 23.0 37.4 50.4 -39.0 39.8 38.8 2.0 -4.1 -5.2 -41.6 5.0 na

Imports (%YoY, value) 30.1 18.4 54.1 16.9 -24.6 13.7 22.7 21.6 1.3 -12.7 -28.6 -13.9 na

FX reserves (ex gold, US$bn) 15.1 33.2 38.6 47.4 47.5 59.3 73.0 86.2 95.5 102.5 93.0 90.0 na


Debt indicators

Gross external debt (US$bn) 43.4 74.0 96.9 107.9 112.9 118.2 125.2 137.1 148.7 157.0 150.0 153.0 na



Total debt service (US$bn) 11.1 11.8 25.4 31.8 30.5 21.1 22.5 22.1 24.6 25.6 25.0 26.0 na




Broad money supply (%YoY) 30.2 85.7 25.7 30.6 15.5 23.1 21.3 7.3 1.6 -8.2 -12.5 6.5 na

3M interest rate (KAZPRIME avg %) na 5.4 7.5 8.8 9.6 2.0 1.8 2.5 5.0 6.8 10.3 10.5 na

3M interest rate spread over $-Libor (ppt) - 0.2 2.2 5.9 9.0 1.7 1.5 2.1 4.7 6.6 10.0 9.6 na

NBK refinancing rate, % year-end 8.0 9.0 11.0 10.5 7.0 7.5 7.5 5.5 5.5 5.5 16.0 8.5 na

1-year yield (avg %) 3.6 2.8 8.5 7.8 6.6 3.2 1.8 1.9 2.7 3.1 5.0 6.5 na

10-year yield (avg %) 6.1 4.8 5.1 6.0 7.1 6.9 6.2 5.7 5.8 6.3 7.8 9.0 na

Exchange rate (KZT/€) year-end 158 167 176 168 213 197 192 199 212 225 276 263 264

Exchange rate (KZT/€) annual average 165 158 168 177 206 196 205 192 202 239 229 269 270

Exchange rate (KZT/US$) year-end 134 127 121 121 148 147 148 151 154 182 260 250 240

Exchange rate (KZT/US$) annual average 133 126 123 120 148 147 147 149 152 179 210 255 245

Source: IMF, UNCTAD, National Bank of Kazakhstan, Bloomberg, Renaissance Capital estimates


Facing the spectre

190

Kenya 665

Figure 665: Kenya key economic indicators

Ratings (M/S&P/F) B1/B+/B+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 5.7 5.9 6.9 0.2 3.3 8.4 6.1 4.5 5.7 5.5 5.2 5.5 6.0

Private consumption (%YoY) na na 5.3 -1.6 4.7 7.6 6.3 5.7 8.3 7.6 6.1 6.2 6.8

Government consumption (%YoY) na na 8.1 8.6 8.7 3.6 4.1 7.3 1.1 8.2 7.9 7.5 7.2

Investment (%YoY) 18.2 18.6 2.2 12.9 10.0 14.1 4.5 12.7 1.4 6.5 8.1 8.0 8.0

Industry, value added (%YoY) 4.4 5.0 7.1 4.7 2.8 5.4 2.8 4.5 6.4 6.8 7.0 6.9 6.9

Nominal GDP (KESbn) 1,587 1,862 2,151 2,483 2,864 3,169 3,726 4,255 4,731 5,358 6,088 6,915 7,865

Nominal GDP (€bn) 16.9 20.6 23.3 24.4 26.6 30.2 30.1 39.2 41.4 46.3 54.6 57.5 60.9

Nominal GDP (US$bn) 21.0 25.8 32.0 35.9 37.1 40.0 42.0 50.4 55.0 60.9 61.0 61.6 66.7

Population (m) 33.8 34.7 35.7 36.7 37.7 38.5 39.5 40.7 41.8 42.9 44.1 45.2 46.4

GDP per capita (US$) 622 744 896 978 983 1,040 1,062 1,237 1,315 1,418 1,384 1,361 1,436


Loans to non-banking sector (lcl bn) 417 475 541 686 758 915 1,191 1,360 1,580 2,035 2,341 2,786 3,343

Lending/GDP (%) 26.3 25.5 25.1 27.6 26.5 28.9 32.0 32.0 33.4 38.0 38.4 40.3 42.5


Prices

CPI (average %YoY) 9.9 6.0 4.3 16.2 9.4 3.8 13.6 9.6 5.7 7.0 6.6 7.5 7.5

CPI (end-year %YoY) 4.7 7.3 5.6 17.8 5.3 4.5 18.6 3.2 7.1 6.0 7.5 8.1 7.0

Fiscal balance (% of GDP)*

General government budget balance -2.3 -2.5 -3.2 -4.2 -4.9 -4.8 -5.8 -6.4 -7.7 -8.6 -7.9 -6.4 -5.5

General government primary balance 0.0 -0.5 -0.8 -1.8 -2.7 -2.5 -2.2 -2.9 -3.3 -4.5 -5.4 -5.3 -4.4


External balance

Exports (US$bn) 3.5 3.5 4.1 5.0 4.5 5.2 5.8 6.1 5.9 6.0 5.7 6.1 6.3

Imports (US$bn) 5.6 6.8 8.4 10.7 9.5 12.1 14.8 16.4 16.4 18.2 16.2 17.0 17.8

Trade balance (US$bn) -2.1 -3.3 -4.3 -5.6 -5.0 -6.9 -9.0 -10.3 -10.5 -12.2 -10.5 -10.8 -11.5

Trade balance (% of GDP) -10.2 -12.6 -13.3 -15.7 -13.5 -17.3 -21.5 -20.4 -19.1 -20.0 -17.2 -17.6 -17.2



Net FDI (US$bn) 0.0 0.1 0.7 0.1 0.6 0.7 0.8 0.8 0.5 0.8 1.1 1.4 1.5

Net FDI (% of GDP) 0.1 0.2 2.3 0.3 1.6 1.7 1.9 1.7 0.9 1.2 1.8 2.3 2.2

C/A balance plus FDI (% of GDP) -1.2 -1.8 -1.1 -5.3 -2.8 -4.5 -8.7 -6.8 -5.8 -7.7 -5.8 -5.0 -4.3

Exports (%YoY, value) 27.0 1.6 17.5 22.0 -10.7 14.4 11.7 6.4 -4.4 2.5 -5.8 8.6 2.6

Imports (%YoY, value) 28.8 20.8 23.9 27.4 -11.2 27.4 22.3 10.9 -0.2 11.2 -11.2 5.0 4.8



Debt indicators



Gross external debt (% of exports) 187 190 182 151 191 171 179 260 305 426 546 554 603





Central bank rate (CBR), %YE 0.0 10.0 8.8 8.5 7.0 6.0 18.0 11.0 8.5 8.5 11.5 10.0 9.0



3-month interest rate (t-bill avg %) 8.1 5.7 6.9 8.5 6.9 2.3 18.3 8.1 9.5 8.7 10.5 8.9 8.5

3-month interest rate spread over $-Libor (ppt) 3.4 0.4 0.9 5.8 6.3 1.5 17.2 7.6 9.0 8.1 9.7 7.5 7.1

5Y yield (%avg) 11.0 12.5 11.5 10.5 10.5 9.5 14.5 13.5 12.9 12.6 13.2 12.7 12.5

Exchange rate (KES/EUR) year-end 85.8 91.8 93.0 109 109 108 110 113 119 110 120 123 136

Exchange rate (KES/EUR) annual average 93.9 90.5 92.2 102 108 105 124 109 114 116 111 120 129

Exchange rate (KES/$) year-end 72.5 69.6 63.8 78.2 75.8 80.7 85.1 86.0 86.3 90.6 109 115 121

Exchange rate (KES/$) annual average 75.5 72.1 67.3 69.2 77.2 79.2 88.8 84.5 86.1 88.0 99.8 112 118

Source: IMF, UNCTAD, Central Bank of Kenya, Bloomberg, Renaissance Capital estimates

Source: IMF, UNCTAD, National Bank of Kazakhstan, Bloomberg, Renaissance Capital estimates


Facing the spectre

191

Kuwait 666

Figure 666: Kuwait key economic indicators

Ratings (M/S&P/F) Aa2/AA/AA

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 10.1 7.5 6.0 2.5 -7.1 -2.4 10.6 7.7 0.8 0.1 1.2 2.5 2.7

Investment (% GDP) 16.4 16.2 20.5 17.6 18.0 17.7 13.5 12.8 14.1 15.1 20.8 21.0 20.5



Nominal GDP ($bn) 80.8 101.6 114.7 147.4 106.0 115.4 154.0 174.1 175.8 172.6 123.2 128.5 141.8

Population (mn) 3.0 3.2 3.4 3.4 3.5 3.6 3.7 3.8 3.9 4.0 4.1 4.2 4.3

GDP per capita ($) 27,017 31,907 33,729 42,825 30,414 32,217 41,829 45,988 45,203 43,163 29,982 30,423 32,652


Lending/GDP (%) 51.4 54.8 67.0 64.2 88.6 83.2 66.4 59.6 62.4 63.4 85.5 82.8 na


Prices

CPI (average % YoY) 4.1 3.1 5.5 6.3 4.6 4.5 4.9 3.2 2.7 2.9 3.3 3.3 3.5

CPI (year-end, % YoY) 4.5 3.6 7.5 9.0 2.1 6.0 3.1 4.4 2.7 2.9 3.3 3.3 3.5


Consolidated government balance 43.3 31.9 37.4 20.2 27.2 25.9 33.0 34.7 34.0 26.3 1.3 0.1 2.5


External indicators





Current account balance ($bn) 30.1 45.3 42.2 60.2 28.3 36.7 65.7 78.7 72.5 53.5 11.4 8.9 12.5

Current account balance (% of GDP) 37.2 44.6 36.8 40.9 26.7 31.8 42.7 45.2 41.2 31.0 9.3 7.0 8.8

Net FDI ($bn) -4.9 -8.1 -9.7 -9.1 -7.5 -4.6 -7.5 -21.6 -15.2 -12.6 na na na

Net FDI (% of GDP) -6.1 -8.0 -8.4 -6.2 -7.0 -4.0 -4.9 -12.4 -8.7 -7.3 na na na














Facing the spectre

192

Lebanon 667

Figure 667: Lebanon key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 2.7 1.6 9.4 9.1 10.3 8.0 0.9 2.8 2.5 2.0 2.0 2.5 3.0




Nominal GDP ($bn) 21.3 21.8 24.6 28.8 35.1 38.0 40.1 44.1 47.6 50.0 54.4 57.0 59.4

Population (mn) 4.0 4.1 4.1 4.2 4.2 4.3 4.4 4.4 4.5 4.5 4.6 4.6 4.6

GDP per capita ($) 5,339 5,342 5,936 6,888 8,274 8,756 9,144 9,966 10,655 11,093 11,944 12,405 12,799


Lending/GDP (%) 70.4 72.6 74.9 77.0 72.6 83.5 89.7 89.8 91.9 94.4 92.9 94.8 na

Gross domestic saving (% of GDP) 8.4 12.1 17.0 16.4 13.7 3.8 11.8 -0.2 -2.6 -2.0 -0.1 1.8 3.0

Prices

CPI (average % YoY) -0.7 5.6 4.1 10.8 1.2 4.0 5.0 6.6 4.8 1.9 0.1 1.5 2.3

CPI (year-end, % YoY) 0.5 7.2 6.0 6.4 3.4 4.6 3.1 10.1 1.1 -0.7 1.0 2.0 2.5




External indicators







Net FDI ($bn) 1.9 1.8 2.5 3.3 3.7 3.8 2.7 3.0 0.9 1.2 na na na


C/A balance plus FDI (% of GDP) -4.8 1.0 3.0 0.5 -2.1 -10.7 -8.3 -17.6 -24.8 -22.5 na na na

Exports (% YoY, value) 7.3 22.4 23.3 24.8 0.2 12.4 8.9 6.7 -17.6 -10.4 na na na

Imports (% YoY, value) -0.6 0.6 25.7 36.6 0.5 10.7 11.6 6.1 1.3 -4.9 na na na











Facing the spectre

193

Lithuania 668

Figure 668: Lithuania key economic indicators

Ratings (M/S&P/F) A3/A-/A-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 7.8 7.4 11.1 2.6 -14.8 1.6 6.1 3.8 3.3 3.0 1.8 2.6 3.0

Investment (% GDP) 24.2 26.9 32.3 28.1 12.6 18.1 21.9 19.2 19.1 18.9 21.1 21.8 22.4


Nominal GDP (lcl bn) 21 24 29 33 27 28 31 33 35 36 38 40 43

Nominal GDP ($bn) 26.2 30.2 39.8 48.3 37.5 37.2 43.5 42.8 46.4 48.3 41.8 44.6 48.1

Population (mn) 3.3 3.3 3.2 3.2 3.2 3.1 3.0 3.0 3.0 2.9 2.9 2.9 2.9

GDP per capita ($) 7,879 9,246 12,314 15,104 11,866 12,001 14,374 14,338 15,692 16,469 14,317 15,368 16,632

Stock of bank credit (lcl, bn) 9 12 17 20 19 18 16 18 17 17 18 19 na

Lending/GDP (%) 40.7 49.9 59.1 62.0 69.1 62.6 52.8 53.8 48.8 46.8 47.5 46.9 na


Prices

CPI (average % YoY) 2.7 3.8 5.8 11.1 4.2 1.2 4.1 3.2 1.2 0.2 -0.4 1.6 1.7

CPI (year-end, % YoY) 3.0 4.5 8.2 8.5 1.2 3.6 3.5 2.9 0.5 -0.2 0.2 1.5 1.9




External indicators





Current account balance ($bn) -1.9 -3.1 -5.9 -6.3 0.8 -0.1 -1.7 -0.5 0.7 0.1 -0.9 -1.1 -1.1

Current account balance (% of GDP) -7.2 -10.4 -14.9 -12.9 2.1 -0.3 -3.8 -1.2 1.6 0.1 -2.2 -2.4 -2.2

Net FDI ($bn) 0.3 1.6 1.4 1.6 -0.2 0.8 1.4 0.3 0.3 0.2 na na na

Net FDI (% of GDP) 1.3 5.2 3.5 3.4 -0.6 2.2 3.2 0.7 0.6 0.5 na na na

C/A balance plus FDI (% of GDP) -5.8 -5.2 -11.4 -9.6 1.4 1.8 -0.6 -0.5 2.2 0.6 na na na













Facing the spectre

194

Mauritius 669

Figure 669: Mauritius key economic indicators

Ratings (M/S&P/F) Baa1/NR/NR

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 1.5 4.5 5.9 5.5 3.0 4.1 3.9 3.2 3.2 3.6 3.2 3.8 3.6

Investment (% GDP) 22.7 26.7 26.9 27.3 21.3 23.7 26.0 24.8 25.1 22.9 25.4 26.3 26.1



Nominal GDP ($bn) 6.3 6.3 8.4 8.5 9.6 9.8 11.0 11.2 11.9 12.6 11.6 12.1 12.9

Population (mn) 1.2 1.2 1.2 1.2 1.2 1.3 1.3 1.3 1.3 1.3 1.3 1.3 1.3

GDP per capita ($) 5,090 5,071 6,775 6,871 7,730 7,836 8,814 8,932 9,474 9,998 9,187 9,647 10,240


Lending/GDP (%) 80.2 80.5 80.6 90.8 89.0 93.3 96.3 106.0 112.9 104.1 103.2 104.2 na


Prices

CPI (average % YoY) 4.9 8.9 8.8 9.7 2.5 2.9 6.5 3.9 3.5 3.2 2.0 3.0 3.0

CPI (year-end, % YoY) 3.8 11.6 8.6 6.8 1.5 6.1 4.9 3.2 4.1 0.2 3.0 3.0 3.0




External indicators







Net FDI ($bn) 0.0 0.1 0.3 0.3 0.2 13.8 -1.0 5.7 1.2 0.5 na na na

Net FDI (% of GDP) -0.1 1.6 3.3 3.8 2.3 141.3 -9.0 50.5 10.1 4.2 na na na

C/A balance plus FDI (% of GDP) -5.1 -7.5 -2.1 -6.3 -5.1 131.0 -22.8 43.3 3.8 -1.3 na na na

Exports (% YoY, value) 4.5 5.4 -6.5 5.1 -15.1 14.5 7.9 4.2 0.4 13.2 na na na





Key policy rate (% YE) na 8.5 9.3 6.8 5.8 4.8 5.4 4.9 4.7 4.7 na na na







Facing the spectre

195

Morocco 670

Figure 670: Morocco key economic indicators

Ratings (M/S&P/F) Ba1/BBB-/BBB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 3.3 7.6 3.5 5.9 4.2 3.8 5.2 3.0 4.7 2.4 4.9 3.7 4.8

Investment (% GDP) 27.5 28.1 33.9 39.1 35.0 34.1 35.8 35.0 34.7 33.7 33.4 34.3 35.1


Nominal GDP (lcl bn) 553 604 648 717 748 785 820 848 901 925 999 1,052 1,115

Nominal GDP ($bn) 62.3 68.6 79.0 92.5 92.9 93.2 101.4 98.3 107.2 110.0 103.1 109.9 117.6

Population (mn) 30.2 30.5 30.8 31.2 31.5 31.9 32.2 32.5 32.9 33.2 33.5 33.8 34.2

GDP per capita ($) 2,066 2,250 2,563 2,967 2,948 2,927 3,149 3,022 3,264 3,316 3,077 3,249 3,442

Stock of bank credit (lcl, bn) 296 359 462 577 644 715 790 830 859 896 950 1,007 na

Lending/GDP (%) 53.5 59.4 71.4 80.5 86.1 91.2 96.3 97.9 95.3 96.9 95.1 95.7 na


Prices

CPI (average % YoY) 1.0 3.3 2.0 3.9 1.0 1.0 0.9 1.3 1.9 0.4 1.5 2.0 2.0

CPI (year-end, % YoY) 2.1 3.3 2.0 4.2 -1.6 2.2 0.9 2.6 0.4 1.6 1.6 2.0 2.0


Consolidated government balance -5.9 -1.9 -0.1 0.7 -1.8 -4.3 -6.6 -7.3 -5.2 -4.9 -4.3 -3.5 -3.0


External indicators







Net FDI ($bn) 1.6 2.0 2.2 2.2 1.5 0.7 2.3 2.5 2.9 3.1 na na na


C/A balance plus FDI (% of GDP) 2.4 1.4 0.3 -4.8 -3.7 -3.7 -5.6 -7.0 -5.2 -2.6 na na na













Facing the spectre

196

Nigeria 671

Figure 671: Nigeria key economic indicators

Ratings (M/S&P/F) Ba3/B+/BB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 2.5 5.4 4.5 8.2 6.1 4.8 5.3 4.2 5.5 6.3 2.8 4.0 4.2

Private consumption (%YoY) na na na na na na 2.6 0.3 29.3 0.0 0.0 0.0 0.0

Government consumption (%YoY) na na na na na na 4.6 -2.0 1.4 0.0 0.0 0.0 0.0

Investment (%YoY) na na na na na na -29.8 1.9 10.5 0.0 0.0 0.0 0.0

Oil production (mbd YE) 2.5 2.4 2.2 2.1 2.1 2.4 2.4 2.0 2.2 2.2 2.0 2.1 2.2

Nominal GDP (NGNtn) 21.1 27.4 31.4 37.8 39.6 55.5 63.7 72.6 81.0 90.1 98.3 111.2 125.6

Nominal GDP (€bn) 127.4 170.0 182.0 215.8 189.4 276.9 293.3 359.2 382.4 414.8 440.3 440.6 480.7

Nominal GDP (US$bn) 158.5 213.6 249.5 317.5 264.1 367.3 408.4 461.8 508.0 545.7 491.5 471.5 526.4

Population (m) 136 140 144 148 152 156 160 165 169 174 179 184 189

GDP per capita (US$) 1,164 1,525 1,734 2,148 1,739 2,354 2,547 2,803 3,001 3,136 2,750 2,567 2,790


Loans to non-banking sector (lcl tn) 2.0 2.6 5.1 8.1 10.2 9.7 14.2 15.1 16.5 18.1 19.3 21.1 23.5

Lending/GDP (%) 9.5 9.3 16.1 21.3 25.7 17.5 22.3 20.8 20.4 20.1 19.7 18.9 18.7


Prices

CPI (average %YoY) 17.9 8.4 5.4 11.5 12.6 13.7 10.8 12.2 8.5 8.4 13.2 12.9 10.1

CPI (end-year %YoY) 11.6 8.6 6.6 15.1 13.9 11.8 10.9 12.0 8.0 8.1 14.8 10.9 9.3


Federal government balance 2.9 2.7 -0.3 0.6 -1.9 -2.5 -1.7 -1.5 -1.4 -1.0 -2.5 -2.1 -1.9


External balance

Exports (US$bn) 49.8 58.8 54.8 80.7 60.0 75.1 93.3 96.0 95.1 83.9 44.6 48.4 55.8

Imports (US$bn) 13.4 22.8 32.7 27.8 30.0 53.8 62.2 53.6 51.4 57.1 39.5 41.5 46.3

Trade balance (US$bn) 36.4 36.0 22.1 52.9 30.0 21.3 31.1 42.5 43.8 26.8 5.0 6.9 9.4

Trade balance (% of GDP) 23.0 16.9 8.9 16.7 11.3 5.8 12.0 9.2 8.6 4.9 1.0 1.5 1.8

Current account balance (US$bn) 9.8 36.8 27.9 29.3 14.0 13.4 8.8 20.4 20.7 6.2 -14.3 -12.8 -10.8


Net FDI (US$bn) 5.0 8.8 6.0 5.5 5.8 4.0 7.7 4.2 3.0 2.9 2.5 2.7 2.7

Net FDI (% of GDP) 3.1 4.1 2.4 1.7 2.2 1.1 1.9 0.9 0.6 0.5 0.5 0.6 0.5

C/A balance plus FDI (% of GDP) 9.3 21.4 13.6 11.0 7.5 4.7 4.0 5.3 4.7 1.7 -2.4 -2.1 -1.5

Exports (% YoY, value) 43.3 18.0 -6.8 47.3 -25.7 25.2 24.2 3.0 -1.0 -11.8 -46.9 8.7 15.1

Imports (% YoY, value) -10.8 70.0 43.6 -15.1 8.1 79.3 15.5 -13.8 -4.1 11.2 -30.8 5.0 11.6



Debt indicators








Monetary policy rate (MPR), %YE 13.0 14.0 9.5 9.8 6.0 6.3 12.0 12.0 12.0 13.0 13.0 11.5 10.0


Credit to the private sector (%YoY) 30.8 27.8 97.1 59.4 26.0 -4.4 46.2 6.7 9.1 9.9 6.5 9.0 11.5

3M interest rate (t-bill avg %) 7.7 6.9 7.8 6.9 4.3 7.5 14.1 11.7 10.9 10.8 10.4 11.0 10.5

3M interest rate spread over $-Libor (ppt) 3.1 1.6 1.8 4.1 3.7 6.7 13.0 11.2 10.4 10.2 9.6 9.6 9.1

5Y yield (%YE) 0.0 13.0 9.5 10.5 9.4 12.0 11.2 11.8 13.5 13.8 13.1 12.0 11.7

Exchange rate (NGN/EUR) year-end 154 170 172 195 214 203 206 206 221 222 253 258 284

Exchange rate (NGN/EUR) annual average 166 161 172 175 209 200 217 202 212 217 223 252 261

Exchange rate, NGN/$) year-end 130 129 118 140 150 152 159 156 160 183 230 242 254

Exchange rate (NGN/$) annual average 133 129 126 119 150 151 156 157 159 165 200 236 239

Source: IMF, UNCTAD, Central Bank of Nigeria, Bloomberg, Renaissance Capital estimates


Facing the spectre

197

Oman 672

Figure 672: Oman key economic indicators

Ratings (M/S&P/F) A1/A-/NR

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 2.5 5.4 4.5 8.2 6.1 4.8 4.1 5.8 4.7 2.9 4.4 2.8 2.0

Investment (% GDP) 22.1 28.0 35.2 37.5 29.2 26.2 19.1 25.3 28.0 28.4 29.5 29.9 30.5



Nominal GDP ($bn) 30.2 36.1 40.8 59.3 46.7 56.8 67.7 75.4 77.0 77.8 60.2 60.6 65.2

Population (mn) 2.6 2.7 2.7 2.8 2.9 2.9 3.0 3.3 3.6 3.7 3.8 4.0 4.1

GDP per capita ($) 11,524 13,536 14,954 21,275 16,203 19,697 22,621 22,921 21,425 20,925 15,672 15,323 15,973


Lending/GDP (%) 32.5 33.1 41.0 40.3 54.2 50.3 49.1 50.9 53.5 58.9 79.1 80.1 na


Prices

CPI (average % YoY) 1.9 3.2 5.9 12.6 3.5 3.3 4.0 2.9 1.2 1.0 0.4 2.0 2.9

CPI (year-end, % YoY) 1.9 4.3 8.3 11.8 0.9 4.2 3.3 2.9 0.3 1.0 0.4 2.0 2.9


Consolidated government balance 13.2 14.4 12.4 17.3 -0.3 5.7 9.4 4.7 3.2 -1.5 -17.7 -20.0 -18.5


External indicators





Current account balance ($bn) 5.2 5.7 2.5 5.0 -0.5 5.0 8.9 7.8 5.1 1.5 -10.2 -14.7 -14.6

Current account balance (% of GDP) 17.2 15.7 6.0 8.5 -1.1 8.9 13.2 10.3 6.6 2.0 -16.9 -24.3 -22.4

Net FDI ($bn) 1.3 1.3 3.4 2.4 1.4 -0.3 -0.4 0.2 0.2 0.0 na na na

Net FDI (% of GDP) 4.3 3.7 8.3 4.0 2.9 -0.4 -0.5 0.2 0.3 0.0 na na na



Imports (% YoY, value) 2.4 23.5 46.6 43.5 -22.1 10.8 19.4 19.0 22.1 -14.6 na na na




Key policy rate (% YE) na na na na na na na na na na na na na

Broad money growth (%YoY) na na na 23.3 4.7 11.3 12.2 10.7 8.5 12.0 na na na






Facing the spectre

198

Pakistan 673

Figure 673: Pakistan key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 9.0 5.8 5.5 5.0 0.4 2.6 3.6 3.8 3.7 4.0 4.2 4.5 4.5

Investment (% GDP) 19.1 19.3 18.8 19.2 17.5 15.8 14.1 15.1 15.0 15.0 15.1 15.3 15.6



Nominal GDP ($bn) 110.1 137.3 152.5 171.2 169.7 177.6 213.6 225.1 231.6 246.8 271.0 282.0 na

Population (mn) 153 155 158 165 168 172 175 179 183 186 190 194 197

GDP per capita ($) 722 883 964 1,040 1,009 1,034 1,219 1,258 1,269 1,326 1,427 1,457 na


Lending/GDP (%) 33.2 30.7 32.1 32.8 29.3 26.8 20.9 20.7 19.9 19.7 19.9 20.0 na


Prices

CPI (average % YoY) 9.3 7.9 7.8 12.0 18.1 10.1 13.7 11.0 7.4 8.6 4.5 4.7 5.5

CPI (year-end, % YoY) 8.7 7.6 7.0 21.5 9.6 11.8 13.3 11.3 5.9 8.2 3.2 6.0 4.1




External indicators





Current account balance ($bn) -1.5 -5.0 -6.9 -13.9 -9.3 -3.9 0.2 -4.7 -2.5 -3.1 -2.3 n/a n/a

Current account balance (% of GDP) -1.4 -3.6 -4.5 -8.1 -5.5 -2.2 0.1 -2.1 -1.1 -1.3 -0.8 -0.5 -0.5

Net FDI ($bn) 2.2 4.2 5.5 5.4 2.3 2.0 1.2 0.8 1.1 1.7 na na na


C/A balance plus FDI (% of GDP) 0.6 -0.6 -0.9 -5.0 -4.1 -1.1 0.7 -1.7 -0.6 -0.6 na na na








Exchange rate (PKR/€), June 114.5 111.4 124.8 137.3 135.2 113.0 117.7 na

Exchange rate (EUR) annual average 73.5 75.2 83.1 91.4 108.3 111.1 119.0 114.5 128.3 134.9 112.4 119.6 na

Exchange rate (PKR/US$) June 85.5 86.0 94.6 99.6 98.7 101.8 110.0 na

Exchange rate ($) annual average 59.0 59.9 60.6 62.1 77.8 83.7 85.6 89.1 96.6 101.6 101.1 107.0 na



Facing the spectre

199

Philippines 674

Figure 674: Philippines key economic indicators

Ratings (M/S&P/F) Baa2/BBB/BBB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.8 5.2 6.6 4.2 1.1 7.6 3.7 6.7 7.1 6.1 6.0 6.3 6.5

Investment (% GDP) 21.6 18.0 17.3 19.3 16.6 20.5 20.5 18.2 20.0 20.9 20.7 21.3 21.9



Nominal GDP ($bn) 103.1 122.2 149.4 173.6 168.5 199.6 224.1 250.1 271.9 284.6 299.3 330.2 366.8

Population (mn) 85 87 89 91 91 93 94 96 97 99 101 103 106

GDP per capita ($) 1,209 1,405 1,684 1,918 1,851 2,155 2,379 2,611 2,789 2,862 2,951 3,192 3,476


Lending/GDP (%) 34.5 36.0 36.8 35.8 36.5 36.7 40.0 41.9 43.6 46.8 49.9 51.8 na


Prices

CPI (average % YoY) 6.6 5.5 2.9 8.2 4.2 3.8 4.7 3.2 2.9 4.2 1.9 3.4 3.5

CPI (year-end, % YoY) 5.9 4.1 3.7 7.8 4.4 3.6 4.2 3.0 4.1 2.7 3.1 2.7 4.1


Consolidated government balance -1.7 0.0 -0.3 0.0 -2.7 -2.4 -0.4 -0.3 0.2 0.9 -0.1 -0.6 -0.8


External indicators







Net FDI ($bn) 0.9 1.6 -2.5 -0.6 0.2 -1.6 -0.3 -1.0 0.1 -0.8 na na na

Net FDI (% of GDP) 0.8 1.3 -1.6 -0.4 0.1 -0.8 -0.2 -0.4 0.0 -0.3 na na na

C/A balance plus FDI (% of GDP) 2.8 7.0 3.8 -0.3 5.1 2.8 2.4 2.4 4.2 4.2 na na na

Exports (% YoY, value) 3.9 14.0 7.4 -2.8 -20.1 31.1 -6.6 8.2 3.8 14.5 na na na





Key policy rate (% YE) 7.1 7.6 6.8 5.6 na 4.1 4.6 3.6 3.5 3.7 na na na







Facing the spectre

200

Poland 675

Figure 675: Poland key economic indicators

Ratings (M/S&P/F) A2/A-/A-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 3.5 6.2 7.2 3.9 2.6 3.7 4.8 1.8 1.7 3.4 3.5 3.5 3.6

Investment (% GDP) 19.6 21.5 24.8 24.3 20.2 21.0 22.2 20.6 19.1 20.2 20.1 20.7 21.3


Nominal GDP (lcl bn) 985 1,065 1,187 1,277 1,362 1,437 1,554 1,616 1,663 1,729 1,790 1,881 1,978

Nominal GDP ($bn) 304.4 343.3 429.2 530.0 436.8 476.5 524.1 496.7 526.2 547.9 481.2 508.9 540.2

Population (mn) 38.2 38.2 38.1 38.1 38.1 38.0 38.1 38.1 38.1 38.0 38.0 38.0 38.0

GDP per capita ($) 7,975 8,996 11,256 13,906 11,454 12,533 13,769 13,049 13,825 14,411 12,662 13,390 14,217

Stock of bank credit (lcl, bn) 285 353 464 633 678 735 838 858 896 968 1,036 1,119 na

Lending/GDP (%) 28.9 33.1 39.1 49.6 49.8 51.2 53.9 53.1 53.9 56.0 57.9 59.5 na


Prices

CPI (average % YoY) 2.1 1.0 2.5 4.2 3.5 2.6 4.3 3.7 0.9 0.0 -0.8 1.0 2.0

CPI (year-end, % YoY) 0.7 1.4 4.0 3.3 3.5 3.1 4.6 2.4 0.7 -1.0 0.1 1.6 2.2




External indicators







Net FDI ($bn) 6.9 10.7 18.0 10.4 8.5 9.3 14.0 6.6 3.7 8.7 na na na


C/A balance plus FDI (% of GDP) -0.3 -0.9 -2.1 -4.6 -2.0 -3.6 -2.3 -2.1 -0.6 0.3 na na na













Facing the spectre

201

Qatar 676

Figure 676: Qatar key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 7.5 26.2 18.0 17.7 12.0 19.6 13.4 4.9 4.6 4.0 4.7 4.9 4.2




Nominal GDP ($bn) 44.5 60.9 79.7 115.3 97.8 125.1 169.8 190.3 201.9 210.1 192.1 192.2 212.1

Population (mn) 0.8 1.0 1.2 1.6 1.6 1.6 1.7 1.8 2.0 2.2 2.4 2.6 2.7

GDP per capita ($) 54,239 62,895 69,194 74,176 59,925 76,434 99,417 103,587 98,721 94,009 78,817 73,730 77,843


Lending/GDP (%) 37.9 40.0 50.8 52.1 62.9 59.4 56.8 63.5 66.8 70.1 84.3 93.5 na


Prices

CPI (average % YoY) 8.8 11.9 13.6 15.2 -4.9 -2.4 1.9 1.9 3.1 3.0 1.6 2.3 2.9

CPI (year-end, % YoY) 8.8 11.9 13.6 15.2 -4.9 0.4 2.1 2.6 2.5 2.9 1.6 2.3 2.9


Consolidated government balance 9.0 8.5 10.4 10.8 15.5 6.1 10.2 14.2 20.7 14.7 4.5 -1.5 -2.5


External indicators





Current account balance ($bn) 7.5 9.5 11.5 26.6 6.4 24.0 52.1 62.0 62.4 54.8 9.7 -8.6 -5.8

Current account balance (% of GDP) 16.8 15.5 14.4 23.1 6.5 19.1 30.7 32.6 30.9 26.1 5.0 -4.5 -2.7

Net FDI ($bn) na na na na na na -9.2 -1.4 -8.9 -5.7 na na na

Net FDI (% of GDP) na na na na na na -5.4 -0.8 -4.4 -2.7 na na na

C/A balance plus FDI (% of GDP) na na na na na na 25.3 31.8 26.5 23.4 na na na


Imports (% YoY, value) 67.6 63.4 42.5 18.8 -10.7 -6.8 -3.9 12.9 6.5 13.3 na na na











Facing the spectre

202

Romania 677

Figure 677: Romania key economic indicators

Ratings (M/S&P/F) Baa3/BBB-/BBB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.2 8.1 6.9 8.5 -7.1 -0.8 1.1 0.6 3.4 2.8 3.4 3.9 3.4

Investment (% GDP) 23.9 27.2 31.3 33.4 27.1 26.8 27.9 27.0 24.5 23.0 24.2 24.2 24.1



Nominal GDP ($bn) 100.3 123.5 171.7 209.7 168.0 168.0 186.1 172.0 191.6 199.1 174.9 183.4 196.8

Population (mn) 21.4 21.3 21.1 20.6 20.4 20.3 20.2 20.1 20.0 19.9 19.9 19.8 19.8

GDP per capita ($) 4,692 5,811 8,125 10,160 8,221 8,277 9,214 8,561 9,570 9,981 8,807 9,251 9,951


Lending/GDP (%) 20.9 27.1 36.3 38.8 40.5 40.8 41.2 39.8 36.1 33.6 32.1 32.2 na


Prices

CPI (average % YoY) 9.0 6.6 4.8 7.8 5.6 6.1 5.8 3.3 4.0 1.1 -0.4 -0.2 2.5

CPI (year-end, % YoY) 8.7 4.9 6.6 6.3 4.8 8.0 3.1 5.0 1.6 0.8 -0.5 1.1 2.5




External indicators







Net FDI ($bn) 6.5 11.0 9.6 13.6 4.9 3.0 2.6 2.9 3.9 3.3 na na na


C/A balance plus FDI (% of GDP) -2.1 -1.5 -7.8 -5.0 -1.6 -2.8 -3.3 -2.9 1.2 1.2 na na na











Source: IMF, UNCTAD, Bloomberg Source: IMF, Bloomberg, BNR, Renaissance Capital


Facing the spectre

203

Russia 678

Figure 678: Russia key economic indicators

Ratings (M/S&P/F) Ba1/BB+/BBB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 6.4 8.2 8.5 5.2 -7.8 4.5 4.3 3.4 1.3 0.6 -4.0 0.8 1.9

Private consumption (%YoY) 12.2 12.2 14.3 10.6 -5.1 5.1 6.4 6.8 5.0 1.3 -8.2 0.9 na

Government consumption (%YoY) 1.4 2.3 2.7 3.4 -0.6 -1.5 0.8 -0.2 1.1 -0.1 -1.8 -1.4 na

Investment (%YoY) 10.9 16.7 21.0 10.6 -14.4 5.8 10.2 6.0 0.9 -2.0 -9.0 2.3 na

Industrial production (%YoY) 5.1 6.3 6.8 0.8 -9.2 8.3 4.8 2.5 0.3 1.7 -3.4 1.3 na

Unemployment rate (%YoY) 7.2 7.2 6.1 6.3 8.4 7.5 6.6 5.5 5.6 5.3 6.1 5.8 5.4

Nominal GDP (RUBbn) 21,610 26,917 33,248 41,277 38,807 46,309 55,800 61,811 66,194 71,406 75,571 80,927 86,788

Nominal GDP ($bn) 764 990 1,299 1,658 1,224 1,523 1,898 1,994 2,075 1,850 1,245 1,379 1,512

Population (mn) 143 143 143 143 143 143 143 143 143 144 147 147 147

GDP per capita ($) 5,332 6,930 9,095 11,617 8,567 10,660 13,272 13,914 14,480 12,873 8,481 9,372 10,258

Gross domestic saving (% of GDP) 30.5 30.4 30.9 30.3 21.3 26.1 29.5 28.6 23.3 23.0 22.9 24.6 na


Lending/GDP (%) 25.6 30.4 37.6 40.8 42.4 40.2 42.9 46.4 50.9 52.9 50.2 49.0 na

Deposits (RUBbn) 5,170 7,306 10,458 12,211 14,897 18,586 22,675 25,754 30,286 35,860 36,757 39,329 na

Loan-to-deposit ratio 107 112 120 138 110 100 106 111 111 105 103 101 na

Prices

CPI (average %YoY) 12.7 9.7 9.0 14.1 11.7 6.9 8.4 5.1 6.8 7.8 15.3 7.2 5.7

CPI (end-year %YoY) 10.9 9.0 11.9 13.3 8.8 8.8 6.1 6.6 6.5 11.4 12.3 6.7 5.2

PPI (average %YoY) 18.6 12.2 12.0 22.1 -14.3 14.9 17.3 10.0 4.0 6.0 na na na

Wage rates (%YoY, nominal) 26.9 24.3 27.8 27.2 7.8 12.4 12.2 13.9 12.8 9.5 5.1 4.1 na

Fiscal balance

Cons. government balance (% of GDP) 7.5 7.4 5.4 4.1 -5.9 -4.0 0.8 0.0 -0.8 -0.5 -2.9 -1.5 na


External balance

Exports ($bn) 244 304 354 472 303 401 522 528 523 494 361 383 404

Imports ($bn) 125 164 223 292 192 249 324 336 341 308 204 221 238

Trade balance ($bn) 119 140 131 180 111 152 198 192 182 186 158 162 166

Trade balance (% of GDP) 15.6 14.1 10.1 10.9 9.1 10.0 10.4 9.6 8.8 10.0 12.7 11.8 11.0

Current account balance ($bn) 85 95 78 104 49 70 99 71 34 60 69 72 75


Gross FDI ($bn) 16 38 56 75 37 43 55 51 79 19 12 25 na

Gross FDI (% of GDP) 2.0 3.8 4.3 4.5 3.0 2.8 2.9 2.5 3.8 1.0 1.0 1.8 na

C/A balance plus FDI (% of GDP) 13.1 13.4 10.3 10.8 7.0 7.4 8.1 6.1 5.5 4.2 6.5 7.1 na

Exports (%YoY, value) 33.3 24.6 16.4 33.3 -35.8 32.3 30.2 1.1 -0.9 -5.7 -26.9 6.1 na

Imports (%YoY, value) 28.3 31.2 36.0 30.9 -34.2 29.7 30.1 3.6 1.7 -9.8 -33.9 8.5 na

Foreign exchange reserves ($bn) 182 304 479 427 439 479 499 538 430 385 359 368 na


Debt indicators

Gross external debt year-end ($bn) 257 313 464 481 467 483 545 636 729 594 498 474 na



Total debt service ($bn) 59 85 107 148 87 100 109 128 143 130 101 91 na




Broad money supply (%YoY) 38.5 48.7 43.5 0.8 17.7 31.1 22.3 11.9 15.1 4.5 1.2 5.2 na

Refinancing rate year-end (%) 12.0 11.0 10.0 13.0 8.8 7.8 8.0 8.3 8.3 8.3 8.3 7.0 6.5

REPO rate year-end (%) 6.5 6.5 6.5 9.5 6.0 5.0 5.3 5.5 5.5 17.0 10.5 7.0 6.5

Deposit rate year-end (%) 0.5 2.3 2.8 7.3 4.0 3.0 4.0 4.3 4.5 16.0 9.5 6.0 5.5

3-month interest rate (MosPrime avg %) 4.9 5.1 5.9 9.8 13.7 4.3 5.1 7.1 7.0 10.5 13.8 9.5 na

3-month rates minus $-LIBOR 1.3 -0.1 0.6 6.8 13.0 4.0 4.8 6.7 6.8 10.3 13.3 8.0 na

3-year yield (avg %) na na 6.1 7.5 10.7 6.8 7.1 7.8 8.0 7.8 na na na

Exchange rate (RUB/$) year-end 28.8 26.3 24.5 29.4 30.2 30.5 32.1 30.5 32.7 56.2 63.0 58.0 56.9

Exchange rate (RUB/$) annual average 28.3 27.2 25.6 24.9 31.7 30.4 29.4 31.0 31.9 38.6 60.7 58.7 57.4

Exchange rate (RUB/EUR) year-end 34.1 34.7 35.9 42.7 43.3 40.8 41.7 40.3 44.9 68.4 66.8 60.9 62.6

Exchange rate (RUB/EUR) annual average 35.2 34.1 35.0 36.5 44.1 40.3 40.9 39.9 42.4 50.9 66.2 61.9 63.1

Source: IMF, UNCTAD, Rosstat, CBR, Bloomberg, Renaissance Capital estimates


Facing the spectre

204

Rwanda 679

Figure 679: Rwanda key economic indicators

Ratings (M/S&P/F) NR/B+/B+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 9.4 9.2 7.6 11.2 6.2 6.3 7.5 8.9 4.7 6.9 6.5 7.0 7.5

Private consumption (%YoY) 9.3 9.2 -10.5 24.0 8.0 7.5 6.5 7.5 1.0 4.8 9.8 7.3 8.0

Government consumption (%YoY) 10.5 8.0 2.3 2.5 4.0 4.8 7.0 17.8 3.8 14.3 -7.5 7.9 8.5

Investment (%YoY) 16.6 9.2 27.8 31.5 5.3 7.5 9.8 22.5 8.5 8.5 7.2 7.4 7.2

Industry value added (%YoY) 9.8 10.8 9.5 15.0 1.8 8.3 17.8 8.3 9.8 5.8 8.5 9.0 9.0

Nominal GDP (Rwfbn) 1,440 1,716 2,065 2,623 3,017 3,323 3,846 4,437 4,864 5,389 5,968 6,699 7,545

Nominal GDP (€bn) 2.1 2.5 2.7 3.2 3.8 4.2 4.3 4.7 5.4 6.0 6.7 8.0 8.4

Nominal GDP (US$bn) 2.6 3.1 3.7 4.7 5.2 5.6 6.3 7.1 7.1 7.9 8.6 8.5 9.2

Population (m) 9.0 9.2 9.4 9.6 9.8 10.0 10.2 10.5 10.8 11.1 11.4 11.7 12.0

GDP per capita (US$) 285.6 337.9 398.8 489.4 532.7 558.7 621.9 676.5 661.4 712.7 750.9 729.6 766.7


Stock of bank credit (lcl, bn) 162 208 254 335 349 391 502 670 758 906 1,124 1,405 1,742

Lending/GDP (%) 11.3 12.1 12.4 13.1 11.8 12.0 13.2 15.4 17.0 18.8 20.8 20.8 20.8


Prices

Urban CPI (average %YoY) na na na na na 3.8 3.1 6.3 4.2 1.8 2.7 2.7 4.6

Urban CPI (end-year %YoY) na na na na na 4.5 7.1 3.9 3.6 2.1 3.9 3.1 4.5


General govt. budget balance (incl. grants) 0.9 0.2 -1.8 0.9 0.3 0.4 -1.2 -5.0 -4.0 -5.1 -4.4 -3.9 -4.0


External balance

Exports (US$bn) 0.1 0.1 0.2 0.3 0.2 0.3 0.5 0.6 0.4 0.3 0.5 0.7 0.9

Imports (US$bn) 0.4 0.4 0.6 0.9 1.0 1.1 1.6 2.0 2.2 2.4 2.3 2.2 2.4



C/A balance inc offical transfers (US$bn) 0.0 -0.1 -0.1 -0.2 -0.4 -0.3 -0.5 -0.8 -0.6 -0.9 -0.9 -0.9 -1.2

C/A balance inc official transfers (% of GDP) 1.0 -4.3 -2.2 -4.9 -7.3 -5.5 -7.2 -11.4 -7.8 -11.9 -10.5 -10.3 -13.6

Net FDI (US$bn) 0.0 0.0 0.1 0.1 0.1 0.0 0.1 0.2 0.3 0.3 0.3 0.3 0.4

Net FDI (% of GDP) 0.4 1.0 2.2 2.2 2.3 0.8 1.7 2.2 3.6 3.4 3.3 3.5 3.8

C/A balance plus FDI (% of GDP) 1.4 -3.3 0.0 -2.7 -5.1 -4.7 -5.6 -9.2 -4.2 -8.5 -7.2 -6.9 -9.8

Exports (%YoY value) 27.5 17.9 20.0 51.4 -12.3 37.2 44.0 27.3 -39.7 15.0 16.0 16.0 16.0

Imports (%YoY value) 28.2 26.2 30.2 51.5 12.6 9.3 44.4 25.6 14.3 6.8 -5.5 6.0 6.0

FX reserves (ex gold US$bn) 0.3 0.4 0.5 0.6 0.6 0.7 0.9 0.7 0.9 0.9 0.8 1.0 1.0

Import cover (months imports) 11.1 11.0 10.7 8.1 7.6 7.7 7.2 4.4 5.1 4.3 4.0 5.3 0.0

Debt indicators



Gross external debt (% of exports) 1209 330 324 253 319 244 222 253 550 666 472 407 367




Exchange rates 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Key repo rate YE 12.5 12.5 12.5 11.3 6.0 6.0 7.0 7.5 7.0 6.5 6.5 6.0 6.0


Exchange rate (RWF/EUR) year-end 655 724 794 780 819 796 783 833 932 835 847 857 942

Exchange rate (RWF/EUR) annual average 694 694 750 804 792 774 837 790 894 902 793 840 899

Exchange rate (RWF/$) year-end 554 549 544 559 571 594 604 631 676 690 770 801 841

Exchange rate (RWF/$) annual average 558 552 547 547 568 583 601 614 673 686 710 785 821

Source: IMF, UNCTAD, National Bank of Rwanda, Bloomberg, Renaissance Capital estimates

Source: IMF, UNCTAD, Rosstat, CBR, Bloomberg, Renaissance Capital estimates


Facing the spectre

205

Saudi Arabia680

Figure 680: Saudi Arabia key economic indicators

Ratings (M/S&P/F) Aa3/AA-/AA

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 7.3 5.6 6.0 8.4 1.8 4.8 10.0 5.4 2.7 3.5 3.4 2.2 2.9

Investment (% GDP) 20.2 22.2 26.5 27.3 31.7 30.7 26.8 26.3 26.2 27.8 29.7 30.5 30.1

Unemployment rate year-end (%) 6.1 6.3 5.6 5.2 5.4 5.5 5.8 5.5 5.6 5.5 n/a n/a n/a


Nominal GDP ($bn) 328.2 376.4 415.7 519.8 429.1 526.8 669.5 734.0 744.3 746.2 632.1 643.2 694.5

Population (mn) 23.3 24.1 24.9 25.8 26.7 27.6 28.4 29.2 30.0 30.8 31.4 32.0 32.7

GDP per capita ($) 14,068 15,604 16,667 20,157 16,095 19,113 23,594 25,139 24,816 24,252 20,139 20,093 21,269

Stock of bank credit (lcl, bn) 436 476 578 735 734 776 858 1,003 1,126 1,256 1,357 1,465 na

Lending/GDP (%) 35.4 33.7 37.1 37.7 45.6 39.3 34.2 36.4 40.3 44.9 57.2 60.7 na


Prices

CPI (average % YoY) 0.5 1.9 5.0 6.1 4.1 3.8 3.7 2.9 3.5 2.7 2.1 2.3 2.9

CPI (year-end, % YoY) 1.1 2.8 6.0 9.5 4.0 5.8 2.7 3.6 3.0 2.4 2.1 2.3 2.9


Consolidated government balance 18.0 20.8 11.8 29.8 -5.4 3.6 11.2 12.0 5.8 -3.4 -21.6 -19.4 -17.6


External indicators





Current account balance ($bn) 90.1 99.1 93.4 132.3 21.0 66.8 158.6 164.8 135.4 76.9 -22.4 -30.3 -13.2


Net FDI ($bn) 12.5 18.4 24.5 36.0 34.3 25.3 12.9 7.8 3.9 2.6 na na na















Facing the spectre

206

Serbia 681

Figure 681: Serbia key economic indicators

Ratings (M/S&P/F) B1/BB-/B+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 5.5 4.9 5.9 5.4 -3.1 0.6 1.4 -1.0 2.6 -1.8 0.5 1.5 2.0

Investment (% GDP) 24.8 25.0 29.1 30.3 19.4 18.5 20.1 21.0 17.7 15.6 17.3 17.9 19.0



Nominal GDP ($bn) 26.1 30.7 40.5 49.2 42.6 39.0 46.5 40.7 45.5 43.9 36.6 37.7 39.8

Population (mn) 7.4 7.4 7.4 7.4 7.3 7.3 7.2 7.2 7.2 7.2 7.2 7.2 7.2

GDP per capita ($) 3,504 4,145 5,486 6,689 5,820 5,354 6,426 5,658 6,354 6,123 5,103 5,268 5,556

Stock of bank credit (lcl, bn) 518 609 834 1,125 1,306 1,657 1,788 1,958 1,871 1,871 1,964 2,063 na

Lending/GDP (%) 29.6 29.6 35.4 41.0 45.3 54.0 52.5 54.6 48.3 48.2 49.4 49.7 na


Prices

CPI (average % YoY) 16.3 10.7 6.0 12.4 8.1 6.1 11.1 7.3 7.7 2.1 1.6 3.4 4.0

CPI (year-end, % YoY) 15.8 5.7 11.0 8.6 6.6 10.2 7.0 12.2 2.2 1.8 2.5 4.1 4.0


Consolidated government balance 1.1 -1.0 -0.9 -1.9 -3.6 -3.7 -4.1 -6.8 -5.3 -6.3 -3.9 -3.8 -3.0


External indicators







Net FDI ($bn) na na 2.5 2.7 1.9 1.2 2.5 1.2 2.1 1.8 na na na

Net FDI (% of GDP) na na 6.1 5.5 4.4 3.0 5.4 3.0 4.5 4.1 na na na

C/A balance plus FDI (% of GDP) na na -11.1 -15.5 -1.8 -3.4 -3.1 -8.4 -1.6 -1.9 na na na

Exports (% YoY, value) na 516.6 37.3 24.3 -24.0 17.4 20.3 -3.7 29.7 0.6 na na na

Imports (% YoY, value) na 402.9 40.9 23.3 -29.8 4.2 18.6 -4.9 8.9 -0.5 na na na











Facing the spectre

2074

Slovenia 682

Figure 682: Slovenia key economic indicators

Ratings (M/S&P/F) Baa3/A-/BBB+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.0 5.7 6.9 3.3 -7.8 1.2 0.6 -2.7 -1.1 3.0 2.3 1.8 2.0

Investment (% GDP) 28.4 30.2 32.9 32.7 23.4 22.2 21.7 18.8 19.4 19.8 19.8 19.3 19.6



Nominal GDP ($bn) 36.4 39.6 48.2 55.9 50.4 48.1 51.3 46.3 47.7 49.6 42.7 44.0 46.1

Population (mn) 2.0 2.0 2.0 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1

GDP per capita ($) 18,219 19,781 23,964 27,788 24,789 23,499 25,043 22,514 23,162 24,051 20,715 21,304 22,274


Lending/GDP (%) 55.4 64.8 77.5 83.8 90.7 92.2 88.2 88.3 73.2 61.1 58.2 57.3 na


Prices

CPI (average % YoY) 2.5 2.5 3.6 5.7 0.9 1.8 1.8 2.6 1.8 0.2 -0.4 0.7 1.5

CPI (year-end, % YoY) 2.3 2.8 5.6 2.1 1.8 1.8 2.1 2.6 0.7 0.2 -0.2 1.9 1.9


Consolidated government balance -1.0 -0.8 0.3 -0.3 -5.4 -5.2 -5.5 -3.1 -13.9 -5.8 -3.7 -5.3 -5.0


External indicators



Trade balance ($bn) -1.1 -0.9 -1.5 -2.9 -0.3 -1.0 -0.9 0.1 0.6 2.0 na na na

Trade balance (% of GDP) -2.9 -2.3 -3.1 -5.2 -0.7 -2.0 -1.7 0.1 1.2 4.0 na na na

Current account balance ($bn) -0.7 -0.7 -2.0 -3.0 -0.3 -0.1 0.1 1.2 2.7 3.5 2.9 2.7 2.6

Current account balance (% of GDP) -1.8 -1.8 -4.1 -5.3 -0.6 -0.1 0.2 2.6 5.6 7.0 6.7 6.2 5.7

Net FDI ($bn) -0.1 -0.2 -0.3 -0.2 -0.7 0.1 0.9 0.6 0.1 1.6 na na na

Net FDI (% of GDP) -0.2 -0.5 -0.7 -0.4 -1.4 0.2 1.7 1.3 0.2 3.2 na na na

C/A balance plus FDI (% of GDP) -2.0 -2.4 -4.8 -5.8 -1.9 0.1 1.9 3.9 5.8 10.2 na na na













Facing the spectre

208

South Africa 683

Figure 683: South Africa key economic indicators

Ratings (M/S&P/F) Baa2/BBB-/BBB

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 5.3 5.6 5.4 3.2 -1.5 3.0 3.2 2.2 2.2 1.5 1.4 1.3 2.1

Investment (% GDP) 18.3 20.2 21.0 23.2 20.7 19.5 19.1 20.1 20.1 20.4 20.0 19.8 19.7



Nominal GDP ($bn) 257.7 271.8 299.0 287.1 297.2 375.3 417.1 397.4 366.2 350.1 317.3 326.5 340.5

Population (mn) 47.3 48.0 48.7 49.3 50.1 50.8 51.6 52.3 53.2 54.0 54.9 55.7 56.6

GDP per capita ($) 5,442 5,664 6,146 5,818 5,938 7,389 8,090 7,592 6,890 6,483 5,784 5,859 6,015


Lending/GDP (%) 65.9 73.6 78.3 76.7 74.6 70.4 67.6 68.4 67.4 67.2 68.3 68.8 na


Prices

CPI (average % YoY) 3.3 4.7 7.1 11.5 7.1 4.3 5.0 5.7 5.8 6.1 4.8 5.9 5.6

CPI (year-end, % YoY) 3.5 5.9 8.8 10.1 6.3 3.5 6.1 5.7 5.4 5.8 5.5 5.7 5.6


Consolidated government balance -0.3 0.7 1.2 -0.5 -4.7 -4.8 -3.9 -4.1 -4.1 -3.8 -4.1 -3.7 -3.4


External indicators



Trade balance ($bn) -8.1 -22.3 -30.6 -26.6 -19.4 0.4 -12.2 -14.6 -17.3 -18.2 na na na

Trade balance (% of GDP) -3.1 -8.2 -10.2 -9.2 -6.5 0.1 -2.9 -3.7 -4.7 -5.2 na na na



Net FDI ($bn) 5.6 -5.3 3.6 12.0 6.3 3.9 4.3 1.7 1.7 -1.2 na na na

Net FDI (% of GDP) 2.2 -2.0 1.2 4.2 2.1 1.0 1.0 0.4 0.5 -0.4 na na na

C/A balance plus FDI (% of GDP) -1.0 -6.4 -4.2 -1.4 -0.6 -0.5 -1.1 -4.5 -5.3 -5.8 na na na













Facing the spectre

209

Sri Lanka 684

Figure 684: Sri Lanka key economic indicators

Ratings (M/S&P/F) B1/B+/BB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 6.2 7.7 6.8 6.0 3.5 8.0 8.2 6.3 7.3 7.4 6.5 6.5 6.5

Investment (% GDP) 26.8 28.0 28.0 27.6 24.4 27.6 29.9 30.6 29.8 29.6 29.8 29.9 29.9



Nominal GDP ($bn) 24.4 28.3 32.4 40.7 42.0 49.6 59.2 59.4 67.5 74.9 79.5 86.3 94.2

Population (mn) 19.6 19.8 19.9 20.1 20.2 20.4 20.5 20.7 20.8 21.0 21.1 21.3 21.4

GDP per capita ($) 1,245 1,430 1,624 2,027 2,077 2,429 2,880 2,874 3,239 3,574 3,768 4,061 4,403

Stock of bank credit (lcl, bn) 807 998 1,190 1,266 1,196 1,492 2,005 2,356 2,533 2,584 2,713 2,848 na

Lending/GDP (%) 32.9 34.0 33.3 28.7 24.7 26.6 30.6 31.1 29.2 26.4 25.5 24.3 na


Prices

CPI (average % YoY) 11.0 10.0 15.8 22.4 3.5 6.2 6.7 7.5 6.9 3.3 1.7 3.4 4.3

CPI (year-end, % YoY) 7.5 13.5 18.7 13.9 5.0 6.8 4.9 9.2 4.7 2.1 3.2 3.6 5.0




External indicators







Net FDI ($bn) 0.2 0.5 0.5 0.7 0.4 0.4 0.9 0.9 0.9 0.9 na na na


C/A balance plus FDI (% of GDP) -1.5 -3.7 -2.6 -7.8 0.4 -1.3 -6.3 -5.2 -2.5 -1.5 na na na








Exchange rate (EUR) annual average 125 131 152 159 160 150 154 164 171 174 149 152 156





Facing the spectre

210

Tanzania 685

Figure 685: Tanzania key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 5.7 5.1 8.8 5.6 5.4 6.4 7.9 5.1 7.3 7.0 6.9 7.0 7.0

Private consumption (%YoY) 11.4 8.1 6.7 6.5 5.8 6.3 12.4 7.4 7.2 7.1 7.4 7.0 7.0

Government consumption (%YoY) 11.9 8.2 9.5 13.2 5.1 17.0 271.9 7.9 9.0 7.7 18.0 6.9 7.1

Investment (%YoY) 18.7 16.0 14.5 7.8 10.1 10.2 31.4 11.3 9.8 10.4 8.0 8.5 9.0

Nominal GDP (TZStn) 19.1 23.3 26.8 32.6 37.8 43.6 52.4 61.3 71.0 79.4 89.4 100.4 112.1

Nominal GDP (€bn) 13.6 14.8 15.7 18.5 20.4 22.8 23.7 30.1 33.0 34.8 36.3 39.1 40.3

Nominal GDP (US$bn) 17.0 18.6 21.6 27.2 28.5 30.2 33.0 38.6 43.9 47.7 44.5 43.6 45.4

Population (m) 37.6 38.6 39.7 40.7 41.8 42.8 43.9 44.9 45.8 46.7 47.7 48.6 49.6

GDP per capita (US$) 451 482 544 668 682 705 752 860 957 1,021 932 896 914


Stock of bank credit (lcl, tn) 1.4 2.1 3.0 4.4 4.8 5.8 7.4 8.7 10.2 12.1 14.1 16.3 18.9

Lending/GDP (%) 7.5 9.0 11.1 13.4 12.7 13.3 14.1 14.2 14.3 15.3 15.8 16.2 16.8


Prices

CPI (average %YoY) 4.4 7.3 7.0 10.3 12.1 7.2 12.7 16.0 7.9 6.1 5.7 6.5 6.3

CPI (end-year %YoY) 5.0 6.7 6.4 13.5 12.2 5.6 19.8 12.1 5.6 4.8 7.6 6.6 6.0


General government budget balance* 0.0 0.0 -1.7 -4.5 -6.4 -6.9 -5.0 -5.0 -3.3 -4.0 -4.2 -3.0 -3.0


External balance

Exports (US$bn) 1.7 1.9 2.2 3.6 3.3 4.3 5.1 5.5 5.5 5.6 6.1 6.7 7.3

Imports (US$bn) 3.0 3.9 4.9 7.0 5.8 7.2 9.8 10.5 10.9 11.3 11.2 11.6 12.5





Net FDI (US$bn) -0.9 -0.4 0.6 1.2 1.0 1.8 1.3 1.8 1.9 1.9 1.9 1.9 2.1

Net FDI (% of GDP) -5.5 -2.1 2.7 4.6 3.3 6.0 4.1 4.7 4.3 4.0 4.3 4.4 4.6

C/A balance plus FDI (% of GDP) -10.5 -8.5 -5.3 -4.8 -3.0 -0.4 -7.9 -7.0 -6.2 -5.4 -4.2 -3.3 -3.0

Exports (%YoY, value) 14.9 12.6 16.1 60.7 -7.8 31.1 17.9 7.4 -0.4 2.6 9.0 10.5 8.7

Imports (%YoY, value) 20.7 28.9 25.8 44.3 -16.8 22.8 37.2 7.3 3.5 3.7 -0.7 2.9 7.9

Gross official reserves (US$bn) 2.0 2.1 2.7 2.9 3.6 3.9 3.7 4.1 4.4 4.2 3.9 4.1 4.2


Debt indicators




Total debt service (US$bn) 0.1 0.1 0.4 0.8 -0.2 0.3 0.6 0.2 0.2 0.2 0.2 0.5 0.6

Total debt service (% of GDP) 0.6 0.3 2.0 2.8 -0.8 1.1 1.7 0.5 0.2 0.2 0.2 0.5 0.6



Broad money supply, M2 (%YoY) 36.6 13.7 27.2 24.4 20.8 21.8 15.0 16.0 10.9 17.0 10.0 12.0 13.0


3M interest rate (t-bill YE %) 14.7 14.4 9.9 11.2 6.1 5.2 12.6 11.9 13.6 13.2 10.8 10.2 9.8


5Y yield (% YE) 17.0 15.2 17.6 16.4 13.5 11.6 13.2 14.9 15.4 14.6 12.3 14.1 14.7

Exchange rate (TZS/EUR) year-end 1,361 1,668 1,683 1,838 1,920 1,987 2,050 2,091 2,192 2,013 2,211 2,464 2,769

Exchange rate (TZS/EUR) annual average 1,401 1,572 1,701 1,764 1,849 1,914 2,209 2,040 2,148 2,280 2,461 2,568 2,786

Exchange rate (TZS/$) year-end 1,151 1,265 1,154 1,318 1,340 1,484 1,582 1,585 1,590 1,733 2,205 2,400 2,544

Exchange rate (TZS/$) annual average 1,126 1,251 1,241 1,199 1,326 1,442 1,586 1,587 1,617 1,664 2,010 2,303 2,472

Source: IMF, UNCTAD, Bank of Tanzania, Bloomberg, Renaissance Capital estimates


Facing the spectre

211

Tunisia 686

Figure 686: Tunisia key economic indicators

Ratings (M/S&P/F) Ba3/NR/BB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.0 5.7 6.3 4.5 3.1 2.6 -1.9 3.7 2.3 2.3 1.0 3.0 4.0

Investment (% GDP) 21.7 23.4 23.7 25.5 24.7 25.7 23.6 24.3 22.0 21.0 21.5 21.7 21.9



Nominal GDP ($bn) 32.3 34.4 38.9 44.9 43.6 44.1 46.0 45.2 47.0 48.6 44.3 44.6 45.6

Population (mn) 10.0 10.1 10.2 10.3 10.4 10.5 10.7 10.8 10.9 11.0 11.1 11.2 11.3

GDP per capita ($) 3,218 3,394 3,805 4,343 4,178 4,177 4,305 4,198 4,317 4,422 3,985 3,972 4,024


Lending/GDP (%) 55.6 54.8 55.2 57.3 59.1 65.7 72.6 72.1 72.0 72.6 74.1 75.0 na


Prices

CPI (average % YoY) 2.4 3.2 3.0 4.3 3.7 3.3 3.5 5.1 5.8 4.9 5.0 4.0 3.9

CPI (year-end, % YoY) 3.7 2.6 3.9 4.4 3.3 3.3 3.9 5.9 5.7 4.8 4.4 4.0 3.9




External indicators







Net FDI ($bn) 0.7 3.2 1.5 2.6 1.5 1.3 0.4 1.6 1.1 1.0 na na na


C/A balance plus FDI (% of GDP) 1.3 7.6 1.5 2.0 0.7 -1.7 -6.5 -4.8 -6.0 -6.8 na na na













Facing the spectre

2124

Turkey 687

Figure 687: Turkey key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 8.4 6.9 4.7 0.7 -4.8 9.2 8.8 2.1 4.2 2.9 3.0 2.9 3.7

Investment (% GDP) 20.0 22.1 21.1 21.8 14.9 19.5 23.6 20.1 20.6 20.2 20.6 20.7 20.8


Nominal GDP (lcl bn) 649 758 843 951 953 1,099 1,298 1,417 1,567 1,747 1,986 2,199 2,415

Nominal GDP ($bn) 482.7 529.3 646.4 730.6 614.4 731.5 774.7 788.6 823.0 798.3 722.2 721.2 761.4

Population (mn) 68.4 69.3 70.2 71.1 72.0 73.1 74.2 75.2 76.1 76.9 77.7 78.6 79.4

GDP per capita ($) 7,054 7,638 9,214 10,283 8,529 10,002 10,438 10,490 10,821 10,381 9,290 9,180 9,594

Stock of bank credit (lcl, bn) 153 207 265 330 373 517 679 807 1,078 1,277 1,507 1,703 na

Lending/GDP (%) 23.6 27.4 31.4 34.7 39.2 47.1 52.3 56.9 68.8 73.1 75.9 77.4 na


Prices

CPI (average % YoY) 8.2 9.6 8.8 10.4 6.3 8.6 6.5 8.9 7.5 8.9 7.4 7.0 6.5

CPI (year-end, % YoY) 7.7 9.7 8.4 10.1 6.5 6.4 10.4 6.2 7.4 8.2 8.0 6.5 6.5




External indicators







Net FDI ($bn) 9.0 19.3 19.9 17.3 7.0 7.6 13.8 9.2 8.8 5.5 na na na


C/A balance plus FDI (% of GDP) -2.6 -2.4 -2.8 -3.1 -0.8 -5.2 -7.9 -5.0 -6.8 -5.1 na na na

Exports (% YoY, value) 16.6 16.2 25.5 23.2 -22.6 11.5 18.5 13.0 -0.4 3.8 na na na

Imports (% YoY, value) 19.7 19.6 21.9 18.8 -30.2 31.7 29.8 -1.8 6.4 -3.8 na na na











Facing the spectre

213

UAE 688

Figure 688: UAE key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 4.9 9.8 3.2 3.2 -5.2 1.6 4.9 7.2 4.3 4.6 3.0 3.1 3.3

Investment (% GDP) 19.2 18.4 24.4 23.7 30.2 26.1 22.4 23.1 23.2 24.7 24.2 24.7 24.2


Nominal GDP (lcl bn) 663 816 947 1,159 931 1,051 1,276 1,371 1,422 1,467 1,245 1,308 1,405

Nominal GDP ($bn) 180.6 222.1 257.9 315.5 253.5 286.0 347.5 373.4 387.2 399.5 339.1 356.2 382.6

Population (mn) 4.1 5.0 6.2 8.1 8.2 8.3 8.5 8.8 9.0 9.3 9.6 9.9 10.1

GDP per capita ($) 43,989 44,317 41,472 39,073 30,920 34,614 40,819 42,590 42,874 42,942 35,391 36,142 37,737

Stock of bank credit (lcl, bn) 290 386 531 777 787 792 819 833 952 999 1,049 1,112 na

Lending/GDP (%) 43.8 47.3 56.0 67.1 84.5 75.4 64.2 60.7 66.9 68.1 84.2 85.0 na


Prices

CPI (average % YoY) 6.2 9.3 11.1 12.3 1.6 0.9 0.9 0.7 1.1 2.3 3.7 3.0 2.7

CPI (year-end, % YoY) 7.8 10.2 11.7 6.6 1.2 0.9 0.8 0.9 1.7 3.0 3.3 3.0 2.7


Consolidated government balance 20.2 25.3 21.8 20.1 -4.3 2.0 6.3 10.9 10.4 5.0 -5.5 -4.0 -1.8


External indicators



Trade balance ($bn) -10.7 -3.3 -13.6 -10.8 -33.7 -2.4 21.6 16.4 9.7 -11.2 na na na

Trade balance (% of GDP) -5.9 -1.5 -5.3 -3.4 -13.3 -0.8 6.2 4.4 2.5 -2.8 na na na



Net FDI ($bn) 7.2 1.9 -0.4 -2.1 1.3 3.5 5.5 7.1 7.5 7.0 na na na

Net FDI (% of GDP) 4.0 0.9 -0.1 -0.7 0.5 1.2 1.6 1.9 1.9 1.8 na na na








Broad money growth (%YoY) na na na na 5.9 4.0 1.6 8.2 12.6 9.2 na na na






Facing the spectre

214

Uganda 689

Figure 689: Uganda key economic indicators

Ratings (M/S&P/F) B1/B/B+

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 10.0 7.0 8.1 10.4 8.1 7.7 6.8 2.6 3.9 4.8 5.2 5.5 5.8

Investment (% GDP) 29.7 28.0 30.9 27.7 27.6 26.0 29.5 29.5 29.2 30.2 33.4 34.8 35.3


Nominal GDP (lcl tn) 19.6 22.6 26.2 31.3 37.7 44.0 53.2 61.7 66.2 71.8 79.8 88.6 97.6

Nominal GDP ($bn) 11.0 12.3 15.2 18.2 18.6 20.2 21.1 24.6 25.6 27.6 24.9 26.6 29.3

Population (mn) 28.7 29.7 30.7 31.8 32.9 34.0 35.1 36.3 37.6 38.7 39.9 41.1 42.3

GDP per capita ($) 384 415 495 572 565 594 601 678 680 713 625 648 691

Stock of bank credit (lcl, tn) 1.4 1.9 2.3 3.5 4.1 5.5 7.1 8.2 8.7 9.9 11.3 12.9 na

Lending/GDP (%) 7.4 8.5 8.7 11.3 10.9 12.6 13.3 13.3 13.2 13.8 14.2 14.6 na


Prices

CPI (average % YoY) 8.6 7.2 6.1 12.0 13.1 4.0 18.7 14.0 4.8 4.6 5.7 6.5 5.9

CPI (year-end, % YoY) 3.7 10.9 5.2 14.3 11.0 3.1 27.0 5.3 4.3 4.9 6.4 6.6 5.1




External indicators







Net FDI ($bn) 0.4 0.6 0.8 0.7 0.8 0.5 0.9 1.1 1.1 1.1 na na na


C/A balance plus FDI (% of GDP) 1.2 1.7 0.7 -3.7 -1.8 -6.5 -6.5 -3.5 -2.8 -5.5 na na na

Exports (% YoY, value) 24.3 18.4 38.9 28.9 -28.8 14.0 18.2 2.3 7.9 6.0 na na na

Imports (% YoY, value) 19.0 24.5 36.7 29.5 -33.7 15.6 32.5 -0.1 -0.6 0.9 na na na




Key policy rate (% YE) na na na na na na 23.0 12.0 11.5 11.0 na na na







Facing the spectre

215

Ukraine 690

Figure 690: Ukraine key economic indicators

Ratings (M/S&P/F) Ca/B-/RD

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) 3.1 7.6 8.2 2.2 -15.1 0.3 5.5 0.2 0.0 -6.8 -9.0 2.0 3.5

Investment (% GDP) 22.5 24.5 27.8 27.4 17.1 20.9 22.4 21.7 18.5 14.1 11.6 12.5 13.0


Nominal GDP (lcl bn) 457 565 751 991 947 1,079 1,300 1,405 1,465 1,567 1,981 2,262 2,572

Nominal GDP ($bn) 89.3 111.9 148.7 188.2 121.6 136.0 163.2 175.7 179.6 130.7 90.1 93.8 104.3

Population (mn) 46.7 46.5 46.2 46.0 45.8 45.6 45.5 45.2 40.5 42.8 42.7 42.7 42.6

GDP per capita ($) 1,910 2,408 3,220 4,095 2,655 2,983 3,590 3,883 4,435 3,051 2,109 2,199 2,451

Stock of bank credit (lcl, bn) 153 255 444 755 737 747 822 854 965 1,074 1,181 1,240 na

Lending/GDP (%) 33.4 45.2 59.1 76.2 77.8 69.2 63.2 60.8 65.8 68.5 59.6 54.8 na


Prices

CPI (average % YoY) 13.5 9.1 12.8 25.2 15.9 9.4 8.0 0.6 -0.3 12.1 50.0 14.2 9.9

CPI (year-end, % YoY) 10.3 11.6 16.6 22.3 12.3 9.1 4.6 -0.2 0.5 24.9 45.8 12.0 8.0




External indicators





Current account balance ($bn) 2.5 -1.6 -5.3 -12.8 -1.7 -3.0 -10.2 -14.3 -16.5 -6.2 -1.5 -1.5 -1.5

Current account balance (% of GDP) 2.8 -1.4 -3.5 -6.8 -1.4 -2.2 -6.3 -8.1 -9.2 -4.7 -1.7 -1.7 -1.4

Net FDI ($bn) 7.5 5.7 9.2 9.9 4.7 5.8 7.0 7.2 4.1 0.3 na na na


C/A balance plus FDI (% of GDP) 11.3 3.7 2.7 -1.5 2.4 2.0 -2.0 -4.1 -6.9 -4.5 na na na












Gross external debt (US$mn)

Gross external debt (% of GDP)

Gross external debt (% of exports)


Broad money supply (%YoY) year-end

Key policy rate (%) year-end

Exchange rate (VND/€) year-end

Exchange rate (VND/€) annual average

Exchange rate (VND/US$) year-end

Exchange rate (VND/US$) annual average


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Vietnam 691

Figure 691: Vietnam key economic indicators

Ratings (M/S&P/F) B1/BB-/BB-

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 7.5 7.0 7.1 5.7 5.4 6.4 6.2 5.2 5.4 6.0 6.8 6.3 7.6

Private consumption (%YoY) 5.8 7.5 9.8 7.7 2.3 8.2 4.1 4.9 5.2 6.1 9.0 5.0 6.0

Government consumption (%YoY) 8.2 8.5 8.9 7.5 7.6 12.3 7.1 7.2 7.3 7.0 10.0 6.5 7.0

Investment (%YoY) 9.8 9.9 24.2 3.8 8.7 10.9 -7.8 1.9 5.3 9.3 9.5 7.0 9.5

Industrial production (%YoY) na na na 7.4 7.1 9.3 6.8 7.4 6.0 7.4 9.8 9.0 9.5


Nominal GDP (lcl tn) 914 1,062 1,247 1,616 1,809 2,158 2,780 3,245 3,584 3,938 4,294 4,731 5,165

Nominal GDP (US$bn) 57.6 66.4 77.5 98.3 101.6 112.8 134.6 155.5 170.4 185.8 195.2 197.1 204.6

Population (m) 82.4 83.3 84.2 85.1 86.0 86.9 87.8 88.8 89.7 90.6 91.6 92.5 93.5

GDP per capita (US$) 700 797 920 1154 1182 1298 1532 1752 1900 2050 2131 2130 2188


Stock of bank credit (lcl, tn) 553 694 1,068 1,339 1,869 2,476 2,830 3,078 3,470 3,950 4,661 5,080 na

Lending/GDP (%) 60.5 65.4 85.6 82.9 103.3 114.7 101.8 94.8 96.8 100.3 108.5 107.4 0.0

Deposits (lcl bn) na na na na na na na na na na na na na

Loan to deposit ratio (%) na na na na na na na na na na na na na

Prices

CPI (average %YoY) 8.4 7.5 8.4 23.1 6.7 9.2 18.7 9.1 6.6 4.1 2.2 3.1 3.8

CPI (end-year %YoY) 8.8 6.7 12.6 19.9 6.5 11.7 18.1 6.8 6.0 1.8 2.5 3.6 3.9


Consolidated government balance -1.2 0.3 -2.0 -0.5 -6.0 -2.8 -1.1 -6.8 -7.4 -6.1 -6.9 -6.7 -5.9

Consolidated primary balance -0.5 1.0 -1.0 0.5 -4.9 -1.6 0.0 -5.6 -5.9 -4.5 -5.0 -4.9 -3.9

Total public debt (central govt) 36.5 38.4 40.9 39.4 45.2 48.1 46.5 48.6 52.6 57.2 61.2 63.7 66.1

External balance

Exports (US$mn) 32.4 39.6 48.4 62.1 56.5 71.3 95.4 114.4 132.4 150.1 164.7 175.0 190.0

Imports (US$mn) 36.8 44.4 60.8 80.8 67.7 83.2 104.1 112.4 132.7 149.3 170.1 180.0 190.0

Trade balance (US$mn) -4.3 -4.8 -12.4 -18.7 -11.2 -11.9 -8.7 2.0 -0.3 0.8 -5.4 -5.0 0.0

Trade balance (% of GDP) -7.5 -7.2 -16.1 -19.0 -11.0 -10.6 -6.5 1.3 -0.2 0.4 -2.8 -2.5 0.0

Current account balance (US$mn) -0.6 -0.2 -7.0 -10.8 -6.6 -4.3 0.2 9.3 7.7 9.1 -1.0 -1.9 -0.5

Current account balance (% of GDP) -1.0 -0.2 -9.0 -11.0 -6.5 -3.8 0.2 6.0 4.5 4.9 -0.5 -0.9 -0.2

Net FDI (US$mn) 1.9 2.3 6.8 9.3 6.9 7.1 6.6 7.2 6.9 8.1 8.6 9.0 10.0

Net FDI (% of GDP) 3.3 3.5 8.8 9.4 6.8 6.3 4.9 4.6 4.1 4.3 4.4 4.6 4.9

C/A balance plus FDI (% of GDP) 2.3 3.2 -0.3 -1.5 0.3 2.5 5.1 10.6 8.6 9.3 3.9 3.6 4.6

Exports (%YoY, value) 22.5 22.1 22.2 28.4 -9.0 26.0 33.8 20.0 15.7 13.4 9.7 6.3 8.6

Imports (%YoY, value) 15.0 20.8 37.0 32.9 -16.2 22.8 25.1 8.0 18.0 12.5 13.9 5.8 5.6

Foreign exchange reserves (ex gold, US$mn) 9.0 13.4 23.5 23.9 16.0 12.1 13.1 25.2 25.5 33.8 36.0 36.0 38.0


Debt indicators

Gross external debt (US$mn) 3.2 3.8 5.8 7.7 38.6 43.8 52.2 59.1 65.7 70.7 74.7 80.0 85.0




Broad money supply (%YoY) year-end 28.9 33.4 53.6 -11.7 16.6 27.0 27.8 7.6 33.2 26.2 28.1 na na

Key policy rate (%) year-end 0.0 0.0 0.0 8.0 5.0 7.5 6.8 5.3 3.8 4.5 5.5 na na

Exchange rate (VND/€) year-end 18,836 21,176 23,358 24,391 26,482 26,096 27,262 27,496 29,088 25,879 24,750 26,460 28,860

Exchange rate (VND/€) annual average 19,729 20,092 22,046 24,193 24,822 25,370 28,766 26,834 27,935 28,163 24,464 25,968 27,775

Exchange rate (VND/US$) year-end 15,918 16,056 16,017 17,483 18,479 19,498 21,034 20,840 21,095 21,388 22,500 24,500 26,000

Exchange rate (VND/US$) annual average 15,856 15,991 16,083 16,445 17,800 19,121 20,657 20,873 21,029 21,199 22,000 24,000 25,250

Source: IMF, Bloomberg, State Bank of Vietnam, Renaissance Capital Estimates


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Zambia 692

Figure 692: Zambia key economic indicators

Ratings (M/S&P/F) B2/B/B

Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (%YoY) 5.3 6.2 6.2 5.7 6.4 7.6 6.8 6.8 6.7 5.6 4.3 4.0 5.8

Investment (% of GDP) 31.0 36.7 31.7 29.6 30.3 29.9 33.5 34.2 33.6 31.1 30.9 30.7 31.4

Nominal GDP (ZMWbn) 37.2 46.0 56.3 67.1 77.3 97.2 115.4 128.4 144.8 163.7 182.4 203.5 228.9

Nominal GDP (€bn) 6.8 10.2 10.3 12.2 11.0 15.3 17.1 19.4 20.2 20.2 20.6 17.3 21.6

Nominal GDP (US$bn) 8.4 12.8 14.1 17.9 15.3 20.3 23.8 25.0 26.9 26.6 23.0 18.5 23.6

Copper price, $/t, YE 4,542 6,308 6,642 3,042 7,342 9,650 7,590 7,907 7,376 6,368 5,420 4,500 na

Population (m) 11.7 12.0 12.3 12.6 12.9 13.3 13.6 14.1 14.5 15.0 15.5 16.0 16.6

GDP per capita (US$) 717 1,064 1,143 1,418 1,185 1,528 1,749 1,774 1,847 1,769 1,480 1,154 1,425


Stock of bank credit (lcl, bn) 2.6 4.0 5.8 8.4 8.0 9.0 10.8 15.0 16.9 19.3 21.8 25.1 29.1

Lending/GDP (%) 6.9 8.7 10.4 12.5 10.3 9.3 9.3 11.7 11.7 11.8 12.0 12.3 12.7

Loan to deposit ratio na na na 77.5 73.9 66.1 61.2 69.9 64.9 72.6 71.0 70.0 70.0

Prices

CPI (average %YoY) 18.3 9.0 10.7 12.4 13.4 8.5 8.8 6.6 7.0 7.8 7.9 7.6 7.3

CPI (end-year %YoY) 15.9 8.2 8.9 16.6 9.9 7.9 9.9 7.3 7.1 7.9 9.0 7.5 7.2


General government budget balance -2.2 16.1 -1.0 -0.7 -2.0 -2.4 -1.7 -2.9 -6.5 -6.1 -7.8 -6.5 -5.6


External balance

Exports (US$bn) 1.9 3.7 4.9 4.9 4.3 7.1 9.0 9.5 10.8 10.2 9.7 10.2 11.3

Imports (US$bn) 2.6 2.9 4.0 4.8 3.8 5.3 7.2 7.9 9.2 8.7 8.1 8.5 9.3

Trade balance (US$bn) -0.7 0.8 0.9 0.2 0.5 1.9 1.8 1.6 1.6 1.5 1.6 1.7 2.0

Trade balance (% of GDP) -8.3 5.9 6.1 0.9 3.0 9.1 7.7 6.4 6.1 5.7 6.7 9.0 8.3

Current account balance (US$bn) -0.6 0.0 -0.8 -1.0 0.6 1.2 0.7 1.4 -0.2 -0.4 -0.3 -0.6 -0.5

Current account balance (% of GDP) -7.2 -0.4 -5.4 -5.8 3.8 5.9 3.0 5.5 -0.6 -1.4 -1.5 -3.5 -2.2

Net FDI (US$bn) 0.4 0.6 1.3 0.9 1.0 0.7 0.9 2.4 1.7 2.5 1.7 1.8 2.0

Net FDI (% of GDP) 4.2 4.8 9.4 5.2 6.3 3.5 3.7 9.7 6.3 9.3 7.2 9.7 8.5

C/A balance plus FDI (% of GDP) -3.0 4.5 4.0 -0.6 10.1 9.4 6.7 15.2 5.7 8.0 5.7 6.3 6.3

Exports (%YoY, value) 1.1 98.2 31.9 1.1 -13.5 67.6 26.4 5.5 13.9 -5.7 -5.3 5.4 10.8

Imports (%YoY, value) 48.7 14.4 36.8 18.4 -20.2 39.2 35.9 10.3 16.0 -5.4 -6.5 4.9 9.5



Debt indicators








Policy rate, %YE na na na na na na na 9.3 9.8 12.5 13.5 12.5 11.5


Credit to the private sector (%YoY) 18.6 54.3 47.0 43.8 -5.2 13.3 29.4 39.2 14.2 14.1 13.5 15.0 16.0

3M interest rate (t-bill YE %) 15.1 8.7 11.5 13.9 5.1 6.3 7.1 7.8 8.0 13.0 15.0 13.5 12.0


5Y yield (% YE) na 13.6 15.7 19.0 17.1 13.0 15.4 13.5 16.5 18.7 25.0 22.0 19.0

Exchange rate (ZMK/EUR) year-end 3.96 5.84 5.63 6.69 6.65 6.40 6.64 6.87 7.61 7.73 13.3 10.6 10.6

Exchange rate (ZMK/EUR) annual average 5.50 4.52 5.48 5.51 7.04 6.37 6.76 6.61 7.16 8.11 8.86 11.8 10.6

Exchange rate (ZMK/$) year-end 3.35 4.43 3.86 4.80 4.64 4.79 5.13 5.21 5.52 6.39 12.1 9.89 9.50

Exchange rate (ZMK/$) annual average 4.42 3.60 4.00 3.75 5.05 4.80 4.86 5.14 5.39 6.16 7.94 11.0 9.70

Source: IMF, UNCTAD, Bank of Zambia, Bloomberg, Renaissance Capital estimates


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Zimbabwe 693

Figure 693: Zimbabwe key economic indicators


Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E

Activity

Real GDP (% YoY) -7.7 -3.6 -3.4 -16.6 7.5 11.4 11.9 10.6 4.5 3.3 1.4 2.4 3.0

Investment (% GDP) na na na na 15.1 23.9 22.4 13.5 13.0 13.1 12.9 12.8 13.1



Nominal GDP ($bn) 7.8 7.2 6.9 5.9 8.2 9.4 11.0 12.5 13.5 13.8 13.9 14.3 15.0

Population (mn) 11.8 12.0 12.0 12.1 12.2 12.3 12.7 13.0 13.1 13.3 13.4 13.6 13.7

GDP per capita ($) 655 598 576 490 667 765 866 961 1,028 1,043 1,037 1,054 1,094

Stock of bank credit (lcl, bn) na na na 0.4 0.8 1.7 2.7 3.4 3.9 4.1 4.3 4.4 na

Lending/GDP (%) na na na 6.7 9.3 17.6 24.2 27.3 28.9 29.6 30.7 30.8 na

Gross domestic saving (% of GDP) n/a n/a n/a n/a -32.0 8.0 -8.5 -11.0 -12.5 -8.9 -10.1 -7.1 -6.2

Prices

CPI (average % YoY) -31.5 33.0 -72.7 157.0 6.2 3.0 3.5 3.7 1.6 -0.2 -1.6 0.0 0.9

CPI (year-end, % YoY) n/a n/a n/a n/a -7.7 3.2 4.9 2.9 0.3 -0.8 -0.7 0.5 1.2


Consolidated government balance -6.4 -2.5 -3.0 -2.0 -2.1 0.7 -1.3 -0.6 -1.9 -1.5 -1.3 -0.5 -1.0


External indicators







Net FDI ($bn) na na na na na na na na na na na na na

Net FDI (% of GDP) na na na na na na na na na na na na na

C/A balance plus FDI (% of GDP) na na na na na na na na na na na na na

Exports (% YoY, value) -22.2 -32.6 167.1 -3.5 -44.3 27.5 46.2 0.5 4.9 2.0 na na na

Imports (% YoY, value) -3.8 35.8 -5.1 27.5 -11.5 37.3 20.2 5.7 0.5 -6.9 na na na





Broad money growth (%YoY) na na na na na na na na na na na na na





Source: IMF, UNCTAD, Bank of Zambia, Bloomberg, Renaissance Capital estimates


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Analysts certification

This research report has been prepared by the research analyst(s), whose name(s) appear(s) on the front page of this document, to provide background information about the issuer or issuers (collectively, the “Issuer”) and the securities and markets that are the subject matter of this report. Each research analyst hereby certifies that with respect to the Issuer and such securities and markets, this document has been produced independently of the Issuer and all the views expressed in this document accurately reflect his or her personal views about the Issuer and any and all of such securities and markets. Each research analyst and/or persons connected with any research analyst may have interacted with sales and trading personnel, or similar, for the purpose of gathering, synthesizing and interpreting market information. If the date of this report is not current, the views and contents may not reflect the research analysts’ current thinking.

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Disclosures appendix


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Renaissance Capital equity research distribution of ratings

Investment Rating Distribution Investment Banking Relationships*

Renaissance Capital Research Renaissance Capital Research

Buy 143 44% Buy 3 100%

Hold 110 34% Hold 0 0%

Sell 67 21% Sell 0 0%

Under Review 2 1% Under Review 0 0%

Restricted 0 0% Restricted 0 0%

Cov. in Trans. 1 0% Cov. in Trans. 0 0%

323 3

*Companies from which RenCap has received compensation within the past 12 months. NR – Not Rated UR – Under Review

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Kirill Panarin +7 (495) 258-7770 x4009 Russia/CIS, Africa Kirill Panarin +7 (495) 258-7770 x4009 Russia/CIS, Africa

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Tobacco Anastasia Burkhanova +7 (495) 258-7770 x4594 Russia/CIS/MENA/Pakistan

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Utilities

Vladimir Sklyar +7 (495) 258-7770 x4624 Russia/CIS/SSA/Pakistan

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Frontier and emerging markets Facing the spectre

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Transcript of Frontier and emerging markets Facing the spectre