There is pent-up demand for exposure to China, but we are probably in a period when the world is happy not to hold too much of it, you get a pretty decent (bond) yield but people will be reluctant to pile in because of expectations of currency depreciation.

Kieran Curtis

Categorized in : Company News

A downgrade looks more likely than it did last week, the question is, if Turkey gets downgraded as a result of this instability does that affect the amount of financing available, and if so how does it affect the growth model?

It will take a combination of weaker currency and higher interest rates to get us back to Nigeria, when we compare Nigeria to other oil exporters it hasn't had enough of a currency adjustment.

We expect trend weakness in Turkey though we wouldn't be surprised to see a rally in the near term if a government is formed, with a coalition, there will probably be a greater requirement for pork-barrel politics and the question is will this endanger the fiscal conservatism that's been a hallmark of Turkey so far. We feel quite uncomfortable with this mix.

I can't deny the pricing is not attractive but to my mind there are still non-economic non-market risks attached to investing in Russia.