Hello 2015

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

China slowdown, collapsing currencies and the double-edged sword of cheaper oil – Jonathan Wheatley and James Kynge of the FT’s emerging markets team discuss the outlook for 2015 in EM countries.

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 Jan Dehn, Ashmore Group

As the Fed prepares to hike rates in 2015, the window of opportunity presented by hyper-easy monetary policies for developed economies to undertake deeper fundamental reforms is rapidly closing.

So far, hardly any progress has been made. President Obama’s tenure has not seen the country’s economic problems solved. US trend growth has halved since the 1960s, while the debt stock has doubled to more than 350 per cent of GDP (not counting the further 300 per cent of GDP in unfunded social care liabilities). Europe and Japan recently re-engaged in QE-type stimuli to defend their fundamentally challenged economies from the effects of higher US rates in the future. 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