BLUE QUADRANT CAPITAL MANAGEMENT BLOG
In this article, we will review the latest economic data for South Africa and discuss some of its implications as it relates to the outlook for the country's financial assets, including the MSCI iShares South Africa exchange-traded fund (NYSEARCA:EZA). More importantly in the final part of this article, we will detail what we consider a reasonable downside target for the currency, based on the assumption that the global liquidity backdrop (specifically $ liquidity) will continue to tighten further over the next 12 to 18 months. https://seekingalpha.com/article/4208663-south-africa-fair-value-rand-world-normalized-interest-rates?source=all_articles_title
In this article, we will take a look at the most recent economic data covering the South African (EZA) economy, specifically referencing the supply-side or production side of the economy. As we have detailed in prior articles, a mix of structural constraints (most notably as it pertains to the country's state-owned electricity company), as well as an ongoing and worsening policy disconnect, are severely damaging the country's supply-side and key export sectors.
In this article, we will take a closer look at South Africa’s (EZA) largest state-owned enterprise, the utility parastatal Eskom. Eskom recently outlined its funding plans for the 2018/19 financial (March year-end) and is also expected to shortly release its annual financial results for the 2017/18 financial year.
The unsecured lending industry (sub-prime) in South Africa (EZA) has once again come under the spotlight after the publication of a recent report by short sellers, Viceroy Research, which focused on the country’s largest unsecured lender, Capitec (OTCPK:CKHGY).
In this article, we will review the latest Drilling Productivity Report (DPR) from the U.S. Energy Information Administration (EIA) for the period covering March 2018. In particular, we will focus on the metrics and trends for the premier shale basin in the U.S., the Permian located in West Texas and Eastern New Mexico, and what this may mean for the US Exploration and Production sector (XOP).
South Africa’s (EZA) current account balance narrowed modestly in 2017 from 2.8% of GDP in 2016 (calendar) to 2.5%. The narrowing in the country’s current account deficit was due to the widening in the country’s trade surplus from ZAR 35bn in 2016 to ZAR 69bn in 2017 or roughly 1.5% of GDP. https://seekingalpha.com/article/4157800-south-africas-current-account-balance-deteriorate-2018
Two key events that have taken place over the past week could fundamentally reshape the appetite for global risk going forward, the first being the renewed risk of a global trade war, and the second, the outcome of the recently held Italian elections.
In this article, we assess the outlook for the US dollar (NYSEARCA:UUP) over the medium term, particularly in light of the currency's relative under performance in 2017. Despite a further 75 basis point (bps) increase in the Federal Reserve's targeted rate band, the US dollar (USD) lost ground against most major currencies, as well as a handful of emerging market currencies.
South African financial assets have recently enjoyed strong gains on the back of the election of the perceived market reformist Cyril Ramaphosa as the new president of the country’s ruling political party, the African National Congress (ANC), in December. The country’s currency, the rand, in particular appreciated strongly in December, gaining more than 10% against the US dollar for calendar 2017. Since making a cyclical bottom in January 2016, the iShares MSCI South Africa ETF (NYSEARCA:EZA) has nearly doubled.
In this article, we will take a closer look at the United States (U.S.) Exploration and Production (E&P) sector (NYSEARCA:XOP), and in particular address some of the narratives or perhaps “myths” that continue to depress valuations in the sector or at least with respect to the smaller or mid-tier producers.