guest post

Russian asset prices have taken a severe battering this year and are now ranked as among the cheapest in the world. The obvious question many are now asking is, “is this a good time to buy” or “is there more pain to come” which might lead to even lower prices and valuations in 2015?

Apart from the cheap valuations, the reason why investors are asking that question now is because, during Russia’s previous two recent crises, in 1998/’99 and 2008/’09, we had similar situations where the reasons to continue avoiding the country were overwhelming but it was, nevertheless, exactly the right time to buy. Read more

By Taras Kuzio of the University of Alberta

In a Slovyansk café bar this month I received a rude wake-up call about the weakness of western support for Ukraine in the face of Russia’s annexation of Crimea and its aggression in the Donbas. A soldier on a neighbouring table listened in to my conversation in English with a humanitarian aid worker and, when he got up to leave, delivered the comment: “You useless fuckers”. Many more Ukrainians have been dismayed at the weak response from the US, Canada and Europe. Read more

By Arthur Bastings of Millicom

Africa watchers frequently comment on how technological innovation on the continent is leap-frogging more developed markets. But now the market is more competitive than ever and companies have to look ahead to anticipate consumer needs and stay relevant. What’s next for Africa’s digital and mobile revolution? Read more

By Tony Volpon of Nomura Securities

The Brazilian economy is in a perilous state as it enters 2015. Economic growth is flirting with an outright recession this year. Inflation is oscillating around the upper bound of the inflation target. Fiscal accounts are showing a primary deficit, and measures of indebtedness are rising. The current account deficit is also rising and the country may see a trade deficit in 2014.

External conditions are unlikely to improve in 2015. Brazil was one of the big winners from the Chinese-driven commodity boom, so it is not surprising that many of the problems we see today began with the fall in the country’s terms of trade that began in 2011. Whatever the inadequacies of the policy response, the government does have a point when it argues that external conditions have been a big part of the slower growth seen since 2011. Read more

By Saurabh Mukherjea of Ambit Capital

As I finish my two-week year-end trip to meet our western clients (around 40 of them), it is obvious that enthusiasm regarding investing in India is at record highs. Over the past fortnight, I have met at least 10 western-hemisphere-based funds that have either just started investing in India or have applied to the Indian securities regulator for Foreign Portfolio Investor (FPI) status (which allows them to access the Indian stockmarket directly). Even more interestingly, half a dozen of the clients I met have moved to larger, better-appointed offices in money centres like London, New York, Zurich and San Francisco. Read more

Timothy AshBy Timothy Ash of Standard Bank

This time last year I was asked to contribute an article for beyondbrics on the outlook for 2014, and I chose Ukraine (see Hello 2014: Ukraine’s crisis may run and run, December 20, 2014). That post turned out to be prescient, although even I could never have imagined the remarkable turn of events in that country this year.

For 2015 I think Ukraine will remain in the headlines, but its future is likely at least partially to be determined by events in its eastern neighbour, Russia. The new reform administration in Kiev can succeed, if Moscow gives it some breathing space and scales back its own direct intervention in Ukraine. Read more

By Mohamed El-Erian

One of the main challenges facing emerging countries in 2015 will be dealing with increased economic and policy “divergence” within the advanced world. It is a challenge that will widen the gap between well- and poorly-managed economies. It is also one that will tax even the best-run economies. In turn, their response will influence the prospects for the advanced world. Read more

By Aleksandar Vucic, Prime Minister of the Republic of Serbia

Serbia recently began its accession talks with the EU and is firmly dedicated to its European path. This is a blessing to a country like Serbia, since its geographic position places us at a key strategic juncture between Europe and the Orient – and this role is becoming ever more prominent.

The first character in the Chinese words for Serbia and Serbian is pronounced sai. It translates as ‘place of strategic importance’. As Chinese characters so often do, it offers a remarkably concise and meaningful description of Serbia’s relationship with China and the world more broadly. Read more

By Jukka Pihlman of Standard Chartered Bank

The Chinese currency’s path to internationalisation has been stellar so far but something may happen next year that could propel the renminbi (RMB) into the currency stratosphere.

The IMF’s Special Drawing Rights (SDR) – the IMF’s ‘virtual currency’ based on a basket of other currencies reviewed every five years – rarely warrant much excitement. But if the RMB gets included in 2015, alongside the dollar, euro, pound and yen, it could boost the Chinese currency’s fortunes overnight. Read more

By Alejandro Poiré of Tecnológico de Monterrey

What makes Mexico’s current political turmoil unique is that it has put the problem of corruption front and centre of the social agenda. Streets, schools, homes, corporate offices, union meetings and workplaces are teeming with a mix of anger and concern. There is an underlying feeling that it is corruption that lies at the root of our inability to protect the innocent from murder and abuse; that it is corruption that could derail the future promised by the remarkable reforms of the past few years.

As Mexico’s leading public intellectuals have argued, its current crisis, a crisis of corruption and rule of law, calls into question its very viability as a democracy. Yet its political elites have yet to grasp the depth of the problem. The government’s leadership style has pushed social allies away. Opposition parties, mired in their own decomposition, have not served as a channel for social outrage, and players on all sides of the aisle seem way too eager to look past their lamentable wrongdoings. Read more

By Taras Kuzio of the University of Alberta

A year ago I took the seven hour Hyundai Rotem intercity train from Kiev to Donetsk, introduced on this and two other routes for the Uefa Euro 2012 football championship to carry supporters to Ukraine’s newly built stadiums. The journey is now two hours shorter as the train only goes as far as Slovyansk and Kramatorsk, situated 30 kilometres from the front line of the Russian occupied enclave of the Donetsk People’s Republic (DNR). Read more

By Greg Konieczny of Templeton Emerging Markets Group

Following presidential elections in Romania last month and the surprising but positive victory of Klaus Iohannis, there was one key development that we, as a major investor in the market, really wanted to see: namely, for the government to pledge to reduce its budget deficit and commit to a new loan agreement with the IMF in 2015.

If an agreement is signed following negotiations between the government and the Fund this week, it will further prompt Romania to implement reforms and increase fiscal predictability. Read more

By Olena Bilan of Dragon Capital and VoxUkraine

Despite securing sizeable financial support from western lenders in April — $27bn for two year — Ukraine is again finding itself precipitously close to a financial meltdown. The national currency lost 50 per cent of its value this year despite the central bank attempting to curb devaluation pressures through exchange controls and FX interventions. Foreign reserves have fallen close to $8bn, the lowest level in a decade and equivalent to a mere 1.3 months of imports. Ukraine needs $12-15bn of additional external funding next year, on top of the $16bn scheduled under the current support package, in order to repay $9bn of maturing FX debt, pay $8-9bn for imported gas and build up reserves to at least 2 months of import cover.

Were Ukrainian authorities solely responsible for pushing the country to the brink of disaster? Not this time. Read more

By Shumita Sharma Deveshwar of Trusted Sources

The Indian government’s sale of a 5 per cent stake in the Steel Authority of India Ltd (SAIL) was meant to serve as a gauge of investor sentiment towards public sector stocks before the bigger sell-offs of shares in Coal India and the ONGC oil & gas group. But it has left some doubts about the potential success of the record disinvestment programme and the consequent reduction of the fiscal deficit. Read more

By Alan Riley of City Law School

Following South Stream’s demise the Danube nations must look again at their energy vulnerability. These low income states, locked into antique energy infrastructure and facing high renewable bills, face a major energy dilemma – a dilemma shared, in a less acute form, with the rest of the European Union. One way forward is to look again at whether a deal on gas between Russia and the EU could be made to work as a means of encouraging economic growth and helping to settle the dispute over Ukraine. Read more